Trevor Guy v MacE & Jones and Others
| Jurisdiction | England & Wales |
| Judge | Sir William Blackburne |
| Judgment Date | 24 April 2012 |
| Neutral Citation | [2012] EWHC 1022 (Ch) |
| Docket Number | Case No: HC09C00788 |
| Court | Chancery Division |
| Date | 24 April 2012 |
[2012] EWHC 1022 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir William Blackburne
Case No: HC09C00788
The Claimant (assisted by Victoria Gregory) appeared in person
Mark Simpson QC and Spike Charlwood (instructed by DAC Beachcroft LLP) for the first defendant
Ian Gatt QC and Mark Cooper (instructed by Herbert Smith LLP) for the second defendant
Ben Patten QC and Sian Mirchandani (instructed by Weightmans LLP) for the third defendant
Hearing dates: 1-3, 6-10 and 13-17 February 2012
Introduction
This is the trial of claims for professional negligence against three firms of solicitors. The claimant, Trevor Guy, has the ability to identify and acquire development sites which can be turned to profit by cleaning them up with a view to their onward sale. This litigation is concerned with a derelict brownfield site comprising approximately 47.5 acres (much of it a former brickworks) at Ten Acres Lane, Newton Heath, in Manchester ("the Land").
Mr Guy first got to know of the Land in 1998. Believing it to have development potential he kept an eye on it and was eventually able to acquire it in three separate lots over the course of 2003. He alleges that it was fraudulently transferred from his ownership to Ten Acre Ltd ("TAL"), a Gibraltar company controlled directly or indirectly by a Mr Shaid Luqman. Mr Luqman was its sole director. He alleges that the defendant firms are each liable to him for the value of Land and associated costs because their negligence facilitated that transfer.
Mr Guy accuses Mr Luqman of the fraud. At the time, Mr Luqman was a director of, among other companies, Pearl Holdings (Europe) Ltd ("Pearl"), a lender which specialised in short-term financing. Mr Guy's acquaintance with Mr Luqman dated back to 2001. He began to borrow from Pearl in 2002. It was with finance provided by Pearl that he was enabled to acquire the Land.
In November 2004 Pearl changed its name to Lexi Holdings Plc ("Lexi"). In October 2006 Lexi went into administration owing many millions of pounds. In 2007 Mr Luqman was disqualified from being a company director for 15 years in connection with his conduct of another company. He was described by Patten J as "completely dishonest". In 2007 and again in 2009 he was committed to prison for contempt. In 2011 he was given a ten months' suspended prison sentence in connection with a passport offence. Not long afterwards he fled the jurisdiction and has not since returned. It is important to emphasise, however, that at the time of the transfer of the Land to TAL in June 2004 Mr Luqman was regarded as a rising star in the business community of the North-West. There was no reason to question his integrity. In particular, in October 2004 he was named "Young Entrepreneur of the Year" at an annual event sponsored by Ernst & Young. Mr Guy told me that this is regarded as a prestigious award in business circles in the North-West. I have no reason to doubt that that is so.
The Land was made up of four separate titles. The transfer of the land to TAL was dated 22 June 2004. An application to register the four titles in TAL's name was made on 30 July 2004 and was completed by registration some time later. Mr Guy accepts that he signed the transfer at a meeting with his then solicitor, Paul Bibby of the second defendant, on 19 April 2004 but contends that, when he did so, the document contained no reference to the Land or to the price for it. He contends that, at the same meeting, he signed a form of contract for the sale of the Land. He says that this too contained no reference to the price to be paid for it. Mr Guy also alleges that at that meeting he signed a blank piece of paper on a representation by Mr Bibby that it would be used for a power of attorney in Mr Bibby's favour to enable Mr Bibby to complete what Mr Guy accepts was an intended sale of the Land to TAL. That evening, he flew from Manchester to London and, early the next day, took a flight to Grenada in the Caribbean. He was there for ten days. He claims that the purpose of the power of attorney was to enable Mr Bibby to complete the intended sale and transfer to TAL during his absence in the Caribbean. This was on the basis that the transaction was one of urgency. He alleges that a price of £15 million was subsequently added to the draft contract and draft transfer that he had earlier signed and that on 22 June 2004 and without his authority the Land was indeed transferred to TAL. He further alleges that the consideration in fact agreed for the Land was £10 million and not £15 million. He alleges that the transfer occurred as a result of Mr Luqman's fraudulent machinations. This, in the event, was some time after his return from abroad. By then, he alleges, the proposed transaction had been aborted. He alleges that the transfer bearing his signature and the price of £15 million came into the possession of Mr Luqman who then passed it on to Mr Varun Maharaj of the first defendant firm which, by then, had been instructed by Mr Luqman to act for TAL in the transaction. It was Mr Maharaj who dated the signed transfer and subsequently sent it to the Land Registry to complete the matter. By then, the second defendant was no longer acting for him. Instead Michael (known popularly as Mick) Hewitt of the third defendant was acting.
