National Westminster Bank Plc
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Lindsay,Mr Justice Lindsay |
| Judgment Date | 22 July 2003 |
| Neutral Citation | [2003] EWHC 1821 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC01C04623 |
| Date | 22 July 2003 |
[2003] EWHC 1821 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Lindsay
Case No: HC01C04623
Part 20
Part 20
Mr Selwyn Bloch Q.C. and Mr Stuart Ritchie (instructed Defendant/part 20 Claimant
Mr Michael Gadd (instructed by Ince & Co.) for the Part 20 Defendant
Hearing dates: 10 th June 2003 —13 th June 2003
th June 2003 —18th June 2003
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
Approved Judgment
This action concerns a Solicitor who, acting for one client, acted against a former one. In 1989 Mr Jeffrey Bonas, who appears by Mr Selwyn Bloch Q.C. and Mr Stuart Ritchie, was ordered to pay a substantial sum to his first wife upon their divorce. Brice Droogleever, Solicitors, who appear by Mr Gadd, acted for him in the ancillary proceedings. Mr Bonas borrowed from National Westminster Bank plc a good part of the sum that he was required to pay. A friend, Mr Colin Edwards, who had been a client of Brice Droogleever, guaranteed the borrowing to a limit of £350,000 and charged his flat to the Bank in support.
Despite a number of arrangements sought to have been made over some years, Mr Bonas failed to repay the Bank. A substantial sum, which later became more than £350,000, became owing. Mr Edwards and the flat were at risk; Brice Droogleever advised Mr Edwards. Mr Bonas complained, by reason of Brice Droogleever's having acted for him in his ancillary proceedings, that that was improper but Brice Droogleever continued to act for Mr Edwards. Eventually, after some dealings which, crucially, Mr Bonas claims were agreed and contractual, Mr Edwards, advised by Brice Droogleever, separately agreed to pay the Bank £230,000; that exonerated him from further liability but left Mr Bonas still exposed to the Bank. In June 1996 the Bank started proceedings against Mr Bonas for some £578,000. In 2001 Mr Bonas raised a Part 20 claim in those proceedings against Brice Droogleever. Although Mr Bonas has settled with the Bank the Part 20 claim did not settle and it alone comes before me.
Mr Bonas claims that Brice Droogleever acted in breach of confidence owed to him, Mr Bonas, and he says that they were negligent and that they deliberately interfered with or procured breaches of contractual arrangements which, he alleges, he had arrived at with Mr Edwards and the Bank. That interference, says Mr Bonas, being by way of breach of confidence, was interference by unlawful means. Mr Bonas, he says, thereby lost the benefit of contracts which would have capped his liability to the Bank and would have left him liable only to Mr Edwards. I am not told of any proceedings by Mr Edwards against Mr Bonas.
I have heard oral evidence, mainly by way of cross-examination, from Mr Bonas and Mr Edwards for the claimant and from Mr Brice, Mr Knight and Mr Crossman for Brice Droogleever. I should say something in general terms about these witnesses.
As the judgment unfolds it will be found that on a number of issues I have preferred the evidence of persons other than Mr Bonas. He was, for a short span, a man of exceptional wealth and, perhaps to protect that position, cloaked his affairs with "offshore" Isle of Man trusts and Isle of Man and Swiss bank accounts. Anyone who goes to such lengths to achieve opacity but then later finds himself in debt can hardly complain when others conclude that it might be that he has more resources than he is claiming to have. That possibility for a number of years coloured the response to him of the Bank, of Brice Droogleever and even of his friend Mr Edwards. In particular, so far as credibility is concerned, as will be found below, I hold that he did offer a company to Mr Edwards as recompense for Mr Edwards finding himself having to pay the Bank under the guarantee and being liable also to lose his flat on that account. Any such offer, of course, suggested that the company in question was at his disposition and thus was inconsistent with his claim that by then he had no undisclosed resources. Before me Mr Bonas was thus forced to deny that any such offer had been made. However, as I shall explain below, I preferred the evidence of his own witness, Mr Edwards, and of Mr Brice on the issue; the offer of the company was made. I cannot regard Mr Bonas as a reliable or candid witness.
