England and Wales High Court (Queen's Bench Division) Decisions

The Parties

i)                    Mr Tinkler was a substantial shareholder in and an executive director of Stobart;

ii)                  the First Defendant (“Mr Ferguson”) was a director and non-executive chairman of Stobart. He left Stobart on 23 July 2019;

iii)                the Second Defendant (“Mr Brady”) was, and remains, Stobart’s Chief Executive Officer;

iv)                the Third Defendant (“Mr Coombs”) was, and remains, a non-executive director of Stobart;

v)                  the Fourth Defendant (“Mr Laycock”) was Stobart’s Chief Financial Officer. He left that role, and with it his position on the board, on 6 July 2018, and then left the Company on 31 August 2019; and

vi)                the Fifth Defendant (“Mr Wood”) was a non-executive director of Stobart, until 23 July 2019.

The overall dispute

The Stobart Judgment

History of the Malicious Falsehood Action

i)                    the Re-Amended Particulars of Claim do not advance a reasonably arguable or properly particularised case under s.3(1) Defamation Act 1952 and contain no claim for special damage and so the statement of case discloses no reasonable grounds for bringing the claim; and

Abuse of process: re-litigation/collateral attack

“In an action for … malicious falsehood, it shall not be necessary to allege or prove special damage - 

(a)     if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form, or

(b)     if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.”

“… The Court cannot strike out a claim for a £50 debt simply because, assessed against the costs of the claim, it is not ‘worth’ pursuing. Inherent in the value of any legitimate claim is the right to have a legal wrong redressed. The value of vindicating legal rights - as part of the rule of law - goes beyond the worth of the claim. The fair resolution of legal disputes benefits not only the individual litigants but society as a whole.”

[54]   ... An abuse of process is of concern not merely to the parties but to the court. It is no longer the role of the court simply to provide a level playing field and to referee whatever game the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately and proportionately used in accordance with the requirements of justice…

i)                    the Defendants were not parties to the Stobart Action;

ii)                  the Defendants had no financial interest in the outcome of the Stobart Action;

iii)                the Defendants could not be said to be the real parties behind the Stobart Action (they were not at risk of an order for costs being made against them under s.51 Senior Courts Act 1981);

iv)                by the time the Stobart Action came on for trial, Mr Ferguson (who was a non-executive director) had announced his plan to leave the company and Mr Laycock had ceased to be a director;

v)                  Mr Coombs and Mr Wood were only ever non-executive directors; and

vi)                Mr Brady’s position as a director was insufficient to make him a privy.

i)                    it was issued before the Stobart Action;

ii)                  it raises different issues from the ones decided in the Stobart Action;

iii)                the Judge in the Stobart Action was well aware of the Malicious Falsehood Action and stated that he was not deciding any issue in those proceedings;

iv)                there is no collateral attack on the Stobart Action. Mr Tinkler says that he accepts the Court’s decision in the Stobart Action as to the lawfulness of the Claimant’s dismissal stands (however strongly he disagrees with it). Success in the Malicious Falsehood Action will not impugn that decision; and

v)                  there is no unfairness to the Defendants if he is permitted to pursue the Malicious Falsehood Action and no real argument that this claim should have been tried at the same time as the Stobart Action.

Damage and the adequacy of Mr Tinkler’s claim under s.3(1) Defamation Act 1952

i)                    Mr Tinkler does not have an arguable claim since (a) he alleges no special damage; and (b) he has not particularised a sufficient case to come within s.3(1) Defamation Act 1952; and

ii)                  even if his pleaded case were allowed to continue, Mr Tinkler would, in any event, only be awarded nominal or near nominal damages even if he succeeded in the claim and the claim should in all the circumstances be struck out under the Jameel jurisdiction as disclosing no substantial tort.

i)                    first, the principle that damage to reputation cannot be claimed in a malicious falsehood action (see [44(v)] above);

ii)                  second, the Court ruled that the Announcement did not convey the seriously defamatory meanings that Mr Tinkler had alleged had caused him harm. The only meaning that the Court found to be defamatory was meaning (c) (see [15] above), but that has been removed from consideration because Mr Tinkler has abandoned his defamation claim.

i)                    Mr Tinkler’s immediate public reaction to the Announcement was to send a vigorous letter of defence to all shareholders on 9 June 2018 (the same day on which he issued the Claim Form in the Malicious Falsehood Action, but it was not served until later) protesting about the “mud-slinging” and urging shareholders to vote against Mr Ferguson’s election (see [308]-[309] Stobart Judgment).

ii)                  On 14 June 2018, Stobart announced publicly (by further RNS) that Mr Tinkler had been dismissed. This was followed, on 15 June 2018, by Stobart issuing the Claim Form in the Stobart Action. Mr Tinkler complains, as part of his case on malice, that these steps were taken by the Defendants “in order to… publicise (false) allegations of wrongdoing by the Claimant in the press” (§8.11.7 Re‑Amended Particulars of Claim). Mr Caldecott QC submits that any harm caused by the Announcement pales into insignificance when compared to Mr Tinkler’s subsequent dismissal and the publicity of it (identified for complaint by Mr Tinkler in §8.11.7.1).

iii)                On 15 February 2019, the Stobart Judgment was handed down. Mr Caldecott QC submitted “somewhat ironically, most of the more serious elements in [Mr Tinkler’s] original defamation claim were subsequently found to be true by HHJ Russen…” (see [11] above, in particular the finding that Mr Tinkler had acted in serious breach of his fiduciary and contractual duties as a director of Stobart and had been lawfully dismissed). The Stobart Judgment received very significant publicity amongst the business community and more widely. Mr Caldecott QC argues that, since 15 February 2019, any adverse consequences and/or pecuniary damage suffered by Mr Tinkler are likely to have been caused by the Stobart Judgment, not the Announcement.

i)                    §11.1 merely repeats the particulars of falsity and cannot sensibly assist on the statements’ tendency to cause pecuniary damage (or not).

ii)                  §11.2 concerns the alleged width of publication, which again cannot of itself establish the requisite tendency.

iii)                §11.3 (and its sub-paragraphs) is central to Mr Tinkler’s case on establishing that publication of the Announcement was likely to cause him pecuniary damage. As noted above, the Defendants had attacked this part of Mr Tinkler’s case at the hearing before Nicol J and Mr Tinkler had been given an opportunity to amend (and provide further information about) his case on damage.

