Scriven v Scriven & Ors [2015] EWHC 1690 (Ch)

Case No HC12D01427

[2015] EWHC 1690 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, The Rolls Building

Date 24 June 2015

London EC4A 1NL

Before

THE HON MR JUSTICE BARLING

Between

EDWARD SCRIVENClaimant

LEE DANIEL SCRIVENDefendants

DANIEL EDWARD SCRIVENDefendant

GARY BRIAN WINSTONDefendant

EVANS MOCKLER LIMITEDDefendant

LONDON TOMBS LIMITED (in administration)Defendant

Bernard Weatherill QC and Christopher Aylwin (instructed by Neumans LLP) for Claimant

James Bogle (instructed by Direct Access) for First, Second & Third Defendants

Nicole Sandells and Nick Broomfield (instructed by Robin Simon) for Fourth Defendant

for The Sixth Defendant was not represented.

Hearing Hearing dates: 16-17 January 2014, 20-24 January 2014, 27-31 January 2014, 3-5 February 2014, 28 March 2014, 31 March 2014, 8-10 May 2014 and 8-10 October 2014

Judgment

INDEX

Para Introduction 1 - 4 The Parties 5-9 Background 10ff Earlier period – Glenfields, Caesar’s, the E&C property, SCH Jersey, Labrett 11-19 The Purchase Agreement 20-22 Multiplex payments – SCHUK 23 Original Tooley Street project – involvement of other investors and PDT 24-27 Meeting of 5 December 2006 28-31 Departure of PDT – reactions of Edward and his sons 32-34 New Tooley Street project - LTL Family Meeting – involvement of HPI 35-43 April/May 2007 - termination of Edward’s directorship –allotment of new shares 44-56 Funding of the new project 57-64 Edward’s involvement in the new project 65-66 Completion and opening of the Tooley Street attraction 67 Edward consults his solicitors – LTL’s dispute with Merlin 68-70 Edward’s row with Lee – intimation of Edward’s claim 71-76 Edward’s statutory demand – Edward’s “angry letter” –Edward’s and Donna’s approach to Merlin –final breakdown in relations between Edward and his sons 77-87 Edward’s claim in these proceedings 88ff Claim against Danny, Lee and Gary 89-97 Claim against EM 98-105 Key issues 106ff Introduction 106 What was agreed in the Purchase Agreement?107-119 Was there an overarching “Family Business Agreement” (“FBA”)?120-130 What happened at the 5 December 2006 meeting?131-137 Did “the Company Agreement” exist?138-140 The LTL Family Meeting – Did Edward agree not to participate in the project?141-250 The meeting at EM on 3 April 2007, the allotment of further shares, and the ending of Edward’s appointments as company secretary and director of LTL 251-252 Effect of my findings on the claims 253ff Claims against Danny, Lee and Gary in respect of E&C, SCH Jersey and SE17 Properties Limited 253-254 Claim against Danny and Lee in respect of LTL/LBEL 255-256 Claim against EM 257-261 Issues which do not arise or are academic in the light of the findings 262ff Were the Highstone companies agents of EM?264-274 Was Edward a client of EM?275-285 Causation of loss 286-296 Other issues 297 Conclusion 298-299 Postscript 300

GLOSSARY OF ABBREVIATIONS

4 WR: 4 Walworth Road 12 WR: 12 Walworth Road 5 December 2006 Minutes: minutes of the Second Meeting of the Directors of London Tombs Limited Caesar’s: a nightclub in the Old Kent Road owned by Glenfields the Company Agreement: an alleged agreement between Edward, Lee and Danny whereby the shares in LTL would be owned as to one third each E&C or the E&C property: premises at the Elephant & Castle, comprising a pub with flat above, held under the Glenfields umbrella EM: Evans Mockler Limited, an incorporated accountancy practice and the Fourth Defendant FBA: Family Business Agreement Glenfields: Glenfields (Holdings) Limited HCF: Highstone Company Formations Limited HD: Highstone Directors Limited HS: Highstone Secretaries Limited Highstone or the Highstone companies: collectively Highstone Directors Limited, Highstone Company Formations Limited and Highstone Secretaries Limited HPI: Halloween Productions Inc.Labrett: Labrett Limited LBEL: London Bridge Experience Limited LTL: London Tombs Limited the LTL Family Meeting: a meeting between Edward, Danny and Lee, at Edward’s home, between late February 2007 and mid April 2007 Merlin: Merlin Entertainments Group Limited Morleys: a fast food takeaway located at the E&C property Mr Mockler: Martin Mockler, a shareholder in the Fourth Defendant, EM, and in the Highstone companies Mr Toghill: Simon Toghill, a shareholder in the Fourth Defendant, EM, and in the Highstone companies Multiplex Multiplex Developments OTE Oliver Twist Experience, a themed restaurant the Page 85 Overview: page 85 of a Profit and Loss Budget Overview of the original Tooley St project said to have been prepared by Edward in July 2008 the Purchase Agreement: an oral agreement in 2004/5 between Lee, Danny and Edward concerning the disposal of Edward’s one third share of SCH Jersey/E&C SCH Jersey: South Central Holdings Limited, a company incorporated in Jersey SCH UK: South Central Holdings (UK) Limited, a company incorporated in the UK

[1]At the heart of this action is a very sad breakdown in relations between the claimant and his two sons, who had for many years prior to this dispute worked closely and reasonably happily together in a number of family businesses. The claimant alleges that in 2007 his sons, without his knowledge, wrongfully set out to deprive him of his interests in two businesses. The claimant now seeks substantial damages and other relief, including exemplary damages, from his sons, his nephew and an accountancy company, on grounds of breach of trust, of contract, and of other fiduciary duties, and negligence.

[2]The action was commenced by a claim form dated 3 April 2012. The trial has taken nearly six weeks (including reading days). The hearing began during January 2014, the last day in court was in October 2014 and the final written closing submissions were filed towards the end of November 2014. The closing submissions alone comprise over 1,100 pages. During the hearing twenty witnesses of fact were called, plus two expert witnesses. Unchallenged witness statements (some with agreed redactions) from a further eight witnesses were received. The documents and written evidence put before me extend to some fifty five ring binders containing tens of thousands pages of documents.

[3]The statements of two witnesses (Lee Scriven, the first defendant, and Michael Buxton) were admitted unamended and unchallenged by cross-examination because those witnesses were, for different reasons, not in a position to attend court to give oral evidence. His medical condition rendered it dangerous for Lee to attend the trial and give evidence. It was agreed that his statement, which amounted to little more than concurrence with the written evidence of his brother Danny, could be read. In Mr Buxton’s case, his wife very sadly died in the course of the hearing.

[4]Numerous aspects of the factual background are disputed, and in the course of evidence and submissions dozens, if not hundreds, of issues of fact emerged. It is not necessary, or indeed practicable, for me to refer to all of these, let alone to attempt to resolve them. The fact that I do not mention each such issue, or every item of evidence and submission relating to an issue, does not mean that I have failed to have regard to the evidence and submissions touching on it. I have considered all the evidence and submissions, both written and oral, put before me in the course of the proceedings. I refer to these only as necessary in order to explain my conclusions.

The parties

[5]The claimant is Edward Scriven. His sons, Lee Daniel Scriven and Daniel Edward Scriven (respectively the first and second defendants) have been called Lee and Danny during the hearing. His nephew, Gary Brian Winston (the third defendant) has been called Gary. I will use the same names in this judgment.

[6]The fourth defendant, Evans Mockler Limited (“EM”), is an incorporated accountancy practice which has on occasions acted for Gary, Edward, Lee and Danny, as well as for companies connected with them. The shareholders in EM are Martin Mockler (“Mr Mockler”), Simon Toghill (“Mr Toghill”), and Michael Evans. Mr Mockler and Mr Toghill gave evidence.

[7]The former fifth defendant, Highstone Directors Limited (“HD”), is a company associated with EM, as also are its sister companies, Highstone Company Formations Limited (“HCF”) and Highstone Secretaries Limited (“HS”). The managing director of HCF is Rhys Evans. Where appropriate these three companies will be referred to collectively as “Highstone” or “the Highstone companies”. Mr Mockler, Mr Toghill and Michael Evans also own the Highstone companies. The claim against HD was dismissed by a consent order dated 19 December 2012.

[8]The sixth defendant is London Tombs Limited (“LTL”). The ownership and control of this company and its wholly-owned subsidiary, London Bridge Experience Limited (“LBEL”), are at the centre of the present dispute. LTL was joined as a defendant so that it would be bound in the event that rectification of the register of its members was ordered in this action. It has played no active part in the proceedings; it was put into administration and its business was sold by the administrators.

[9]Edward is represented by Mr Bernard Weatherill QC and Mr Christopher Aylwin. Lee, Danny and Gary are represented by Mr James Bogle. EM is represented by Miss Nicole Sandells and Mr Nicholas Broomfield.

Background

[10]It is necessary to describe the history of the current dispute. The account which follows is intended to be as succinct and as uncontroversial as possible, consistent with the need to identify some of the key issues of fact which fall to be determined. It is also more or less chronological, save where it is desirable to depart from strict chronology in order to make the narrative intelligible. Earlier period – Glenfields, Caesar’s, the E&C property, SCH Jersey, Labrett

[11]Edward, who is now 79 years of age, left school at 14 unable to read or write properly. After taking casual labouring jobs and a spell in the army, he began to work on a self-employed basis in what in his evidence he termed the “hospitality” business. He would take over problem public houses and manage them. He also developed other business interests, including an operation straightening scaffold poles. In 1959 he married his first wife, Eileen and they had 3 children – a daughter Maxine, and then Lee and Danny. In 1996 Edward and Eileen were divorced and thereafter Edward married Donna in July 1996. It is common ground that the divorce and remarriage caused tension between Edward and his children.

[12]Family members, including Lee and Danny, helped Edward in some of his enterprises from time to time. Eventually, Lee and/or Danny became more involved. The earliest enterprise referred to in the evidence involved a company called Parkview Leisure Ltd, incorporated in 1989. Edward, Lee and Danny along with three other non-family members were directors and shareholders. It appears that this business, which lasted a year, was created to implement a contract obtained by one of the other shareholders, involving the replacement of signage for a national chain of public houses. From then on Edward, Lee and Danny participated to a greater or lesser extent in a number of business ventures involving pubs or clubs, sometimes with other family and non-family members involved. In about 1991 most of these ventures were put under the umbrella of a company called Glenfields Limited, later re-named Glenfields (Holdings) Limited (“Glenfields”). The shareholding in this company fluctuated over the years.

[13]One of the businesses held under the umbrella of Glenfields was based on premises comprising a pub, with a flat above, at Elephant & Castle (“E&C”). The company had occupied E&C from about 1993 and a long lease was bought in about 1997. It seems that by about 2003 Glenfields was in financial difficulties and was threatened by its bank with winding-up. The financial difficulties were caused, at least in part, by an unsuccessful nightclub venture, in the Old Kent Road (“Caesar’s”). E&C, however, was generating cash in the form of rent.

