Grant v Bragg
| Jurisdiction | England & Wales |
| Judgment Date | 22 January 2009 |
| Neutral Citation | [2009] EWHC 74 (Ch) |
| Docket Number | CLAIM NO: HC07C02086 |
| Court | Chancery Division |
| Date | 22 January 2009 |
[2009] EWHC 74 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
CLAIM NO: HC07C02086
Mrs Helen Galley (instructed by Brook Martin & Co of London) for Mr Grant
Mr Bragg in person
Premier Resorts Limited did not appear and was not represented.
HEARING DATES: 27, 28, 29, 30 AND 31 OCTOBER 2008
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
EDWARD BARTLEY JONES Q.C.
INTRODUCTION
The primary issue which arises in this Action is whether a concluded contract was ever entered into between the Claimant (“Mr Grant”) and the Defendant (“Mr Bragg”) for the purchase by Mr Bragg from Mr Grant of the whole of Mr Grant's shareholding in Premier Resorts Limited (“the Company”) at the price of £346,760. The secondary issue (and one far easier of resolution) is a counterclaim brought by Mr Bragg against Mr Grant whereby Mr Bragg seeks damages for breach of a written Shareholders' Agreement (undated but signed by Mr Grant and Mr Bragg on or about 14 October 2003).
The contract, if it arose at all, was concluded in January or early February 2007. Since 20 January 2007 Mr Bragg has entirely excluded Mr Grant from participation in the Company, leading Mr Grant to set up his own competing business (Resort Group International Limited) which has traded from early February 2007. Mr Grant still retains his shareholding in the Company however, since Mr Bragg denies that any contract for the purchase of Mr Grant's shares was ever created. Hence the present Action brought by Mr Grant to enforce the contract which he says exists.
Originally the Company also brought a counterclaim against Mr Grant for alleged breaches of his fiduciary duties as a director of the Company. However, the Company is now insolvent and entered into administration on 25 September 2008. By letter dated 17 October 2008 the joint administrators indicated that the Company was not in a position to participate in the proceedings nor to pursue its counterclaim.
Mr Grant has been represented by solicitors and counsel (Mrs Galley) throughout. Originally Mr Bragg and the Company were represented by the same firm of solicitors and counsel. However on 15 August 2008, and no doubt because of funding difficulties, those solicitors ceased to act for both Mr Bragg and the Company and, accordingly, Mr Bragg has presented his case to me in person. I must say immediately that he did so with impeccable courtesy and not inconsiderable ability. Mrs Galley also more than fulfilled her duties to the Court by assisting me, and Mr Bragg, as appropriate in the circumstances. It is, however, more than a little unfortunate in a case such as the present – where there is much to be said on Mr Bragg's behalf on issues both of fact and law—that I do not have the benefit of hearing from counsel for Mr Bragg. That is unfortunate not merely from Mr Bragg's point of view but also from that of Mr Grant. As any Court seeks to ascertain and investigate the case of a litigant in person, especially where that litigant in person clearly has something of substance to say, there is a clear danger that a person such as Mr Grant might perceive that the judicial process is weighted against him in some way.
This is a case where the underlying merits (in non-legal terms) would lead me strongly to wish to find that the contract for which Mr Grant contends was, indeed, entered into between himself and Mr Bragg. Whether, however, that contract was entered into as a matter of law (or more correctly mixed fact and law) is a more difficult issue. The problem facing me is that the issue I have to decide is stark – either there was a contract or there was not. This is not a case where the claim is one of “unfairly prejudicial” conduct under sections 459 to 461 of the Companies Act 1985 (now sections 994 to 999 of the Companies Act 2006). Not merely, therefore, do I have no general discretion to make a share purchase order because of unfairly prejudicial conduct but, also, I must be careful to remind myself that conduct which might be classed as unfairly prejudicial should not be utilised to find the existence of a contract where such unfairly prejudicial conduct is not directly relevant to the narrow issue as to whether a contract was, in fact, created into at all.
THE COMPANY :
It is common ground that the Company was a quasi-partnership with each of Mr Grant and Mr Bragg holding 50% of the shareholding. They were both directors, albeit that they were not the sole directors (but nothing turns on this latter point). The Company was incorporated on 1 March 1997 and operated as a sales and marketing company for holiday and time share developments, many but not all of them abroad. Almost from the outset there were tensions between Mr Grant and Mr Bragg, hardly surprising granted their differing personalities.
