Sharon Lesley Walsh v Redmayne-Bentley LLP

JurisdictionEngland & Wales
CourtChancery Division
JudgeSaffman
Judgment Date18 October 2019
Neutral Citation[2019] EWHC 2761 (Ch)
Date18 October 2019
Docket NumberClaim nos. C 30 LS 699 and E 91 LS 038

[2019] EWHC 2761 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN LEEDS

BUSINESS LIST

HIS HONOUR JUDGE Saffman, SITTING AS A HIGH COURT JUDGE

Claim nos. C 30 LS 699 and E 91 LS 038

Between:
(1) Sharon Lesley Walsh
(2) Scott Samuel Walsh
Claimants (in action C30LS699)
and
(1) Redmayne-Bentley LLP
(2) Redmayne (Nominees) Ltd
(3) Redmayne Bentley (A Firm)
(4) Ian Hooper
Defendants (C30LS699)/Claimants (E91LS038)

and

(1) Harvey John Hall
(2) Joanne Hilary Raines
Defendants (E91LS038)

Mr Benjamin Wood for Redmayne Bentley

Mr Gregory Pipe for the Harvey John Hall and Joanne Raines

Mr Mark Cawson QC for Sharon Walsh and Scott Walsh

Hearing date: 10 and 11 September 2019

Date draft circulated to the Parties 24 September 2019

Date handed down 18 October 2019

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

1

This matter was listed before me on 10 September 2019 for a 2 day hearing to consider 2 distinct issues.

a. First, applications to consolidate i) a claim brought by Mrs Sharon Walsh and her son, Scott Walsh against the defendants who are various entities operating under the Redmayne Bentley banner (all of whom shall hereafter be referred to simply as RB) with ii) a claim brought by RB against Mr John Hall and Mrs Joanne Raines. Mr Hall is Sharon Walsh's father and Mrs Raines is his daughter and Sharon Walsh's sister.

b. Second, applications to strike out the claim brought against RB by Sharon Walsh and Scott Walsh on the basis that it has no real prospect of success and/or that the proceedings are an abuse of process. These latter applications are brought by RB and Mr Hall and Mrs Raines, as indeed are the applications for consolidation.

2

Mr Benjamin Wood of counsel represents RB, Mr Gregory Pipe of counsel represents Mr Hall and Mrs Raines and Mr Mark Cawson QC represents Mrs Sharon Walsh and Mr Scott Walsh. I am grateful to all three for their very helpful skeleton arguments and oral submissions

3

The consolidation applications were initially resisted by Sharon and Scott Walsh. However, that is no longer their position. Accordingly, an order for consolidation has been made by consent. The fact that the 2 claims have now been consolidated has relevance to the strike out applications inasmuch as Mr Pipe argues that Mr Cawson's recognition that consolidation is appropriate gives additional credence to the arguments that he and Mr Wood offer in support of their joint contention that the current action brought by Sharon and Scott Walsh should not be permitted to progress and should be struck out.

4

The only substantive issues requiring determination therefore are the applications of RB, Mr Hall and Mrs Raines to strike out the claim brought by Sharon and Scott Walsh. It is not disputed by Mr Cawson that Mr Pipe is as entitled as Mr Wood to make such an application following consolidation notwithstanding that there is no claim by Mrs or Mr Walsh against either of Mr Pipe's clients.

5

Before I come to applications it is appropriate to set out some brief background.

The current proceedings

6

In November 2016 the claimants, Sharon Walsh and Scott Walsh, issued proceedings against RB. The claim alleges breach of contractual, fiduciary, statutory and tortious duties and breach of trust in connection with RB's management of 2 share portfolios. RB are in business as stockbrokers and investment portfolio managers.

7

The claim centres around two share portfolios managed by RB on a discretionary basis which had been set up John Hall in 2001. These two share portfolios were held in the name of RB as nominees but were designated in their accounts as being held, in respect of one such portfolio, for the benefit of Sharon Walsh and, in respect of the other portfolio, in Sharon Walsh's name for the benefit of Scott Walsh.

8

Both Sharon and Scott Walsh allege that the beneficial ownership in these respective portfolios reposed in them. Mr Hall denies that was ever the position. His position is that the true beneficial ownership in those portfolios has always vested in him. His assertion is that they were simply two of a number of portfolios managed by RB which were set up in the names of members of John Hall's family but in respect of which he, John Hall, remained the ultimate beneficial owner.

