John Seneschall v Trisant Foods Ltd
| Jurisdiction | England & Wales |
| Judge | Greenwood |
| Judgment Date | 11 March 2024 |
| Neutral Citation | [2024] EWHC 456 (Ch) |
| Year | 2024 |
| Court | Chancery Division |
| Docket Number | Case No: CR-2021-000495 |
In the Matter of Trisant Foods Limited
And in the Matter of the Companies Act 2006
[2024] EWHC 456 (Ch)
INSOLVENCY AND COMPANIES COURT JUDGE Greenwood
Case No: CR-2021-000495
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Rolls Building
Royal Courts of Justice
7 Rolls Buildings
London EC4A 1NL
Daniel Northall (instructed by Armstrong Teasdale LLP) for the Petitioner
The Respondents appeared in person (the 4 th Respondent appearing for the 2 nd Respondent)
Hearing dates: 13–17 and 22 November 2023
This judgment was handed down remotely at 9.30am on 11 March 2024 by circulation to the parties or their representatives by e-mail.
ICC JUDGE
[A] Introduction
In this matter, by my judgment in respect of liability following a trial in November 2022 (“ the Liability Trial”) I held:
1.1. that the Petitioner, Mr Seneschall, had established that the affairs of the 1 st Respondent (“ the Company”) had been conducted in a manner unfairly prejudicial to his interests as a member under s. 994 of the Companies Act 2006 (“ the Act”);
1.2. that Mr Seneschall had established that the 2 nd to 5 th Respondents had conspired to injure him by unlawful means; and,
1.3. I dismissed the counterclaim of the 2 nd Respondent (“ Market Fresh”).
My reasons for those conclusions were contained in my judgment (“ the Liability Judgment”) at [2023] EWHC 1029 (Ch). In brief summary, amongst other things, I held as follows.
2.1. From about the end of 2019 there was a plan which involved, as a principal aim, the end or reduction of Mr Seneschall's participation in the Company's affairs. Each of the 3 rd Respondent (“ Ms Jones”), the 4 th Respondent (“ Mr Marshall”) and the 5 th Respondent (“ Mr McCormick”) knew about the plan, agreed to it, and in different respects, each according to his/her position, participated in it.
2.2. The plan entailed (or was, from time to time, more or less intended by each protagonist to entail) the eventual purchase of Mr Seneschall's shares in the Company by Market Fresh (or perhaps another entity directed by Mr Marshall) albeit from a position of relative bargaining strength. Ultimately, Mr Marshall was the person upon whom the entire plan depended. Mr Seneschall was unaware of the plan, which was dishonestly concealed from him.
2.3. Importantly, even if, by the end of 2019, the relationship between the parties was such that some change of management or ownership was justified or even necessary, that fact did not excuse the Respondents' concealed plan, or the terms on which, in effect, Mr Seneschall was excluded from the business, given the Company's continuing reliance on his property as security, and given the absence of an offer of any sort to buy his shares, or to relieve him of his obligations as guarantor or mortgagor of or in respect of its liabilities.
2.4. The decision to allege gross misconduct against Mr Seneschall was not taken because of a genuine belief that his conduct justified that allegation. It was motivated by the Respondents' desire to exclude Mr Seneschall, according to their pre-existing plan; the disciplinary process was not conducted fairly, or in good faith. Furthermore, following his suspension in July 2020, Mr Seneschall was deliberately excluded (in breach of the ISHA) from participation in the Company's financial affairs (including the decision to accept informal funding from Market Fresh) and was refused information to which he was entitled, as a director.
2.5. The plan was designed to exclude Mr Seneschall from participation in the business, and from knowledge about its affairs, whilst at the same time exploiting his home as security. Although his financial position may not have been damaged by the refinancing in July 2020, the decisions to suspend Mr Seneschall and to end Ms Jones' suspension, were both deliberately and dishonestly delayed (at least, their communication to Mr Seneschall was deliberately delayed) in order to allow Mr Seneschall to complete the Reward Loan, secured on his house, in ignorance of what was planned and what would very soon happen.
2.6. Mr Seneschall's interest as a mortgagor and/or guarantor should be treated as an aspect of his interests as a member for the purposes of s.994. He had agreed to the use of his home as security, and to the personal risks thereby created, only as an aspect of his initial and continuing membership.
In respect of unlawful means conspiracy, again in brief summary, I held as follows.
3.1. From about June 2020, there was an unlawful means conspiracy between Mr
Marshall, Ms Jones, Market Fresh and Mr McCormick, to exclude Mr Seneschall from participation in the Company's affairs.
