Nicholas Anthony Christopher Candy and Others (Appellants /Defendants) v Mark Alan Holyoake and Another (Respondents / Claimants)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Gloster,Lord Justice Jackson |
| Judgment Date | 28 February 2017 |
| Neutral Citation | [2017] EWCA Civ 92 |
| Docket Number | Case No: A3/2016/2059 A3/2016/2747 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 February 2017 |
[2017] EWCA Civ 92
Lady Justice Gloster
Vice President of the Court of Appeal, Civil Division
and
Lord Justice Jackson
Case No: A3/2016/2059
A3/2016/2060
A3/2016/2747
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR JUSTICE NUGEE
AND
THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
THE CHANCELLOR OF THE HIGH COURT
HC2015003369
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Tom Adam QC and Mr Alexander Polley (instructed by Gowling WLG (UK) LLP) for the Appellants/Defendants
Mr Roger Stewart QC and Mr Richard Fowler (instructed by Gunnercooke LLP) for the Respondents / Claimants
Hearing dates: 5–6 October 2016
Approved Judgment
Introduction
This is an appeal ("the notification injunction appeal") by Mr Nicholas Candy, Mr Christian Candy and CPC Group Limited (collectively, "the appellants" or "the defendants") against two orders of Nugee J, which imposed upon them, and thereafter continued in modified form, what has been described as a notification injunction.
There is a further appeal ("the fortification appeal") by the appellants in relation to a judgment by Etherton C (as he then was) that an insurance policy taken out by Mr Mark Holyoake and Hotblack Holdings Limited ("Hotblack", together, "the respondents" or "the claimants") was satisfactory fortification of their cross-undertaking in damages given in relation to the modified notification injunction.
On 6 October 2016 we indicated that we would allow the appeal against the orders of Nugee J and set aside the notification injunction. We said that we would give our reasons subsequently. This judgment sets out my reasons for concluding that the notification injunction appeal should be allowed. It also sets out my reasons for allowing the fortification appeal.
The appeals arise in the context of a claim brought by the respondents against the appellants and three other defendants in relation to a loan agreement. In summary:
i) Mr Holyoake claims to be a successful businessman with a background in property development. Hotblack is a Jersey registered company ultimately owned by Mr Holyoake.
ii) In 2011, Mr Holyoake and Hotblack were seeking to purchase a valuable property in Grosvenor Gardens. In order to complete the £43 million purchase, the appellants approached Mr Nicholas Candy with a view to securing a loan of £12 million at very short notice.
iii) Mr Nicholas Candy is a well-known property developer and was considered by Mr Holyoake to be an old friend. Mr Christian Candy is the brother of Mr Nicholas Candy.
iv) In the event, a loan of £12 million was made to Mr Holyoake by CPC Group Ltd ("CPC), a Guernsey registered company. The relationship between CPC and Mr Nicholas Candy is a matter of dispute. The appellants say that Mr Christian Candy is the sole owner of CPC and that Mr Nicholas Candy does not own or control CPC. The respondents do not deny that Mr Christian Candy has an ownership interest, but say that Mr Nicholas Candy is also a co-owner and/or controlling mind of CPC.
v) The respondents allege that, after the loan was made the appellants, together with three directors of CPC, conspired to intimidate Mr Holyoake to enter into a series of agreements and to procure Hotblack to enter into certain of those agreements. These agreements are alleged to have been disadvantageous and oppressive to the respondents and highly advantageous to CPC.
vi) On the appellants' case, Mr Holyoake lied in obtaining the loan and repeatedly defaulted on it. They allege that, subsequently, following a series of individual compromises in respect of these defaults, the parties reached a final and binding compromise which released all claims, including those presently advanced by the respondents.
Whilst the two appeals are connected in the sense that the notification injunction ordered by Nugee J ultimately gives rise to the issues concerning fortification, they are otherwise discrete. I therefore divide this judgment into two parts. The first deals with the notification injunction appeal. The second part deals with the fortification appeal.
THE NOTIFICATION INJUNCTION APPEAL
Procedural chronology
Both the appellants and the respondents sought to emphasise certain aspects of the chronology of the proceedings before Nugee J ("the judge"). I therefore set out the sequence of events in some detail. All dates refer to 2016.