iv)                §11.3.1 contains general assertion as to the likelihood of the Announcement jeopardising his future appointment as a director of any UK company. The sub‑paragraph contains no suggestion that Mr Tinkler has, in fact, been refused any position, still less any suggestion that such refusal was caused by publication of the Announcement.

v)                  §11.3.2 contains a similar general assertion that charities or other organisations were unlikely to want to be associated with Mr Tinkler or that Government ministers and senior civil servants would not meet with him. The same objection is taken to the lack of any specific refusals. Mr Caldecott QC suggests that such a reaction to the Announcement would appear to be wholly disproportionate.

vi)                §11.3.3 contains no details of the alleged reduction in the Claimant’s ability to attract investment for future ventures or investments and has impaired his ability to recruit high calibre individuals to any future board of which Mr Tinkler was part. The same causation points are made on behalf of the Defendants. The response to the Request for Further Information yielded no details (see [23] above). The Defendants’ solicitors complained that the lack of particulars had been a matter that had been raised specifically at the hearing before Nicol J. They asked Mr Tinkler to identify with which individuals/entities Mr Tinkler met and when the meetings occurred. No details were provided. Mr Watts, in his witness statement noted that Mr Tinkler had provided no further additional information in respect of his damage claim. Mr Tinkler left this aspect of the case unaddressed in his witness statement dated 23 March 2020. Mr Caldecott QC submits that Mr Tinkler has now had a further 7 months in order to provide details to support his claim that the publication of the Announcement was likely to cause him pecuniary damage. His witness statement, it is argued, does not provide any explanation for the mechanism whereby the publication of the Announcement was likely to cause Mr Tinkler pecuniary damage.

vii)              Mr Tinkler confirmed in a response to a Request for Further Information that the articles referred to in §11.3.4 were the articles set out in §11.2 (i.e. articles relied upon as reporting upon and/or repeating the Announcement). Mr Caldecott QC submits that these cannot demonstrate a likelihood of pecuniary damage.

Decision

Re-litigation/collateral attack

“Each of the Defendants, being directors of the Company, knew the matters referred to at paragraph 8.1-8.4 above and, accordingly, knew that the Claimant (a) had not destabilised the Board at a crucial time for the company’s business and (b) had not required (or forced) the Board to deal with the challenges listed in [39]-[43] of the Announcement (whether in the recent past or at all); the Defendants knew (as set out above) that none of the matters listed could properly be regarded as a “challenge” which the Claimant had required (or forced) the Board to address.”

[792] As to that… duty, there are two reasons why I have concluded the Four Directors were not in breach of it. The first is that I find that each of them thought that it was in the best interests of the Company to publish [the Announcement]. I have already referred to Mr Coombs' view about the need for [the Announcement] in addressing, on the question of an intention to injure within Issue 2, what he perceived to be Mr Tinkler’s aims. All four of them considered that his challenge to Mr Ferguson (with its repercussions in respect of Messrs Wood and Coombs) was destabilising the Company.

[793] The second reason is that the terms of [the Announcement], though inappropriate in the respects mentioned above, do not justify the conclusion (by way of an objective check upon their subjective thoughts) that no reasonable director would have agreed to it. This second reason is reinforced by the advice the Four Directors received at the time and by the absence of any evidence that it damaged the Company...

i)                    Issue H and Issue K: Mr Tinkler alleges that the termination of his employment and his removal as a director on 14 June 2018 was “invalid” (§8.11.6.1 Re‑Amended Particulars of Claim). HHJ Russen QC found that it was valid and lawful (as was his removal as a director of Stobart): [953] and [955] (see also the cross-referenced paragraphs of the Stobart Judgment identified in Appendix 2). Permitting this issue to be re-litigated in the Malicious Falsehood Action would amount to a direct challenge to this finding in the Stobart Action.

ii)                  Issue I: Mr Tinkler alleges that the transfer of approximately 5.3 million shares into the Employee Benefit Trust so that their voting rights could be utilised in order to secure the re-election of Mr Ferguson as Chairman at the 2018 AGM was improper (§8.11.11 Re-Amended Particulars of Claim). Further he alleges that these actions were in breach of the Defendants’ duties to act in the best interests of Stobart (§8.7.3). In relation to the former, HHJ Russen QC found that the transfer was improper, but that it was done by them in what they believed to be in the best interests of Stobart ([874]). Permitting this latter issue to be re-litigated in the Malicious Falsehood Action would amount to a direct challenge to this finding in the Stobart Action.

iii)                Issue J: Mr Tinkler alleges that Mr Ferguson acted improperly in using discretionary proxies which he held at the 2018 AGM of Stobart to vote against Mr Tinkler’s appointment as a director (§8.11.12.2 Re-Amended Particulars of Claim). This issue is perhaps of peripheral relevance as, as Mr Tinkler expressly pleads, Mr Tinkler was elected despite Mr Ferguson’s use of the proxies. The same complaint was made in the Stobart Action, but rejected by HHJ Russen QC: [885]-[886]. Permitting this issue to be re-litigated in the Malicious Falsehood Action would amount to a direct challenge to this finding in the Stobart Action.

iv)                Issue L: Mr Tinkler contends that his efforts to remove Mr Ferguson as Chairman of Stobart were motivated by what he believed to be the best interests of Stobart (§§8.1.3, 8.2 and 8.7 Re-Amended Particulars of Claim). I have already noted that this is not a relevant issue in the Malicious Falsehood Action (see [72] above), but even if it were, it was an issue that was decided adversely to Mr Tinkler in the Stobart Action. HHJ Russen QC found that Mr Tinkler’s “grievance over remuneration was really the spark for Mr Tinkler going on the offensive in pressing for change within the boardroom” [694] and that the Judge had “no difficulty in drawing the inference that it was [his] grievance about remuneration which caused him to target Mr Ferguson” [704]. Permitting this issue (to the extent that it is relevant) to be re-litigated in the Malicious Falsehood Action would amount to a direct challenge to the identified findings in the Stobart Action.

v)                  Issue M and N are two very minor factual issues, relied upon by Mr Tinkler in the Malicious Falsehood Action (§§8.11.2 and 8.11.4), but which were decided against him in the Stobart Action ([588]-[602]). Permitting these issues to be re‑litigated in the Malicious Falsehood Action would amount to a direct challenge to the identified findings in the Stobart Action.

