St. James's Place Wealth Management Plc v Kevin Charles Dixon-Nutt
| Jurisdiction | England & Wales |
| Judge | Worster |
| Judgment Date | 15 June 2023 |
| Neutral Citation | [2023] EWHC 1431 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CC-2023-BHM-000001 |
[2023] EWHC 1431 (Comm)
HHJ Worster
(sitting as a Judge of the High Court)
Case No: CC-2023-BHM-000001
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BIRMINGHAM
CIRCUIT COMMERCIAL COURT (KBD)
Birmingham Civil Justice Centre
The Priory Courts, 3, Bull Street, Birmingham B4 6DS
Paul Nicholls KC (instructed by DAC Beachcroft LLP) for the Claimants
Thomas Robinson (instructed by Lewis Silkin) for the Defendant
Hearing date: 28 February 2023
Approved Judgment
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.
HHJ Worster
HHJ Worster
Introduction
The parties to this litigation have brought two claims. The first in time was issued by Mr Dixon-Nutt against St James's Place Wealth Management plc in June 2021. By that claim Mr Dixon-Nutt seeks a declaration that he was entitled to the payment of certain fees arising from financial products he issued to clients of St James's Place Wealth Management plc pursuant to an agreement between those parties dated 2 July 2018. He also makes a claim for damages to be assessed (the “Dixon-Nutt claim”). The second claim was brought by St James's Place Wealth Management plc and two other entities in the same group (referred to collectively as “SJP”) against Mr Dixon-Nutt in May 2022 alleging breach of contract and/or misrepresentation. The claim is for the rescission of the agreement of 2 July 2018 and damages (the “SJP claim”). Given their common issues, the two claims are being case managed and tried together.
At the material times, Mr Dixon-Nutt was a financial advisor. Between 2003 and 2018 he was self-employed, and was an appointed representative of SJP for the purposes of the Financial Services and Markets Act 2000. That relationship was governed by the terms of an appointment letter and a Partner Handbook. In 2018 Mr Dixon-Nutt entered into an agreement with SJP (in effect) to transfer his business to them. SJP claim that he misrepresented the true position of his business to them. By the agreement of 2 July 2018 Mr Dixon-Nutt warranted (in simple terms) that he had conducted his business in accordance with the terms of his appointment with SJP and had disclosed all information which would materially affect a purchaser for value of his business.
Subsequently a former client of Mr Dixon-Nutt (“Mr T”) made a complaint to SJP about Mr Dixon-Nutt. SJP settled Mr T's complaint in January 2019 and made a payment to him of £258,000. As part of the complaint process, Mr T provided SJP with a recording of a meeting he and others had had with Mr Dixon-Nutt on 3 November 2017. The recording was made without Mr Dixon-Nutt's knowledge and consent, and contains some material which may be helpful to SJP in the current litigation with Mr Dixon-Nutt. Mr Dixon-Nutt's position is that this recording is inadmissible because it is protected by the without prejudice rule.
In its claim against Mr Dixon-Nutt, SJP allege that he was lent money by his client Mr T, and that the loan was funded by the client withdrawing money invested with SJP. That would have been a breach of Mr Dixon-Nutt's contractual arrangements with SJP, and consequently a breach of the July 2018 agreement. SJP also say that had that client loan been disclosed to them, they would not have entered into the agreement of 2 July 2018 and paid Mr Dixon-Nutt for his business. In addition, SJP rely upon other misconduct (to use a general word) on the part of Mr Dixon-Nutt apparently referred to in the recording of the meeting with Mr T. Mr Dixon-Nutt denies that he acted in breach of his contract with SJP. He agrees that he took a loan from Mr T, but not one which involved the withdrawal of investments Mr T held with SJP or which was a breach of his contractual arrangements with SJP. He denies any breach of the July 2018 agreement or that SJP are entitled to any of the sums they claim.
SJP have relied upon the recording of the meeting of 3 November 2017 in pleading their case in the SJP claim, and would intend to use that recording in evidence to support what they plead. SJP's case is summarised at paragraph 41 of the Particulars of Claim in the SJP claim:
The Defendant breached [the agreement of 2 July 2018] inasmuch as [certain of the warranties in that agreement] were not true, having regard to the Client Loan, and the facts and matters referred to in paragraphs 21.1 to 21.4 above, in paragraphs 22.1 to 22.3 above, and paragraphs 23.1 to 23.3 above.
