England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Rolls Building, 7 Rolls Buildings Fetter Lane, London EC4A 1NL
		23/05/2017

CHIEF MASTER MARSH :

1. This judgment relates to an application made by the Defendants to strike out paragraphs 6 – 22 (inclusive), 36, 41(part) sub-paragraph 44(2)(part), 45(1), 45(2), 48(5)(part) and 48(6) of the Re-Re-Amended Particulars of Claim. In the alternative, the Defendants apply for summary judgment concerning the issues raised in sub-paragraphs 45(1) and 45(2). In view of the extent of the Re-Re-Amended Particulars of Claim that are the subject of this application, for convenience, a complete copy of the statement of case forms appendix 1 to this judgment.
2. The second part of the application concerned a Part 18 request made by the Defendants but it is no longer pursued, the request having been answered.

Procedural background

3. This claim was issued on 3 March 2014 and yet some three years later it has made very little progress. It has only reached the stage of statements of case having been exchanged and requests under Part 18 being answered. The first cause of the delay was an application made by the Defendant (at that point Mr Gubay was alive; he died on 5 January 2016) seeking a declaration that the courts of England and Wales were not the forum conveniens for this litigation and for a declaration that the claim should be tried in the Isle of Man. That application came before me and judgment dismissing the application was handed down on 14 November 2014.
4. The next step was for the Defendant to apply for an order striking out the claim on the basis that there were no reasonable grounds for bringing a claim in the tort of malicious prosecution, such tort not being, it was said, part of English law. That application came before Miss Amanda Tipples QC sitting as a Deputy Judge. She handed down judgment on 15 May 2015 striking out the claim but granted permission for an appeal to be leap-frogged to the Supreme Court. The appeal came before the Supreme Court and on 20 July 2016 the appeal was allowed and the order of the Deputy Judge was set aside. The order of the Supreme Court permitted the whole of the claim to proceed to trial.
5. The Particulars of Claim have been amended on three occasions. On the first occasion the amendments were permitted pursuant to my order dated 14 November 2014 when the Defendant's application to stay the claim was dismissed. The amendments were relatively minor and were designed to cure criticisms about the manner in which the Particulars of Claim had been drafted. The complaints concerned certain passages which referred to witness statements in the underlying claim. A further application for permission to amend came before me on 3^rd March 2015 but was adjourned to be heard with the strike out application.
6. The second round of amendments was then made pursuant to the order of Miss Amanda Tipples QC dated 9 June 2015. These amendments principally comprised the addition of a new cause of action, namely a claim that Mr Gubay was liable to Mr Willers because the underlying claim was an abuse of process. It is significant to note, however, that at paragraph 11 of the Deputy Judge's judgment, after having summarised the principal elements of the Particulars of Claim, she went on to say:

"Except for the point that the tort does not extend generally to civil proceedings, Mr Livesey QC does not take any issue with the rest of the pleading or make any complaint that the claim has not been properly pleaded."

7. After the decision of the Supreme Court was known, there were a number of exchanges between the parties concerning further amendments. Perhaps unusually, the Defendants (by then the executors of Mr Gubay's estate had been appointed to carry on the proceedings) applied to the court for an order that the Claimant serve his Re-Re-Amended Particulars of Claim. In a witness statement made by Rebekah Parker of Laytons solicitors (who act for the Defendants) she explained that some amendments were required to the Particulars of Claim consequential upon the decision of the Supreme Court. Having pointed out in correspondence what the Defendants felt was required by way of amendment, and having chased the Claimant for a response, the application was made. Her witness statement confirms that the Defendants were minded to consent to the proposed Re-Re-Amendments provided that some additional amendments were made dealing with the substitution of the executors for Mr Gubay, Mr Gubay's death and other matters. The Re-Re-Amended Particulars of Claim were then served in a form which, apparently, was acceptable to the Defendants.
8. The Defendants have had a change of heart and have now made the application that came before me. One response to the application made by the Claimant is that it should be dismissed because it is an abuse of the court's process in light of, amongst other things, the circumstances I have outlined.
9. A defence has been served and at paragraph 10 the Defendants say they have pleaded to paragraphs 6 – 22 of the Re-Re-Amended Particulars of Claim without prejudice to their primary case that the allegations set out in those paragraphs are abusive and in any event irrelevant to the determination of the proceedings. The Claimant has served a Reply.

Background

10. It is necessary to summarise the background facts so that the claim can be seen in its proper context. Mr Gubay was by the date of his death, according to the Claimant, a very wealthy man (he is said to have been a billionaire). His wealth came from having created a number of successful businesses in various countries including Kwik-Save, a chain of supermarkets, and Total Fitness, a chain of health clubs. He also invested extensively in property development in the United Kingdom. He set up a trust (The Santon Trust) in 1994. The Trust became the beneficial owner of a very large number of companies, albeit that many were dormant; the total number is estimated to be approximately one hundred. Langstone Leisure Limited ("Langstone") was one such company.
11. In 1986 Mr Gubay appointed the Claimant to work with him and from about 1991 the Claimant became Mr Gubay's 'right hand man'. He retained that position until he was dismissed in August 2009. For a lengthy period of time before his dismissal, he was privy to all the business dealings of Mr Gubay and the companies owned by the Trust, he was appointed a director of most if not all of them, was a signatory on their bank accounts and gave instruction to solicitors in connection with litigation with which the companies were involved.
12. Mr Gubay is said to have had a considerable appetite for litigation. The Claimant describes him as someone who had the habit of pursuing vendettas against other people and of using litigation, and his very considerable wealth, to that end. At the heart of the claim is the Claimant's assertion that since he was dismissed in August 2009, for reasons which that Claimant says had no basis whatever, he has been the subject of one Mr Gubay's vendettas. I will, in a moment, describe the somewhat convoluted litigation history but before I do so, it is instructive to refer to Mr Gubay's will. It is a short document giving instructions concerning his residuary estate. It makes provision for the disposal of his residual estate in three stages. First, there is the conventional requirement for his funeral and testamentary expenses and any debts to be paid. Secondly, the will provides that the residuary estate is to be held upon trust:

"To apply such funds as may be necessary to continue to conclusion the defence of claims brought against me by Peter Alan Willers [a claim in the Isle of man and the current proceedings] ("the court proceedings"), including any appeals, enforcement proceedings and any other proceedings, which may arise out of the court proceedings ("the litigation"). I DIRECT my Trustees to vigorously progress the litigation. My Trustees shall not deviate from my instructions in respect of the litigation, unless there are exceptional circumstances which deem it necessary to do so, in which case, my Trustees must seek the court's directions."

13. The residuary estate is thereafter left to the B fund of the Santon Trust. There are, in practice, no restrictions on what the Defendants choose to spend in defending this claim and they are directed to defend it vigorously. Regardless of Mr Gubay's instructions to his trustees, this litigation must be conducted strictly in accordance with the requirements of the overriding objective and no doubt the Defendants understand that excess vigour is unlikely to be helpful to their cause. A similar observation applies to the Claimant.
14. These remarks are made in the context of the underlying claim brought by Langstone against Mr Willers. In a judgment given at a second pre-trial review in that litigation, Mr Justice Vos (as he then was) remarked:

"3. The parties treat this case as state litigation. They all intend to fight the action, as it appears, to the death. No point is too small to be argued at great length."