Damage and Jameel abuse of process

i)                    First, his claims for reputational damage cannot be claimed as damage in a malicious falsehood action.

ii)                  Second, none of the matters he identified during his oral submissions could be relied upon (even if I were willing to allow him an opportunity to re-plead his case). The loss of salary (or other remuneration) and loss of share options were not caused by publication of the Announcement, they were caused by the termination of his employment and directorship by Stobart. Both have been held to be lawful in the Stobart Judgment.

iii)                Third, and almost certainly the largest obstacle, Mr Tinkler’s pleaded case discloses no proper case on causation. Mr Caldecott QC’s submissions are compelling. If the Announcement had been the only thing of significance publicly to affect Mr Tinkler, then an inferential case based on a drop-off of offers of directorships or investment opportunities might have had some prospect of success. But that was not the position. The Announcement was an early incident in the wider battle, played out publicly, between Mr Tinkler and the other directors of the board of Stobart. Objectively judged, the very public sacking of Mr Tinkler on 14 June 2018 is much more likely to have caused pecuniary damage to Mr Tinkler than publication of the Announcement and then, subsequently, even that damage was more likely than not to have been eclipsed by the publicity that the Stobart Judgment received. After the Stobart Judgment, any pecuniary damage that Mr Tinkler says was likely to have been caused to him was, absent a compelling alternative explanation, likely to have occasioned by the Stobart Judgment. In order for his pleaded case on the likelihood of pecuniary damage to disclose reasonable grounds for bringing his claim, Mr Tinkler had to explain a way - or a mechanism - whereby an RNS, in the fairly anodyne terms of the Malicious Falsehood Meaning, retained any real potency to cause pecuniary damage after Mr Tinkler’s public dismissal from Stobart and the subsequent adverse findings publicly made against him in the Stobart Judgment, including that he had acted in serious breach of his fiduciary duties as a director of Stobart.

Appendix 1 - Extracts from the Re-Amended Particulars of Claim in the Malicious Falsehood Action

[Amendments made in the Amended Particulars of Claim, dated 14 June 2019, shown with single underlining or single strike through

Amendments made in the Re-Amended Particulars of Claim, dated 10 September 2019, shown with double underlining or double strike-through]

Particulars of Falsity

8.1         The Claimant has not acted in breach of his duties as a director of the Stobart Group nor has he deliberately had not destabilised the board at a crucial time for the business, whether as alleged in the Announcement or at all. In fact, the Company’s continuing success has always been at the forefront of the Claimant’s actions as evidenced by (among other things):

8.1.1.           The Claimant’s decision to step down as CEO of the Company in 2017 in order to focus his talents on finding new deals for the Company through Stobart Capital and so that he could realise some of his shareholding without having a negative effect on the share price of the Company.

8.1.2.           The Claimant’s continued provision of more than 50% of his time on dealing with operational issues for the Company following his resignation as CEO, despite the fact that these issues were supposed to be dealt with by the Second Defendant when he took over as CEO so that the Claimant could focus on pursuing investment opportunities for the Company. As the Second Defendant preferred to spend his time in London the Claimant was required to visit all of the Company’s regional sites in order to provide the requisite operational oversight.

8.1.3.           The Claimant formed the view that it would be in the best interests of the Company for the First Defendant to step down from his position as Director and Non-Executive Chairman of the Company and, having failed to persuade the First Defendant to step down voluntarily, the Claimant gave notice that he would vote against his re-election at the AGM. In those circumstances, it was for the shareholders to decide (by vote at the AGM) whether or not to re-elect the First Defendant. As the Defendants knew:

8.1.3.1      a change in the identity of the Non-Executive Chairman (of itself) would neither destabilise the Company nor adversely affect its operational management. Both the First and Fifth Defendants have admitted (in their evidence in the Stobart claim) that this was the case. The Second Defendant (as CEO) would have been prepared to work with another Chairman.

8.1.4.           The facts and matters set out at 8.3 and 8.4 below.

8.2         Further, the Claimant’s opposition to the First Defendant continuing as Chairman of the Company was based on his view of what was in the best interests of the Company. The Claimant has not acted selfishly or for self-interested reasons nor is he seeking to protect his own position. Paragraph 8.1 above is repeated. In fact:

8.2.1.           The origin of the current dispute is predominantly the Claimant's opposition, as a shareholder, to the First Defendant's re-election as Chairman. This opposition is founded upon the Claimant's serious concerns about to the First Defendant's poor corporate governance style, which the Claimant believes has had a detrimental effect on the Company.

8.2.2.           The Defendants have repeatedly tried to force the Claimant’s resignation as a Director in response to the Claimant's criticisms.

8.2.3.           The Claimant could not be ousted from his role involuntarily (other than by way of the mechanism at Article 89(5) of the Company's Articles of Incorporation) is, and has always been, an effective and experienced company director who has delivered value to shareholders and is popular both with the Company staff and its shareholders. Paragraph 8.3 below is repeated.

8.2.4.           Paragraphs 8.6 to 8.12 below are repeated.

8.3         The Claimant has been a successful manager of both the Company and Stobart Capital and was not guilty of any improper conduct whilst CEO of the Company. In fact, under the Claimant’s leadership as CEO of the Company (among other things):

8.3.1.           the share price rose from 130p in 2008 to 296p in June 2017, a 128 per cent increase;

8.3.2.           dividends of over £240 million were paid to shareholders;

8.3.3.           over £800 million of appreciation value after funds was raised;

8.3.4.           he created a platform for a multimodal logistics business;

8.3.5.           he purchased Stobart Energy, which has now become the leading supplier of biomass in the UK;

8.3.6.           he purchased the Moneypenny property portfolio, which subsequently delivered a 22.5 per cent IRR;

8.3.7.           he acquired Autologic for £12 million and since realised a 6x multiple;

8.3.8.           in 2014, the Company sold 51 per cent of Eddie Stobart Logistics ("ESL") when the Stobart Group had a market capitalisation of c.£475 million, realising £195 million of cash to reduce debt levels and strengthen the Company’s balance sheet.