[14]It was decided to hive off E&C. EM was instructed to set up a company in Jersey to hold E&C, with Gary as sole director and holder of the only share. This company, incorporated in May 2003, was called South Central Holdings Limited (“SCH Jersey”) and the lease of E&C was transferred from Glenfields to SCH Jersey. In a Jersey compliance document signed by Danny and sent to a corporate service company in September 2005, the equal beneficial owners of SCH Jersey are said to be Edward, Lee and Danny.

[15]It is a matter of dispute whether, as Edward contends, SCH Jersey was set up, “at the instigation of Evans Mockler” Amended P/C, para 20. to protect E&C from the creditors of Glenfields, or whether, as Danny and Lee assert, the Jersey company was set up because of Edward’s concern that the local authority might pursue his assets in order to recoup the cost of his first wife’s nursing home care. It is fair to say that in his oral evidence Edward was less certain about the role of EM in advising about this. Mr Mockler strongly contested Edward’s suggestion, and said in cross-examination that far from advocating the creation of a Jersey company, he had advised Edward and his sons that such an arrangement would not suit their purposes, as they were all UK domiciled. The defendants also dispute Edward’s contention that Gary was paid a one-off sum of £20,000 (or any sum) as remuneration for his role in the arrangement, and that £45,000 was paid by SCH Jersey to Glenfields in respect of the lease. Mr Mockler’s evidence was that he was instructed by the Scrivens to arrange for the formation of SCH Jersey, which he understood was to purchase the lease of E&C. He said that Highstone dealt with the incorporation. He was not aware that Gary was paid any money to hold the shares in the company on trust.

[16]The premises housing Caesar’s, including the flat above, were sold. With part of the proceeds of sale Glenfields’ secured bank loan was discharged, along with other debts. Some of the proceeds were also apparently used to refurbish the bar at E&C, and to create a separate fast food takeaway there (“Morleys”). Glenfields was placed in voluntary liquidation and dissolved in 2004.

[17]At that time the area around E&C was being re-developed. A developer, Multiplex Developments (“Multiplex”), agreed to let properties at 4 and 12 Walworth Road (“4 WR” and “12 WR” respectively) to the Scrivens on short leases. 12 WR was let out by them as a shop. 4 WR was much larger, and the Scrivens converted it into 2 nightclubs (Whispers and Ministry of Salsa) and a bar (Los Arraros), each of which they rented out. The aim was to make as much money as possible before Multiplex needed possession of the premises in order to demolish and re-develop them. In November 2006, 4 and 12 WR were vacated (and the associated businesses closed) as Multiplex wished to commence demolition of the premises.

[18]The businesses at 4 and 12 WR were operated through a company called Labrett Limited, incorporated in January 2004 (“Labrett”). At incorporation Lee held 99 shares and Edward held 1. The bar and Morleys at E&C were also operated through Labrett. Edward described the businesses operated through Labrett as “the family business”, and refers in his pleading and evidence to a “Family Business Agreement” (“FBA”).

[19]He stated that each week he and his two sons would meet in the office at E&C and count the rent from these ventures, and then divide and distribute it in 3 equal shares. However, he said that some of the cash would be saved and these savings were kept by him in a safe at his home, and were recorded in a book which was kept in the office safe to which, until about April 2007, only he had the key. Thereafter, he said, Danny kept the key. The money saved, according to Edward, was in the order of £184,000-£200,000. Edward’s evidence about the savings, and about the existence of such a thing as the FBA, is very much disputed by Danny and Lee. They contend that no such savings (or book in which they were recorded) ever existed, and that there was no such thing as the FBA. I will return to these issues in due course. The Purchase Agreement

[20]It is common ground that in 2004-5 Edward was very concerned that financial provision should be made for Donna after his death, and that there were numerous discussions on this subject between Edward, Lee and Danny. It is also common ground that at some point in that period (the parties differ on the timing) Lee and Danny reached an oral agreement with Edward about the disposal of Edward’s one third share of SCH Jersey/E&C (“the Purchase Agreement”). However, the nature of the Purchase Agreement is strongly contested. Lee and Danny contend that Edward agreed to transfer his share in SCH Jersey/E&C to Danny and Lee with immediate effect for £200,000, on the basis that that sum would be paid to Donna from Edward’s death in weekly instalments of £400, this being approximately the amount Edward had been receiving from E&C. According to Edward the agreement was that at his death his interest in SCH Jersey/E&C would be transferred to Lee and Danny, the interest would be professionally valued, and Lee and Danny would pay Donna the value, which they considered to be worth over £200,000 at the time of the Purchase Agreement.

[21]It is common ground that Danny and Lee continued to pay Edward £300-£400 weekly out of the rent of the E&C premises. Danny stated Eg Day 9, pages 63-65. that when there was not enough available from that source he and Lee would top it up from other sources. It is Edward’s case that he was entitled to a share of this rent as of right. His sons’ case is that from the time of the Purchase Agreement the payments were made out of love and affection. As will be seen, these payments continued, more or less continuously, until August 2011, when Edward’s solicitors issued a letter before action. Additional lump sum payments were also made by Danny and Lee to Edward from time to time, totalling about £16,200. These, too, are said by Danny and Lee to have been paid out of love and affection.

[22]In June 2005 and April 2006 Edward underwent hip replacement surgery. The second operation was not a success and left him with extreme pain and mobility difficulties. Multiplex payments – SCHUK

[23]In October 2005 SCH Jersey was struck off the register of companies due to the Jersey agents’ fees not being paid. Before the company was reinstated (which was not until July 2007) Danny had negotiated an agreement with Multiplex allowing them to use a space at the rear of E&C for access to land on which they were going to build a tower block, and also providing for Multiplex’s workmen to have access to a café which would be installed by the Scrivens in E&C. The value of this agreement was £190,000. However, with SCH Jersey removed from the register there was no bank account into which these monies could be paid. Edward or EM (there is conflicting evidence) suggested incorporating a UK company with the same name, so that the money from Multiplex could be paid into that company’s bank account. This is what happened. South Central Holdings (UK) Limited (“SCH UK”) was incorporated in September 2006. Edward was the sole director and shareholder. The monies from the contract negotiated by Danny with Multiplex were paid into this company’s bank account in two instalments in April 2007 and November 2007. It appears to be common ground that most of these funds were used for the purposes of the Tooley Street project (see paragraph 63 below). Original Tooley Street project – involvement of other investors and PDT

[24]From about September 2006 Edward, Lee and Danny began to consider seriously the idea of operating a scare attraction and an “Oliver Twist Experience” (“OTE”) themed restaurant. They identified suitable premises under the arches of London Bridge in Tooley Street, which had previously been used as a nightclub. EM/Highstone were instructed to incorporate LTL, and this was completed on 20 September 2006. The plan was that the scare attraction would be operated in the basement of the premises by a Spanish entity, Pasaje Del Terror (“PDT”), which was already running a scare ride in Blackpool. One possibility was that PDT would sub-rent the basement from LTL. The OTE restaurant would be run on the ground floor by LTL or an operating company.

[25]At first the Scrivens considered involving other investors in the project, in particular family friends Simon Bourn and Ken Brennan, plus Lee’s son Paul. According to Edward, the Scrivens afterwards decided that they would prefer not to involve these others. A meeting was held on about 22 October 2006 at which each potential investor was informed that they would have to make an initial investment of £25,000 by Christmas 2006. Edward stated that this had the desired effect of causing Paul Scriven, Simon Bourn and Ken Brennan to pull out. A note of a meeting on 30 November 2006 between Danny and Mr David Meredith of C R Busby and Co (“Busbys”), accountants, indicates that by that date only Edward, Lee and Danny were envisaged as participating in their side of the joint venture with PDT (albeit with the possibility of Paul Scriven having an ancillary role).

[26]David Meredith is married to Lee and Danny’s cousin, Kirstie Meredith. Both David and Kirstie Meredith gave evidence. Mr Meredith became acquainted with the Scrivens in about 2003. He said that in 2006 Danny asked him to act for him personally and for some companies which Danny controlled. He referred to a meeting which he and Kirstie had with Danny on 20 November 2006, at which Danny explained the Scrivens’ plans for LTL, including the proposed joint venture with PDT. Further discussions took place at the meeting a few days later on 30 November. Mr Meredith’s evidence was that on the latter occasion, Danny and Lee asked him to help in preparing business plans, and he advised that they should ask Glynn Moore, a local business adviser, to do this. It seems that Mr Meredith then put them in contact with Glynn Moore, who provided the help they required.

[27]A number of business plans dated variously December 2006, March 2007 and May 2007 were prepared by Mr Moore, with a view to raising finance. In the first two plans Edward, Danny and Lee were described as equal shareholders and owners, and as the key personnel with individual management responsibilities. This changed in the May 2007 plan, where only Danny and Lee were so described (see paragraph 56 below). Meeting of 5 December 2006

[28]It is common ground that a meeting took place at the office of EM on 5 December 2006, and that Mr Mockler, Edward and his two sons were present. Unfortunately not much else about the meeting is agreed. There is a document of that date entitled “Minutes of the Second Meeting of the Directors of London Tombs Limited” (“the 5 December 2006 Minutes”) which was the subject of much cross-examination and many submissions. A number of resolutions are recorded in the document, including that Danny was to be appointed chairman of LTL, that EM were to be “auditors”, and that the sole share was to be allotted to Danny. Companies House forms bearing the same date also record the appointment of Edward as a director and company secretary, and Lee and Danny as directors.

[29]It is Edward’s pleaded case Amended P/C, paragraphs 43, 50-51, and Amended Reply to Amended Defence of EM, paragraph 7. that this document does not reflect what actually happened. He contends that at the meeting he gave express instructions to Mr Mockler that the shares in LTL were to be split equally between himself and his two sons to reflect the fact that they each owned one third of the project “as normal”. His evidence is that these two words were a reference to the overarching FBA which existed between the three of them, and with which Mr Mockler was familiar. He denies that it was resolved to allot the single share to Danny, as the agreement (and instructions to EM) had been that the three of them were to be equal shareholders.

[30]Danny’s evidence is that at the meeting the nature of the project was explained to Mr Mockler who was asked whether he was aware of any potential investors. Danny states that other than this, and the appointment of directors, EM was simply informed that the single share was to be put in his (Danny’s) name. According to Danny there was no mention of setting the company up “as normal”, and Mr Mockler was not informed that Edward, Danny and Lee were to have equal shareholdings. Day 8, p.132-3.

