Hunter v Senate Support Services Ltd and Others
| Jurisdiction | England & Wales |
| Judgment Date | 17 May 2004 |
| Neutral Citation | [2004] EWHC 1085 (Ch) |
| Docket Number | Case No: HC03C00228 |
| Court | Chancery Division |
| Date | 17 May 2004 |
[2004] EWHC 1085 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr John Randall QC Sitting as a Deputy Judge of the High Court
Case No: HC03C00228
Mr Peter Griffiths of Counsel (instructed by Reid Minty, Solicitors, London W1) appeared for the Claimant.
Mr Edward Davies of Counsel (instructed by Hammonds, Solicitors, London EC2) appeared for the Defendants.
Hearing dates: 2 nd-5 th February, 23 rd-27 th February, and 1 st April 2004
In accordance with paragraph 9.3 of the Chancery Guide, this is the official judgment of the Court, and I direct that this written judgment may be used for all purposes as the text of the judgment, and that no further note or transcript need be made.
John Randall QC, Deputy Judge
The Deputy Judge:
Introduction
(1) In this action the Claimant, Mr Keith Hunter, seeks to impugn the forfeiture of his minority shareholdings in the First, Second and Third Defendant companies (respectively "SSS", "Acquire" and "EAT"; together "the 3 subsidiaries"). The shares in question have all been transferred to the Fourth Defendant ("SVSP"), which is the group holding company of the 3 subsidiaries as well as other companies. SVSP is effectively controlled by Mr Tim Cookson (the vast majority of whose former shareholding in SVSP has been transferred to a discretionary trust for members of his family, including himself) and Mr Vic and Mrs Pam Tippins (I shall refer to the three of them together as "the majority"). There are also minority shareholders, including a Mr Roy Farrier and a Mr Edward Bevan.
(2) As his counsel Mr Griffiths frankly acknowledged when opening the case, the Claimant's underlying but substantive purpose in bringing this action is to gain locus standi to bring petitions under s.459 Companies Act 1985 ("CA85") in the 3 subsidiaries, and most particularly in SSS, where he perceives that his forfeit shareholding had the greatest value.
(3) On a superficial review of the facts giving rise to this action, a world weary cynic might well conclude that what occurred must have been some form of 'set-up', deliberately instigated and carried through by the majority so as to get rid of someone they regarded as a troublesome minority shareholder and to appropriate the benefit of his shareholdings for themselves. Were it so, the resolution of the case would have been straightforward. However the longer the trial went on, the clearer it became that the picture was in truth very different.
(4) At trial the Claimant called 2 witnesses (including himself), and the Defendants 5 (plus a sixth, whose evidence was taken as read). There were 5 bundles of documents, and I shall refer to documents appearing in those bundles in the form TB1/2 (1 being the volume and 2 being the page), omitting the numbers shown on any relevant tab dividers. After the close of the evidence the Claimant obtained transcripts of the evidence, to which I shall refer in the form TPT 3.2.04 p1 (being the transcript of evidence given on 3 rd February 2004 at page 1), where appropriate adding line numbers.
The witnesses
(5) Prior to his involvement with the majority the Claimant, a retired police officer who had previously been involved with another company which had not prospered, owned and ran Oasis Support Services Limited ("Oasis"), which had a security business. Through transactions I shall summarise below, he joined in first Mr Cookson's company Senate Food Services Limited ("Senate Food") and then the newly formed SVSP group. He plainly feels a strong sense of grievance against his opponents in this litigation in respect of a number of matters, including but by no means limited to their involvement in the forfeiture of his shares in the 3 subsidiaries. However I am satisfied that it was the Claimant who was primarily responsible for the breakdown in communication and working relations between himself and the majority which occurred in and around September 2002, and which has indirectly led to this lengthy and doubtless expensive litigation: he had a tendency to assert that agreements had previously been reached when they had not (e.g. his letter of 30 th June 2000 – as to which see paragraph (19) below); he was primarily responsible for the increasingly acrimonious tenor of the e-mails exchanged; he it was who came to refuse to speak to the majority (see e-mail of 19 th September [TB4/232]), having declined to ring back in response to an answer-phone message left by Mr Tippins earlier that morning; he it was who recklessly failed to take seriously at least the first call notice (which he accepts receiving) and did not (contrary to the terms of his own e-mail dated 16 th October) take professional advice about it. Short but telling descriptions or characterisations of him incidentally emerged (I am sure genuinely, rather than in any deliberate attempt to 'smear' him) in the course of the evidence of a number of his former colleagues within the SVSP group, not limited to the majority. He was described as 'bloody-minded', and the sort of person who might be expected to pay a sum of a few hundred pounds late on the last possible day entirely in small coins, just to make a point. Mr Farrier at one point said of the Claimant (in the context of not having paid the £300 by 24 th October) "he was being Keith —awkward". Having read quite a number of his e-mails, and observed him in the witness box, I am satisfied there is substance in these descriptions or characterisations of the Claimant. He was not always, in particular from late August 2002 onwards, an easy man to deal with.