8.4         Further, the Claimant hads not required (nor had he forced) the Board to address unwarranted challenges whether as alleged or at all. In fact, as the Defendants knew, none of the bullet points listed under the heading “Mr Tinkler” can or could properly be described as “challenges” posed by the Claimant and/or as matters the Board had been required or “forced” by him to address. Further, although not included specifically in the Judge’s formulation of the available meanings (see paragraph 8 above), as the Defendants knew, it was false to describe the matters referred to in [39-43] of the Announcement as being and/or to be “in the recent past” (see [38] of the Announcement). Using the same sub-headings as in the Announcement under the section headed “Mr Tinkler”:

8.4.1.           Settlement of contractual issues arising from a previous related party transaction when [the Claimant] was CEO:

8.4.1.1.    The Company acquired W A Developments Limited ("WADL"), at the then Board’s request, to expand its railway maintenance and infrastructure activities. The sellers in that transaction were William Stobart ("Mr Stobart") and the Claimant (together "Sellers").

8.4.1.2.    The Sellers were Executive Directors of the Company at the time, so the Company engaged third party advisers to do due diligence and prepare a fair valuation. The Sellers separately instructed Eversheds LLP.

8.4.1.3.    As is standard, limitations were agreed to the Sellers' liability. The agreed apportionment of that risk and responsibility was reflected in the price paid.

8.4.1.4.    The Sellers agreed with the Company that the Sellers would only have liability under the Tax Indemnity and Tax Covenant for a fixed period of seven years, namely until 4 April 2015.

8.4.1.5.    More than nine years after Completion, the Sellers received a letter dated 15 August 2017 from the Company asserting a claim. The Claimant replied explaining that the time limit for notifying a Tax Claim against them had expired on 4 April 2015, as was the case. The Claimant (prior to 29 May 2018) provided the Board with a copy of the advice he had received from a QC to that effect.

8.4.1.6.    The Defendants and each of them authorised a claim to be made against the Claimant and the Company issued proceedings on 7 June 2018. On 16 November 2018, Phillips J gave summary judgment in the Claimant’s favour and summarily assessed costs in the sum of £258,000 against the Company.

8.4.1.7.    Accordingly, as was confirmed by the High Court in the judgment referred to at 8.4.1.6 above, the Claimant was at all times entitled to, and did, rely upon the expiry of the limitation. Paragraph 8.11.2 below is repeated.

8.4.1.8.    In any event, this matter was a claim raised by the Company in 2017 (belatedly and wrongly), arising from a sale that had taken place in 2008 and said to be based on an indemnity that had expired in 2015. It was not, nor could it reasonably be described as, a “challenge” that had been “posed” by the Claimant, “in the recent past” (or at all).

8.4.2.           A proposed selective buyback of part of [the Claimant's] stake in the Company

8.4.2.1.    On 15 September 2017, the Claimant emailed the First Defendant regarding a buy-back scheme that the Claimant had investigated for the Second Defendant and the Board arising out of the Second Defendant’s own strategy paper.

8.4.2.2.    The Company at the time had received a large injection of cash from the listing of its 49% stake in Eddie Stobart Logistics Limited (now Eddie Stobart Logistics PLC). The cash was generating no interest whereas the Company was paying approximately a 6 per cent yield on dividends. In that situation, a company buy-back would have reduced the Company’s outgoings and accordingly, the material impact would be positive for the Company. Further, as the Company is an acquisitive one, it is a good strategy for it to hold issued shares in the Treasury until a later date when it can realise them for cash without having to increase borrowings.

8.4.2.3.    In the event, this proposal was never discussed with the Board, only the First and the Second Defendants, who although they ultimately did not agree to the proposal, had initially expressed their “full support” for it. As the First Defendant has admitted (in his evidence in the Stobart Claim) the Claimant’s email of 15 September 2017 was “perfectly fair”; the First Defendant “thought it was an option we should look at”; and, when the brokers had advised against it, the Claimant did not press the proposal.

8.4.2.4.    The Claimant’s proposal was manifestly legitimate as there was more than enough cash in the Company for the buy-back scheme and it would not have materially impacted the Company’s cash reserves. It was not, nor could it be reasonably described as, a “challenge” posed by the Claimant.

8.4.3.           A proposed additional ex-gratia bonus for [the Claimant] of shares then worth some £8m

8.4.3.1.    At a meeting on 10 January 2018, the Claimant met with the First Defendant and Richard Butcher, Chief Executive of the Company's Infrastructure Division. The Claimant stated that in light of his role and the value he had delivered that he was under-rewarded, as were other managers under the Long-Term Incentive Plans (“LTIPs”). He suggested that the Company's Remuneration Committee could make a distribution from the Employee Benefit Trust ("EBT"), a trust set up by the Company in 2007 for the purpose of rewarding high performance. The EBT had only made two distributions since its establishment.

8.4.3.2.    The First Defendant informed the Claimant that he did not feel that the Remuneration Committee alone could make such a decision and that the matter should be put to shareholders.

8.4.3.3.    In the event, although the Claimant did have subsequent meetings with shareholders (as the First Defendant had agreed he could do), this subject was barely discussed. The Claimant's proposal was only ever discussed in substance with the First Defendant, and was never presented to the Board. In the circumstances, it was not, nor could it be reasonably described as, a “challenge” posed by the Claimant.

8.4.4.           A proposed buy-out of the Company when the share price was in the range of 100p to 120p

8.4.4.1.    Around 2015, the Company was considering a management buy-out and becoming private, under the code-name “Project Kent”. This was supported by a large number of shareholders, and engaged with by the independent members of the Board, particularly as the management proposal was an offer amounting to 140p per share, significantly above the market value. Ultimately, no buy-out was agreed as the Company wanted about 5p more per share it was decided not to put the proposal into effect.

8.4.4.2.    The proposal was manifestly legitimate, conducted according to good corporate governance procedures, and with the benefit of independent advice for both the Board teams considering the proposal. It was not in the “recent past”; nor was it properly described as a “challenge” posed by the Claimant but would have represented a good outcome for all shareholders had the proposed buy-out taken place, as the First Defendant admitted in his evidence in the Stobart Claim.

