Titanium Capital Investments Ltd v Jonathan Hughes

Hearing dates: 26 Nov 24 – 18 Dec 24

Approved Judgment

This judgment was handed down remotely at 10.30am on 20 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

The claims which I consider in this judgment all relate to the business of a partnership (the Partnership) that traded as “Hughes Healthcare” that was formed in or around September 2020 between Philip Manduca ( PM) and Jonathan Hughes ( JH). The Partnership's business involved the sale of lateral flow tests ( LFTs) during the COVID-19 pandemic. To that end, the Partnership imported into the UK LFTs that were manufactured in China by a company Acon (which expression includes other members of the Acon group unless I specify otherwise) and sold those tests predominantly in the UK. JH and PM agreed that the Partnership would, in some sense, be operated as a “division” of Hughes Group Limited ( HGL) that JH owned together with Lyn Blyth who is now his wife. Even though she now uses the name Lyn Hughes, I will still refer to her for the purposes of this judgment as LB, without intending any disrespect, simply because her name on all the contemporaneous documents appears as Lyn Blyth.

Although PM and JH were the only partners in the Partnership, others worked hard to develop its business, including LB, PM's wife, Orarin Manduca ( OM), his son from a previous marriage, Frederick Manduca ( FM) and FM's friend, Michael Hodnett ( MH). There is a dispute as to the precise role that FM and MH played, but they were at the very least initially instrumental in making sales of LFTs on the Partnership's behalf. In late December 2020, FM and MH incorporated a company ( Newfoundland) and Newfoundland became a distributor of Hughes Healthcare LFTs selling those tests as principal.

Newfoundland enjoyed considerable financial success. Strains in the relationship between PM and JH developed. An attempt to rescue the deteriorating relationship by the execution of a “shareholders' agreement” (the SHA) dated 27 April 2021 proved unsuccessful. On 27 June 2021, JH sent an email (the Dissolution Email) to PM dissolving the Partnership.

I will tend to use the expression “ Claimants” to include the Claimants and the Third to Seventh Parties and “ Defendants” to refer to JH and LB, recognising that these proceedings involve litigants in two “camps”: the Manducas, MH and affiliated companies on one hand and JH, LB and their companies on the other. The Appendix to this judgment summarises the large number of claims that are in issue. By way of high-level overview, those claims arise out of the following grievances that are alleged:

i) PM alleges that, following termination of the Partnership, JH, LB and entities that they control continued seamlessly to operate the Partnership's business for their benefit. In doing so, they were able to conclude a lucrative deal for the sale of LFTs to the Danish government (the Danish Deal). PM seeks remedies such as an account of profits so made including, but not limited to, the profits of the Danish Deal.

ii) PM was not party to the SHA. Rather, the party to the SHA in the Manducas' camp was Titanium Capital Investments Limited ( Titanium). Titanium asserts that JH is in breach of his obligations under the SHA.

iii) JH alleges that during the life of the Partnership, PM, assisted by others, diverted sales leads so that others (particularly Newfoundland) could benefit from them at the expense of the Partnership. He also asserts that PM had a “secret share” in Newfoundland's profits which meant that he had a motive for doing so. JH seeks remedies that make good the asserted resulting loss of profit to the Partnership and an account of PM's alleged “secret profit”.

iv) JH also alleges that PM breached other fiduciary duties prior to dissolution of the Partnership including by procuring sales of LFTs to be made through other companies that he controls, rather than through the Partnership.

v) In closing submissions, JH advanced a case that PM used assets of the Partnership after dissolution to continue to sell LFTs, although the extent to which that claim was pleaded and properly before the court was disputed.

vi) Newfoundland made various claims against JH, LB and others, including claims for unlawful means conspiracy and breach of contract. It said in closing submissions that it was no longer pursuing those claims.

PM has issued separate proceedings against Dan Butcher ( DB), who helped with the Partnership's sales efforts before it was dissolved and continued to work with JH after dissolution, playing a key role in the Danish Deal. This judgment does not deal with any claim against DB because PM's application made before trial to join DB to the present proceedings was dismissed. That said, DB was a witness at this trial. I have, therefore, where necessary made factual findings that draw on DB's witness evidence, but have been circumspect and avoided making unnecessary factual findings in these proceedings that might be important in any later trial of the claim against DB.

Although Berkeley Health Limited is named as the Fifth Defendant, proceedings against it are stayed and this judgment therefore deals with no aspect of the claims against it.

By her order of 28 April 2023, Master Kaye directed that there be two trials of the various claims and counterclaims. This is my judgment on the first trial for which the parties produced an Agreed List of Issues. Matters consequent on, or additional to, my findings in this judgment will have to be dealt with at a later trial, or trials ( Trial 2).

PART A—EVIDENCE AND WITNESSES

Some of the Defendants' witnesses dealt with peripheral issues:

i) Aslan Ryskali, Christopher Rawlinson, Teresa Krausmann and Bent Von Eitzen were all cross-examined and were both reliable and honest witnesses. Angela Nielson was also cross-examined. I have concluded that she was an honest witness and I have accepted her evidence about how PM behaved on the few occasions she had dealings with him, but that evidence has little to say about the substance of this dispute.

ii) Fraser Tenant also gave evidence on peripheral matters. He was not cross- examined and I have accepted his unchallenged evidence.

iii) Heather Davies provided a witness statement, but said that she was too unwell to attend court for cross-examination. The Claimants made no application to cross-examine her and I have admitted her witness statement as hearsay evidence.

The central witnesses for the Claimants were PM, FM and OM. The key witnesses for the Defendants were JH, LB and DB. Both sides made serious criticisms of the credibility, and honesty, of each other's witnesses and alleged a suppression of relevant documents and other disclosure failings.

Before addressing these criticisms, I note that this was a “document heavy” case. All parties communicated extensively by email and WhatsApp. While the Defendants criticise the Claimants' disclosure of WhatsApps, on any view I have a large number of contemporaneous documents. It follows that I have tested the evidence of all witnesses who were cross-examined against the contemporaneous documentary record, admitted and incontrovertible facts and inherent probabilities.

That said, I have had regard to witness evidence consisting of recollections as well. Those recollections are important in this case since there are a number of instances where one party claims that the contemporaneous documentary record does not tell the whole story, or is being misinterpreted. My conclusions as to the credibility of the witnesses has informed my assessment of their evidence on matters such as these.

Criticisms of the Claimants' witnesses and their conduct of the proceedings

Absence of MH

As can be seen from the table in the Appendix MH is a defendant to actions brought by JH for knowing receipt, dishonest assistance and unlawful means conspiracy. As a director and shareholder in Newfoundland, he also had some interest in, and insight into, claims that Newfoundland was bringing although those claims were abandoned in closing.

MH has not given any witness evidence. I would have been interested to hear his evidence on a number of issues. He could, for example, have shed some light on whether, and if so why, he was content for Newfoundland to pay £300,000 to Basfour for the stated purpose of renovating the Manducas' home in South Africa (see paragraph 323.i) below). As the person who had the WhatsApp exchange with Nabeel Sheikh, he could have explained what “Freds dads contract thing” was (see paragraphs 333 to 334 below). He would have been affected by any arrangement for PM to have a “secret share” in Newfoundland's profits and could have explained his understanding as to any such arrangement. He could have explained whether Newfoundland was making loans to PM (and, if so, why he was content with that) or paying him “consultant commission” (see paragraph 311 below).

In his oral evidence, FM gave an explanation for MH's...