15. The Judge also remarked during the course of the hearing that the claim appeared to be a "grudge match" and there was a "history of bad blood" between Mr Gubay and Mr Willers. Further, and relevantly he described Mr Willers' witness statement as being "ridiculously prolix".
16. It is plain that, whatever the outcome of the Defendants' application, this claim will need to be, and will be, the subject of very careful case management.
17. The history of litigation commences with a dispute between Langstone and Aqua Design and Play limited ("Aqua") which occurred in the late 1990's. Langstone was a company registered in England which operated the Total Fitness business, ultimately for the benefit of the Santon Trust. The Claimant was a director of Langstone. Aqua was engaged by Langstone in the construction of swimming pools at the health clubs which Langstone created. Langstone alleged that Aqua had constructed a number of defective pool covers and Langstone instituted proceedings against Aqua for damages for breach of contract. Instructions were given by, or perhaps via, the Claimant to solicitors to pursue the claim. When Aqua went into liquidation, judgment was obtained but the matter did not stop there. Langstone offered an indemnity to the liquidator so that proceedings might be taken against a director for wrongful trading. Those proceedings were instituted in August 2005. Ultimately they were discontinued without any recovery having been made.
18. The maximum sum which was recoverable in the claim against Aqua, and subsequently the wrongful trading claim, was a figure somewhere between £250,000 and £400,000. Mr Gubay said it was only in 2009 he discovered from Langstone's auditors that the legal costs incurred to that date in the wrongful trading proceedings exceeded £900,000. This, amongst other things, led to Mr Willers being dismissed in August 2009. Shortly afterwards, Mr Gubay commenced proceedings against Mr Willers in the Isle of Man seeking to recover circa £140,000 which he believed had been taken from his bank account without his authority and paid into the joint account of Mr Willers and his wife. That claim was subsequently discontinued but Mr Willers had by then brought a counterclaim for sums in excess of £3million for monies allegedly promised to him the Defendant relating to his employment. The trial of Mr Willers' counterclaim commenced in March 2014 but was heavily disrupted due to Mr Gubay's ill health. I was told that it is now nearing a conclusion with written closing submissions having been provided and oral submissions are to follow shortly. A judgment is expected before the end of this year. One of the issues in Mr Willers' claim in the Isle of Man, in addition to the employment claim, is the extent to which Mr Gubay exercised control over all the entities forming part of the Anglo Trading Group. That is an issue that also arises from the Particulars of Claim in these proceedings but it is accepted on both sides that a determination of the issue in the Isle of Man will not form an issue estoppel for the purposes of these proceedings.
19. After Mr Willers' dismissal in 2009, fresh directors were appointed to Langstone and they took the decision (at least at a formal level it was a decision of the directors) that the wrongful trading proceedings should not proceed any further. No recovery was made and substantial liabilities which had been incurred under the Langstone indemnity to the liquidator of Aqua were paid. Proceedings were then issued by Langstone in the Chancery Division in London against Mr Willers for approximately £1.9m based on allegations that his prosecution of the litigation against Aqua, and the wrongful trading proceedings, gave rise to serious breaches of his duties as a director which had caused substantial loss to Langstone. In substance, Mr Willers' defence to those proceedings was that Mr Gubay was at all material times a shadow director of Langstone and all decisions relating to the pursuit of the claim against Aqua and the wrongful trading proceedings were either made by him or with his knowledge and consent. Mr Willers issued Part 20 proceedings making these allegations against Mr Gubay and alleging that he had at all material times acted as a director and was responsible for any breaches of duty such that Mr Willers bore no responsibility for the decisions made in connection with the prosecution of the litigation (applying the Re Duomatic principle).
20. The trial of the Langstone claim was due to take place with a time estimate of 5 weeks commencing on 15 April 2013. As I have mentioned there were two pre-trial reviews before Vos J. Following the second pre-trial review, the directors of Langstone decided to discontinue the claim and served notice of discontinuance. At a subsequent hearing before Newey J, Mr Willers sought an order that his costs be paid on an indemnity basis and that Mr Gubay should be liable jointly and severally with Langstone for the costs of the main action and the Part 20 proceedings. The application was unsuccessful, the judge having accepted the explanation provided to him about the reasons for discontinuance.
21. These proceedings were subsequently commenced by Mr Willers. For present purposes the cause of action which is of principal relevance is that based on the tort of malicious prosecution. There is no significant difference between the parties' summary of the constituent elements. I will adopt the summary provided by Mr Mitchell QC. He says Mr Willers must show that:

i. Mr Gubay prosecuted the Langstone claim, in the sense that he caused Langstone to bring that claim;

ii. The Langstone claim was determined in Mr Willers' favour;

iii. Mr Gubay had no reasonable and probable cause for causing Langstone to bring the Langstone claim;

iv. Mr Gubay acted maliciously in causing Langstone to bring the Langstone claim;

v. Mr Willers has suffered loss and damage as a result.

22. Mr Mitchell QC's principal complaints about the Re-Re-Amended Particulars of Claim is that immaterial matter is pleaded and that Mr Willers has pleaded a case in wider terms than is necessary to establish the cause of action. He submits that the court should take the opportunity at this stage to control the claim with a view to ensuring that the issues that arise from the statement of case are no wider than is strictly necessary which will in turn lead to disclosure being properly limited and, similarly, witness evidence that is directly focussed on the real issues of fact. He relies in part on the unhappy state of the Langstone claim when it arrived for a pre-trial review and to the excessively prolix witness statement of Mr Willers. He submits that there is a real danger that this case may head down the same path if it is not controlled at this stage.

The Law

23. It is common ground that the court has a jurisdiction to control pleadings by the application of CPR 3.4(2). Although the application notice does not give particulars, Mr Mitchell QC says the Defendants rely upon all three limbs of that sub-rule. The previous strike out application brought when Mr Gubay was alive was based only on CPR 3.4(2)(a).
24. The provisions of the CPR cater for a very wide range of claims. CPR 16.4(1)(a) requires that Particulars of Claim "must include a concise statement of the facts on which the Claimant relies". There are three overlapping elements to the rule. First, the requirement for concision, secondly the requirement to plead facts and, thirdly, that the facts pleaded are those relied upon by the claimant. The rule and the Practice Direction go on to deal with certain additional matters which ought to be included in certain claims.
25. I was referred to the summary of the principles concerning statements of case set out in the judgment of Akenhead J in Charter UK Limited v Nationwide Building Society [2009] EWHC 1002 (TCC) at [16]. He points to the requirement that Particulars of Claim must contain the basic facts upon which the Claimant relies and should not include matters which are immaterial to the relief or remedies sought. Furthermore, the court has powers to strike out part of a pleading if it contains immaterial matter. (Reference was also made to the recent decision of Ms Sara Cockerill QC (sitting as a Deputy Judge of the High Court) in Ventra Investments Limited (in voluntary liquidation) v Bank of Scotland PLC [2017] EWHC 199 (Comm)).
26. Mr Page QC, however, points to the decision of Jackson J (as he then was) in ATOS Consulting Limited v Avis Europe PLC [2005] EWHC 982 (TCC) where the statements of case were in a form which can best be characterised as "untidy". The Judge remarked:

"A court will not strike out a statement of case merely because the statement of case would generate some untidiness in the pleadings. A court will not strike out a statement of case merely because one will end up with a bundle of pleadings, some parts of which are redundant. A court will only strike out a statement of case pursuant to the second limb of rule 3.4(2)(b), if the statement of case is such as to prevent the just dispose of the proceedings or, alternatively, such as to create a substantial obstruction to the just dispose of the proceedings."

27. Jackson J went on to provide a note of warning saying:

"…it is not appropriate for the court to step down into the arena and to tell either party how to plead its case. If there are infelicities in the pleadings or if some parts of the pleadings have to be disregarded because one parties case is re-pleaded in the reply in a different but permissible manner, well, the court must live with that."

28. The proper approach to statements of case was also considered by the Court of Appeal in Hague Plant v Hague [2014] EWCA Civ 1609 in litigation which Briggs LJ described as having been litigated "on a truly grand scale". Christopher Clark LJ [76] having pointed to the requirement of CPR 16.4 (1)(a) that a statement of case must provide a concise statement of the facts on which a party relies went on to say that particulars of claim:

"…need not, and should not, contain the evidence by which they are to be proved or the opposing party's pleadings or admissions. Whilst it may be appropriate in some circumstances to rely, as proof of dishonesty, on the fact that the defendant's account of his position requires explanation and that he has given several different accounts, all unacceptable, this can and should be done in a concise way, referring to documents (but not necessarily quoting in extenso) which makes clear what is in issue. The pleading cannot be used as a first draft of an opening or a delineation of points for cross-examination."

29. It is of note, however, that CPR 16.4(3)(a) is not drafted in terms that the particulars of claim "must only include ….". The rule is prescriptive as to what must be included but it does not expressly prohibit other matters being pleaded, although the requirement for concision strongly suggests that extraneous detail is discouraged. And it seems to me there can be different views about what facts ought to be relied upon. The Claimant may believe it is permissible to rely upon a wider set of facts than the Defendant considers necessary to make out the cause of action. This suggests to me that compliance with CPR 16.4(1)(a) is not a red line issue and there is a margin of appreciation concerning compliance.
30. Mr Page QC, in the course of his submissions, referred me to paragraph 7.11 of Zuckerman on Civil Procedure (3rd Edition 2013) where, having referred to the requirement that statements of case should be concise goes on to say:

"However, the CPR have considerably eroded the old rule that pleadings should contain any material facts, not the evidence supporting them. This is because the exchange of statements of case now serves a wider purpose than just identifying the issues and ensuring that parties are not taken by surprise at the trial. Statements of case are meant to enable the parties to assess the strength of each other's case and to give the court a fair idea of the nature of the dispute and of any special difficulties to which it may give rise. There is no ban on pleading evidence. Indeed, parties are encouraged to mention particularly significant items of evidence or append particularly significant documents. The thinking is the better the parties can gauge the strength of their respective cases, the more likely they are to settle without trial. Finally, statements of case are meant to furnish the court with sufficient information about the nature of the dispute and of any evidentiary difficulties in order to enable the court to manage the case satisfactorily."

