Mr Nigel Rowe & Others v Ingenious Media Holdings Plc & Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nugee |
| Judgment Date | 02 July 2020 |
| Neutral Citation | [2020] EWHC 1731 (Ch) |
| Court | Chancery Division |
| Docket Number | INGENIOUS LITIGATION HC-2017-000490, BL-2018-000279 BL-2018-001466, BL-2018-002554 BL-2019-001140 Claim Nos: Hc-2015-004561, Hc-2016-001674 Hc-2017-001049, Bl-2018-000507 Claim No: Fs-2017-000005 |
| Date | 02 July 2020 |
[2020] EWHC 1731 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building, Royal Courts of Justice
Fetter Lane, London, EC4A 1NL
Mr Justice Nugee
INGENIOUS LITIGATION
Claim Nos: HC-2015-002715, HC-2015-004581
HC-2017-000490, BL-2018-000279
BL-2018-001466, BL-2018-002554
BL-2019-001140
Claim Nos: Hc-2015-004561, Hc-2016-001674 Hc-2017-001049, Bl-2018-000507
Claim No: Fs-2017-000005
Andrew Hunter QC, Tom Cleaver, and Gayatri Sarathy (instructed by Stewarts Law LLP) for the Stewarts Claimants
Mark Vinall (instructed by Peters & Peters Solicitors LLP) for the Peters & Peters Claimants
Tom Mountford (instructed by Mishcon de Reya LLP) for the Mishcon de Reya Claimants
Simon Birt QC, Craig Morrison, Geoffrey Kuehne and Sophie Shaw (instructed by RPC) for the Ingenious Defendants
David Yates QC and Niamh Cleary (instructed by TLT LLP) for Coutts & Company
Ben Quiney QC, Carlo Taczalski and Frederick Simpson (instructed by Kennedys Law LLP) for SRLV (a firm)
Richard Handyside QC, James Duffy and Nick Daly (instructed by Herbert Smith Freehills LLP) for UBS AG
Simon Pritchard and Harry Adamson (instructed by Eversheds Sutherland (International) LLP) for HSBC Private Bank (UK) Ltd
Hearing dates: 9 and 10 June 2020
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.
Introduction
On 9 to 11 June 2020 I heard a Case Management Conference ( “CMC 3”) in these actions. I was able to give oral rulings on most of the issues that were raised, but there was one aspect argued on Days 1 and 2 on which I reserved judgment. This is my judgment on that point.
It is not necessary to give an account of the background. The parties themselves are very familiar with it, and if anyone else is interested they can find a sufficient account in two reserved judgments I have given: Barness v Ingenious Media Ltd [2019] EWHC 3299 (Ch) and Rowe v Ingenious Media Holdings plc [2020] EWHC 235 (Ch).
CMC3 was largely devoted to disclosure issues. The parties were able to agree very many items, but there were three linked issues on the agenda which were argued together. They concern the question whether and to what extent the claimants should give disclosure as to their other investments. Putting it very broadly, there were two issues to which such disclosure was said to go: first, the financial sophistication of each claimant and their appetite for investing in more or less risky investments ( “the sophistication point”), and second, a question as to the causation of loss ( “the loss point”). Mr Richard Handyside QC, for UBS, took the lead on the sophistication point for the defendants, and Mr Simon Birt QC, for the Ingenious Defendants, on the loss point; Mr Andrew Hunter QC led for the claimants on both issues; and in each case they were supported and supplemented by counsel for the other parties. I am very grateful for the efficient and effective way in which all concerned made their submissions and conducted the hearing, which was, as is currently standard practice, held as a remote hearing.
The issues
The relevant issues are issues 8, 13 and 29 on the Disclosure Agenda.
Issue 8, as summarised on the Agenda, is as follows:
“Should the Pleading Claimants give disclosure in relation to other investments they made and/or investment advice they sought or received in relation to potential investments?
If so, what is the appropriate formulation for such disclosure and what are the appropriate limits?
The formulations proposed by the Pleading Defendants are:
Issue 1: “What investments did [Pleading Claimant] make between [date] and [date] (other than (i) investments made in the course of his employment, (ii) purchases of residential property in which he or his family resided, (iii) contributions to personal pensions or ISAs)?”
