Richard Pease v Henderson Administration Ltd

JurisdictionEngland & Wales
JudgeRichard Spearman
Judgment Date28 March 2018
Neutral Citation[2018] EWHC 661 (Ch)
CourtChancery Division
Docket NumberCase No: HC-2016-000142
Date28 March 2018

[2018] EWHC 661 (Ch)




Royal Courts of Justice

Strand, London, WC2A 2LL


Richard Spearman Q.C.

(Sitting as a Deputy Judge of the Chancery Division)

Case No: HC-2016-000142

Richard Pease
Henderson Administration Limited

Richard Leiper QC and Zac Sammour (instructed by Michelmores LLP) for the Claimant

Daniel Oudkerk QC and Adam Woolnough (instructed by Simmons & Simmons LLP) for the Defendant

Hearing dates: 22–26 January and 29 January-1 February 2018





The issues in outline


The parties and the formation of the Contract




The evidence of the witnesses


Key events


The applicable legal principles


Mr Pease's claim for management fees


Mr Pease's claim that Henderson breached Clause 3.6.1


Mr Pease's claim for damages for breach of Clause 3.6.1


Henderson's claim under Clause 3.6.2






This is a claim for breach of a written contract of employment dated 5 June 2009 (“the Contract”), made between the Claimant (“Mr Pease”) as employee and the Defendant (“Henderson”) as employer. Important aspects of the Contract relate to an investment fund known as the European Special Situations Fund (“the ESSF”). I have had regard to all the provisions of the Contract, although I will set out only the most crucial terms in this judgment. Clause numbers referred to without qualification relate to the Contract.


Mr Richard Leiper QC appeared for Mr Pease and Mr Daniel Oudkerk QC for Henderson. I am grateful to them for their clear and helpful written and oral submissions.

The issues in outline


Mr Pease makes two central claims. First, that Henderson has wrongfully refused to pay him his share of the management fees relating to the ESSF. Second, that, following his decision to terminate his employment, Henderson refused to permit him to replace the relevant Henderson group company as manager of the ESSF as stipulated by the Contract. Mr Pease contends that the latter breach substantially delayed the time when he was able to assume control of the funds within the ESSF, and that this delay in turn caused him (a) loss of the management fees that he would otherwise have earned during the period of delay and (b) further losses, on the basis that the extent of the funds under management was irreversibly depleted during that period, both because a number of existing investors sold their investments and because the fund lost potential new investors. The claim in relation to these further losses is complicated by various considerations: (i) Mr Pease's starting point is that the value of the new fund management company that was set up to manage the ESSF, Crux Asset Management Limited (“Crux”), and thus the value of shares in Crux, is directly related to the funds under management in the ESSF, (ii) next, Mr Pease contends that he has suffered losses as a shareholder in that he owns 70% of the shares in a company (Pease Co Limited) which in turn owns 75% of the shares in Crux (causing him to limit his claim in closing to 52.75% of the overall reduction in the value of Crux, although I consider that the correct calculation is 75% x .7 = 52.50%), and (iii) the claim for loss of potential new investors, and thus for part of the loss of value in Crux, is a claim for loss of a chance.


Henderson accepts that it has not paid Mr Pease a share of all the management fees received by the Henderson group in respect of the management of the ESSF during the term of Mr Pease's employment, but contends that on the proper interpretation of the Contract it was entitled to defer those fees and, ultimately, to forfeit those fees if they remained unvested on termination of his employment. Further, Henderson disputes Mr Pease's second claim on various grounds, including that it did not act in breach of the Contract and that he has not made out his claim for damages. In addition, Henderson raises a set-off and counterclaim in respect of 50% of the management fees generated by the ESSF in the 12 months following the date of termination of Mr Pease's employment in June 2015, on the basis that Mr Pease was obliged under the Contract to procure the payment of those fees to Henderson, which (as he accepts) he has not done.


In answer to Henderson's case as to non-payment of 50% of the post-termination management fees generated by the ESSF, Mr Pease originally took two points. First, that Henderson's entitlement, if any, should be calculated by reference to the investments that were in the ESSF at the time when Crux took over management alone, and without regard to any further investments that were made in the ESSF during that period of 12 months. Mr Leiper abandoned that point during the trial. However, Mr Pease's second point remains live. This is that, in accordance with the Contract, the events which trigger his liability to procure the payment of those fees have not arisen.