31. Mr Page QC relies on that paragraph. Mr Mitchell QC says simply that Professor Zuckerman is wrong. It is of interest, however, that Professor Zuckerman does not refer to any authority in support of his discussion about the purpose of statements of case and it is not one which can be said to be founded in the CPR. To my mind, there is much to be said for statements of case remaining as concise as possible. It is not the function of statements of case to 'tell the story' and over-lengthy statements of case are positively unhelpful for the purposes of case management. With the greatest respect to Professor Zuckerman, I do not consider that his description of the manner in which statements of case should be, or may be, prepared accurately represents the requirements of the CPR. In light of the remarks, albeit obiter, by Christopher Clarke LJ in Hague Plant, what appears to be an encouragement to plead evidence is out of step with the CPR. There may be instances where it is helpful to refer to particular items of evidence by way illustration, or to refer to authority, but normally it is far more helpful for a statement of case, and especially Particulars of Claim, to set out only the essential facts which are necessary to make out the cause or causes of action that are relied upon, broken down by reference to their constituent elements, and an explanation for the relief that is claimed. It is important that a clear distinction is made between the facts that are necessary to enable the Defendant to understand the claim it has to meet and the facts upon which the Claimant will wish to rely at the trial of the claim. All too often Particulars of Claim are a conflation of a statement of case and a witness statement, no doubt on the basis that it is thought, wrongly, that the length of the statement of case and a deluge of factual material may add to its weight and strength.
32. An allied point arises concerning the use of judicial time. Inevitably, over-lengthy and diffuse statements of case are likely to require a greater share of judicial time than is necessary. It might have been thought at one time, even after the Civil Procedure Rules came into force, that parties to litigation were entitled to ask for as much judicial time as they felt their case warranted; that judicial resources were available on demand. If that was the position in the past, it is certainly not the position now. The court's powers to limit disclosure and control witness evidence have been strengthened and the move to allocate to the parties only a fair share of the court resources, which is part of the overriding objective, was given judicial support in the judgement of Briggs LJ at [27] in Hague Plant Limited v Hague and others. The parties to a claim will no doubt have their own view of the importance of the litigation but what really matters is an objective assessment by the court about what share of the available resources should be applied to a case, regardless of whether the parties take a different view on that subject.
33. The only other authorities to which passing reference need be made relate to Mr Page QC's submission that the Defendants' application is an abuse of the court's process. He points to Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1 and Holyoake v Candy [2016] EWHC 3065 (Ch). Johnson v Gore Wood related to the issue of separate claims but Mr Page QC submitted that the principles apply equally to further applications within the same claim. The decision of Nugee J in Holyoak v Candy is more on point. It is not in doubt that it may be an abuse of the court process to issue more than one application seeking the same or similar relief. However, to my mind, it will often be unnecessary for the court to consider a subsequent application in that way. The court invariably has a discretion to refuse to grant relief that is sought and, even if a subsequent application is not an abuse of the court process, it may well be that the court is far less likely to grant relief in the exercise of its discretion if a litigant seeks to have a second run at the same issue or where the issue could either have been raised on a previous application or at a much earlier stage of the claim.

The Application

34. The main substance of the application relates to paragraphs 6 – 22, 36, 41 and part of paragraph 44(2) of Re-Re-amended Particulars of Claim. The Defendants complain that these paragraphs include irrelevant material and are pleaded in a manner which is unnecessarily broad. The court is invited to exercise its case management powers, about which there is no dispute between the parties, to strike out parts of the Re-Re-Amended Particulars of Claim relating to the claim for malicious prosecution with a view to that claim moving forward in a more limited fashion.
35. The application to strike out sub-paragraphs 46(5) and (6) relates to the alternative claim that the Langstone action was an abuse of process.
36. Different considerations apply to the application as it relates to sub-paragraphs 45(1) and (2). These two sub-paragraphs concern the Claimant's alleged loss. It is said in certain specific respects that the claim shows no reasonable grounds and should be struck or alternatively judgment should be entered under CPR part 24.2.
37. I will deal with the three elements of the application as summarised above in turn.
38. Paragraphs 6 – 22 of the re-re-amended Particulars of Claim are headed:

"Mr Gubay's control of the Santon Trust and the Anglo Group"

The Defendants say that the Claimant's reference throughout these paragraphs to the Santon Trust and to all the companies within the Anglo Group is unnecessarily wide. The Claimant's case does not turn on Mr Gubay's control of the trust or all the companies within the group. It turns on his ability to control Langstone.

39. It is also said that there are numerous occasions where the statement of case contains evidence rather than facts that are necessary to make out the cause of action upon which the Claimant relies. Examples of this complaint can be seen in:

i. Paragraph 6 where there is a generalised reference to Mr Gubay's intentions in setting up the Santon Trust;

ii. Paragraph 9 where reference is made to evidence provided by Mr Gubay in proceedings in New York;

iii. Paragraph 10 where reference is made to a witness statement of John Nugent given in proceedings in the Isle of Man;

iv. Paragraph 14 where examples are given of Mr Gubay's management and control between 1986 and 2009 of the Anglo Group;

v. Paragraph 16 where references are made to a witness statement provided by Mr Gubay in proceedings between him and Mr Willers in the Isle of Man.

40. Complaints are also made about the relevance of certain facts which are pleaded.
41. Despite the complaints made by the Defendants, the total length of the re-re-amended Particulars of Claim is some nineteen pages. It is not, therefore, a conspicuous example of an over-lengthy statement of case.
42. As Jackson J remarked in ATOS Consulting Limited v Avis Europe PLC, it is not for the court to tell a party how to plead its case. There are many different styles of pleading that fall within the spirit, and the letter, of the CPR and it is not to the point that the court may consider that there are infelicities in the drafting. It is not for the court, in effect, to say that it could have drafted the statement of case better than the draftsman and there must be some margin of appreciation about what comprise the essential facts that underpin the claim. The starting point is the Claimant's view about the facts it relies upon and a degree of latitude must be provided.
43. The heart of the Defendants' complaint relates to the need for the claim to deal with the allegation that Mr Gubay had control over the Santon Trust and all the companies in the Anglo Group. Mr Page QC submits in response that it is necessary for the court to consider all the companies within the Anglo Group because Mr Gubay operated the companies compendiously; and it will not be necessary to review the actions of every company because the vast majority were dormant. Furthermore, it is essential to the Claimant's case to show that Mr Gubay operated as a shadow director to the Anglo Group companies. This goes, he says, to reasonable and probable cause, who was the prosecutor of the claim and to malice. As Mr Page QC put it, the real issue is not whether Mr Gubay ran one or other of the companies but whether, as he claimed, he only gave advice and guidance or, in fact, gave instructions the directors were accustomed to act upon. In addition he said that:

i. Although there were approximately 100 companies in the Anglo Group, the vast majority were dormant property holding companies;

ii. The number of directors who were involved over the entire period was not great, perhaps 20;

iii. The Claimant wishes to match the case in the Langston action which was put forward on the basis that Mr Gubay controlled the group. That is the way the Claimant's case will be put forward, not by reference to the control of individual trading companies;

iv. The evidence about control will be quite limited because Mr Gubay did not issue written instructions, there are only a few board minutes and Mr Gubay's notebooks have either been lost or destroyed.