(6) Although I can accept much of his evidence, there were particular aspects of it about which I have reservations. At points in his cross-examination he appeared himself to be a little uncomfortable in the evidence that he gave; a particular example is when dealing with his assertion that it was reliance on certain words in note 10 to the accounts which had been sent to him on 6 th September which (in contrast to the terms of his own e-mail dated 16 th October) caused him to decide that he could safely decline to pay the call. I have also had anxiously to consider whether I can accept his evidence that he did not receive the second call notice (dated 16 th October). I shall revert to these points below.
(7) A Mr Hudson, formerly employed in the accounts department of SVSP reporting to and sharing an office with Mrs Pam Tippins, was called for the Claimant on the topic of whether the sums comprised in the management charges by SVSP to the 3 subsidiaries, and in particular SSS, were calculated on a proper or fair basis. When he gave oral evidence it rapidly became clear that his witness statement markedly over-stated the evidence which he was in fact able to give. I accept his oral evidence. In essence, he said that he was not in a position to impugn any of the sums included as not being fair allocations of relevant expenditure. Insofar as there were round sums which appeared to have been set so as roughly to match (and thus eliminate) the profit which would have been reported without their inclusion, there was no example he could point to in respect of the years and the companies with which he was familiar where the round sum represented an increase (as opposed to a reduction) of the sum which would otherwise have been arrived at [TPT 4.2.04 p39].
(8) Given the serious case (in part tantamount to a conspiracy theory) put against them, and given that some personal advantage accrued to them (through SVSP) from the ultimate transfer of the Claimant's shares to SVSP, I have of course had to scrutinise the evidence of the 2 male members of the majority especially closely. Having done so, and taking full account of the corrections each had to make as to what documents they had available to them on 26 th and 27 th September 2002 (as to which see below), I find each of them to have been impressive and scrupulously honest witnesses.
(9) Mr Cookson was the majority shareholder in Senate Food from its incorporation in July 1999 until the creation of the SVSP group in July 2000 (Mrs Pam Tippins held 15% of its shares). In October 1999 Senate Food acquired the entire issued share capital of the Claimant's company Oasis, which upon becoming a subsidiary of Senate Food was renamed SSS. By January 2000 he was involved in negotiations with Mr and Mrs Tippins concerning a possible merger of their respective business interests. Implementation of that proposal commenced in April 2000, with the incorporation of SVSP as the intended holding company of their new group. He gave his evidence in a calm and measured way, and impressed me as a witness. He was generally quite precise in his use of language including in his interpretation of questions, but subject to that was willing to accept points put to him in cross-examination where appropriate. One passage which illustrates both points is at TPT 23.2.04 p25 line 32 – p26 line 8. His evidence when later re-called was mostly of a similarly impressive character, though at one point he was honestly mistaken, I believe through some confusion (see paragraph (152) below).
(10) Mr Tippins and his wife were the majority shareholders in Catercheck Purchasing Group Ltd and Catercheck Consultancy Serves Ltd from their respective incorporations in 1997 and 1999 (Mr Cookson held a minority shareholding in the former, and Senate Food in the latter). Mr Tippins did his best to maintain temperate communication with the Claimant when that became increasingly difficult. He took the initiative to use Mr Martin as a channel of communication (the Claimant had known and dealt with Mr Martin for longer than the...
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