[31]Mr Mockler’s evidence was to the same effect as Danny’s. He said that he asked who the shareholders were to be, “and Danny explained to me it was a very fluid situation” as “some investors had pulled out and that they also hadn’t decided what the project was going to be, and that until the project was decided upon and the shareholding was agreed, he would retain the share.” Day 14, p.52. He said that Edward was present when this was discussed and raised no objection. Mr Mockler denied being given the instructions as to shareholdings in the company, as alleged by Edward. He also denied knowledge of the FBA. Departure of PDT – reactions of Edward and his sons

[32]On about 22 February 2007 Edward, Lee and Danny had a meeting about the proposed Tooley Street project with representatives of PDT. The agenda for the meeting (apparently prepared by the Scrivens’ lawyers) indicates that it had been intended to discuss shareholdings, directorships, work required to be carried out at the premises, IP rights, insurance, financing and several other items needed to take the project forward. However, it is common ground that at the meeting PDT stated that they did not wish to go ahead with the project as their “hearts were not in it”. In evidence Edward queried whether PDT had entirely pulled out at that stage, given a letter from PDT in March 2007. However, he said that after the meeting “we began to look to a future without their participation.” 2nd witness statement, para 114.

[33]The parties are at odds about their reaction to PDT’s loss of interest. Danny’s evidence was as follows: that they were all very deflated and disappointed after the meeting with PDT, and there was some discussion about whether they could or should go ahead with the project without PDT; that he and Lee said they were still willing to do so and were both prepared to raise the necessary money; that Edward, however, said that he had wanted PDT to be involved because they had experience of running this kind of scare attraction, and also because it would avoid him having to come up with funds, which he would not be able to do; and that Edward had advised Danny and Lee not to go ahead themselves.

[34]Edward disputed Danny’s account. His evidence was that he, Lee and Danny were “essentially quite happy with that outcome” as the PDT proposals were “unviable from our point of view.” Ibid, para 113. He said in evidence that “We were still keen on establishing a scare attraction at the Tooley Street premises without PDT’s participation.” Ibid, para 115. New Tooley Street project - LTL Family Meeting – involvement of HPI

[35]I now refer to a meeting which took place between Edward, Danny and Lee at Edward’s home at some point between late February and mid April 2007 (“the LTL Family Meeting”). Both Edward and Danny/Lee accept there was a meeting at Edward’s home in that period, but that is more or less the extent of the common ground.

[36]Danny and Lee’s pleaded case Amended Defence of Ds 1, 2, 3, and 6, para 21. is that after PDT had pulled out, Danny and Lee visited Edward at his home and told him: that despite PDT’s withdrawal they had decided to fund and build the project themselves; that he (Edward) neither had the funds nor was he in sufficiently good health to participate; that as he was their father they would look after him until he died; that they were going to ask Kirstie to be the company secretary and to keep the books. They plead that although Edward was initially unhappy, in the end he agreed that it was a sensible course and that he would not have an interest in LTL or any new business at Tooley Street. In his written evidence Danny states that at this meeting he and Lee also re-affirmed their previous agreement to pay £200,000 to Donna in instalments after his death. WS, para 68. Their pleading puts this meeting sometime between 22 and 27 February 2007. In the course of his oral evidence Day 8, page 150. Danny told the court that in the light of the documents he now believes it took place after 14 March 2007.

[37]Edward’s position, as pleaded Amended P/C, para 52A. , is that in April 2007 In his evidence Edward accepted that the meeting might have been earlier than April: see his 2nd WS para 133. he was ill and scheduled to have another hip operation later in the year; Danny and Lee visited him at home and encouraged him to come into the office less and to take things easy; it was agreed that Lee and Danny would assume greater responsibility for the daily management of the new project, however, Edward continued to work on the project:

“Essentially we were just agreeing that I take it easy to properly recuperate”

. Ibid, para 135. He denied the account as pleaded by Danny/Lee, including that he had been informed that they had plans to appoint Kirstie as company secretary in his place. Ibid para 136.

[38]It is agreed that on or about 27 February 2007 LTL took a 15 year lease of the Tooley Street premises, and that on or about that date the lease was signed by Danny and Lee at the offices of the solicitors, Rosenblatt. It is also agreed that Edward drove Danny and Lee to Rosenblatt’s office, remaining in the car while they signed the lease. However, Edward’s pleaded case Amended P/C, para 47; Amended Reply to Def, para 77. and evidence 2nd WS, para 117. is that he was told by Danny and Lee that he need not come in to sign himself as only two signatures were required and he was on crutches and found movement difficult. Danny and Lee’s pleaded case is that the reason he was not involved in the signing was because he had no interest in the project. Amended Def, para 78.

[39]At this point I need to mention another dispute of fact. Edward’s case is that on the date the lease was signed (which he accepts may have been 27 February 2007) there was a separate meeting at the office of EM, at which Edward, Danny and Lee were present, along with Mr Mockler. According to Edward, the purpose of the meeting was to inform Mr Mockler of the agreement which the three Scrivens had reached, namely to set up LBEL as the operating company for the Tooley Street project, and to instruct him to arrange for all three of them to be directors either with equal shareholdings in LBEL or to make LBEL a wholly-owned subsidiary of LTL. Amended P/C, para 46; 2nd WS, para 122-123.

[40]The pleaded case of Danny, Lee and EM is that no such meeting ever took place. Amended Def, para 77; Amended Def of 4th D, para 9(w). In his written evidence Mr Mockler states that he has no record or recollection of such a meeting ever occurring, and is not aware of any such agreement between the Scrivens. He also states (which is common ground) that neither he, nor EM nor any of the Highstone companies were involved in the incorporation of LBEL. 3rd WS, para 45. It is similarly not in dispute that LBEL was incorporated by Mr Meredith’s firm, Busbys, on 10 May 2007 as a wholly-owned subsidiary of LTL, and that Danny and Lee were the only directors, with Kirstie as company secretary.

[41]After PDT effectively dropped out of the project in about February 2007, Danny identified another possible collaborator in the form of a US company, Halloween Productions Inc, which had experience in the provision and operation of scare attractions (“HPI”). Danny and Lee arranged for the Vice-President of HPI, Mr Jim Kelly, to visit the Tooley Street premises, and this visit took place towards the end of March 2007. Mr Kelly expressed interest in HPI becoming involved in providing the scare attraction. On his advice the OTE restaurant concept was scrapped and attention was mainly focussed on the creation of a scare attraction. Mr Kelly also suggested the possibility of a museum on the ground floor, an idea which was pursued.

[42]Edward’s evidence is that he took part in discussions with Mr Kelly as a joint beneficial owner of the project. Danny’s evidence is that to the extent that Edward was present at meetings with HPI, he did so only as Danny’s and Lee’s father. Mr Kelly gave evidence, both written and oral, to which I shall refer in due course.

[43]It was decided to operate a “London Bridge Experience” themed attraction on the ground floor, incorporating a small museum, and a scare attraction in the basement. Staff were taken on, a price was agreed with HPI for supplying and installing the scare attraction, and on 21 April 2007 an agreement between LTL and HPI was signed by Danny. On 26 April 2007 the bank account of SCH UK was credited with a £100,000 payment from Multiplex. This payment was pursuant to the agreement negotiated by Danny, to which I referred at paragraph 23 above. On 1 May 2007 Danny emailed HPI’s bank details to Edward who, it will be recalled, was the sole director and shareholder of SCH UK. The next day Edward instructed SCH UK’s bank to transfer about £53,000 to HPI. Following that, in late May 2007, Danny and an associate visited HPI in St Louis to meet their personnel and examine the project in detail. April/May 2007 - termination of Edward’s directorship – allotment of new shares

[44]I now turn to certain contentious events of April/May 2007. I begin by identifying what is common ground. The following are not in dispute:(1) there exist what purport to be minutes of the 3rd meeting of the directors of LTL on 3 April 2007 with Danny and Lee (but not Edward) present;

(2) these minutes record resolutions that Danny be appointed chairman and that a further 999 paid up shares in LTL be issued and allotted, as to 499 to Danny and 500 to Lee, (the single original subscriber share remaining with Danny after having been apparently allotted to him in December 2006);

(3) forms 88(2) and 288b were filed with Companies House by EM on 10 April 2007; each was on an HCF headed pro-forma dated 3 April 2007 and apparently signed by Danny, recording respectively the allotment of the 999 shares and the termination of Edward’s appointment as company secretary of LTL;

(4) the shares allocated to Lee and Danny pursuant to the 3 April 2007 resolution were issued on 20 April 2007.

[45]Edward’s case is that he had no notice or knowledge of this meeting or of the intention to allot the shares and to remove him as company secretary, and that his sons and Mr Mockler knew or ought to have known that he would not have consented.

[46]Danny and Lee’s case is that these steps simply reflected the fact that Edward had earlier agreed that he would not be involved in the new project which his sons would thenceforth be pursuing and financing on their own.

[47]Mr Mocker gave evidence to the effect that he had been phoned by Danny and asked to arrange a meeting on 3 April 2007; that he was present at the meeting at EM’s premises on that date “as the note-taker” and that he gave his manuscript note of the meeting to Rhys Evans with a request to Highstone to produce minutes and prepare the necessary documents on behalf of LTL. He said that at the meeting he was told by Danny that the original project had been aborted and that he and Lee alone would be taking a potential new scare attraction project forward, with assistance of a manufacturer in America, and that Edward would not be involved and had agreed to resign as company secretary and director; Mr Mockler said he had “the clear impression” from this that Edward did not approve of the new project; he said that Danny told him Kirstie Meredith would be the new company secretary and that he (Danny) would get back to Highstone in due course in relation to Edward’s directorship.

[48]By April 2007 Mr Meredith began to become more directly involved in the project. He had earlier, in November 2006, had a number of meetings with Danny, Lee and Kirstie (his wife) in which he had provided advice on aspects of financing and on whom to approach to help with developing a business plan and cash flow forecasts (see paragraph 26 above); and in December 2006 he had visited Tooley Street, where he was shown round by Danny and had also discussed the project with Lee. He said that Edward had been at the premises on this occasion but he had not then, or ever, had any business discussions with Edward.

[49]Mr Meredith said that by 30 April 2007 he was aware that PDT had pulled out and that Clydesdale Bank, the hoped-for source of funding, had turned the project down. His evidence is that on that date Kirstie told him that Danny and Lee wished to have a meeting with him with a view to taking forward the new project. He produced his manuscript note of this discussion with Kirstie, in which he records being told by her that Danny and Lee would be the only directors and that Kirstie would be company secretary. The note also records that Edward had pulled out of the project, and would not be providing funding, and would not be a director, company secretary or shareholder or otherwise involved. Mr Meredith said that this was what Kirstie had told him.

[50]Mr Meredith’s evidence was that a meeting between Danny, Lee, Kirstie and he took place on 2 May 2007. The information already provided to him by Kirstie was confirmed, and Busbys were instructed to incorporate LBEL, all the issued share capital of which was to be owned by LTL. Mr Meredith was told that the company was to be the operating subsidiary of LTL. He was also told that Danny and Lee now owned the shares in LTL equally, there being no other shareholder, and that as company secretary Kirstie would be helping with book keeping and other administrative tasks. It is common ground that Busbys incorporated LBEL as wholly-owned subsidiary of LTL on 10 May 2007.