At the beginning of the trial, an issue arose as to whether Mr Pease was entitled to rely on a Schedule of Loss which he had served on 2 October 2017 and had amended on 6 December 2017 (to correct an error as to the proper currency in one part of the calculation, which had the effect of reducing the overall claim from £47m to £31.5m). For reasons contained in a separate judgment, I ruled that Mr Pease was entitled to rely on this Schedule of Loss, and to call factual evidence in support of it (but not expert evidence, for which neither side had either sought or obtained permission). The sums claimed in this Schedule of Loss take no account of Mr Pease's claims for management fees that he says have been wrongly withheld by Henderson, which are claimed in the sum of £4,380,800, or of Henderson's set-off and counterclaim, which is in the sum of £3,973,125.50. Mr Pease's claim for the far larger sums set out in the Schedule of Loss formed no part of his original Claim Form and Particulars of Claim, and was first raised in a set-off and Part 20 claim in response to Henderson's set-off and counterclaim.

The parties and the formation of the Contract


Mr Pease is a very experienced fund manager. He joined New Star Asset Management in 2001, where he launched and managed several funds. One of those funds was the New Star European Fund, in which he invested his own seed capital. In 2009, New Star Asset Management was acquired by the Henderson group, which is how Mr Pease came to enter into the Contract and to be employed by Henderson as Director of European Equities. Mr Pease conceived the ESSF, which was launched in 2009 with seed money provided by Mr Pease and his friends, and of which he was fund manager.


Henderson is a member of the Janus Henderson Group, which is an independent asset manager specialising in active investment. The Janus Henderson Group is dual-listed on the New York Stock Exchange and the Australian Securities Exchange and has a market capitalisation of approximately US $7 billion.


Henderson's acquisition of New Star Asset Management was achieved through an unconditional offer for shares and took effect on 9 April 2009. After the acquisition, Mr Pease continued to manage various New Star funds, and Henderson made clear to him that it wanted him to stay on and manage funds for them. Among the matters raised by Mr Pease were that he wanted to set up the ESSF, which he said that he would seed, and that he wanted to be able to take that fund with him if he left Henderson. This appears to have been the genesis of the provisions relating to the ESSF which found their way into the Contract. Although the date of the Contract is 5 June 2009, the start of Mr Pease's employment by Henderson was back dated to 1 May 2009. Both parties were represented by experienced lawyers in the negotiation of the Contract.



Before the Contract had been finalised, from about early May 2009, Mr Pease and Henderson began work on launching the ESSF. It was proposed that the fund would be known as the “New Star European Special Situations Fund” and would be housed under an umbrella Open Ended Investment Company (“OEIC”). Mr Pease stated in his witness statement that the ESSF was set up as a sub fund of an existing Henderson umbrella OEIC “without reference to me”, but he accepted under cross-examination that he was “a key man in the process” and that he did know about this proposal.


The ESSF was launched on 1 October 2009. In summary:

(1) An OEIC is a vehicle designed for the purposes of pooled investment, which can contain several sub-funds with distinct investment strategies and management.

(2) An Authorised Corporate Director (“ACD”) assumes full responsibilities for the management of an OEIC, including the distribution of the shares in the OEIC.

(3) The ESSF was set up as a sub-fund within an umbrella Henderson OEIC (“the Henderson OEIC”) – which, until the FSA approved a name change on 7 January 2010 (effective on 6 April 2010), was called the New Star OEIC. This was in accordance with Henderson's standard practice.

(4) Initially, the Henderson OEIC contained seven other sub-funds, but only the Henderson Global Financials Fund (“GFF”) was still in operation in 2014 during the negotiations regarding the transfer of the ESSF pursuant to Clause 3.6.1.

(5) Pursuant to an ACD Agreement dated 6 April 2010, the ACD of the Henderson OEIC was Henderson Investment Funds Limited (“HIFL”).

(6) It was the evidence of Mr Bowers that retaining responsibility for the marketing and/or sales effort in relation to the funds in the Henderson range enables Henderson to pursue a coherent sales strategy across the range of products and service offerings that it has.


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1 cases
  • Richard Pease v Henderson Administration Ltd
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 15 February 2019
    ...failure to allow him to replace the manager of the ESSF in breach of cl 3.6.1. 6 In his judgment (the neutral citation for which is [2018] EWHC 661 (Ch)) the Judge (i) upheld Mr Pease's claim for withheld remuneration; (ii) held that Henderson was in breach of contract in failing to permit......

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