8.4.5.           A proposed related party transaction associated with the recent aborted airline transaction

8.4.5.1.    Since June 2017, the Company had been considering possible structures to remove Stobart Air from the Company’s balance sheet and to create a consolidated vehicle for the regional airline market.

8.4.5.2.    Accordingly, the Claimant (requested by the Board as part of his remit through Stobart Capital) proposed that the Company could transfer part of its aviation business into a private consortium which would then be the catalyst for future acquisitions of regional airlines including Flybe. The Company would retain up to 49% of any value created and the subsequent value generated by the business on an ongoing basis. In so doing, the acquisition of regional airlines including Flybe could be treated as an investment and their profit and loss figures would not affect the Company’s balance sheet.

8.4.5.3.    The Second Defendant was enthusiastically supportive of the Claimant’s proposal (which was code-named Project Blue) stating (among other things) in an email dated 12 November 2017 “we need to stop the debates and get on with it”. As the Second Defendant admitted in his evidence in the Stobart Claim: he “liked the proposal” and “was convinced it was the right thing to do for the business”; further, he agreed that there was “no breach of duty in putting proposals forward”.

8.4.5.4.    In the event, the consolidation did not occur. The First and Second Defendant chose to follow a different structure to acquire Flybe which was ultimately aborted. The Claimant was not personally involved in the aborted transaction other than through Board discussions. The Claimant’s proposal in 8.4.5.2 above was manifestly legitimate, as evidenced by the Second Defendant’s response at 8.4.5.3 above. In the circumstances, it was not, nor could it be reasonably described as, a “challenge” posed by the Claimant.

8.4.6.           The Claimant personally has at all material times properly managed Stobart Capital. In any event, the Claimant’s management of Stobart Capital has no impact upon the Company.

8.5         The Claimant has not repeatedly shown himself to be so lacking in integrity that he is unfit to hold the office of company director. The Claimant repeats and relies upon the matters set out above.

Particulars of Malice

8.6         Paragraphs 8.1, 8.2 to and 8.4 above are repeated. The Announcement was published by the Defendants and each of them as part of a concerted unlawful campaign against the Claimant (“the Campaign”), the dominant improper purposes of which were (among other things) to:

8.6.1.           secure the re-election of the First Defendant as Chairman at the forthcoming Annual General Meeting on 6 July 2018 (“the AGM”) by whatever means necessary; and/or

8.6.2.           as a result, protect the position of the Second, Third and Fifth Defendants who had aligned themselves publicly with the First Defendant, including the Third and Fifth Defendants who had made clear that they would resign if the First Defendant was not re-elected; and/or

8.6.3.           counter the Claimant’s letter to the Board stating his intention to vote against the re-election of the First Defendant (which had been the subject of an RNS Announcement on 25 May 2018), and silence the Claimant’s legitimate criticisms of the First Defendant by damaging the Claimant’s reputation so that shareholders, stakeholders and prospective investors in the Company would not follow his lead and would not vote for him at the AGM.

As set out below, the Campaign against the Claimant, which the Defendants code-named “Project Shelley”, is ongoing and he reserves his right to add to the particulars of malice set out below.

8.7         The Claimant has publicly stated his opposition to the re-election of the First Defendant who he believed was s is unfit to continue as Chairman of the Company. The vote is due to take took place at the AGM on 6 July 2018. In contrast, the Defendants and each of them are were all in favour of the First Defendant’s re-election and the Third and Fifth Defendants have publicly stated (not least in the Announcement itself) that they will would resign from the Board if the First Defendant is was not re-elected.

8.7.1.           On 28 May 2018 (Bank Holiday Monday) the Defendants formed an improperly constituted (and therefore invalid) Committee of the Board consisting of the Second, Third and Fifth Defendants (“the Committee”).

8.7.1.1.    The Committee was meant to be (but was not) an independent and impartial decision-making Committee comprised only of directors who were “non-interested” in the outcome of the First Defendant’s re-election, and which, as the Fifth Defendant made clear, “would obviously…not include Iain and Andrew Tinkler”.

8.7.1.2.    The Third and Fifth Defendants were both personally interested in the outcome, having pledged that they would stand down if the First Defendant was not re-elected. As the Fifth Defendant admitted in evidence in the Stobart Claim: he had already “taken sides”. By standing down themselves, they would suffer financially.

8.7.1.3.    Further, the First Defendant (contrary to his purported exclusion from the Committee) attended meetings of the Committee and provided it with his (non-independent) advice, views and “input”.

8.7.2.           In a letter dated 14 June 2018 from Rosenblatt (“Rosenblatt”), the new solicitors appointed by the Committee on or about 14 June 2018, it was stated that the Committee was established purportedly to exercise “all powers of the Board…in connection with the Company’s handling, action or other response to the actions of [the Claimant] in relation to his attempts to block the re-election of [the First Defendant] as Chairman of the Board…” (as referred to at Paragraph 8.11.6 below). Paragraph 8.2 above is repeated.

8.7.3.           Accordingly, the Claimant and the Defendants were and are on opposite sides of a fiercely contested, personal Boardroom power-struggle. In that situation, the Defendants acted together to “fight like tigers” to influence the shareholders into voting for the outcome they wanted (as the Third Defendant admitted in his evidence in the Stobart Claim). This was directly contrary to the Defendants’ duty as directors.

8.8         As is evident from the terms of the Announcement and the manner of its publication, it was deliberately designed by the Defendants and each of them to cause damage to the Claimant’s reputation, as was the case.

8.8.1.           There was no need for the Announcement at all. The RNS issued on Friday 25 May 2018 contained sufficient information and satisfied all legal and regulatory requirements: this was admitted by each of the First, Second and Third and Fifth Defendants in their evidence in the Stobart Claim (the Fourth Defendant did not give evidence). There was no need (whether by legal or regulatory requirement) for the Company to provide further information on the next working day (Tuesday 29 May 2018) in a further RNS.

8.8.2.           The Announcement was devised as a tactical move as part of the Defendants’ “war” strategy to “win” the re-election of the First Defendant by using all means they chose, by denigrating the Claimant publicly and damaging his name and reputation.

8.8.2.1.    In an email exchange late on Friday 25 May 2018, the Fifth Defendant claimed to the First Defendant that the Claimant had “previous” and suggested that it would be “worthwhile” to “build up a picture of previous incidents”; the First Defendant responded that Ian Soanes “just might be the man”.