44. Mr Page QC, in support of his submission that the Defendants application is an abuse of process points to Mr Gubay's strategy in connection with this litigation and, indeed, to the underlying issues in the claim itself. In this claim the defendants have already made an unsuccessful application to stay the claim on the basis of forum non conveniens and an unsuccessful application to strike out the claim on the basis that it showed no reasonable grounds, the latter application having finally been determined in favour of the Claimant in the Supreme Court. He says that the current application is simply an illustration of the Defendants fulfilling the instructions given to them by Mr Gubay prior to his death that are clearly outlined in Mr Gubay's will. In short, he says, the Defendants will stop at nothing to prevent this claim reaching a trial and he contrasts the Claimant's impecuniosity with the vast wealth at the disposal of the Defendants.
45. Mr Page QC also points out that it is now three years since this claim was issued and yet it has not made any progress beyond statements of case. Furthermore, and I think importantly, he submits that the Defendant not only could have applied to make the current application a long time ago but should have done. He says the application should have been made at the same time as the application to strike out the claim on the basis that it did not make out a cause of action known in English law. Mr Mitchell QC distinguishes that type of strike out application from the one now made which is, he says, properly characterised as a case management application with a view to controlling the cost of the litigation. There is, however, a more compelling point which relates to the history of the development of the Particulars of Claim. In the course of writing this judgment, I noted that in the judgment of Miss Amanda Tipples QC dated 15 May 2015 she remarked [11] that Mr Livesey QC, who appeared for Mr Gubay, did not make any complaint that the claim had not been properly pleaded. I had not been addressed about this remark at the hearing and I invited observations from the parties. Having considered the further submissions with which I have been provided, I do not think there is a basis for concluding Mr Livesey QC made a formal concession. It is telling, however, that no complaint was made, in similar form to the complaints now made, at the time. Even if the current complaints are properly characterised as primarily relating to case management, if they had been sufficiently egregious to warrant a striking out, it is difficult to believe that Mr Livesey QC would not have made that point even if the submission was merely ancillary to the primary ground relied upon at the time. There was certainly an ample opportunity to do so.
46. The first amendment to the Particulars of Claim was minor. The re-amendment was approved by Miss Tipples QC, an earlier application to amend having been adjourned to the judge to be dealt with at the hearing of the strike out application. No objection to those amendments was made at the time. The re-re-amendment came about following the order of the Supreme Court dated 20 July 2016. Throughout this entire period paragraphs 6 – 22 have remained largely unchanged (paragraph 22 is the exception). No point has been taken in a similar fashion to the application now made.
47. My conclusion in relation to these paragraphs of the re-re-amended Particulars of Claim is, as to the main basis of complaint, that only Langstone is relevant rather than the Anglo Group and the Trust, the Claimant is entitled to plead his case on a wider basis because he relies on control in relation to the whole Anglo Group and the Trust. It may transpire that this is wider than is strictly necessary, but it would be wrong to insist upon amendments at this stage. And although, if the claim were to be started afresh now, it would be desirable for the statement of case to exclude some, or all, of the extraneous evidence relied upon, it would be wrong at this stage to hold up the progress of the claim and to require yet further amendments to be made in the hope that this may lead to a saving of cost.
48. In addition, although I do not conclude that the application is an abuse of the courts' process, it is not far short of being oppressive given that the Defendants have had an ample opportunity to complain previously and I consider that there is some real force in the submission made by Mr Page QC that the Defendants are seeking to delay the progress of this claim and to make it unduly difficult and expensive for the Claimant to pursue it.
49. I have indicated to the parties, however, that the sort of approach about which Mr Justice Vos (as he then was) made remarks in the Langstone claim will not be tolerated in the course of the conduct of this claim. The Claimant has a tendency to produce witness statements which are prolix and it will be part of the court's case management function to exercise rigorous control over both disclosure and witness statements. As to the former, Mr Mitchell QC referred to a letter from the Claimant's solicitors dated 22 November 2016 which followed the service of the defence. In addition to requesting copies of documents referred to in the defence, the letter contained a schedule running to six pages of what is described as "early disclosure". The manner in which that schedule is drafted clearly indicates that the Claimant will be seeking disclosure that is far wider than is necessary for the fair resolution of the issues in this claim. There is a strong sense that the list emanated from the Claimant himself without his lawyers having exercised careful judgment about it. If that surmise is wrong, it would appear that the schedule demonstrates a lack of judgment and possible lack of understanding of the duties owed to the court.
50. I turn briefly to deal with paragraphs 36, 41 and 44(2) of the Particulars of Claim. I need say nothing further in addition to the remarks I have already made concerning the earlier paragraphs in the Particulars of Claim. I do not consider it is appropriate to strike them out. Similarly, sub-paragraphs 48(5) and (6), although wider than strictly necessary, do not require to be struck out.
51. Paragraph 45(1) includes a claim for damages for, amongst other things, "injury to health". Mr Mitchell QC submits that this is a personal injury claim, albeit that no particulars have been given and no medical evidence has been provided. The Claimant has now provided a schedule of loss settled by counsel and supported by a statement of truth from the Claimant. Particulars of the injury to health and suffering are provided at least in outline. Nevertheless, the claim remained un-particularised within the Particulars of Claim. Mr Mitchell QC submits that it is not open to the Claimant to amend the claim at this stage because he would fall foul of s.35 of the Limitation Act 1980 because he would be seeking to insert a new claim which is statute barred.
52. Put briefly, Mr Mitchell QC submitted that the Claimant should be required to make an application to amend the Particulars of Claim to plead properly the personal injury claim. The Defendant will then have an opportunity to oppose the application on the basis that the claim is statute barred. If permission were to be granted the Defendant will rely on s.11 of the Limitation Act 1980 and the Claimant will have to rely upon s.33 of the Act. There is, however, a short answer to this point provided by Mr Page QC. The cause of action in this claim relied upon by the Claimant in respect of malicious prosecution came into being only when the Langstone claim was resolved in favour of the Claimant. That is an essential part of the cause of action. The Langstone claim was resolved in favour of the Claimant by it being discontinued on 28 March 2013 and this claim commenced under a year later, on 3 March 2014. It follows that there can be no question of this element of the claim being statute barred whether the limitation period is three or six years.
53. The final point concerns sub-paragraph 45(2) which is a further limb of the Claimant's claim for damages. He claims loss of earnings over the period from 27 August 2009 to 28 March 2013 of £500,000. Again, the claim for damages has been fleshed out in the schedule of loss. Indeed, the claim has been considerably increased as the Claimant now claims loss of earnings of at least £500,000 per year from 17 February 2010 to date and continuing. This produces a claim of approximately £3.5m to date and continuing.
54. The Defendants point to the claim made by the Claimant in the proceedings in the Isle of Man (Mr Willers' counterclaim). Mr Willers pleads that Mr Gubay entered into a contractual commitment to procure Mr Willers' continued employment and to make certain capital allocations to him. He makes a claim, inter alia for £1.6m but in addition seeks loss of earnings and benefits (the latter being pension, health insurance and life cover) to the date of death of Mr Gubay and for three years thereafter.
55. The Defendants complain that there is an overlap between the Isle of Man claim and this claim and that to claim similar and overlapping sums in two different jurisdictions is an abuse of the court's process. I do not consider, however, that the Defendants' case in this respect has a proper foundation. I can see nothing, as such, that would be wrong in making overlapping claims, subject of course to the principle of avoiding double recovery. In any event, the claims are based upon entirely different causes of action. Mr Willers' counterclaim in the Isle of Man is based upon a contract. This claim is based in tort. I can see no reason why the claim for damages under this head may not be pursued.
56. As a general observation, however, it is desirable that the particulars given in the schedule of loss are, in some fashion or another, incorporated into the Particulars of Claim. This can be done very simply by reference to the schedule of loss being made in the Particulars of Claim.
57. I will hear counsel when this judgment is handed down as to any consequential orders that are to be made. These will include directions for the case management and trial of the claim.

APPENDIX 1

RE-RE-AMENDED PARTICULARS OF CLAIM

 

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION




BETWEEN




PETER WILLERS

Claimant




-and-




ALBERT GUBAYELENA JOYCE and JOHN NUGENT

(in substitution for and in their capacity as executors of Albert Gubay (deceased)

Defendants

 

 

 

---

 

RE^[1]-RE^[2]-AMENDED^[3] PARTICULARS OF CLAIM

 

 

---

 

 

Introduction

 

1.                  The Defendant ("Mr Gubay") was is a successful businessman who made a substantial fortune from, among other things, the "Kwik-Save" supermarket chain and subsequently, the "Total Fitness" health gym chain in the UK and in the Republic of Ireland. The Claimant ("Mr Willers") acted as Mr Gubay's right hand man for 23 years from 1986 until he was dismissed by Mr Gubay in 2009.

