Ms Joy Margaret Griffiths v Mr John Tudor Griffiths
| Jurisdiction | England & Wales |
| Judge | Curl |
| Judgment Date | 03 February 2023 |
| Neutral Citation | [2023] EWHC 175 (Ch) |
| Docket Number | Case No: CR-2022-000358 and CR-2022-000359 |
| Court | Chancery Division |
[2023] EWHC 175 (Ch)
DEPUTY ICC JUDGE Curl KC
Case No: CR-2022-000358 and CR-2022-000359
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Royal Courts of Justice, Rolls Building,
Fetter Lane, London, EC4A 1NL
Fraser Campbell (instructed by Burges Salmon LLP for the Petitioner)
Thomas Elias (instructed by Aaron & Partners LLP) for the First Respondent)
The other Respondents did not appear and were not represented
Hearing dates: 9 December 2022
Deputy ICC Judge Curl KC:
On 9 February 2022, Ms Joy Margaret Griffiths presented two unfair prejudice petitions (“Petition(s)”). The Petitions concerned, firstly, T G Builders Merchants Limited (“TGBM”; the Petition in relation to it “TGBM Petition”) and, secondly, Ellesmere Sand & Gravel Co. Limited (“ESG”; the Petition in relation to it “ESG Petition”) (TGBM and ESG together “Companies”). It is alleged by the Petitions that the affairs of the Companies are being and have been conducted in a manner that has caused unfair prejudice to the petitioner as a member of each of them.
This judgment concerns applications made on 23 March 2022 (“Applications”) by the first respondent to each of the Petitions, Mr John Tudor Griffiths, that the Petitions be struck out in their entirety or, alternatively, that certain paragraphs in the Petitions be struck out or have summary judgment entered in respect of them. In this judgment I refer to the applicant and the first respondent by their given names, “Joy” and “Tudor” respectively, as they were referred to by their counsel at the hearing, without intending any disrespect to either of them in doing so. Joy was represented by Mr Fraser Campbell and Tudor by Mr Thomas Elias, both of counsel.
No defence to the Petitions has yet been filed. Tudor's solicitor has made a witness statement dated 23 March 2022 concerned mainly with the procedural history to the dispute and also exhibiting some contemporaneous documents. There are no other witness statements, although the Petitions as issued are supported by a statement of truth signed by Joy's solicitor. Both sides made submissions on instructions at the hearing based on what their clients would say in due course. Even by the standards of an application for early summary disposal, there is little factual evidence before the court from either side.
BACKGROUND
I take the background primarily from the Petitions. Nothing in this judgment is to be taken as a finding of fact or any indication of the likelihood that any allegation made by either side will succeed at trial.
Factual background
Joy and Tudor are sister and brother. The Companies are part of a family business founded by Joy and Tudor's great-grandfather in 1874.
TGBM was incorporated in 1978. It currently has ten issued £1 shares. Joy and Tudor each own four of those ten shares and the remaining two are owned jointly by Tudor and Mr Stuart Haynes as trustees of the Michael Griffiths Settlement. The Michael Griffiths Settlement is named as the second respondent to the TGBM Petition. Mr Michael Griffiths was Joy and Tudor's brother; he was formerly a shareholder in TGBM and is now deceased. Tudor's co-trustee, Mr Haynes, is a solicitor and a partner in the firm Aaron & Partners LLP (“A&P”), which is acting for Tudor in these proceedings in his capacity as first respondent to the Petitions. Joy is a director of TGBM.
ESG was incorporated in 1959 and currently has 7,500 issued £1 shares. Joy and Tudor each own 2,500 of those shares. A further 2,500 shares are owned jointly by Mr William Griffiths and Mr Haynes as trustees of the WM Griffiths Family Settlement (“Family Trust”). The Family Trust is named as the second respondent to the ESG Petition. Mr William Griffiths is the father of Joy and Tudor and I refer to him in this judgment as “Billy”, as he was referred to during the hearing, again without intending any disrespect thereby. Joy has not been a director of ESG at any time.
A third company, Tudor Griffiths Limited (“TGL”), is referred to a number of times in the Petitions. TGL was incorporated in 2008 and Tudor holds all the voting shares in it. Joy has no ownership interest or management role in TGL. Since at least 2009, ESG has been part of an informal partnership with TGL, known as WM Griffiths Farms (“WMGF”). The role of WMGF is to collect rent from agricultural land owned by each of EGL and TGL.