3.2. The conspiracy was based on an agreement previously conceived (in November 2019) and in certain respects previously acted on.
3.3. The conspiracy caused Mr Seneschall loss.
This is my judgment in respect of Mr Seneschall's remedies consequent upon the Liability Judgment, and following a further trial (“ the Remedies Trial”) (a split trial having been ordered by ICCJ Briggs at a CCMC held on 16 August 2021). It should be read and understood in conjunction with the Liability Judgment.
[B] The Development of the Issues in respect of Remedies
At the Remedies Trial, there were issues concerning:
5.1. the extent to which certain relief sought by Mr Seneschall was open to him (at all) on the pleadings, and the scope of his pleaded case in respect of causation;
5.2. the extent to which certain allegations made by the Respondents were open to them, both on the pleadings and in any event at this stage of the proceedings, the Liability Trial having now concluded, and judgment having been given, including for the dismissal of the counterclaim.
As a result, and in order in due course to explain my conclusions on those issues, it is necessary to summarise the genesis of the parties' respective cases in respect of relief.
The Original Pleadings
By the Amended Petition, as set out in the Prayer and insofar as material, the Petitioner sought:
7.1. in respect of unfair prejudice, under s. 996 of the Act:
7.1.1. at paragraph 1, an order that “ the Second to Fourth Respondents, or any of them, do procure the purchase of all the Petitioner's shares in Trisant … at a fair value to be determined by the Court, and with interest, on the following bases and assumptions: (a) a sale between a willing vendor and a willing purchaser acting at arm's length without any discount being applied for such shareholding constituting a minority holding ….”; at paragraph 1(c) the Petitioner sought adjustments to the share value to take account of alleged misfeasance, and at 1(d), an order that the shares be valued as at the date of the order or as at such other date as the Court might think fit;
7.1.2. paragraph 2 sought, in the alternative, an order that the “ Second to Fourth Respondents” sell any shares in the Company “ in which they have an interest” to the Petitioner at a fair value to be determined by the Court;
7.1.3. paragraph 6 sought an “ order for compensation”; and,
7.1.4. paragraph 8 sought such “ other order or relief as the Court shall in the premises consider just and appropriate”;
7.2. in respect of unlawful means conspiracy, at paragraph 7, “ damages”.
I observe that no share purchase or sale order was sought against Mr McCormick (the 5 th Respondent) who was not a member of the Company and at no time owned or held any interest in any of the Company's shares (and so in any event had nothing to sell). By contrast, paragraph 5 sought, further or alternatively, an order authorising proceedings against “ the Second to Fifth Respondents” (emphasis added) by or in the name of the Company, and paragraphs 6 and 7 were not directed at particular named Respondents (and were therefore directed at all).
Whilst no submissions were made on this point, and whilst I will not for this reason alone treat as precluded any of the relief now sought against Mr McCormick (given the breadth of the Court's powers under s. 996, and given the terms of paragraphs 6 and 8 of the Prayer) the terms of the Prayer do reflect a real distinction between Mr McCormick and the 2 nd to 4 th Respondents, all of whom were members (or in the case of Mr Marshall, the ultimate owner of a member).
In respect of the claim for damages for conspiracy, particulars of loss were stated at paragraphs 77 to 82 of the Amended Petition. In summary, and insofar as now material, the Petitioner sought:
10.1. compensation for loss suffered by reference to the value of his shares, “ which have been reduced to zero due to liquidation of the Company which arose as a direct consequence of the Control Conspiracy and Exclusion Conspiracy”;
10.2. compensation because, “ by reason of the Exclusion Conspiracy”, he has suffered “ the actual or threatened enforcement of the security” given against his home in respect of the Reward Loan, and because “ had the Petitioner been aware of either the Control Conspiracy or the Exclusion Conspiracy, he would not have agreed” (amongst other things) to provide that security. Moreover, and again had he “ been aware of” the Conspiracies, he alleged that he would have enforced the Redemption Agreement in September 2019 or would have enforced the terms of the ISHA or HoTs to recover title to shares not yet paid for; in the further alternative, and again, “ had the Petitioner been aware” of the Conspiracies, he would not have agreed to consolidate the Nucleus and Alfandari Loans, or given security against his home in respect of the Reward Loan.
Two points arise, regarding causation, to which I shall return below:
11.1. first, although on a basis...
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John Seneschall v Trisant Foods Ltd
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