2.                  In this claim Mr Willers contends that Mr Gubay's estate is liable to Mr Willers in the tort of malicious prosecution abuse of process. Mr Gubay wrongfully and maliciously maliciously caused proceedings for negligence and breach of fiduciary duty to be brought in England against him, in circumstances where Mr Gubay knew that the claim was false because he was the author of the acts complained of within those proceedings. Those proceedings are known herein as "the Langstone Action" and were brought against Mr Willers by Langstone Leisure Limited ("Langstone"), a company within a group of companies known as the Anglo Group. The Anglo Group was is controlled by Mr Gubay. Further or alternatively, Mr Gubay's estate is liable to Mr Willers in the tort of abuse of process.  Mr Gubay never intended the Langstone Action to go to trial. He brought them through Langstone for the dominant and improper purpose of causing financial hardship and personal distress to Mr Willers, pursuant to a vendetta, which he was (and is) carrying on against Mr Willers on the mistaken premise that Mr Willers defrauded him and/or the Anglo Group.

3.                  In the Langstone Action it was alleged that Mr Willers had acted in breach of his common law and fiduciary duties to Langstone as a director in causing Langstone to fund and indemnify the Liquidator of a company known as Aqua Design and Play Limited ("Aqua") for the purpose of investigating and prosecuting an action against David and Shaun Adams, Aqua's former directors, for wrongful trading and the giving of unlawful preferences. The costs incurred by the Liquidator and those of the Adams family, for which Langstone became liable after that action was abandoned shortly before trial in late 2009, on the instructions of Mr Gubay, amounted to £1.95m. This underlying action is known herein as the "Wrongful Trading Action".

4.                  By his Defence and Part 20 Claim in the Langstone Action Mr Willers denied liability and sought an indemnity from Mr Gubay, whom he joined into the action as Third Party. The indemnity was claimed on the grounds that Mr Gubay was the sole effective decision maker of the Anglo Group and Mr Gubay had directed Mr Willers to prosecute and carry on the Wrongful Trading Action through Aqua's Liquidator; such that he was responsible for any loss and damage caused to Langstone as a consequence.

5.                  On 28th March 2013, 2 weeks before the date fixed for a 5 week trial of the Langstone Action, Langstone gave notice of discontinuance of the action. By order of Newey J dated 16th April 2013, Langstone was ordered to pay Mr Willers's costs and Mr Gubay's costs of the Part 20 Claim.

 

Mr Gubay's control of the Santon Trust and the Anglo Group

 

6.                  In about 1972 Mr Gubay moved to the Isle of Man in order to benefit from its low tax regime. In about 1994 he transferred all or much of his fortune, including the companies owned by him, to the trustees of the Santon 1994 Settlement ("the Santon Trust") a trust set up on 31st March 1994 for tax avoidance reasons and, in particular, because he intended to move to the Republic of Ireland to set up the Total Fitness Business and wished to protect his assets from falling within Ireland's tax net.

7.                  The Santon Trust is a defeasible trust which alloweds Mr Gubay total effective control over the trust property which includes the Anglo Group:

(1)               As "Settlor" under the Santon Trust, Mr Gubay was also "Appointor" and "Protector". As "Appointor" Mr Gubay had the right (inter alia) to alter the terms of the trust and the powers of the trustees (Cl 6 (2) of the Trust Deed), add to the list of beneficiaries (Cl 14(1)), direct the trustees to pay the trust money to particular beneficiaries (Cl 6 (3)) or direct the trustees to transfer the trust fund to other trustees (Cl 6(4));

 

(2)               As Protector Mr Gubay could (inter alia) appoint or dismiss any or all of the trustees (Sched 1 Pt V11) and the trustees could not exercise any of their powers of disposition without his consent (Cl 19).

 

8.                  Mr Gubay's practice was to treat the assets of the Santon Trust and of the companies within the Anglo Group exactly as though they were his own assets. He made no reference to the corporate Trustee or its directors save to instruct them put his wishes into effect and to sign formal documents which had to be signed by them. His method of doing business was exactly the same after the creation of the Santon Trust as it had been before.

9.                  By way of example, in paragraphs 1 and 2 of an affidavit dated 17 February 2003 in the case of The People v Simone NY Slip Op 23889 [2 Misc 3d 469] December 8, 2003 in New York, Mr Gubay stated that he was able to direct the trustees as to how the settled funds he had amassed were to be invested and that he had instructed his trustees to make funds available to his nephew, Mr Simone, to whom Mr Gubay gave permission to trade in securities with trust funds. Pursuant to Mr Gubay's instructions, the directors of the Trustee, one of whom was Mr Willers, transferred $6 million into 10 brokerage accounts in the United States between 1998 and May 2003. The said accounts were in the name of five Isle of Man companies within the Anglo Group, of which the trustees were also directors.

10.              In Paragraph 4.3 of the Witness Statement of John Nugent made on 28th June 2010 on behalf of Mr Gubay in proceedings in the Isle of Man between Mr Gubay and Mr Willers, Mr Nugent admitted that the trustees of the Santon Trust did not involve themselves in the operation of the companies because they expected those companies "to seek Mr Gubay's advice and guidance on strategic direction, key business decisions and major property issues". In fact Mr Gubay gave directions, not advice and guidance and all directors knew that disobedience to any direction would be likely to result in instant dismissal.

11.              At all material times Mr Gubay's practice was to exercise individual control over all of his companies, including Langstone. The directors of those companies were appointed and dismissed by him personally and were accustomed to act in accordance with his instructions. Save for the Celtic Bank, which was required to do so for compliance, the boards of those companies never discussed or voted on any substantive decisions, they simply executed Mr Gubay's instructions. Though minutes of board meetings were from time to time produced for formal reasons, often the meetings never took place. If they did, there was never any discussion. Mr Gubay was, therefore, the Group's sole effective decision-maker.

12.              None of the directors of those companies, including Mr Willers, were ever empowered by Mr Gubay to make any substantive decisions as to how his businesses were run. Whenever a problem arose, or a decision on any matter of substance was required, it was always referred by Mr Willers (or another director) to Mr Gubay and Mr Gubay would issue an instruction immediately, Mr Gubay's decision would be implemented and the result reported back to Mr Gubay. Prior to Mr Gubay's return to the Isle of Man in 2006, Mr Willers spoke to Mr Gubay most days on the telephone and travelled to England to meet him when required to do so, which was approximately once per month. Mr Willers's function was limited to making the decisions required to put into effect Mr Gubay's instructions so that the companies did exactly what Mr Gubay wanted in accordance with Mr Gubay's objectives.

13.              Mr Gubay's practice was to receive reports and to give instructions orally, normally by telephone, but sometimes face to face. A short, succinct and clear oral statement was all that was required to which Mr Gubay immediately responded in the same vein and his decision was then implemented. Mr Gubay regarded correspondence between himself and his directors and staff, even email correspondence, as a waste of time.

14.              By way of example of Mr Gubay's management and control, between 1986 and 2009:

 

(a)               No property was ever sold other than on Mr Gubay's instructions;

 

(b)               No property was ever bought other than on Mr Gubay's instructions;

 

(c)                No development was ever commenced other than on Mr Gubay's instructions;

 

(d)               No contentious litigation was ever commenced, pursued or compromised other than on Mr Gubay's instruction, save in respect of very minor claims;

(e)               Mr Gubay would, when he felt the market was right, trade in currency with funds belonging to companies within the Anglo Group, the Bank implementing his buy/sell instructions. No other director ever gave such instructions;

(f)                 From 1986 to 2009 Mr Gubay set the salaries and salary increases of all directors (including that of the Defendant) and employees save for those of Celtic Bank, whose salaries, by agreement with Mr Gubay, followed Barclays Bank levels;

(g)               In about 2004 Mr Gubay instructed the Defendant to direct the trustees to transfer about £9 million to his personal account some of which was to fund payments to the Defendant and 2 other directors on the sale of the Total Fitness business. The trustees complied with that direction;

(h)               Mr Gubay would select residential properties for purchase by the companies within the Anglo Group which he would then refurbish to his personal requirements and in which he would live or use when he left the Isle of Man. Mr Gubay continues to use company properties in this manner. No other director within the Group used or uses company properties in this manner.

 

15.              In the premises Mr Gubay was at all material times "shadow director" and controlling mind of and agent for all of the companies within the Santon Trust.