Central to Joy's complaints in the Petitions is the allegation that Tudor has achieved control of the Companies and has excluded Joy, contrary to a common understanding between their shareholders that they would be “run subject to an overarching quasi-partnership”. It is alleged that Tudor has caused TGL to operate as an administrative hub and has caused the Companies to pay excessive charges (variously referred to as an “administrative fee”, “head office charge” or a “management charge”) to TGL.
Procedural background
Following their issue on 9 February 2022, A&P on behalf of Tudor raised a number of objections to the Petitions by a letter dated 10 March 2022. Two detailed schedules (“Schedules”) were provided under cover of that letter setting out a series of particularised issues with each of them.
ICC Judge Prentis made a directions order with the consent of the parties on 11 May 2022. That order directed, inter alia, that the Petitions be case managed and heard together.
Joy's solicitors, Burges Salmon LLP, provided draft amended versions of the Petitions under cover of a letter dated 7 November 2022. Those draft amended versions engaged with certain of the objections raised on behalf of Tudor in the Schedules. A&P agreed to the proposed amendments by a letter dated 14 November 2022, subject to Joy paying Tudor's costs of and occasioned by them. That agreement was, however, given expressly without prejudice to Tudor's intention to continue to pursue the Applications on the basis of his remaining objections to the Petitions which were set out in revised versions of the Schedules enclosed with A&P's letter of 14 November 2022.
By a letter from their solicitors FBC Manby Bowdler LLP dated 15 November 2022, the trustees of the Michael Griffiths Settlement and the Family Trust indicated their intention to take no part in the Applications on the basis that these were matters between Joy and Tudor.
Under cover of a letter from A&P dated 24 November 2022, Tudor provided a spreadsheet in relation to each of the five accounting years ending 31 March 2018 to 31 March 2022 inclusive (“the Spreadsheets”). The Spreadsheets provide a limited breakdown of the way in which the head office charges paid by the Companies to TGL have been calculated for those years. Costs of employees have been apportioned on a percentage basis between eight entities (including the Companies and TGL itself), as have various heads of cost described as “head office running costs (being costs that are not specific to [TGL])”. The heads of cost are identified by broad categories, such as “Computer”, “Rates”, “Repairs”, “Telephone, Fax & Postage”. There is also a category described as “uncharged rents”, which A&P explained in their covering letter are costs charged to TGBM alone for the use of land and property owned by TGL.
Burges Salmon objected on behalf of Joy to the late provision of the Spreadsheets and raised a number of questions about them by a letter dated 30 November 2022. At the hearing, Mr Campbell repeated Joy's complaint that the provision of the Spreadsheets on 24 November 2022, which was two weeks before the hearing of the Applications, was extremely late given that the Applications had been made on 23 March 2022. He submitted that the Spreadsheets raised more questions than they answered, not least because they contained no underlying rationale or methodology for the various percentage shares attributed to the Companies or the other entities.
In light of the narrowing of the positions between the parties following the provision by Burges Salmon of the draft amended Petitions and by A&P of the revised Schedules, all references in the remainder of this judgment to the Petition or to the Schedules are to those updated versions of the documents, rather than to the Petitions as issued or the superseded versions of the Schedules, save where otherwise stated.
THE TEST FOR STRIKING OUT OR SUMMARY JUDGMENT
There was no dispute between the parties on the correct approach to striking out or the grant of summary judgment on a statement of case. Mr Elias drew my attention to the Court of Appeal's digest of the applicable principles in Global Asset Capital Inc v Aabar Block SARL [2017] EWHC Civ 37, [2017] 4 WLR 163, which drew on the well-known judgment of Lewison J (as he then was) in Easyair Ltd (trading as Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch), at [15]. In Global Asset Capital, Hamblen LJ (with whom McFarlane LJ agreed) identified at [27] the following principles applicable both to strike out and to summary judgment:
“(1) The court must consider whether the case of the respondent to the application has a realistic as opposed to fanciful prospect of success – in this context, a realistic claim is one that carries some degree of conviction and is more than “merely arguable”.
(2) The court must not conduct a “mini-trial” and should avoid being drawn into an attempt to resolve conflicts of fact which are...
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