8.8.2.2.    On Saturday 26 May 2018, David Arch, one of the company’s brokers, emailed the Defendants saying that he had been “thinking further about how we might play this matter” and that “If we really want to win…we should go out hard on Tuesday morning to seize the moral high ground and the initiative. This would involve serving notice to AT [a reference to the Claimant] on Monday evening and issuing a hard hitting announcement first thing Tuesday”.

8.8.2.3.    On the same day, the Second Defendant emailed the First Defendant to similar effect, stating: “We’re all thinking about the strategy for ensuring we win this very difficult battle and get on the front foot.” He referred to “information” that “can be released” (setting the direction for the 29 May 2018 RNS and leaks of Company information to the media).

8.8.2.4.    The Defendants arranged to speak by telephone on Sunday 27 May 2018 (during that Bank Holiday weekend) at 6.30pm. Prior to the call, the Second Defendant circulated by email points for discussion and potential draft wording to be included in an RNS.

8.8.3.           There was (as the Defendants knew) no proper reason for making an attack on the Claimant through a further RNS issued on the next working day after the RNS issued on 25 May 2018; they were not providing necessary information to the shareholders or the market.

8.9         By email at 23.32 on 28 May 2018 (a Bank Holiday), the Fourth Defendant sent a copy of the draft Announcement to the Claimant (and other members of the Board), stating that “it will be released to RNS at 7am tomorrow morning”.

8.9.1.           Notwithstanding that the Defendants deliberately intended to leave the Claimant no time to respond to the proposed Announcement (despite the fact that it contained defamatory allegations against the Claimant as determined by Mr Justice Nicklin (“the Judge”) on 17 December 2018 it contained the Defamatory Statements in relation to it made seriously defamatory allegations against the Claimant as the Defendants knew and intended) the Claimant’s solicitors nonetheless managed to respond to the Defendants by email at 2.29am, informing them that “without limitation the section headed “Mr Tinkler” contains material regarding our client that is false and highly defamatory. In addition, there are some misleading statements in relation to the Company which need to be corrected to ensure that the market is not misled”. The email asked the Defendants to confirm that they would not proceed with the publication of the Announcement until rectified.

8.9.2.           No response was received from the Defendants’ solicitors and so the Claimant’s solicitors sent a further chasing email at 14.11 on 29 May 2018 stating (among other things) that the Claimant did not accept that the appointment of the Committee was valid.

8.9.3.           The Defendants ignored the Claimant’s request and failed to make any further enquiries as to the specifics of the defamatory material referred to, instead choosing to publish the Announcement “in materially the same form” as confirmed by the Defendants’ solicitors in their email at 4.53pm on 29 May 2018.

8.9.4.           In an email dated 29 May 2018 at 15.10 to the Board the Fourth Defendant stated that: “This Announcement has been released by Redleaf recently. To be clear it did not have my approval and I believe it should be amended so that the Ongoing Board does not include me in the definition in a number of places. I suggest an amendment urgently”.

8.9.5.           Despite the Fourth Defendant privately resiling from the publication of the Announcement and calling for its urgent amendment, and the remaining Director, John Garbutt not being “entirely convinced”, the Defendants and each of them have made no changes to the Announcement which is still widely available online as set out in Paragraph [4] above.

8.10     By letter dated 30 May 2018 the Claimant asked (among other things) that the Defendants release a further Announcement apologising for and withdrawing the statements made. No such apology or withdrawal has been forthcoming and the Announcement still remains publicly available (unamended) on the RNS website and on the Company’s website as set out at Paragraph 4 above. A hyperlink to the Announcement has also been was also included in the letter from the Fifth Defendant to the shareholders as part of the AGM documents provided on 25 June 2018.

8.11     Further, the Claimant will rely upon the following facts and matters as yet further evidence of the Campaign against him as set out at 8.56 above. The Defendants were, in January and February 2018, extremely keen “to get [the Claimant] off the Board” of the Company, as shown by the following:

8.11.1.       the First Defendant’s instruction on or about 17 January 2018, to the Company Secretary, Louise Brace, to draft an unsolicited resignation letter for the Company to give to the Claimant;

8.11.2.       on 25 January 2018 the First Defendant ambushed the Claimant with a draft RNS to announce his (untendered) resignation;

8.11.3.       the First Defendant on 5 February 2018 sought a recommendation from Jonathan Brown, the Company’s then in-house solicitor (former partner and now Chairman of Hill Dickinson), on the appointment of a new “aggressive” firm of solicitors to advise the Company, on 5 February 2018, to prepare for litigation against the Claimant;

8.11.4.       the First Defendant proposed amendments to draft Board minutes for the 25 January 2018 meeting indicating (falsely) that the Claimant had said he would step down on 16 February 2018 (the amendments proposed were not accepted); and

8.11.5.       the Defendants on 26 February 2018 drafted a resolution under Article 89(5) of the Company’s Articles of Association for the removal of the Claimant (this attempt was aborted: it required the consent and signatures of all the directors, other than the Claimant; John Garbutt, a director, refused to sign).

8.11.6.       By letter dated 14 June 2018, the Fifth Defendant purported to terminate the Claimant’s employment with the company “with immediate effect” for the (spurious) reasons set out in Rosenblatt’s letter of the same date (“the purported termination”).

8.11.6.1.For the avoidance of doubt, the Claimant avers that the purported termination (which was made with no warning at all) is invalid. Rosenblatt claim to represent the Company on the instructions of the Committee (which for the reasons set out above is improperly constituted).

8.11.6.2.The Claimant first learnt of the purported termination when he was informed by an employee of Stobart Capital, who had been copied into an email from the Second Defendant stating that he had been dismissed; at the same time the Claimant became aware of material circulating online, such as “Former Stobart CEO Andrew Tinkler gets the sack” (https://www.hl.co.uk/shares/stock-market-news/company-news/former-stobart-ceo-andrew-tinkler-gets-the-sack).