Mr Guy blames the three defendants in the respective persons of Mr Maharaj, Mr Bibby and Mr Hewitt for having allowed the transfer to proceed when each had the means of preventing this from happening. He claims that this occurred in breach of the duties of care which each owed to him. He seeks to recover from the respective firms by which these three persons were then employed the loss which he says he thereby suffered. He assesses that loss as the value of the Land at the time he would subsequently have sold it (giving credit for various amounts he owed Pearl). In the alternative he seeks to recover the value of the Land at the time he was deprived of its ownership less certain borrowings but together with certain other items including his "proportion of the development profit arising in due course" from the Land. This alternative is advanced on the basis that the agreed price for the Land had been £10 million. An "updated" schedule of loss dated 25 October 2011 and served by the solicitors who were still acting for Mr Guy at the time (and bearing the names of leading and junior counsel then retained on his behalf) estimates the loss as either, on the one basis, £5.3 million or, on the other, a figure which Mr Guy was unable to particularise "until after expert evidence as to the value at the time the [L]and would have been sold on had the sale completed as agreed is obtained." In either case he also claims various costs and expenses he says he incurred in his unsuccessful attempts to recover the Land. The updated schedule sets out these costs and expenses. They total just over £2.7 million.
The first and second defendants each deny any liability and, in any event, deny causation and loss even if liability were to be established. Indeed, the first defendant denies even that it ever acted for Mr Guy or otherwise assumed any duty of care to him. The third defendant admits a breach of duty by Mr Hewitt but maintains that this caused no loss. Like the first and second defendants it raises other issues on causation and loss.
Representation at the trial
Mr Guy appeared before me in person. Until November 2011 he had been represented by solicitors and counsel. He was well able to address me and conducted a vigorous, if at times rather off-target, cross-examination of the defendants' witnesses. He had the able assistance of Ms Victoria Gregory (of Janes Solicitors) as a Mackenzie Friend. Ms Gregory shared with Mr Guy the cross-examination of the defendants' witnesses. She also prepared detailed written closing submissions on Mr Guy's behalf. Mr Guy also prepared a written closing note. I shall refer to those two documents simply as Mr Guy's closing submissions. Mr Guy was also assisted by a Mr Parrington who intervened from time to time on his behalf.
A frequent refrain by Mr Guy was that he and his two assistants had had very little time since receiving the numerous trial bundles in mid-December 2011 (following the termination of his legal representation) to master their contents. By the end of the trial there were nearly 50 lever-arch files, supplemented by several supplied by Mr Guy, and 8 lever-arch files of core documents. I had some sympathy with Mr Guy's plight but it was evident that, assisted by Ms Gregory, he had no difficulty in identifying documents to which he wished to refer. When he was unable to locate precisely where the document was he and his team had ready assistance from counsel for the defendants so that on no occasion was there a document which it was not possible to find. I also gave Mr Guy and Ms Gregory plenty of time during the trial, usually by rising for five or ten minutes or longer if needed, to enable them to collect their thoughts. They were given plenty of advance notice of the order in which the defendants' witnesses were to be called. Finally, I gave Mr Guy a further four working days, making in all just over a week, following the conclusion of the defendants' closing submissions, which were for the most part in written form, within which to prepare his own written closing submissions. In all the circumstances, I consider that Mr Guy had...
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