 

16.              Mr Willers will rely in addition upon admissions made by Mr Gubay in his 5th Witness Statement in the current proceedings in the Isle of Man. That witness statement has been referred to at a public hearing in the Court of the Isle of Man in January 2014. In particular:

 

(1)               In paragraph 3(a)(i) Mr Gubay admits adopting a very hands on approach to business, including during the period after establishment of the Santon Trust;

 

(2)               In paragraph 3(c) Mr Gubay admits being the prime architect of the Group's profits over the last 60 years. He decided when to develop a health club business and when to dispose of it;

 

(3)               In paragraph 3(d) Mr Gubay admits that the trustees never refused a request by him for a distribution, so far as he could recall;

 

(4)               In paragraph 4(a)(v) Mr Gubay admits that day to day control was not in the hands of the trustees;

 

(5)               In paragraph 4(a)(v)(a) Mr Gubay admits that his business ideas were usually accepted and put in place by the directors so that he was the individual with the most influence in the running of the companies;

 

(6)               In paragraph 4(a)(v)(c) Mr Gubay admits that until 1996 he was the person with prime responsibility for the running of the companies and the individual to whom the directors looked for guidance and leadership, that between 1996 and 2006 he was the person in charge of Langstone, and that after his return to the Isle of Man in 2006 he continued to guide and advise the directors of the companies;

 

(7)               In paragraph (d) on p 10 Mr Gubay admits that he was the central character in the group and that if the directors had not followed his advice he would not have been best pleased, and that they would generally go along with what he wanted;

 

(8)               In paragraph 6, Mr Gubay admits that he gave directions to others;

 

(9)               In paragraph 17 Mr Gubay admits asking Mr Willers to change the Group's auditors.

17.                                          

18.              As to Mr Gubay's role within the Anglo Group between 1996 and 2006 referred to at (6) above, Mr Willers will further rely on admissions made by Mr Gubay in the Langstone Action.

19.              In his "Defence to the Part 20 Claim", Mr Gubay claimed erroneously at paragraph 8.3 that when he moved to Ireland to set up the Total Fitness chain in 1996, he had resigned as a director of all the companies within the Anglo Group which were not domiciled within the Isle of Man and ceased to be involved in their day to day management. However,

(1)               at paragraph 17.6 it was admitted that he spoke to Mr Willers on an almost daily basis and travelled to the Isle of Man every three to four months prior to the date upon which he returned to Isle of Man permanently in 2006;

 

(2)               at paragraph 17.8 Mr Gubay expressly accepted that he had a "forceful personality";

 

(3)               at paragraph 17.9 it was admitted that Mr Gubay's primary mode of communication was by telephone and that he did not regularly use written communication;

 

(4)               at paragraph 17.10, it was admitted that Mr Gubay's conversations with Mr Willers dealt with issues including ongoing property matters, the running of the Santon Companies and litigation.

 

20.              Mr Willers will rely on the nature and frequency of their daily conversations in support of his contention that Mr Gubay remained the sole effective decision maker of the Anglo Group throughout the period that Mr Willers was employed by him and the Anglo Group and, in reality, nothing changed in that respect after 1996.

 

21.              When Mr Gubay moved back to the Isle of Man in 2006 he continued to provide verbal instructions to Mr Willers on a daily or almost daily basis in precisely the same way before, save that such instructions were given both by telephone and in the course of meetings at Mr Gubay's home in Crogga Mill.

 

22.              When, in early 2009 Mr Gubay (erroneously) began to suspect Mr Willers of disloyalty, he simply directed Mr McDougall and Mr Nugent, directors of the Trustee, to rearrange the boards of the companies within the Group, to his wishes. Mr Gubay's restructuring included appointing himself as a de jure director of all of the companies (or the important companies within the Anglo Group), the appointment of his nominees as executive directors and the removal of a Mr Patrick Herring. Mr Gubay also decided to minimalise Mr Willers' role and gave instructions that there was to be a check on his "cash and signing powers". Subsequently, in about mid 2009 Mr Gubay decided that he would dismiss him.

23.                   

24.              After Mr Willers was dismissed by Mr Gubay or on his instructions in late 2009, Mr Gubay continued to control the Anglo Group in precisely the same way as he had done prior to Mr Willers's dismissal. In support of that contention Mr Willers will rely on evidence contained in the following facts and matters:




(1)               Mr Gubay continued to make all the key decisions in respect of the business of the Anglo Group Companies without reference to their officers or management;




(2)               his practice was to instruct individuals within the Anglo Group Companies or their agents to implement his decisions, failing which he would dismiss them or caused them to be dismissed;




(3)               if he wished to appoint new officers to a position within one of the Anglo Group Companies, he could and would simply instruct its directors to appoint them;




(4)               he was responsible for and controlled litigation commenced, carried on and/or funded by the Anglo Group Companies.  Such litigation included, after 2009, the Langstone Action; an action brought against Mr Willers by Cross Atlantic Ventures Limited; an action brought by Langstone against its former solicitors, Wacks Callers and Pannone's (solicitors instructed in the Aqua Litigation); and a separate action brought by Aqua's Liquidator against solicitors and two Queens Counsel (solicitors and Counsel instructed in the Aqua litigation) as described below.




(5)               a witness statement of Mr Andrew Styles in the Langstone Action dated 9 April 2013. Mr Styles was appointed Chief Financial Officer of the parent company or ultimate parent company of all the companies within the Group between March 2010 and July 2011 and Chief Operating Officer from July 2011 until 24 May 2012, when he was also dismissed by Mr Gubay;




(6)               a witness statement of Mr Stephen Wotton, an accounts manager of another company within the Group, Cross Atlantic Ventures Limited in the Isle of Man Proceedings dated 7 October 2013.

25.  

Mr Gubay's attitude to litigation and control over the Anglo Group's litigation




26.              Mr Gubay was and is exceptionally litigious and has pursued many cases personally and through the companies within the Anglo Group in England, New Zealand, Ireland and the USA. Similarly, during Mr Willers' 23 years with Mr Gubay, many cases were brought under the direct orders of Mr Gubay.

27.              Mr Willers will contend that the Wrongful Trading Action and the subsequent claims against Mr Willers, and the solicitors and Counsel involved in it are examples of cases brought on Mr Gubay's instructions by way of vendetta litigation and, also, for the purpose of deterring others from seeking to cross him or his companies and to retain and reinforce his reputation as an aggressive litigator and someone not to be trifled with.

28.              As to the Wrongful Trading Action, Mr Gubay instructed Mr Willers to cause Langstone to sue Aqua, following a dispute Mr Gubay had had with its director, a Mr David Adams, in connection with the installation of the swimming pools within the Total Fitness chain of gyms. After Aqua was wound up Mr Gubay instructed Mr Willers to fund and/provide indemnities to the Liquidator in order to investigate the conduct of David and Shaun Adams and, subsequently, to sue them for wrongful trading.

29.              Subsequently, Mr Gubay caused Langstone to commence the Langstone Action against Mr Willers in England seeking £1.95m, notwithstanding he knew that he had been responsible for giving the relevant instructions as particularised at paragraphs 40-43 below.

30.              Mr Gubay also caused Langstone:




(1)               to commence a separate claim (No.0MA02108) for negligence against Langstone's solicitors in respect of the same damages; and




(2)               to cause another member of the Group, Anglo International Holdings Ltd, to fund Aqua's liquidator to proceed with a counterclaim for negligence against the solicitors and two Queen's Counsel in respect of the same damages in yet further proceedings (No.HC11C03529).

 

Dismissal of Mr Willers

 

31.              On 16th July 2009 Mr Willers met Mr Gubay who asked him to leave the office. Mr Willers was formally dismissed on Mr Gubay's instructions on 27th August 2009. The reason for his dismissal is unclear to Mr Willers, however it came after Mr Gubay had told Mr Nugent and Mr McDougall that he had been watching the extension and alteration which Mr Willers was making to his personal residence in the Isle of Man. He told them that Mr Willer's wife was greedy and suggested that Mr Willers was to be compared with a previous director who had misappropriated funds from him or his companies. Mr Gubay also referred to the fact that Mr Willers was friendly with two other directors on the board and he suspected Mr Willers of having formed a faction within the Group. Following a disagreement with Mr Gubay as to the appointment of two further directors (inter alia) to the board of one of the Anglo Group companies, Derwent Holdings Limited, Mr Gubay became wrongly convinced that Mr Willers had defrauded him and was seeking to seize control of the Anglo Group from him.