9

In September 2010 RB received a letter purportedly signed by Sharon Walsh requesting that they transfer the assets in these two portfolios to Joanne Raines. RB acted on that letter and accordingly re-designated the accounts in favour of Joanne Raines. Thereafter therefore the share portfolios were held in the name of RB as nominees of Joanne Raines rather than of Sharon and/or Scott Walsh. The share portfolios remained in place and there is no suggestion that this re-designation resulted in different investment decisions being applied as to how the portfolios operated.

10

Sharon and Scott Walsh have asserted that the letter was fraudulent and that they did not request a transfer of the portfolios out of their name and did not wish such transfer to occur bearing in mind that they assert that they were respectively the beneficial owners of those portfolios. Mr Hall and Mrs Raines assert that the letter was genuinely signed by Sharon Walsh on her own behalf and on behalf of Scott Walsh.

11

As I have said, the current claim alleges breach of duty by RB and is premised essentially on the assertion of Sharon and Scott Walsh that, on the basis that they owned the portfolios beneficially, RB's failure to take any step to ascertain whether, in fact, the letter of September 2010 upon which they acted genuinely reflected the wishes of Sharon and Scott Walsh prior to transferring the designation of the accounts, constituted a breach of duty. They allege that as a result of this breach they have lost the value of the portfolio in respect of which they assert their beneficial interest 1.

12

RB deny breach of duty and further contend that, in any event, the Walshes have suffered no loss as a result of any breach that may be established. Nevertheless they have issued proceedings against John Hall and Joanne Raines on the basis that, if any loss has accrued to Sharon and Scott Walsh because RB wrongfully acted on a fraudulent letter of instruction, then that fraudulent letter of instruction emanated from, or with the authority of, Mr Hall and/or Mrs

Raines and therefore they (RB) should be indemnified in respect of any sums that they may be obliged to pay to the Walshes
13

The issues in respect of both the claim against RB and that brought by RB are identical in the sense that the critical questions in both are i) where does the beneficial interest in the portfolios lie? and ii) was the letter of September 2010 genuine or not?

14

Of great importance in this case however is the fact that this is not the first occasion when those 2 issues have been the subject matter of litigation.

The First and Second Proceedings

15

In December 2013 John Hall and Joanne Raines took proceedings against Sharon and Scott Walsh 2 for a declaration that the beneficial ownership in the portfolios was vested in John Hall and/or alternatively Joanne Raines and that Sharon and Scott Walsh had no beneficial interest in those portfolios. I shall call these the “First Proceedings”.

16

RB were parties in the First Proceedings having been added by John Hall and Joanne Raines at some stage as an additional Part 20 defendant. However, RB were not expected to take any active part in the First Proceedings and indeed the Part 20 proceedings brought by John Hall and Joanne Raines made no allegations against RB. It seems to be accepted by all parties that they were brought into the First Proceedings in order that they were bound by its outcome and to enable the better disclosure of documents which might be relevant to the dispute between Hall/Raines on the one hand and Walsh/Walsh on the other.

17

That is not to say that even at that stage Sharon and Scott Walsh did not believe that they had a claim against RB for permitting the situation to arise whereby the designation of the portfolios was altered to their disadvantage.

18

A letter dated 9 September 2014 written by RB's solicitors to Sharon and Scott Walsh's solicitors included a cost budget which included costs incurred in relation to claims intimated against our clients by the claimants (set out in their letter of claim dated 15 November 2012). Additionally, on 25 September 2013 the Walshes' solicitors wrote to the solicitors acting for John Hall and Joanne Raines to the effect that “RB is a defendant in our clients' potential claim”.

19

On 11 March 2014, and before having been served with the First Proceedings, Sharon and Scott Walsh brought their own proceedings against John Hall and Joanne Raines by which a declaration was sought to the effect that the beneficial ownership in those portfolios was vested in Sharon and Scott Walsh respectively. I shall call this the “Second Proceedings”.

20

Despite what they had said in their letter of 25 September 2013 and elsewhere and to which I have just referred, Sharon and Scott Walsh did not bring proceedings against RB. In a letter to RB's solicitors of 12 March...

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