8.11.7.       On 15 June 2018, the Claimant was served with a the Claim Form by the Defendants in the Stobart Claim (purporting to act on behalf of the Company) alleging (among other things) breach of fiduciary duties and breach of the Claimant’s Service Agreement. No particulars of claim were served, and no explanation has been was provided to the Claimant as to the alleged substance of these allegations. It is to be inferred that the Defendants issued the Claim Form in order to safely publicise (false) allegations of wrongdoing by the Claimant in the press, as they had similarly done when they issued and served an unparticularised Claim Form dated 7 June 2018 against the Claimant for payment of sums due and/or payable arising out of the matters pleaded at 8.4.1 above (“the Tax Claim”).

8.11.7.1.Before the Stobart Claim was even served on the Claimant, the allegations made in it were (as the Defendants knew and intended) reported in:

(a)           The Guardian on 14 June 2018 under the heading “Stobart fires former boss Andrew Tinkler from its board”;

(b)          The Times on 15 June 2018 under the headings “Stobart fireworks”, “Five minute digest” and “Need to know”;

(c)           City Am on 15 June 2018 under the heading “Stobart Group’s crisis ignites the governance tinderbox” and “Former Chief Andrew Tinkler fired from Stobart Group board”;

(d)          The Sunday Times on 1 July 2018 under the heading “Bumpy ride for Stobart’s Warwick Brady”; and

(e)           The Telegraph on 2 July 2018 under the heading “Stobart non-exec backs Tinkler as board fracture ahead of vote”;

8.11.7.2.Allegations contained in the Tax Claim were reported in The Times on 9 June 2018.

8.11.8.       The Defendants, or some of them unlawfully leaked to the Daily Telegraph, or authorised the unlawful leaking of the following documents (most likely via its communications firm, Redleaf), as part of their improper strategy to use the press to damage the Claimant:

8.11.8.1.The purported termination letter informing the Claimant of his (purported) dismissal dated 14 June 2018, extracts of which were republished in the articles at 8.11.7.1 above; and

8.11.8.2.a number of the Claimant’s personal and private emails, resulting in an article in the Telegraph dated 20 June 2018 headed “Leaked emails reveals Stobart’s ex-chief’s sexist rant about female boss” and an article dated 21 June 2018 entitled “Ex-Stobart chief ‘s sexist tirade about female boss”. The emails referred to in the article were specifically referenced in an email sent by Rosenblatt, to the Claimant’s solicitors, received on 20 June 2018, shortly before the said article was published; and

8.11.8.3.Emails passing between the Claimant and Philip Day resulting in an article in City AM dated 24 June 2018 headed “Former Stobart Boss at heart of boardroom battle suggested reuniting group” and The Financial Times dated 25 June 2018 entitled “Yellow Cards at Petropavlovsk and Stobart”.

8.11.9.       The said disclosure of such emails, containing the Claimant’s personal data, is in clear contravention of the General Data Protection Regulation and its implementing legislation in the UK, the Data Protection Act 2018 which state, among other things, that all personal data be processed by the Company “lawfully, fairly and in a transparent manner in relation to the data subject” (Article 5.1(a)) and “collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes” (Article 5.1(b)).

8.11.10.   The Defendants have further published the Announcement in a letter from the Fifth Defendant, as Senior Independent Director, dated 8 June 2018 in the Company's Notice of Annual General Meeting at http://www.stobartgroup.co.uk/images/2018-investors/28916_Stobart-NoM_AW-4.pdf.

8.11.11.   The Defendants improperly transferred approximately 5.3 million shares, worth approximately £12 million, from corporate treasury (where they had no voting rights) into the Employee Benefit Trust (where voting and dividend rights attached) so that their voting rights could be utilised (by Jupiter Trustees) in order to secure the re-election of the First Defendant.

8.11.12.   The Company’s AGM took place on 6 July 2018.

8.11.12.1   At the AGM, the First Defendant was re-elected as Chairman by 51.21% of the vote. Asked at the AGM whether he would be standing down, the First Defendant said that he would not. On 9 July 2018, the First Defendant announced his intention to stand down as Chairman within the year.

8.11.12.2   Also at the AGM, a resolution was proposed from the floor to appoint the Claimant as a director. A poll was held on that resolution and it was passed with 51.44% of the vote. This vote would have been higher had the First Defendant not chosen to use the proxy he held for approximately 40 million votes (“the proxies”) to vote against the Claimant’s election when, as he well knew, the proxies had indicated their intention to abstain on the Claimant’s re-election and therefore he should have “withheld” those proxies.

8.11.12.3   Although the Claimant had been appointed at the AGM, through a legitimate and lawful vote by the shareholders, the First, Second, Third and Fifth Defendants immediately resolved to remove him as a director (the Fourth Defendant had ceased to be a director of the Company from 5 July 2018). Further:

(a)      Those Defendants authorised the release of a public statement that the Board of the Company had decided again to dismiss the Claimant following his appointment at the AGM; and that it maintained the view that (despite the support of “certain shareholders” for the Claimant), the Claimant should not act as a director “given the seriousness of his breach of fiduciary duty and the impending court cases against him”;

(b)     Those Defendants included that statement in an RNS, dated 7 July 2018; and

(c)      As those Defendants knew and intended, that statement about the Claimant was reported in the media, including in The Telegraph (on 7 July 2018), the Mail Online (on 8 July 2018) and the Daily Mail (on 9 July 2018).

8.11.13.   In the Stobart Claim, it was falsely alleged that the Claimant was guilty of dishonestly claiming £4.9 million in expenses from the Company. This serious allegation was highly publicised (as the Defendants knew and intended it to be). Yet there was no proper basis for it and it should never have been made. Belatedly, buried in paragraph 348 of the written closing submissions on behalf of the Company in the Stobart Claim, it was abandoned. Yet the Defendants have not apologised for making the allegation or for the damaging publicity they secured for it.

8.12     Each of the Defendants, being directors of the Company, knew the matters referred to at paragraph 8.1-8.4 above and, accordingly, knew that the Claimant (a) had not destabilised the Board at a crucial time for the Company’s business and (b) had not required (or forced) the Board to deal with the challenges listed in [39-43] of the Announcement (whether in the recent past or at all); the Defendants knew (as set out above) that none of the matters listed could properly be described as a “challenge” which the Claimant had required (or forced) the Board to address.