Mr Grant was born in 1944 and served in the Army before leaving with the rank of Major in 1976. Thereafter he ultimately developed a career as a sales and marketing consultant for various holiday resorts. Mr Bragg is younger (he was born in 1957) and had experience as a sales and marketing consultant for timeshare developments (Mr Grant does not appear to have dealt with timeshares). In 1996 when Mr Grant was working as the marketing consultant for the Celtic Manor Resort in Wales he offered Mr Bragg a one year contract as the consultant marketing manager for that development. Following the conclusion of that development Mr Grant and Mr Bragg decided to establish the Company.
In fact, Mr Grant and Mr Bragg were like oil and water. Not only is Mr Grant older than Mr Bragg but his attitude to life is fundamentally different. I have no doubt but that Mr Grant regards his word as his bond and expects others to behave in this way. It seems to be common ground that Mr Grant is a workaholic and, from the start, this gave rise to tensions. I think that Mr Grant may well have been intolerant of those who worked less than he did (and Mr Bragg fell into that category). I think that because of their age and background differentials Mr Grant may well, on occasions, have treated Mr Bragg as if he were the “junior” partner. Conversely, however, Mr Bragg's mistake throughout seems to have been to fail to appreciate quite how important Mr Grant was to the success of the Company. Mr Grant was an old and wise head, with many contacts in the industry, most of whom would be likely to follow him were he to leave the Company and set up business on his own.
I have no doubt but that Mr Grant gave his evidence honestly (notwithstanding one incautious answer he gave in the witness box concerning his motive in January 2007 in changing the name of his new company to Premier Resorts International Limited – an answer which he subsequently corrected on more mature reflection). Equally, and although certain aspects of Mr Bragg's conduct may seem unattractive, I have no doubt that he too is a man who gave his evidence honestly. The problem, in Mr Bragg's case, is that his honest recollection and perception on any issue is, quite clearly, arrived at through a strong prism of self-interest and self-justification. It is, however, only right to record that on numerous occasions in 2006 he was obviously genuinely concerned about Mr Grant's state of health and he postponed the pursuit of his own self interests to avoid further damage to Mr Grant's health. Equally, and after he had been subject to detailed cross-examination by Mrs Galley, he was prepared to say that now matters had been put to him in a different way he could see the issues (such as Mr Grant's entitlement to commission on direct sales) in a new way. Indeed he very fairly opened his closing submissions to me by saying that, as a result of the trial process, he could now for the first time see matters from Mr Grant's perspective.
I treat, therefore, both Mr Grant and Mr Bragg as honest witnesses but I will have to examine carefully their respective recollections and perceptions as to what was occurring in respect of the negotiation of the alleged contract.
The Shareholders' Agreement:
The alleged contract, if it were created, could only have arisen in January or early February 2007. It is impossible, however, to understand what was then occurring without considering the terms of the undated Shareholders' Agreement (“the SA”). The context for the SA was difficulties which had arisen since the inception of the business of the Company over Mr Grant and Mr Bragg's respective contributions in terms of time and, more particularly, continuing income which was being generated from projects with which Mr Grant and, more particularly, Mr Bragg had been involved before the commencement of the business of the Company. Whilst it would appear that Mr Grant's prior projects had quickly stopped producing further income, that was not the case for Mr Bragg. Very substantial sums were continuing to be received which Mr Bragg was of the view that he (or his company—Bragg & Co Limited) was entitled to retain. It does seem as if there continuing income streams were not properly addressed before the commencement of the business of the Company – hence the very differing perceptions as to what should occur.
The SA was drafted by a Mr Christopher Jenkins who, at all material times, was a director and company secretary of the Company. Mr Jenkins had originally been the financial adviser to Mr Bragg and it was Mr Bragg who introduced him to Mr Grant. Subsequently, Mr Grant utilised Mr Jenkins' services for the purposes of his own personal tax affairs....
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Sourcing Update: Q2 2009
...Bragg (Defendant): (1) Russell Bragg (Part 20 Claimant) (2) Premier Resorts Limited (Part 20 Claimant) v Graeme Grant (Part 20 Defendant) [2009] EWHC 74 (Ch), the High Court has held that, even though contracting parties did not execute a draft agreement, and had initially intended that it ......