32.              After he had dismissed Mr Willers, Mr Gubay began a relentless campaign to ruin Mr Willers, using whatever means he could to do so. He took the following wrongful and malicious and malicious actions against him and he did so in the belief that Mr Willers would not have the resources to defend himself:

(1)               Mr Gubay gave instructions that Mr Willers was to be dismissed from all his Anglo Group directorships, which he was;

 

(2)               Mr Gubay caused the Anglo Group to give instructions to its brokers, Berkeley Burke & Co, to withhold Mr Willers' pension on his attaining 65 years of age in early 2010. Berkeley Burke did withhold the pension pending details from Anglo Group as to a legal basis for the request, but released it in February 2010 not having been satisfied as to such a basis;

 

(3)               Mr Gubay gave instructions that Mr Andrew Styles, Chief Financial Officer of Derwent Holdings (the Anglo Group holding company) and a director of Celtic Bank, should inspect the statements of Mr Willers' bank account with Celtic Bank for evidence of wrongdoing, though Mr Gubay had no legal right to do so and knew that he had not. Mr Styles found no such evidence;

 

(4)               Mr Gubay, with the knowledge of his co-directors, gave instructions to a private investigator to obtain copies of Mr Willers's home phone records, though again Mr Gubay knew that he had no legal right to the said records. There is currently a police investigation into this;

 

(5)               On 22nd September 2009 Mr Gubay commenced proceedings in his own name against Mr Willers and his wife in the Isle of Man, claiming that Mr Willers had stolen the sum of £139,941 from him. Mr Gubay knew that this claim was untrue, or alternatively suspected that it was and deliberately refrained from investigating it. The claim was later abandoned and an order for costs followed against Mr Gubay. It is to be inferred that Mrs Willers was to be joined into the proceedings to put further pressure on Mr Willers because she had not been involved in the actions giving rise to the claim;

 

(6)               In December 2009, Mr Gubay caused the Land Registry in the Isle of Man to enter a caveat over Mr Willers' house. The entry of the caveat was wholly unlawful and it was later removed with indemnity costs against the companies in whose name this had been done;

 

(7)               Mr Gubay caused Mr Wotton to carry out an investigation into works that one of the Anglo Group companies, Cross Atlantic Ventures Limited ("Cross Atlantic"), had done on Mr Willers's properties. After Mr Wotton had come to the conclusion  that Mr Willers had  done nothing wrong, Mr  Gubay  then instructed Mr Wotton to raise fresh invoices addressed to Mr Willers, which contained retrospective profit charges on the work which had been done together with the discounts Cross Atlantic had obtained on the materials for the work and VAT. Subsequently, Mr Gubay caused proceedings to be commenced against Mr Willers claiming the said profit charges, VAT and interest. The claim was later abandoned by Mr Gubay before trial just as the Langstone Action and the Wrongful Trading Action were abandoned shortly before trial. For the purposes of the claim, Mr Gubay instructed Mr Wotton to issue similar invoices to him.  These invoices were reversed after the abandonment of the claim;

 

(8)               Mr Gubay caused Langstone to commence the Langstone Action, as set out above. As particularised at paragraphs 40-43 below, he did so in the knowledge that the claims made in the Langstone Action were false because the instructions to commence and continue the Adams proceedings had in fact come from him.

33.              In relation to this period, Mr Gubay referreds to and agreeds with Mr Nugent's 4th Witness Statement in the Isle of Man proceedings. In paragraph 11 of that statement Mr Nugent confirms that Mr Willers was removed at Mr Gubay's request and that after the decision to remove him had been taken and the process had started, Mr Nugent and Mr Gubay decided to investigate Mr Willers' dealings with the Group and that Mr Gubay instructed Mr Bath accordingly.

 

34.              Mr Willers' case is that the object of the investigation and the consequent disciplinary hearing was to find a pretext for Mr Willers' dismissal. This could only be done by making wholly false accusations against him.

 

The proceedings brought by Langstone

 

35.              In May 2010 Langstone commenced the Langstone Action against Mr Willers claiming various breaches of duty relating to the commencement and continuation of the Wrongful Trading Action. The issues in the Langstone action are set out in the parties' pleadings, which Mr Gubay hads in his possession. The principal factual issue was whether Mr Gubay had personally instructed Mr Willers to cause Langstone to commence and continue the Wrongful Trading Action.

36.              The Langstone action was hard fought and costly and involved a number of heavy interlocutory applications. The trial was adjourned for a year so that it could be heard together with the actions brought by Langstone and the Liquidator of the Adams' company against three firms of Solicitors and leading and junior Counsel involved in the Wrongful Trading Action. The trial was eventually fixed for 15th April 2013.

37.              On 28th March 2013, the last day before the Easter vacation, Langstone served notice of discontinuance of the Langstone action, having previously settled the other actions on terms confidential to the parties in those actions save that the resulting Tomlin Orders relating the actions against Wacks Caller and Pannone provided for Defendant's costs totaling £400,000. Argument on the costs issues arising out of the discontinuance was heard by Newey J on 15th  and 16th  April 2013, and he Ordered Langstone to pay Mr Willers' costs of the action and also Mr Gubay's costs of Part 20 proceedings brought by Mr Willers against Mr Gubay.




Malicious prosecution

 

Malicious prosecution

 

38.              Mr Gubay's causing Langstone to bring and continue the Langstone Action constituted the tort of malicious prosecution.  Mr Gubay's causing Langstone to bring and continue the Langstone Action constituted the tort of malicious prosecution. As detailed below:

 

(1)               Mr Gubay prosecuted Langstone's proceedings against Mr Willers;

 

(2)               The case was determined in Mr Willers' favour;

 

(3)               The prosecution was brought without reasonable and probable cause;

 

(4)               The prosecution was carried on by Mr Gubay pursuant to his vendetta against Mr Willers malicious;

 

(5)               Mr Willers suffered damage for which he has not been compensated.

 

 

(1)    Mr Gubay's prosecution of the Langstone action

 

39.              As detailed above, at all material times Mr Gubay was has been the sole effective decision maker within the Anglo Group. He was is and always had has been responsible for making all material decisions regarding its operation and direction, including the institution and carrying on of litigation brought by the Group.

 

40.              On 27th August 2009, the day that Mr Gubay dismissed Mr Willers, Mr Gubay had a meeting with Mr Sorrell of Pannone, the Anglo Group's solicitors, during which Mr Gubay told him "not to put on his lawyer's hat" and that he could bring all the lawyers he liked but "I am a billionaire and you know what I'm like". This was a reference to Mr Sorrell's knowledge, gained over 30 or so years, that Mr Gubay was prepared to pursue vendetta style litigation, such as the Wrongful Trading Action, against those who he perceived to have wronged him or his business, irrespective of the costs or merits of the said litigation.

 

41.              Mr Gubay personally instigated the investigation into Mr Willers' bank accounts and directed the commencement and continuation of the Langstone Action. Mr Willers will rely upon the matters set out above, upon the witness statement of Mr Styles which has been supplied to Mr Gubay and, upon Mr Gubay's disclosure, Mr Willers will also seek an order for disclosure against Langstone. For the avoidance of doubt, if no documents are disclosed showing who made the decisions in relation to the Langstone action, Mr Willers will ask the Court to infer that it was Mr Gubay. It was common ground in the Langstone Action that it was not Mr Gubay's practice to commit communications to writing.

 

(2)    Determination in Mr Willers' favour

 

42.              The discontinuance by Langstone on 28th March 2013, followed by Newey J's Order of 16th April 2013, amounted to a determination of the Langstone Action in Mr Willers' favour.

 

(3)    Lack of reasonable and probable cause

 

43.              Mr Gubay prosecuted the Langstone Action against Mr Willers without reasonable or probable cause in that Mr Gubay knew that it was himself, rather than Mr Willers, who was responsible in fact and in law for committing Langstone to the Wrongful Trading Action and continuing that action. Mr Gubay was also responsible for the decision to cause the Liquidator to abandon the claim and/or to settle it on disadvantageous terms ie that the Liquidator would be responsible for his costs and those of the Adams family. Further or alternatively he was aware that Langstone had suffered no loss since the costs had been paid by another Anglo Group company.

 

44.              As set out in the Particulars of Claim in the Part 20 Proceedings and in the witness statements of Mr Willers and Mr Sorrell, Mr Gubay was the sole effective decision- maker within the Anglo Group and its de facto controller. Moreover, Mr Gubay personally took the key decisions in the Wrongful Trading Action and in respect of all litigation carried on by the Anglo Group generally.

 

45.              Mr Gubay was not unaware of any fact material to his decisions in relation to the Wrongful Trading Action.