Paragraphs 21 and 22 of the SJP Particulars of Claim are as follows:
21. On or around 3 November 2017, the Defendant was present at a meeting with Mr T, Mr T's wife and a third party. During the course of the meeting, the Defendant made the following statements (“the Oral Statements”):
21.1 He had been “f***ing about with” insurance certificates on an aeroplane he jointly owned with Mr T.
21.2 He had forged invoices related to the re-fitting of the same aeroplane.
21.3 He had borrowed money from his clients.
21.4 He had lied to a client about the existence of wine purchased as an investment.
22. The Defendant made the following further written statements in emails that he sent to Mr T on 16 November 2017 and 8 January 2018 (“the Written Statements”):
22.1 “I am also preparing a spreadsheet of all and as accurate costs as possible, for everything to do with GRYSE [the aeroplane], although you may be aware of the vast majority by now. Some original records I no longer have, but the approach I am taking is that “if it can't be proved, it didn't exist” (Email of 16 November 2017)
22.2 “I realise that I have an illness/addiction, which will take a monumental effort to recover from, but I want you to be certain about one thing – I will make every effort in my being, to repay and put right what I have done – I just need to be given a chance to do so …” (Email of 16 November 2017; bold in email)
22.3 “… Every moment of every day, I am conscious of what I have done, and find it hard not to see those actions as having been done by another. However, many of my other actions were as the person that I really am, and I am now fully aware of the enormity of my unconscious stupidity. For what we had, I would humbly ask that you recognise this …” (Email of 8 January 2018)
Mr Dixon-Nutt accepts that he was at a meeting on 3 November 2017 with “ Mr T, Mr T's wife and a third party”. The third party was Jonathan Ball. There is an issue as to whether Mr T's identity should be made public, but the parties are content that I refer to him as Mr T for the present. That issue can be determined in due course. The issue on this application is raised by paragraph 17 of his Defence to the SJP claim. Having made a number of points, Mr Dixon-Nutt says this:
17.7 The Recording reveals that the purpose of the meeting relied upon by SJP was for Mr T…, Mrs T… and Mr Ball to identify liabilities of [Mr Dixon-Nutt], including to Mr T…, and reach agreement on how they would be settled.
17.8 The Recording is accordingly a recording of a without prejudice meeting.
The emails relied upon at paragraph 22 of the SJP Particulars of Claim are said to be covered by the same without prejudice privilege.
Mr Dixon-Nutt then made this application to strike out paragraphs 21 and 22 of the Particulars of Claim in the SJP claim, and any other references to this material, as an abuse of process pursuant to CPR Part 3.4(2)(b). The application was supported by a witness statement by Mr Dixon-Nutt's solicitor dated 11 July 2022.
SJP disagreed that the meeting was covered by without prejudice privilege. On 3 October 2022 the court directed that the parties agree a transcript of the recording. That was done, and I refer below to a number of passages from the transcript by reference to a page number with the prefix “T”. On 3 February 2023, SJP's solicitor made a short witness statement in opposition to the application, confirming that SJP disagreed with Mr Dixon-Nutt's case that the meeting on 3 November 2017 was “without prejudice”, or that the emails which followed it were caught by that privilege. At paragraph 7, the solicitor confirms his instructions that the recording came into SJP's possession when two senior employees of SJP met with Mr T in October 2018 to discuss a complaint he was making against Mr Dixon-Nutt. Mr T had given one of those employees a copy of the recording contained on a memory stick.
Mr Dixon-Nutt made a witness statement in support of his application dated 13 February 2023. I also have a witness statement from Mr Ball (the “third party”) dated 14 February 2023. I refer below to some of the evidence they give about the meeting and its purpose.
The issue on this application is whether the meeting on 3 November 2017 between Mr and Mrs T and Mr Ball on the one side, and Mr Dixon-Nutt on the other, was between parties to a dispute who were genuinely attempting to negotiate a compromise. If they were, then subject to the application of the recognised exceptions to the Without Prejudice rule, the recording is prima facie inadmissible and the application to strike out succeeds. If they were not, then the application fails. Whilst there was some argument about the emails, the reality is that they are to be seen as part of the same process and the same decision should be made in respect of both the oral and the written statements.
The question of whether the meeting and the emails are without prejudice is one to be determined objectively on the evidence available on this application. The transcript and the emails are admissible for that purpose,...
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