[51]It seems to be common ground that on 3 May 2007 Danny and/or Lee telephoned Rhys Evans and instructed him to arrange for the on-line filing with Companies House of the forms relating to Edward’s resignation as a director of LTL, and Kirstie’s appointment as company secretary. Mr Evans carried out these instructions and on the afternoon of the same day Companies House acknowledged these filings by emails to Rhys Evans. Later the same evening an email was sent by Danny and Lee to Rhys Evans, which was copied to Mr Mockler. This stated:

“Hi Rhys, Further to our earlier conversation please note that Mr Edward Scriven…..is to no longer hold the office of Director of [LTL]. He is involved in no legal way to this company and this needs to be reflected in the official documents of the company. (Please check this is so) Also Mrs Kirstie Meredith….is the new Company Secretary.”

[52]Edward contends that at no time did he resign or tender his resignation as a director of LTL, that his removal was effected without his knowledge or consent and was unlawful and invalid, and that the filing with Companies House was made by EM, or EM procured HCF to make it, in accordance with the instructions of Danny and/or Lee.

[53]Danny and Lee’s pleaded case is that Edward’s removal as company secretary and director of LTL were in accordance with, and flowed from, the agreement reached at the LTL Family Meeting (paragraphs 35-43 above).

[54]EM’s pleaded case is that EM had no involvement in the termination of Edward’s directorship, which was understood to arise from the abandonment of the original project and the pursuit of a new project with which Edward did not agree. EM also contends that the filing with Companies House was not made or procured by EM but was carried out by HCF, and that the instructions referred to in Danny and Lee’s email dated 3 May 2007 to Rhys Evans were given to HCF not to EM. In his evidence Mr Mockler stated that he could not remember whether or not he had read the email at the time. As he was only copied-in it would have gone into a separate email folder in his office computer system. He would have reviewed the email at some point, and it would not have come as a surprise, since he had known from 3 April 2007 that Edward was going to resign as a director. He could not remember whether he had had a conversation with Rhys Evans about the email. He said it was his understanding that Danny had phoned Rhys Evans and asked him to deal with Edward’s resignation, that Mr Evans had agreed to do so, and asked Danny for confirmation in writing.

[55]Rhys Evans originally provided a witness statement to EM’s legal advisers, and apparently attended part of the trial. However, he was not called to give evidence and so his witness statement was not before the court and he was not available to be cross-examined by Mr Weatherill.

[56]Meanwhile work on the project went ahead. At some point a new business plan was produced by Glynn Moore dated May 2007. Unlike the earlier versions, this plan did not refer to Edward and referred only to Danny and Lee as the equal owners and the “key people” involved. Kirstie is recorded as company secretary. Funding of the new project

[57]There is little common ground as to how the project was funded. As mentioned above (paragraph 49), the original hoped-for source of finance, Clydesdale Bank, had dropped out at the end of March 2007. It is not in dispute that sometime in the spring or early summer of 2007 Edward drove the managers of his own bank account at the Maidstone branch of Lloyds TSB Bank plc, Mr Mark Lempriere and Ms Linda Martin, to meet Danny and Lee at Tooley Street, with a view to the bank providing finance for the new project. Thereafter Mr Lempriere opened two accounts, one in the name of LTL and the other in the name of LBEL. Danny and Lee were the only signatories and named officers in respect of these accounts. However, no financing was ultimately forthcoming from Lloyds TSB.

[58]Mr Lempriere gave oral evidence. He stated that Edward had on several occasions mentioned the project to him in terms that “my sons are doing this at the moment with this - with this adventure up in London….My impression was that Eddie was referring me or the bank to his sons, because they were doing something at the time.” Day 10, pages 114-115. He also told the court that he had not gained the impression that Edward himself was investing in the project; and he said that Edward’s own bank account was “under some pressure.” He stated that on the visit to Tooley Street Edward remained in the car while he and his colleague Linda discussed the project with Danny and Lee. Mr Lempriere said that Linda was given a copy of a business plan, and that he himself had looked at the financial forecasts in it. Neither Danny nor Lee had at any stage asked him to conceal from Edward the plan or any other information. Mr Lempriere confirmed that the bank had ultimately declined to become involved.

[59]It does not appear to be in dispute (although in his Reply Edward does not admit or deny it Reply, para 19(e). ) that in about mid-May 2007 Lee and his wife re-mortgaged their house, and that the bulk of the sum thus raised – more than £300,000 - was invested in the project. However, Edward contends that this re-mortgage was part of a joint agreement between him and his sons that Lee should loan these funds to the project, and that the loan would be repaid at £10,000 per month, or in default Lee would be repaid by sale of the E&C property. Amended P/C, para 38. Danny and Lee deny that Edward was involved in the decision to re-mortgage Lee’s house or that there was any such agreement relating to repayment as alleged by Edward. They contend that the sums paid by Lee to the new project were not a loan but an investment. Amended Def, para 71.

[60]Between November 2007 and January 2008, a £600,000 loan facility to LBEL was apparently arranged by Danny and Lee with Ruffler Bank plc, and the facility was secured by the personal guarantees of Danny and Lee. This is expressly not admitted or denied by Edward. However, a copy of a facility dated 16 November 2007, together with an amendment dated 14 January 2008, were produced at the trial. Further, the witness statement of Robert Holliday was admitted without challenge. Mr Holliday had been an employee of Ruffler Bank Plc at the relevant time and confirms that a loan was made by Ruffler Bank to the project. He states that prior to the approval of the loan he visited the Tooley Street site in the summer of 2007. He also states that he has only ever had dealings with Danny and Lee and has never met Edward.

[61]Danny and Lee allege that further funding for the project was provided as follows: c. £80,000 in cash and other payments from Lee; c.£20,000 in cash, credit card and other payments from Danny; a £20,000 loan from Gary to Danny and Lee; and an £18,000 loan from an associate called Jimmy Brookes to Danny and Lee. Amended Def, para 24. These contributions are expressly neither admitted nor denied by Edward in his pleading, and in the course of the hearing it appeared that the £20,000 payments by Danny in cash and via credit cards are not disputed. Day 8, page 221.

[62]Danny and Lee also maintain that Danny invested a sum of £300,000 in the project. In oral evidence Danny stated that £320,000 to make this investment was loaned to him personally pursuant to an oral agreement by an entity called Templecourt Limited, through a solicitor’s firm, in September/October 2007, and was injected into the new project between December 2007 and December 2008. Danny stated that the interest rate on the loan was 20%, that no repayments had been made, and that the amount outstanding was about £800,000. Day 8, page 214ff. Edward at one point did not accept that Danny made this investment into the project, but a £200,000 capital injection by Danny is listed among the inputs recorded at page 85 of a Profit and Loss Budget Overview of the original Tooley St project, said to have been prepared by Edward on 2 July 2008 and exhibited to his 3rd witness statement (“the Overview”). Also, in his evidence Edward referred to this sum as having been borrowed by Danny to put into the Tooley Street project. Day 17, p.149.

[63]It appears to be common ground that most of the sums of £100,000 and £90,000 paid by Multiplex into the bank account of SCH UK in, respectively, April and November 2007 (see paragraph 43 above), were used for the purposes of the project. Eg Amended P/C, para 54A; Amended Def, para 24. However, it is Edward’s case that he had a one third beneficial interest in those sums, as they arose from ownership of the E&C property in which he retained a one-third interest (through the one-third beneficial interest he claims in the shares in SCH Jersey, which held the title to E&C). Danny and Lee contend that, by virtue of the Purchase Agreement (see paragraph 20 above), Edward retained no such interest in either the shares in SCH Jersey or the Multiplex sums, that the shares and Multiplex sums were beneficially owned by Danny and Lee alone, and that the payments which Edward made out of the account of SCH UK were made on Danny and Lee’s instructions. Eg Amended Def, para 82(viii). I note that Edward accepted in cross-examination that he had “repaid” himself more than £13,000 out of these Multiplex funds (see paragraph 217 below).

[64]It is also Edward’s case that a sum of c.£184,000-£200,000 representing their joint savings from the Labrett businesses was jointly invested in the project. As already seen, the existence of this sum or any such savings is disputed by Danny and Lee (see paragraph 19 above). Edward also gave evidence that between the autumn of 2006 and early 2007 he made a number of personal financial contributions to the original project and was “putting all money I could access into the project (given my faith in its future success).” Eg 2nd WS, paras 102-111. Edward’s involvement in the new project

[65]As for his physical or tangible involvement in the project, Edward’s case is that due to his illness he was not expected to and did not attend many management meetings and that most of the day to day decisions were taken by Danny and/or Lee and that all routine correspondence was directed to and dealt with by them. However, he contends that notwithstanding this lack of day to day involvement he was involved in all key decisions and was widely regarded as an equal beneficial owner of the project with his sons. He states that he was consulted on issues relating to significant expenditure. See eg Reply, paras 20-21. He also states that even when ill he carried out a great deal of work on the project. In particular, at a time when PDT were still on board he “contributed massively” to the business plan dated March 2007 prepared by Glynn Moore, working specifically on the financial projections in the plan. He states that later, when HPI had become involved, most days he worked on new cash projections and schedules of work as well as providing general advice. 2nd WS, paras 116-120.

[66]It is Danny and Lee’s case that on those occasions when Edward visited Tooley Street after the joint venture with PDT was aborted and the new project involving LBEL had commenced, he did so not as a participant in the project, but as Danny’s and Lee’s father who wished to see how his sons were progressing. They deny that he participated in any of the key decisions relating to the new project, or that he made any financial contribution to it. See eg Amended Def, paras 68-73. Completion and opening of the Tooley Street attraction

[67]Work on the project progressed throughout the spring, summer and autumn of 2007. The original intention had been to open the attraction to the public in December 2007. However, there were delays. Relations between Danny/Lee and HPI deteriorated. Mr Kelly states that the delays in the work were caused by delays in payments to HPI. Danny states that HPI provided insufficient manpower, with most of the team going back to America before the work had been completed leaving only two operatives on site. In the event other contractors (including, according to Danny, a scare attraction contractor from Buffalo, New York State, called Ronald J Doherty) were engaged to complete the work, and there was an opening ceremony at Tooley Street on 27 February 2008. Guests were invited and there were drinks and speeches. Edward states that he was present as a director and co-owner. Danny and Lee state that he was there as their father. Edward consults his solicitors – LTL’s dispute with Merlin

[68]It appears that by the spring/summer of 2008 the business of LTL/LBEL was up and running, and Edward was in financial difficulty. On 4 June 2008 Dundas & Duce, a firm of solicitors consulted by Edward, wrote a letter addressed to LBEL, whose registered office was at Danny’s home address. The letter sought information as to why “a Company that [Edward] controlled called South Central Holdings Ltd paid substantial amounts of money on behalf of your Company…” Danny stated that on receipt of this he rang his father and asked what it was all about, and that Edward replied he had been told by the Citizens Advice Bureau to see a lawyer but he would “call them off”.

[69]On the same date the same solicitors also wrote to Mr Mockler asking for information about “a Company called South Central Holdings Ltd, which I have noted Mr Scriven is a Director of and of which Company you are the Company Secretary.” This appears to be a reference to SCH UK.