Mr Edwards was put into an uncomfortable position. He has been in severe financial difficulties himself as a name at Lloyds and now finds himself trapped between, on the one hand, an old friend, Mr Bonas, who, after a period during which that friend had not been trusted, has at least now been restored to a position devoid of hostility or mistrust, and, on the other, Brice Droogleever, and in particular Mr Brice of that firm, whom he had come to know well after having had the firm act for him for many years. Now restored to better relations with Mr Bonas, he tended, if anything, to understate the mistrust, distaste or even anger that earlier affected his attitude to him. I hold Mr Edwards, though, to have been a witness who in general wished to tell the truth as he saw it to have been. On one important issue I do not accept his version of events but that I hold more to have been a matter of a failure of chronology or memory rather a lapse into deliberate untruth.
Mr Brice, as I shall explain, acted for Mr Edwards when he should not have done so and acted in breach of confidence. He should have realised long since that that was so but my impression was that it was only during the hearing itself that he truly came to acknowledge his shortcomings. When faced with the obvious he ultimately accepted it and he may properly be criticised for the tardiness in his doing so but I do not find him to have been untruthful in his evidence to me. Nor, although this was hinted at by Mr Bloch Q.C. for Mr Bonas, do I find that he either destroyed, concealed or altered attendance notes. Attendance notes made by him in the course of the events I shall need to look at are far less frequent than one could reasonably expect but I regard that as a matter of poor practice in a small firm in which there was no-one to correct or supervise him rather than as indicative of what would have been very serious professional malpractice.
Mr Knight and Mr Crossman both acted for the Bank during the relevant events but neither is still employed by the Bank. To that extent they were a little more remote from bias or interest than were the other witnesses and although, inevitably, their memories were chiefly as was provoked by the Bank's contemporary notes rather than being truly fresh, the Bank's notes were relatively copious and I have no reason to have any doubts about the credibility of either of these two.
With that general background I turn to the facts.
The Ancillary Proceeding~
In 1986 Mr Bonas and his first wife, Elspeth, divorced. The financial provision he was to make for her was not agreed and the issue went to proceedings. Mr Bonas became dissatisfied with the solicitors who had been acting for him and in late 1988 or early 1989 he became the client of Brice Droogleever. That was some 5 months before the hearing of the ancillary proceedings at which the financial provision to be required of him was to be decided. Although he was the client of a firm rather than of one individual, I have had no evidence of any material dealings by the firm other than by way of Mr James Brice and I shall, for simplicity, refer to "Mr Brice" throughout though thereby meaning to cover both him and the firm.
I have not seen the papers in the ancillary proceedings nor the judgment but I have received some evidence about what was said by one party or another and what the judgment said. My impression is that the proceedings were very hard fought; the hearing itself took some 9 days or so. Mr Bonas says that for the purposes of the proceedings, in which Counsel was instructed on his behalf, he provided Mr Brice with information concerning his entire financial position from 1967 to 1989. That included, he said, details of his directorships at and remuneration from Wrightson Wood International Ltd. ("Wrightson Wood") and McCulloch & Wallace Limited.
The parties to the ancillary proceedings were very far apart. Elspeth had given evidence that Mr Bonas had been chairman of the London & Liverpool Trust and had, she said, once owned shares in it worth £28m, although it was accepted, I think, that by the time of the proceedings all or most of that value had been lost upon that Trust going into receivership. Mr Bonas' affairs involved alleged connections with Isle of Man trusts or companies and with Swiss and Isle of Man bank accounts. Elspeth's case, presumably, was that a person who had once been of such high net worth, however briefly, and whose affairs were cloaked by offshore trusts and secretive accounts would have retained far more than Mr Bonas was admitting to, his case being that, so far from having any net worth, he had net liabilities in total of some £73,000. I accept Mr Brice's evidence that Johnson J., who heard the ancillary proceedings in camera and gave his judgment also in camera, said that on the evidence he had received he could not form any truly accurate opinion as to Mr Bonas' assets and I accept also Mr Bonas' evidence that in the Learned Judge's estimation he, Mr Bonas, was worth about £2,500,000. Although Elspeth's evidence and that given by her side was apparently largely circumstantial, she made a compelling case as to the existence of undisclosed offshore or...
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