Issue 2: “What advice did [Pleading Claimant] seek or receive between [date] and [date] in relation to potential investments (other than (i) investments made in the course of his employment, (ii) purchases of residential property in which he or his family resided or (iii) contributions to personal pensions or ISAs)?”
If these issues are included as Issues for Disclosure, should Model C or Model D apply?”
This issue arises as between all the parties.
Issue 13:
“Should the SRLV Pleading Claimants give disclosure in relation to the following issue:
“Between [date] and [date]:
(i) What was [Pleading Claimant's] investor profile including his appetite for risk and tax-efficient schemes?
(ii) What was [Pleading Claimant's] level of sophistication as an investor/ability to understand investments such as the Ingenious Partnerships?”
If so, should this be on the basis of the Model C requests suggested by SRLV? [viz:]
“Documents such as emails, letters, meeting notes, prospectuses of other investments which [Pleading Claimant] considered during the period 2001–2008. Documents (such as emails, letters, CVs, business plans and job applications) evidencing [Pleading Claimant]'s professional experience within the entertainment industry, and as a solicitor.”
This only arises between SRLV and the SRLV Pleading Claimants (who are all Stewarts Claimants).
Issue 29 is an ancillary issue dealing with custodians and the like.
The Pleading Claimants
There are 28 Pleading Claimants (although it is anticipated that for practical purposes, including disclosure, there will only be 27 active Pleading Claimants as one of them, Mr Hughes-Morgan, will not participate due to ill-health). Various distinctions were drawn between them during the course of the argument. They are represented by three different firms of solicitors, each with its own counsel team, and although they have made a great deal of common cause each naturally has its own points to make. They do not all sue the same defendants: some of them sue advisers (of whom SRLV, UBS and Coutts are Pleading Defendants) for negligent advice; some only sue the Ingenious Defendants, primarily, but not exclusively, for deceit (and conspiracy to deceive); some sue HSBC, primarily for conspiracy to deceive.
In the main actions (those against the Ingenious Defendants and the advisers), there are, as well as generic Re-Re-Amended Particulars of Claim, individual pleadings for each Pleading Claimant. (This exercise has not been repeated with the claims against HSBC which have been brought in separate proceedings.) I was taken to selected highlights of these, usually to illustrate some point that counsel wished to make, from which it is apparent that the claimants vary widely in background and experience.
I have not found it easy to keep all these variables and permutations in mind when listening to the argument, or reading the transcripts, and it is difficult to have an overview of the proceedings as a whole when focusing on the detail of one particular claimant. I have therefore prepared a schedule which seeks to collate the relevant information in a simple form, which I have appended to this judgment ( “the Schedule”). The aim is primarily to act as an aide-memoire for myself which can be referred to not only for the present purposes but for other purposes going forward, and to enable me to have a simplified overview of the various claims and who is suing whom. It is not intended to be definitive, and I have probably made some errors in compiling it; if there are any errors of significance they can no doubt be corrected. I will refer to the individual Pleading Claimants by the numbers they bear on the Schedule, which correspond to the numbers of the individual pleadings in the Re-Re-Amended Particulars of Claim (eg “C1” for Mr Rushton-Turner).
General principles
There was no extended debate before me as to the principles applicable to disclosure under the Disclosure Pilot (PD 51U). I have however re-read the guidance given by Vos C in McParland and Partners Ltd v Whitehead [2020] EWHC 298 (Ch), which includes the following:
(1) The “watchword” is contained in PD 51U para 6.4, namely that an order for extended disclosure must be reasonable and proportionate having regard to the overriding objective including certain specific factors [3]. The Disclosure Pilot is intended to apply across a wide range of cases stretching from the highest value business cases to the lowest value ones, and from the most complex, lengthy and document intensive to the least complex cases with few relevant documents; it is critical, however, that in every case, the type of extended disclosure is fair, proportionate and reasonable [4].
(2) The identification of issues for disclosure is a quite different exercise from the creation of a list of issues for determination at trial [56]. It should not be a mechanical exercise of going through the pleadings, but should be driven by the relevance of the documentation likely to be in a party's possession to the contested issues [44].
(3) There is no presumption that a party is entitled to extended disclosure and in particular to Model D or Model E (see PD 51U para 8.2) [9]. The approach to choosing between different disclosure models is illustrated at [50ff]. In particular on one issue in that...
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