[70]At about the same time a company, Merlin Entertainments Group Limited (“Merlin”) which owned London Dungeon, a much larger, long-established and competing attraction nearby, threatened and later began legal proceedings against LBEL, alleging passing off, copyright infringement and unlawful interference with trade. Edward’s row with Lee – intimation of Edward’s claim

[71]At some point in autumn 2008, probably in October, there was a row between Edward and Lee. Danny was away at the time. An acquaintance of Danny and Lee, Valerie Jackson-Harris, had lent to LBEL a number of items from her late husband’s collection so that they could be put on display in the museum which formed part of the Tooley Street attraction. On the day in question she was apparently visiting the premises to see the attraction and to check that the items she had loaned were being looked after. Edward was present, and made some remarks at which it appears that Mrs Jackson-Harris took offence. Lee became angry and told Edward to f— off and keep away as he was not part of the business. Edward phoned Danny the same day, who told him to forget it.

[72]Danny’s evidence is that he was trying to keep the peace between his father and Lee. Edward states that what Lee had said caused him to make inquiries as to how he stood “in case I had actually been excluded from the business”; 2nd WS, paragraph 159. he therefore asked Dundas & Duce to check with Companies House, and as a result he “finally found out” that he had been removed as company secretary and director of LTL on 3 April and 3 May 2007 respectively.

[73]There followed a further letter from Dundas & Duce dated 28 October 2008, stating that Edward and “2 companies which he controls, South Central Holdings Ltd and Milten Ltd have between them invested a little under a quarter of a million pounds into [LTL/LBEL] start up and development costs. We are instructed that such investment was made in return for a third ownership of [LTL/LBEL].” The letter went on to claim that Edward and the two companies had an interest in LTL/LBEL by reason of that investment, which interest along with any shares was now held on constructive trust for them. The letter referred to Edward’s removal as a director of LTL “without any notification to him”, and to the failure to allot shares in LTL or LBEL to him or to appoint him a director of the latter. Enclosed with the letter were some documents purporting to detail Edward’s investment, which was said to include money (c.£37,000) paid towards the project from his own resources. These documents were subject to considerable cross-examination and comment at the hearing. Certain mistakenly duplicated entries were acknowledged by Edward. Nor is there any mention in the documents of the savings of £184,000-£200,000 referred to at paragraph 19 above. It appeared to be common ground that these documents (referred to during the trial as the QuickBooks documents), which were prepared by Edward and formed the basis of his claim as at the end of October 2008, were already in existence in July 2008, well prior to Edward’s row with Lee in October 2008.

[74]There was an acknowledgment letter from Danny and Lee’s solicitor, Mr Neil Sampson of Rosenblatt, in response to which Dundas & Duce stated by letter of 10 November 2008 that Edward would instruct them to commence winding-up proceedings against LBEL and LTL unless “meaningful negotiations” were begun soon.

[75]There was then some telephone contact between the solicitors, in which Dundas & Duce appear to be indicating that the threatened winding-up was in order to recover monies owed. A written reply by Rosenblatt dated 11 November 2008 sought detailed explanations of Edward’s claim, denied that he had an interest in LBEL and LTL, stated that Danny and Lee had no desire to litigate with their father, and pointed out that they had provided substantial funds to him and to Donna without any legal obligation and “out of [their] natural love and affection for their father”.

[76]The next letter from Dundas & Duce was dated 18 December 2008. This stated, among other details, that the LBEL/LTL ventures were funded from the proceeds of earlier company ventures in which Edward, Lee and Danny owned equal shares, that Danny and Lee had sought “deliberately and deceitfully” to deprive Edward of his beneficial share in the new ventures, that he had been deprived of his share of the income generated by those ventures and by the E&C property, that Edward had worked at the new venue for three months, that in November 2007 unaware of the deceit Edward had arranged for SCH UK to invest a further £90,000 in the new ventures, that Lee and Danny should now transfer one third of the shares in LTL/LBEL to Edward and appoint him a director of both companies, and fully account to him for his one third share of the rents/profit of E&C, and should “enter into arrangements to repay SCH UK, Edward, and Milten Ltd the monies invested in the new ventures. Edward’s statutory demand – Edward’s “angry letter” – Edward’s and Donna’s approach to Merlin – final breakdown in relations between Edward and his sons

[77]This was followed on 18 February 2009 by a statutory demand against LTL, as threatened by Dundas & Duce. The demand claims £37,202.42 (being the amount claimed in the July 2008 QuickBooks documents enclosed with the solicitor’s letter of 28 October 2008) as having been invested in the project by Edward from his own resources (paragraph 73 above). The demand states that in return for this investment, paid between November 2006 and mid-February 2007, together with a further investment by a company controlled by Edward (presumably SCH UK) LTL was to have issued one-third of its shares to Edward, to have appointed him director, to have allowed him one-third of the profits of LTL, and to have repaid him the c.£37,000. The demand then states that in view of its failure to comply with these obligations the £37,000 is immediately repayable.

[78]Rosenblatt replied to the statutory demand on 6 March 2009, disputing the alleged debt and seeking withdrawal of the demand and an undertaking not to present a winding-up petition.

[79]Edward then wrote to Rosenblatt on 9 March 2009 reiterating that he wished to be repaid the c.£37,000:

“[LTL] owes me this money as I paid it all out for its benefit.”

On 13 March 2009 he wrote to Danny, Lee, Gary, and Mr Mockler/EM enclosing a draft letter to HMRC which he threatened to send “if my just demands are not met without delay”. The draft letter stated that he was reporting “Company fraud, deception and money laundering” that Edward and the other addressees of his letter had been involved in over several years.

[80]We then come to the so-called “angry letter” sent by Edward to Rosenblatt, also on 13 March 2009. It is headed “My Full and Final Demand” and is several pages long. It contains the following:

“I therefore have come to the conclusion that both my sons have no intention whatsoever of ever reimbursing me let alone as promised to give my wife £200,000 pounds on my death.”

Danny and Lee rely on this statement as supporting their case in relation to the Purchase Agreement (see paragraph 20 above). The letter repeats the threat to report an alleged fraud involving Lee, Danny, Gary and Mr Mockler to HMRC, and states that for this purpose he will supply accounting records which he encloses. These records, prepared by Edward, relate to Labrett and purport to cover the period October 2004 to July 2008. He goes on to make a “take it or leave it” offer to “all concerned”. This offer in fact comprises separate demands directed to each of the persons concerned, and in some cases refers to other grievances involving events several years earlier. Most of the demands already made in correspondence are repeated, including the demand for repayment of the £37,000, and there are additional demands. Compensation and debts against the defendants totalling £427,000 are claimed in an annex. In this Edward refers to his own “Input” as being: “South Central”: £200,000; “Multiplex”: £190,000; and “Cash input”: £37,000. There is no reference in the letter or the enclosures to all or any part of the disputed £184,000-£200,000 Labrett cash savings.

[81]On 27 April 2009, following an intervention by Mr Stevenson, (formerly Edward’s accountant and someone who had known the family for many years), Danny wrote a cheque for £2,000 to his father. This was said by Danny in his evidence to be separate from the “love and affection” weekly payments, and to be an advance payment of the £200,000 payable to Donna on Edward’s death. Day 9, p.102-4.

[82]The next day Donna appears to have contacted Merlin, who were by this time, as I have said, in litigation with LTL/LBEL. An attendance note dated 6 May 2009 prepared by Mr Colin Armstrong, a solicitor and the group legal director of Merlin, was shown to me. The attendance note records that Mr Armstrong returned Donna’s call on 29 April 2009. Donna told him that she and Edward wished to discuss their dispute with Danny and Lee, and a meeting was arranged. This took place on 5 May 2009 with Edward, Donna, Mr Armstrong and two other representatives of Merlin present. The note records that Edward and Donna explained their disagreement with Lee and Danny in detail, and that they claimed to have information which could “close down” LBEL. The Scrivens were asked why they were sharing all this with Merlin, and answered that they felt that disclosing it publicly, either in the litigation between Merlin and LBEL or otherwise, might encourage Danny and Lee to resolve the family dispute. Donna is recorded as saying that if necessary to get justice she would support Merlin in the litigation.

[83]Mr Armstrong’s note then records in four bullet points the following purported statements by Edward:(1) that Danny and Lee decided that the LBEL business should be a scare attraction “against Mr Scriven’s advice”, and that he had also warned them against encouraging London Dungeon customers to visit LBEL instead, as this would provoke London Dungeon and be illegal;

(2) that he had warned his sons that misleading the public into visiting LBEL instead of London Dungeon would also be illegal;

(3) that his sons, although aware of this illegality, deliberately targeted the London Dungeon queue;

(4) that it was regrettable his sons had ignored his advice and warnings, and had they heeded it the current litigation would not have ensued.

[84]The other Merlin representatives at the meeting also prepared attendance notes confirming the truth and accuracy of Mr Armstrong’s note, which was sent to Edward by Mr Armstrong on 12 May 2009. Edward emailed Mr Armstrong on 13 May 2009 denying that he had made the comments referred to at points 1 to 4 above. He also emailed Mr Samson of Rosenblatt much later, in March 2010, stating that Mr Armstrong’s note was “false and completely fabricated …. for his own gains”. The email went on to say that Mr Armstrong had agreed in a conversation with Edward to contact Mr Samson in order to retract the false statements. Edward maintained his position on the note in his evidence. Donna’s evidence on the point was that she could not recall Edward telling Merlin that he had advised against a scare attraction. Day 7, p.27.

[85]When Danny and Lee were shown a copy of Mr Armstrong’s attendance note (which was part of Merlin’s disclosure in the litigation between Merlin and LTL/LBEL) they stopped the weekly payments to Edward of £400. However, these were re-started quite soon after a further intervention of Mr Stevenson. The payments finally ceased in August 2011 when Edward’s solicitors sent a letter before action to the defendants.

[86]On 16 May 2009 Edward sent an email for Danny and Lee’s attention to the email address of an employee at Captive Minds Limited, who were the publicity consultants of LTL/LBEL. The email, which was in very abusive terms, demanded “our money”. This email was more or less the end of communications between Edward and his sons, save for a few phone calls and text messages.