8.13     In the premises, the Defendants and each of them published the False Statements said words knowing they were false or recklessly not caring whether they were true or false and/or with the dominant improper motive of causing harm to the Claimant’s reputation (as has been the case) and/or otherwise furthering the improper purposes of the Campaign.

9.             The publication of the False Statements in the Announcement was calculated to cause pecuniary damage to the Claimant in respect of his office, profession, calling and/or trade as a company director and businessman.

PARTICULARS

9.1.       Paragraphs 8 above and 10 and 11 below are repeated.

9.2.       The contents of publication of the False Statements in the Announcement was were likely to cause shareholders to lose confidence in the Claimant as an Executive Director of the Company and vote against him at the AGM and were likely to cause the Claimant’s other business associates to believe him to be so lacking in integrity that he was an unfit person to be a company director. It is to be inferred that the publication of those False Statements did, in fact, have that effect since the percentage of the Claimant’s share of the vote at the AGM dropped to 51% as against the previous year when it had been significantly higher at 99%.

Damage

10.         As a result of the publication set out above, the Claimant has suffered loss and damage including serious damage to his reputation and substantial embarrassment and distress. The publication is self-evidently extremely grave and of the Defamatory Statements has caused and/or is likely to cause serious harm to the Claimant’s reputation; the The publication of the False Statements was intended and/or likely to cause him pecuniary loss. If and insofar as necessary, t The Claimant will rely upon the facts and matters set out below.

11.         The Claimant will rely in particular upon the following facts and matters in support of his claim for general and/or aggravated damages:

11.1.   Paragraphs 4, 5 and 8 above are repeated.

11.2.   By publishing the Announcement in the form and manner in which they did, with the (apparent) imprimatur of being an RNS required by the legal and/or regulatory obligations of the Company, the Defendants ensured that the words complained of reached the widest possible audience. As the Defendants knew and intended, the words set out at Paragraph 3 above, or their gist, were republished elsewhere in the media, and/or the Defendants authorised their repetition, and/or their repetition was reasonably foreseeable, as a result of which the following publications which are defamatory and/or maliciously false of the Claimant appeared elsewhere on the internet including but not limited to at the following sites:

11.2.1.    http://www.stobartgroup.co.uk/images/2018-investors/28916_Stobart-NoM_AW-4.pdf

11.2.2.    https://www.telegraph.co.uk/business/2018/05/29/stobart-claims-rejected-8m-bonus-request-former-boss-battles

11.2.3.    https://www.telegraph.co.uk/business/2018/05/30/cenkos-quits-stobarts-broker-untenable-position-boardroom-battle/

11.2.4.    https://www.ft.com/content/00bae232-6351-11e8-a39d-4df188287fff

11.2.5.    https://www.ft.com/content/f3857e6a-665c-11e8-8cf3-0c230fa67aec

11.2.6.    https://www.ft.com/content/c549f306-63e5-11e8-a39d-4df188287fff

11.2.7.    https://www.ft.com/content/f06d0f74-65ba-11e8-90c2-9563a0613e56

11.2.8.    https://www.logisticsmanager.com/tinkler-launches-bid-oust-stobart-group-chairman/

11.2.9.    https://uk.webfg.com/news/news-and-announcements/former-stobart-chief-executive-looks-to-oust-chairman--3318388.html

11.2.10.  https://www.thetimes.co.uk/article/stobart-fires-fresh-broadside-in-fight-with-former-boss-mdkv0kdhs

11.2.11.  https://www.thetimes.co.uk/article/stobart-ex-chief-andrew-tinkler-faces-employment-tribunal-q7ct6d8jn

11.2.12.  https://www.thetimes.co.uk/article/stobarts-andrew-tinkler-in-battle-to-get-back-in-saddle-66jbtc2xg

11.2.13.  the Financial Times dated 30 May 2018 under the heading “Stobart Board hits back at executive director”

11.2.14.  the Financial Times dated 30 May 2018 under the heading “Stobart spitting tacks”

11.2.15.  City AM dated 30 May 2018 under the heading “What the papers say this morning”

11.2.16.  The Financial Times dated 4 June 2018 under the heading “Sell-by dates would help contain erratic behaviour of founders”

11.2.17.  The Financial Times dated 8 June 2018 under the heading “City Insider”.

The Claimant reserves his right to add to this list of republications for which the Defendants are liable if necessary.

11.3.   It must have been plain to the Defendants that by giving these allegations (the Defamatory Statements and the False Statements) such widespread publicity they could not but cause the Claimant’s reputation substantial damage (not least, the republications set out above) and cause considerable distress and hurt to the Claimant’s feelings, as has been the case and as was the intention. Paragraph 8 is repeated. The Claimant will rely in particular upon the following adverse effects:

11.3.1.       It is highly unlikely that the Claimant would be asked to become a Director of any UK listed business and almost certain that he would be unable to obtain another role as Chief Executive Officer of a UK Listed Company;

11.3.2.       It is very unlikely that charities or other organisations would want to be associated with the Claimant in any formal capacity or that Government ministers or senior civil servants would readily agree to meet (or be seen to meet) him.

11.3.3.       It has significantly reduced the Claimant’s ability to attract investment for his future ventures from new investors and reduced his ability to recruit high-profile/high-quality business figures to any future company board of which the Claimant is a part; and

11.3.4.       It has led journalists approaching stories about the Claimant to adopt a negative view of him and his reputation.

11.4.   The Defendants’ contemptuous treatment of the Claimant’s complaint including but not limited to their refusal in refusing to take down the Announcement and/or publish an apology to the Claimant, which has meant that the Claimant has been unable to mitigate at least some of the harm done to his reputation by the widespread dissemination of the Defamatory Statements and the False Statements contained in the Announcement. The Claimant will rely upon the Defendants refusal to take down, amend or apologise for the Announcement despite the cogent terms of a letter from over 80% of the Company’s Executive Leadership Team (referred to in paragraph 7.2.2 above. That letter (which had to be sent anonymously given the concern that anyone seen to be supporting the Claimant would be penalised by the Defendants) sent shortly after the publication of the Announcement which stated (among other things) that the Announcement contained “misleading and highly selective and incomplete” statements and showed “a lack of care and foresight as to the impact” on the business.

11.5.   In all the circumstances, the Claimant has suffered increased upset and distress and injury to his feelings.

Appendix 2: Annex to the Application Notice