 

46.              Mr Willers will rely upon the following matters (set out in the statements of Mr Willers [paras 182-348], Mr Sorrell and Mr Styles) and in particular (but without loss of generality) the following:

 

(1)               Mr Willers' statement [paras 192-228] sets out the background to the proceedings against Aqua Design and Play Limited. Mr Gubay developed a grudge against Mr David Adams because of his refusal to provide a guarantee for the company and because of his treatment by Mr Adams personally. He wanted revenge against Mr Adams. In early November 1999 Mr Gubay instructed Mr Willers to procure Langstone to take proceedings against Aqua Design and Play Limited [Willers WS para 228]. Particulars of Claim were files on 7th August 2000 [Willers WS para 238];

 

(2)               In January 2001 Aqua Design and Play Limited went into liquidation. Mr Willers told Mr Gubay and he was furious and determined to get Mr Adams [Willers WS para 240-1]. Mr Gubay instructed Mr Willers to proceed to judgment against the company and then fund proceedings by the liquidator against the directors, as had been done in a previous successful action against an architect working for Mr Gubay. Mr Gubay instructed Mr Willers he was prepared to fund any investigation and litigation required and to give the Liquidator an indemnity against adverse costs orders, provided the case was run by Mr Sorrell [Willers WS para 242-244];

 

(3)               On 2nd March 2001 judgment was entered for Langstone against Aqua Design and Play Limited;

 

(4)               In about June 2001 Mr Gubay instructed Mr Willers to have Mr Haskew, the current Liquidator of Aqua Design and Play Limited, replaced if he would not co-operate [Willers WS para 250];

 

(5)               On about 20th March 2003 Mr Gubay instructed Mr Willers to instruct Bentley Jennison accountants to investigate the wrongful trading claim [Willers WS para 262]. Bentley Jennison gave a favourable initial report on 8th April 2003, and Mr Gubay told Mr Willers to get on with the investigation [Willers WS para 264]. On being told of Bentley Jennison's first draft report, Mr Gubay told Mr Willers "I knew they were at it" [Willers WS para 268];

 

(6)               On September 4th 2003 Mr Willers informed Mr Gubay that the Liquidator wanted to appoint his own solicitors. Mr Gubay told Mr Willers to pay the Liquidator his fees to date, keep the pressure on him and if necessary have him removed [Willers WS para 272];

 

(7)               Mr Gubay fixed the amount of Langstone's Part 36 Claimant's offer at £90,000 [Willers WS para 276];

 

(8)               On 27th July 2004 Langstone sold its trading business. The Wrongful Trading Action was however retained by Langstone on Mr Gubay's instructions [Willers WS para 283];

47.          

(1)               On 22nd September 2004 Mr Willers and Mr Sorrell met with Mr Gubay at Mr Gubay's office in Altrincham. Mr Sorrell gave Mr Gubay a progress report on the litigation. Mr Gubay expressed himself pleased with its progress [Willers WS para 287];

 

(2)               On about 28th April 2005 Mr Willers informed Mr Gubay that he had executed an indemnity for the Liquidator covering the Wrongful Trading Action [Willers WS para 301];

 

(3)               On 10th August 2005 the Wrongful Trading Action was commenced;

 

(4)               In about late October 2005 Mr Willers informed Mr Gubay that the Adams's had provided a large quantity of late disclosure. Mr Gubay told him to get on with the action and take advantage of the Adams's underhand methods [Willers WS para 308];

 

(5)               In about April 2006, Mr Willers told Mr Gubay that the Adams family had offered £150,000 including costs. He replied that it was not enough and they would offer more [Willers WS para 310]. In May 2006 Mr Gubay instructed Mr Willers to reject a further offer of £360,000 inclusive of costs [Willers WS para 312];

 

(6)               On 23rd August 2006 Mr Willers told Mr Gubay that the Adams family had offered £250,000 plus costs. Mr Willers also told Mr Gubay the costs position at the time. Mr Gubay instructed him to reject the offer [Willers WS para 314];

 

(7)               In mid April 2008 and on 17th March 2009 Mr Sorrell updated Mr Gubay with the position in the litigation [Willers WS para 319, 326];

 

(8)               On 29th September 2008 and 9th February 2009 Mr Gubay instructed Mr Willers to appeal unfavourable interlocutory decisions [Willers WS para 324, 325];

 

(9)               Mr Gubay instructed Mr Willers to ensure that the trial of the Wrongful Trading Action took place when he could be present [Willers WS para 330];

 

(10)           Mr Gubay decided to disinstruct Pannone's and to replace them with DWF shortly before the trial of the Wrongful Trading Action. As set out above Mr Gubay was also responsible for the decision to withdraw the Wrongful Trading Action on disadvantageous terms ie that the Liquidator would be responsible for his costs and those of the Adams family.

 

(4) Malice Malice/Vendetta

 

48.              In support of his case that Mr Gubay prosecuted the Langstone Action maliciously, Mr Willers relies upon the following matters:

 

(1)               The lack of reasonable and probable cause (see above);

 

(2)               Mr Gubay appears to have lied to his own legal advisers in relation to his own role in controlling the Anglo Group and directing the Langstone Action;

 

(3)               Mr Gubay's propensity, described in detail in Mr Willers' Witness Statement, to try to destroy anyone with whom he fell out;

 

(4)               Mr Gubay's mistaken belief that he had been defrauded by Mr Willers, a trusted subordinate for 23 years;

 

(5)               The actions taken against Mr Willers after his dismissal, described above, show that Mr Gubay was pursuing a "vendetta" against him out of spite;

49.          

(1)               Mr Gubay caused or procured a private detective to hack illegally into Mr Willers's private telephone records in or about 2010.

 

(5) Damages

 

50.              As a result of the wrongful and malicious prosecution and/or causation of the Langstone Action, Mr Willers has suffered loss and damage as follows:

 

(1)               Damages, including aggravated damages, for distress, injury to health and injury to reputation. The aggravating factors are pleaded under the head "Malice" above;

 

(2)               It was impossible for Mr Willers to find alternative employment while Langstone's claims of breach of duty by Mr Willers were unresolved. Mr Willers claims loss of earnings over the period from 27th August 2009 to 28th March 2013 of £500,000;

 

(3)               Mr Willers claims against Mr Gubay:

 

(a)               The difference between the liability for the costs incurred by Mr Willers in the Langstone Action and those received after assessment on the basis that the action should never have been prosecuted in the first place and/or that such costs are a foreseeable result of commencing litigation;

51.                    

(a)               Any failure to recover assessed costs from Langstone owing to its insolvency or otherwise.




Abuse of process




52.              The aforesaid loss and damage was caused by Mr Gubay causing and/or procuring Langstone to bring and/or continue proceedings against Mr Willers which Mr Gubay, and hence Langstone, did not intend to bring to trial.

53.  

54.              The Langstone Action was brought not for the purpose of succeeding in the claim but for the dominant and improper purpose of oppressing Mr Willers and/or causing him to expend costs and/or causing him distress and anxiety and/or preventing him finding employment and was an abuse of the process of the court.

55.                    

56.              Mr Willers will further rely on the following matters as demonstrating that the Langstone action was an abuse of process:




(1)               Mr Gubay's knowledge and motivation may be attributed to Langstone by virtue of his position as shadow director;




(2)               Mr Gubay procured Langstone to bring the Langstone Action in the knowledge that he, not Mr Willers, was responsible as the sole decision-maker for the alleged breaches of the common law and statutory duties which were the subject matter of the claim against Mr Willers and the same would be established by Mr Willers on the evidence at the trial of the Langstone Action.




(3)               In the Langstone action Mr Gubay was seeking to take advantage of his own wrong.

57.          

(1)               Mr Gubay brought the Langstone Action in the mistaken belief that Mr Willers had defrauded him/the Anglo Group Companies and/or had plotted to take control of the Anglo Group.

58.          

(1)               Mr Gubay appears to have lied to his own legal advisers in relation to his own role in controlling the Anglo Group and directing the Wrongful Trading Action.

59.          

(1)               Mr Gubay knew from the start and/or from the date of service of the Defence that he could not or would not bring the action to trial since it would necessarily involve consideration of his role in the Anglo Group and would thus have jeopardised the Group's tax status in particular when he was managing the Group companies while resident in Ireland from about 1996 to 1998 and in England from about 1998 to 2006.




60.              Insofar as it is necessary to do so, Mr Willers relies upon each of the matters pleaded in paragraph 29 above as constituting an overt act or threat by Langstone and/or Mr Gubay in furtherance of the improper purpose.

 

61.              Further Mr Willers claims interest pursuant to S 35A of the Senior Courts Act 1981.  

 

 

62.              AND THE CLAIMANT CLAIMS

 

(1)               Damages for malicious prosecution; further or alternatively

63.  

(2)               Damages for abuse of process malicious prosecution;

 

(3)               Interest pursuant to statute.