[87]These proceedings were commenced on 3 April 2012. LTL and LBEL were placed into administration in the autumn of 2012. One of the joint administrators appointed by Clydesdale Bank, Mr Jason Baker, gave written and oral evidence on behalf of Edward at the trial. He criticised the conduct of the directors, Lee and Danny, and in particular what he regarded as a lack of co-operation with the joint administrators in respect of the provision of information and company records. He indicated that the administrators were contemplating pursuing the directors directly, although this was unlikely in view of the insufficiency of funds left in the companies after the proceeds of sale of the business and assets (c.£300,000) were distributed to the lender. These had been bought by a company controlled by Mr Roy Ruffler, who was a guarantor under the loan made by Clydesdale Bank. Edward’s claim in these proceedings

[88]Edward’s claim falls primarily into two parts:(1) that which concerns E&C and SCH Jersey, and

(2) that which relates to the Tooley Street project and LTL/LBEL. There is some linkage between the two parts. Other issues relating to the striking off the register of Milten Limited were raised in the claim form but are no longer being pursued as a basis for relief. Mr Weatherill sought, without much enthusiasm, to rely upon these issues as pertinent to the credibility of Danny and Mr Mockler, but he accepts that the issues are “peripheral” and I agree. I have not found the evidence relating to them of assistance and do not propose to refer to them further. Claim against Danny, Lee and Gary

[89]In brief summary, it is claimed:(1) that Edward has established his right to an interest in the E&C property and in SCH Jersey, that he has not given up such rights, and that Danny and Lee have failed to discharge the persuasive burden of satisfying the court that their version of the Purchase Agreement, whereby Edward is said to have agreed to surrender those rights in consideration for his sons’ promise to pay Donna £200,000 in instalments on Edward’s death, was ever made;

(2) that Edward has established an interest in LTL/LBEL and the Tooley Street project generally, that he did not at any stage give up such interest, and that Danny and Lee have failed to discharge the persuasive burden of satisfying the court that Edward did so pursuant to an agreement at the LTL Family Meeting.

[90]As against Gary, Edward claims in particular the following relief:(a) a declaration that Gary is a bare trustee of the shares in SCH Jersey for Danny, Lee and Edward in equal shares;

(b) an account of Gary’s dealings in relation to SCH Jersey;

[91]As against Danny and Lee, Edward claims specific relief in relation to the E&C property as follows:(a) a declaration that Danny and Lee hold the shares in SE17 Properties Limited (by which company the lease of the E&C property is now held) as constructive trustees on trust for themselves and Edward in equal shares, and a declaration that Danny and Lee hold one-third of the shares in SE17 Properties Limited as nominees or bare trustees for Edward;

(b) an account of their dealings in relation to SE17 Properties Limited;

[92]In relation to the Tooley Street project, it is contended that there was an agreement - the FBA - between Danny, Lee and Edward which applied to the manner in which they operated businesses in which they were joint venturers, that that arrangement was based upon a quasi-partnership relationship of mutual trust and confidence, and that as a result Danny, Lee and Edward owed each other fiduciary obligations. These obligations included duties to act at all times only in the joint interest, not to allow individual interest to conflict with that joint interest, and not individually to profit nor to disadvantage other members of the joint venture without their consent. There were also contractual obligations to this or similar effect pursuant to the FBA and/or a separate agreement relating to LTL/LBEL.

[93]Edward contends that Danny and Lee acted in breach of those obligations in that Edward was wrongfully excluded from his right to participate in LTL and LBEL as an equal shareholder and director. In consequence he is entitled to the following relief:(a) a declaration to the effect that Danny and Lee held their shares in LTL as constructive trustees for themselves and Edward in equal shares.

(b) a declaration to the effect that the purported allotment of 999 shares in LTL to Danny and Lee and the transfer of the subscriber share to Danny, were void.

(d) exemplary damages on the basis that the conduct of Lee and Danny demonstrated a cynical disregard for Edward’s rights, and was such as was calculated to earn a greater profit for them than any compensation payable to Edward.

[94]Edward contends that the claim for damages/compensation should reflect the income he would have received from LTL and LBEL up to the date those companies entered administration in October 2012. This lost income is the subject of an assessment by Ms Kay Linnell, of Kay Linnell & Co, Chartered Accountants, an expert accountant instructed on behalf of Edward. In Ms Linnell’s original Quantum Report, this loss was calculated at £216,804, but that figure was revised in the course of the proceedings to £201,287.

[95]It is also claimed that Edward is entitled to damages/compensation for the losses he has suffered as a consequence of being deprived of the opportunity to protect and manage his investment in the Tooley Street project. These damages comprise lost future income and lost future capital value on disposal of his shareholding, as quantified by Ms Linnell in her Quantum Report. These calculations, too, have been revised during the proceedings. This aspect is based on the premise that, absent Edward’s exclusion from the business, it would not have gone into administration and would have continued to trade profitably for the foreseeable future.

[96]Depending on whether it is assumed that Edward would not have disposed of his shareholding until 5, 10 or 15 years after the time when the LTL/LBEL in fact (but not for the purposes of the calculation) went into administration, the total monetary claim (including the figure mentioned earlier for lost income prior to administration) is between £1,018,527 and £2,853,741.

[97]Alternatively, Edward claims repayment by Danny and Lee of the sums he is said to have invested in the Tooley Street project. Those sums include in particular: the c.£37,000 said by Edward to have been invested from personal sources, together with his one-third share of the Multiplex payments of £190,000 and of the cash savings from Labrett earnings (c.£184,000-£200,000). Claim against EM

[98]The primary allegations against EM are as follows. EM had for a number of years prior to 2012 been professional adviser and provider of accountancy services to various family business companies conducted by Lee, Danny and Edward, and also to Edward in his personal capacity and in his capacity as director, shareholder and beneficial owner of such companies. By reason of that long course of dealing, EM was at all material times aware of the FBA, and of the operation and beneficial ownership of family business companies, which included LTL/LBEL; alternatively EM ought reasonably to have deduced that such a relationship existed.

[99]It is claimed that as a result EM owed a number of duties to Edward. These include: a fiduciary duty to act in what EM honestly and reasonably believed to be Edward’s best interests as director, shareholder and part beneficial owner of family business companies; a duty to treat Edward as a director of EM’s client companies no less favourably than it treated Lee and Danny; a fiduciary duty not to put itself in a position where its interest or those of Lee and/or Danny might conflict with Edward’s interests without his informed consent; a duty to Edward, as a client of EM, to exercise reasonable skill, care and diligence in carrying out his instructions, to ensure that his interests were not compromised, to ensure that the affairs of LTL were conducted lawfully and in accordance with the Companies Acts and LTL’s articles of association, and to keep him fully informed of all matters that might affect his interest in LTL.

[100]It is contended by Edward that, because EM knew or ought to have known that LTL was to be established in accordance with an agreement between Edward, Lee and Danny to hold the share capital one-third each and share equally in the financial rewards, then even if Edward was not a client, EM owed him a duty to keep him informed of all developments that might affect his interest in LTL, of any changes to the proposed ownership or directorships of LTL, and if Danny or Lee made any proposal in respect of LTL which was prejudicial to Edward’s interests, not to accept instructions without Edward’s approval, and to notify Edward of any relevant changes that might affect his interest in LTL.

[101]Edward also places reliance upon the principles contained in the ACCA Code of Ethics as giving rise to a duty of care to be straightforward and honest, not to allow bias or conflict of interest to override business/professional judgment, to conform to standards of fair dealing and truthfulness, and not to be associated with communications or information which EM believed to contain materially false or misleading statements.

[102]It is then contended that negligently and in breach of the above duties EM, by itself or its agents the Highstone companies, participated in a course of conduct whereby, without Edward’s knowledge or consent:(1) contrary to his express instructions as to the shareholdings that were to be put in place, and contrary to his interests, the subscriber share in LTL was transferred to Danny, and later shares in LTL were allotted to Lee and Danny alone;

(2) Edward was removed as a director of LTL; and

(3) documents reflecting the share allotment and the termination of directorship were filed at Companies House.

[103]It is also alleged that negligently and in breach of the duties owed to him, EM failed to advise Edward that it would be in his best interests to enter into a formal contract to protect his interest in LTL, permitted a conflict of interest between Lee and Danny on one side and Edward on the other to override the proper professional course of action, was associated with documents relating to the allotment of LTL shares which were materially false and misleading, was not straightforward, and did not conform to standards of fair dealing.

[104]Edward contends that EM’s actions caused him loss and damage in that he has incurred costs, has been deprived of income from LTL, and of the ability from and after 28 October 2008 to participate in the management of LTL and to protect his interest therein by employing his business skills and experience with a view to making LTL profitable or more profitable by increasing turnover, controlling unnecessary expenditure, and preventing Danny and Lee from mismanaging LTL, thereby avoiding the entry into administration.

[105]In essence Edward’s case in this regard is that had he been alerted by EM/Mr Mockler in April or May 2007 he would have been able to mount a successful defence of his rights by exerting personal, commercial or legal pressure on his sons. He was denied that opportunity by EM’s breaches of duty. The quantum of damages claimed against EM is the same as against Danny and Lee. Key issues

Introduction

[106]As appears from the Background section of this judgment, a number of disputes of fact are raised on the pleadings. That number was multiplied in the course of the evidence. A good many such issues are in my view irrelevant or at best peripheral, and do not need to be determined. There are, however, some key issues which I have sought to flag up in the account of the present dispute set out at paragraphs 10 to 87 above, and with which it is necessary to deal. Two major issues relate to the Purchase Agreement and the LTL Family Meeting. I turn immediately to the first of these issues. The question of what occurred at the LTL Family Meeting is dealt with at paragraph 141 ff below. What was agreed in the Purchase Agreement? (paragraphs 20 to 21 above)

[107]This issue has been outlined at paragraphs 20-21 above. The Purchase Agreement was reached in the course of oral discussions which took place sometime in the period in 2004-5, and was not reduced to writing. I have stated that the parties are at odds, not as to the existence of the agreement nor as to the fact that it concerned the disposal of Edward’s one-third share in SCH Jersey/E&C, but as to precisely what was agreed. The rival contentions have also been set out earlier. In short, Danny and Lee contend that Edward agreed to transfer his share in SCH Jersey/E&C to them with immediate effect in consideration of their promise to pay £200,000 to Donna in weekly instalments of c.£400 as from Edward’s death. Edward, on the other hand, contends that the agreement was that his interest in SCH Jersey/E&C would be transferred to Lee and Danny at his death, and that the interest would be professionally valued, and Lee and Danny would pay Donna the value.

[108]Mr Weatherill submits that, since it is not in dispute that Edward had a one-third interest in E&C/SCH Jersey prior to the Purchase Agreement, the evidential burden is on Danny and Lee to establish that he thereby agreed to surrender it in the terms relied upon by them. This proposition did not seem to be contested by Mr Bogle or Miss Sandells, and I approach the issue on that basis.

[109]The main witness evidence relating to this came from Edward, Danny, Gary, Ms Myra Clarke and Mr John Stevenson. Each of these witnesses was cross-examined - in the case of Edward, Danny and Myra Clarke for a considerable time - on this and on many other matters.