On 18 February the respondents issued their application for a notification injunction, supported by an affidavit and a witness statement. During the following four weeks, the appellants filed a witness statement in response and the respondents filed two further affidavits in reply.
On 7–8 April there was a hearing before Nugee J. The judge heard argument and delivered an ex tempore judgment, adjourning the application part-heard until a further hearing (in the event, until 29 April) but also making an interim injunction against the appellants ("the 8 April notification injunction"). The critical provision of the 8 April notification injunction was paragraph 4:
"4. Until the end of the Further Hearing, or until further Order in the meantime, the [defendants] and each of them shall not deal with or dispose of or otherwise engage in transactions with their assets, whether such assets are in or outside England and Wales, where the value of any such dealing, disposal or transaction is in excess of £1,000,000 (one million pounds), without giving seven days advance notice in writing to the [claimants'] solicitors ……, with the exception of dealings, disposals or transactions in respect of UK residential / commercial property (which for the avoidance of doubt includes sales or acquisitions of such property by sale or acquisition of shares in a special purpose vehicle owning such property), in which case notice is to be given within three days post completion of the disposal or acquisition."
Paragraph 11 clarified that this requirement to notify also applied to any transactions in the ordinary and proper course of business.
There were also several provisions providing clarification or dealing with ancillary points. Most of these provisions were in effect identical to the pro forma freezing order annexed to Practice Direction 25A of the CPR ("the Annex"):
i) Paragraph 5 mirrored paragraph 6 of the Annex, providing that the restriction applied to all of the appellants' assets – whether solely or jointly owned, whether legally or beneficially (or otherwise) owned, and included assets which the appellants had the power to dispose of or deal with as if they were the appellants' own assets.
ii) Paragraphs 9–10 mirrored paragraphs 13–14 of the Annex, providing that the appellants could not circumvent the requirement to notify by acting through any other person.
iii) Paragraphs 12–13 mirrored paragraphs 16 and 18 of the Annex, providing respectively: that it was a contempt of court for any person notified of the order knowingly to assist in or permit a breach of the order; and that no bank needed to enquire as to the application of money withdrawn by the appellants if the withdrawal appeared to be permitted.
iv) Paragraphs 14–15 mirrored paragraphs 19–20 of the Annex, addressing persons and assets located outside England and Wales.
During the period from 10 April to 22 April, the appellants filed six further witness statements, including two from Mr Christian Candy and one from Mr Nicholas Candy. On 26 April the respondents filed and served a further affidavit in reply to this evidence. I refer to the evidence post-dating the hearing on 7–8 April, but pre-dating the 29 April hearing, as "the further evidence".
On 26 April the judgment in relation to the 7–8 April hearing was circulated in draft.
On 28 April skeleton arguments were exchanged in advance of the second hearing. Both the appellants and the respondents engaged with the further evidence.
On 29 April there was a second hearing before Nugee J. The judge handed down judgment in relation to the 7–8 April hearing ("the judgment"). After hearing argument, the judge delivered a further ex tempore judgment imposing a significantly modified form of the 8 April notification injunction, which was to continue until trial ("the 29 April notification injunction").
On 10 May there was a further hearing before Nugee J, because the parties were unable to agree the form of the order arising out of the hearing on 29 April. In a short ruling, the judge clarified the terms in which the 29 April notification injunction should be drawn up. The critical provision of the 29 April notification injunction was paragraph 1:
"1. Until after the handing down of Judgment in the Claim or until further Order in the meantime, and subject to paragraphs 2 to 6 below the [defendants] and each of them shall not remove from England and Wales, or in any way dispose of, deal with or diminish the value of their assets whether such assets are in or outside England and Wales where the value of any such dealing, disposal or diminution (a "'Transaction") is in excess of £5,000,000 (five million pounds), without giving seven days advance notice in writing to the [claimants' solicitors], save that:
(1) with regard to Transactions in the ordinary and proper course of business, no notice is required;
(2) with regard to
(i) payments by the [defendants] (or any of them or their wholly owned subsidiaries) to tax authorities, and
(ii) repayment of loans to the [defendants] (or to any of them or their wholly owned subsidiaries)
no notice is required; and
(3) with regard to Transactions in respect of UK real property (which for the avoidance of doubt...
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