[110]It is not in dispute that at the time of the Purchase Agreement Edward was very exercised about the need to arrange financial provision for Donna in the event of his death. He was not in good health and was faced with major surgery. Edward confirmed in his evidence that at the time (c.2005) he valued his one-third share in E&C at about £200,000. Significantly, in his “angry letter” of 13 March 2009, whilst claiming a continuing interest in the property, he also referred to a promise by Danny and Lee “to give my wife £200,000 pounds on my death” (see paragraph 80 above). This is consistent with Danny and Lee’s account that under the Purchase Agreement Donna was to be entitled to an ascertained sum in that amount, and it is inconsistent with Edward’s assertion of an agreement to pay Donna an unascertained amount by reference to a valuation to be made on his death at an indefinite time in the future. Also, his sons’ version would be more likely to have provided the reassurance about Donna’s financial position that Edward was seeking at the time. That the Purchase Agreement involved a sum of £200,000 was also confirmed by Mr Stevenson, who was called on behalf of Edward. He stated in cross-examination that Edward had “sort of confirmed” what Mr Stevenson had been told by Danny and Lee, namely that they had agreed with Edward that Donna would get £200,000 on Edward’s death.

[111]Myra Clarke gave evidence before me for more than one day. I formed a favourable impression of her as a straightforward and reliable witness of truth. Although in his evidence Edward implied that she might have some animus against him, having heard her cross-examined extensively I do not accept that implication. Edward himself indicated in the “angry letter” of March 2009 that she was someone whose account of events he would wish to rely upon, and indeed she was originally sought as a witness for him although she was ultimately called on behalf of Danny, Lee and Gary. It is clear that Myra was intimately acquainted with the Scrivens and their business affairs throughout the period covered by these proceedings. She worked closely with them for several years from 1996 as an accounting assistant. She even lent them money when they were short of funds – as much as £10,000 at one stage.

[112]In relation to the Purchase Agreement Myra’s written evidence was that, “I was aware from conversations that took place between the Scrivens and I that Edward had agreed to give up his share of the Bar South Central to Daniel and Lee and they had agreed, in return, to give Edward’s wife Donna £200,000 for Edward’s share. I believe this was in 2005 but cannot be certain of the exact date.” She confirmed this on several occasions in the course of cross-examination, making clear that Edward himself as well as his sons had told her about the arrangement. She said she was also aware that his sons had given Edward an assurance that they would continue to pay him £400 per week as he was their father. Indeed, it is clear that she herself was often responsible for organising those payments, which she said would be made up by Danny and Lee from other sources if there was insufficient income from the E&C rental income.

[113]In his written evidence Gary stated that he had been told on separate occasions by Danny and by Edward respectively that they had entered into the Purchase Agreement:

“Daniel and Lee had agreed to take over Edward’s share in South Central Holdings (Jersey) Ltd in exchange for giving Donna £200,000, paid out at a rate of £400 per week, when Edward died.”

In cross-examination Gary stated that Edward had told him that he thought £200,000 was a fair price but that he was worried Lee might not pay when the time came as Lee was not fond of Donna, although Danny would pay. In his evidence Edward denied having discussed this with Gary, stating “Gary was an employee. You do not tell employees your private business…” However, it is common ground that Gary, who was also Edward’s nephew, had been holding the shares of SCH Jersey (of which he had also been sole director) on trust for Edward, Danny and Lee, and in my view it would not have been at all unreasonable or unlikely that a change in the beneficial ownership was made known to Gary.

[114]In cross-examination both Danny and Edward maintained their pleaded versions of the Purchase Agreement. Edward emphasised in his evidence that he would not in any circumstances have surrendered his share in E&C before his death, as it was his and Donna’s only source of income. Mr Weatherill submitted that it was “incredible” to suppose that he would do so in consideration of a purely oral promise to pay Donna £200,000 at an indefinite date, without any security or record of the transaction.

[115]I do not find it incredible. Until the unfortunate breakdown in relations which culminated in these proceedings, this was a family which almost invariably agreed to the disposal and allocation of interests in shares and property as between themselves on the basis of trust and without formalities or written records. This point was made on numerous occasions in the evidence by Edward, Danny and other witnesses who were familiar with the way they operated.

[116]There are many examples of this approach being adopted by them, for example, when Gary was allocated the only share in SCH Jersey to hold as nominee for the three Scrivens. Mr Stevenson stated in his written evidence “….the Scriven family did not normally commit anything to writing, matters were just agreed verbally; that was the way they did business. For example, there were no shareholder agreements or nominee agreements between them. Additionally I understood that there was no trust agreement or anything in writing, for the arrangement with Gary Winston when they transferred the flat at the Old Kent Road to Gary….”

[117]Furthermore, it appears that the income from the E&C property varied over time and in 2005 there was not yet any suggestion of a windfall in the form of the payments which were ultimately forthcoming from Multiplex as a result of the agreement negotiated by Danny. Therefore, in the light of what at that time seemed to be a serious threat to his health, Edward might well have considered a promise on the part of his sons to pay his widow £200,000 by means of a regular weekly income after his death to be an attractive arrangement. This would be all the more so if, as I find was the case, Edward was given assurances by his sons that they would look after him financially until he died.

[118]I prefer the evidence of Danny to that of Edward. In general I found Danny to be a more straightforward witness than Edward, who was often evasive, discursive and liable to vary his evidence if he felt under pressure. I also accept Gary’s and Myra’s evidence. I find that on the balance of probabilities the terms of the Purchase Agreement were as stated by Danny, and that in about 2005 Edward agreed to surrender his interest in E&C/SCH Jersey with immediate effect in return for his sons’ promise to provide £200,000 to Donna in weekly instalments on his death. I do not accept Edward’s version of that agreement.

[119]In reaching this conclusion I have taken into account the evidence of Myra (confirmed by the witness statement of Michael Buxton) that a couple of years later, when the Tooley Street project was under way, Edward had instructed Myra not to pay any expenses for that project from his “share” of the E&C rental income. It is not in dispute that Edward had continued to receive part of that income. He would probably have felt that he was morally entitled to this, not least in view of the assurances which I find he had been given by his sons that they would look after him, and it is conceivable that he may have come to believe that he had a right to the payments in a legal sense. However, I find that after the Purchase Agreement Edward did not receive those payments, or any share of the E&C rental income, as of right. Was there an overarching “Family Business Agreement”(“FBA”)? (paragraphs 18, 19 and 29 above)

[120]This issue has been outlined at paragraphs 18, 19 and 29 above. Edward alleges that he and his sons were parties to the FBA, which arose in the late 1980s or early 1990s and is said to have been operated through various companies including LTL/LBEL. Edward’s pleaded case is that the terms of the FBA were unwritten, and included the following: he, Lee and Danny were entitled to equal shares in any project in which the family business invested; he, Lee and Danny would be involved in the management of the family business and would be entitled to be a director of any company which held or operated part of the family business; he, Lee and Danny would share equally in the beneficial ownership and financial rewards (including profits and remuneration for acting as a director and/or employee) of the family business, unless otherwise agreed in relation to a particular project; any finance contributed by them would be treated as a loan to the relevant family business company and would be repayable as a debt prior to the distribution of any profits; on occasions a party to the FBA would invest individually in another idea or project, which was then “excluded by explicit agreement from the scope of the” FBA, but such investment was only with the consent of the other parties to the FBA. Amended P/C, paras 15-17.

[121]Danny, Lee and Gary, in their pleadings and evidence, deny that any such overarching agreement, arrangement or understanding as the FBA has ever existed, and maintain that each of the so-called family business companies was in fact governed by its own distinct arrangement. They also contend that none of them needed the consent of the others, by “explicit agreement” or otherwise, to invest in any business. Everyone was free to pursue other investments or businesses, either collectively or individually, without any constraint of that kind.

[122]Other than Edward, no witness supported its existence, and there was a considerable volume of evidence to the contrary. For example, although Mr Stevenson in his written evidence described certain Scriven ventures as “family businesses” where each of Edward, Lee and Danny had an equal share in the business and its management, he did not there or in his oral evidence support the existence of an overarching, master agreement which governed the parties’ ventures such as that described in Edward’s pleading.

[123]Even in Edward’s own evidence there are aspects inconsistent with the existence of such an agreement. He refers to a number of businesses as “family businesses” which do not fit the FBA criteria because they involved non-family participants: for example, Park View Leisure, the Beehive public house and the Lambeth Tavern. Nor does his, or indeed any, evidence support the alleged requirement for the other FBA parties’ permission to embark on a business with non-FBA participants.

[124]It is clear that Edward, Lee and Danny each pursued separate business interests on numerous occasions. For example, Gary’s written statement, which he confirmed in his oral evidence, states:

“19. I can confirm that there was never any family business arrangement within the family as Edward suggests. I worked with Daniel, Lee and Edward for years and know that is not the case. Over the years that I have known them, Lee, Daniel and Edward have all opened and traded their own businesses without seeking any permission of the others to do so. There has never been any talk of a “family business agreement” and, if there had been, I would have been bound to know of it since each of them would have told me, as a member of the family working with them. I remember Edward opening a business called ‘The London Spa’, a sandwich business, and he was going to do some re-development projects on the continent with a couple of partners whom he knew from Kent. I also remember Edward was trying to open a garden centre in Kent with Lee (I believe they looked at a site on Seven Mile lane and also near Lee’s house) and set up a company called ‘Dandi Little Ponies Ltd’ with Lee and another person called Simon Bourn. None of these enterprises involved any ‘family business agreement’ requiring the consent of the family, or of each other, and requiring any kind of profit share. I would have known if it had, since they would certainly have told me. 20. Daniel opened a taxi company with myself in Swanley, Kent, and purchased a public house in Pembrokeshire with his friend John Graham. He also tried to start a log cabin business with his cousin Kirstie Meredith and with Lee and their sister Maxine. He also had a company called ‘Poop Freeze Ltd’ with John Graham, Maxine and Lee. At no time did Daniel ask anyone for consent or permission to open these businesses and neither were they part of any ‘family business arrangement’. If they had been, I would have known because they would have told me.”

[125]Myra, too, stated in written and oral evidence that she was aware of no such thing as the FBA. At paragraphs 5 and 6 of her statement she said:

“5. Throughout my time working for Daniel, Lee and Edward Scriven I was never told about, nor did I ever see any evidence to suggest, that there was any family business agreement governing the way in which they operated. From my understanding each was free to pursue any business venture they wished to and no permission was needed from each other. By way of example, I remember Daniel coming to the office in or around May 2005 and I asked him whether he was involved in the potential new garden centre business that Lee and Edward were considering opening in Kent. Daniel said that he had not heard anything about this and was surprised Edward and Lee were getting involved in a business which they had no experience of. 6. From my experience of their affairs, each business that either Daniel, Lee or Edward were involved with was governed by different arrangements that depended upon the particular circumstances. There was never any overarching or universal family business agreement that I was aware of. I was not aware of any arrangement whereby each was required to seek the permission of the other or indeed, needed permission, from any other member of the family. Likewise, so far as I was aware, Daniel, Lee and Edward were each free to inform each other about any available business opportunity, and there was no requirement that they must do so nor any need to seek the consent of each other to invest individually in any business idea or project.”

[126]Kirstie Meredith’s evidence was to similar effect. She stated that she was not aware of anything such as the FBA, and when she had been involved in a business venture called “Wilderness Lodge” with Danny, Lee and Maxine Austen (Edward’s daughter), Edward had known all about it but he had not had to give permission for it although he was not part of the project. She also stated that Edward was not involved in other business ventures of Danny’s such as “St Florence”, “Multicars”, and “Poop Freeze”. Edward’s daughter, Maxine, who was not cross-examined, also states in her written witness statement that there was no FBA.

[127]No documentary evidence of the FBA was put before me.

[128]Although he referred to it as an “oral agreement”, Edward himself does not suggest that there was ever a discussion between himself and his sons which gave rise to the FBA. Moreover, Mr Weatherill appeared in the course of the hearing to place less weight on it, and in his closing submissions stated that “…it does not really matter whether there was a pre-existing…Family Business Agreement or not.” This was because there were “actual agreements made in respect of the manner in which SCH Jersey and LTL should be owned and controlled…” Main Closing, Ch 10, para 2.

[129]The evidence overwhelmingly suggests that no such FBA ever existed, and I so find. On this issue I accept the evidence of Danny, Lee, Myra, Gary, Kirstie and Maxine, and I reject that of Edward. Apart from the weight of the evidence against it, I consider that an agreement in the pleaded terms, with the alleged constraints on individual action, would not be plausible for a family who operated in the way that the Scrivens did. It would be unworkable and unenforceable. It is clear from all the evidence I have seen that Edward and his sons had no overarching arrangement of that kind governing their numerous enterprises, and that they treated each different venture individually depending on the circumstances.

[130]It follows that since there was no FBA, Mr Mockler/EM could not have been informed, or have known, about it. This finding has a bearing on the allegations made against EM in relation to the allocation of shares in LTL. What happened at the 5 December 2006 meeting? (Paragraphs 28 to 31 above)

[131]This issue has been described at paragraphs 28-31 above. As stated there, Edward denies that at this meeting it was resolved to allot the single share in LTL to Danny, and challenges the accuracy of the 5 December 2006 Minutes in that respect. He contends that at the meeting he took the lead in explaining the Tooley Street project and expressly instructed Mr Mockler that the shares in LTL were to be split equally between himself and his two sons “as normal”, to reflect the fact that, in accordance with the FBA and a specific agreement in relation to LTL, they each owned one-third of the project. Edward’s case is that Mr Mockler was familiar with the FBA and the arrangements required under it. He alleges that in arranging for the single subscriber share to be allotted to Danny, EM failed to comply with these express instructions.

[132]Edward’s evidence about what transpired at this meeting and what instructions about shareholdings in LTL were given to EM is at odds with Danny’s and Mr Mockler’s.

[133]Having considered all the evidence, and having heard all three witnesses being cross-examined on this issue at length, I am satisfied that Danny’s and Mr Mockler’s accounts are accurate, and I do not accept Edward’s. Mr Mockler impressed me as a straightforward and accurate witness.

[134]I find that the lead at this meeting was taken by Danny and not Edward. I accept Danny’s and Mr Mockler’s evidence that Mr Mockler was instructed by Danny that he (Danny) would hold the single subscriber share until the Scrivens had established who was going to be involved in the business. I find that Edward was present when Mr Mockler was told this, and that this represented the agreed position as between Edward, Lee and Danny. I am satisfied that Edward did not instruct Mr Mockler in the terms Edward alleges. If he had done so I do not believe that Mr Mockler would have done something wholly different, which would have amounted to deliberately ignoring instructions – conduct for which no plausible reason has been put forward. Further, Edward himself acknowledged in cross-examination that it did not matter who had the shares on paper, as the real beneficial ownership was a matter of trust between the Scrivens.

[135]Apart from the fact that I prefer the evidence of Danny and Mr Mockler, it is clear that at this stage the Scrivens were still seeking potential investors. Moreover, PDT were still very much part of the project, and the exact nature of their investment and role in LTL, including any shareholding, remained to be settled. Indeed, the topic of shareholding was on the Scrivens’ agenda for discussion with PDT at the meeting on 22 February 2007 (paragraph 32 above). In these circumstances Edward’s account of the 5 December 2006 meeting is much less plausible. It is also undermined by my finding that the FBA did not exist, as in those circumstances Mr Mockler could not have known about it, and even if Edward had told him to allocate shares in LTL between the three of them “as normal” or “as usual”, this would have meant nothing to Mr Mockler. In any event I find that Edward gave no such instructions.

[136]I should mention an issue which arose in the course of oral closing submissions. Mr Weatherill stated that even if Danny, Lee and Mr Mockler’s evidence were to be accepted, namely that the single subscriber share was to be put in Danny’s name alone for the time being, that would not affect the substance of Edward’s case, which was that, in the light of what was said by Edward at the meeting on 5 December 2006, Mr Mockler knew or must be taken to have learned that Edward had a one-third proprietary interest in that single share. The significance of the acquisition of that knowledge, in Mr Weatherill’s submission, is that it should have rung warning bells and caused Mr Mockler to question what was happening when on 3 April 2007 he was given instructions to arrange for the allocation of shares in LTL only to Danny and Lee (see paragraph 44 above). Miss Sandells objected that this was a different case from the one thitherto alleged against EM/Mr Mockler. Mr Weatherill submitted that it was not a new case, as although Edward’s case is that it was never agreed that the single subscriber share be transferred to Danny, his case against EM depended not on what shares were issued, but on what Mr Mockler had been instructed as to the beneficial ownership in whatever share was issued.

[137]It seems to me, as I pointed out in the course of the closings, that the point being made by Mr Weatherill is a new one. The pleading alleges an express instruction by Edward to EM to divide the shares equally between the three Scrivens, and that in breach of that instruction EM allotted the single share to Danny alone. Amended P/C, paras 43, and 50-51. What is now being said is that the allotment of shares pursuant to whatever instructions may have been given at this meeting (even if EM/Highstone complied to the letter with what they were instructed to do) does not matter, as Mr Mockler was on notice as a result of what was said by Edward at the meeting, that there was equal beneficial ownership in the shareholding. That is a different case, which was not pleaded. However, as I have already indicated, I accept the evidence of Danny and Mr Mockler about what took place at this meeting. As set out at paragraphs 30 and 31 above, their evidence was that Mr Mockler was not informed that Edward, Danny and Lee were to have equal shareholdings, and was merely told by Danny that the situation was very fluid, as some investors had pulled out and that they had not yet decided what the project or the shareholding was going to be. In view of this the new case would not assist Edward. Did “the Company Agreement” exist?

[138]Paragraph 41 of Edward’s Amended P/C, alleges that “It was expressly agreed between [Lee, Danny and Edward] that the shares [in LTL] would be divided up as to one-third (1/3) each”. That agreement is termed “the Company Agreement”, which is defined earlier in the pleading as “The Agreement between Mr Scriven, Lee and Danny that they would each of hold 1/3 of the issued share capital in [LTL], be involved in the management of [LTL] and share equally in the financial rewards produced by [LTL].”

[139]Danny, Lee and Gary in their pleading deny the existence of the Company Agreement. As already noted, their case is that at the 5 December 2006 meeting it was agreed that Danny would receive the single subscriber share, because the ultimate shape of the Tooley Street project, the number and identity of participants, and the structure of LTL were at that time unknown.

[140]The terms of the alleged Company Agreement appear to reflect those of the alleged FBA which, if it had existed as Edward alleges, would have rendered the Company Agreement unnecessary. In my view the reality of the position at the time of the December 2006 meeting is that there was no express agreement between Edward and his sons as alleged, and the extent of their agreement then was reflected in the instructions which I have found were given to EM by Danny on that date. It may well have been the case that, subject to the participation of other investors including PDT, the Scrivens contemplated that each of them would have one-third participation and ownership in LTL, as reflected in notes and diagrams of David Meredith of Busbys at earlier meetings with Danny alone in November 2006. But I do not accept that on 5 December 2006 there was a binding agreement to that effect, whether express as alleged, or otherwise. The LTL Family Meeting – Did Edward agree not to participate in the project? (Paragraph 35ff) Introduction

[141]This central issue has been introduced at paragraph 35ff above. The differing versions of Edward and his sons as to what was agreed at this meeting can be stated in a few sentences. Edward’s case is that Danny and Lee visited him at home and told him that, in view of his poor health and impending hip surgery, he should take it easy, recuperate properly and allow them to take more responsibility for the day to day management of the proposed Tooley Street project. There was no agreement that he should cease to be a participant in the project. Danny’s and Lee’s case is that they informed their father that despite PDT’s withdrawal they were going to fund and build the project themselves, that he had neither the funds nor the health to be able to participate, and that they were going to ask Kirstie Meredith to be the company secretary and keep the books. They assured him that, as he was their father, they would look after him till he died, and they confirmed their promise to pay Donna £200,000 on his death. After some hesitation Edward agreed that this was a sensible course and that he would not have an interest in LTL or the Tooley Street project.

[142]Donna was present when Danny and Lee visited. She stated that the boys sat with their father at the kitchen table while she made drinks at the other end of the room. In cross-examination she stated that she was not present for the whole of the meeting and had not heard all the conversation between them. She said she may have popped out of the room. She did not hear any mention of Edward giving up ownership of the project, but merely that Danny had said that his father was not in the driving seat and must take a back seat and rest. She said the meeting was very amicable.

[143]There is evidence from other witnesses which touches to a greater or lesser extent on this important aspect of the dispute, and there are some specific issues of fact which also have a bearing on it, and which I therefore need to consider in seeking to resolve this question. This evidence and the specific issues are discussed below under the following sub-headings:(1) What was Edward’s reaction when PDT pulled out of the Tooley St project? (paragraphs 145 below)

(2) Did Edward know in April 2007 or thereabouts that Kirstie was to be LTL’s company secretary? (paragraph 149 below)

(3) Edward told Myra not to pay Tooley St expenses from E&C income (paragraph 152 below)

(4) Myra’s evidence as to Edward’s lack of involvement in the new Tooley St project (paragraph 153 below)

(5) Kirstie Meredith’s evidence (paragraph 156 below)

(6) James Kelly’s evidence (paragraph 161 below)

(7) Evidence of Harold Abrahart (paragraph 164 below)

(8) Evidence of Mark Lempriere (paragraph 168 below)

(9) John Brittain’s evidence (paragraph 169 below)

(10) Simon Bourn’s evidence (paragraph 170 below)

(11) Ken Brennan’s evidence (paragraph 171 below)

(12) James Kislingbury’s evidence (paragraph 172 below)

(13) Malcolm Pawley’s evidence (paragraph 173 below)

(14) Witnesses, whose evidence was read (paragraphs 174 to 186 below)

(15) Did the three Scrivens save c. £184,000-£200,000 in cash from Labrett, which was spent wholly or mainly on excavation work at Tooley Street? (paragraphs 187 to 212 below)

(16) Other funding issues (paragraphs 213 to 227 below)

(17) Was there a meeting at EM’s office on 27 February 2007? (paragraphs 228 to 230 below)

[144]Once I have considered those matters, I will state my conclusion on what was agreed at the LTL Family Meeting (see paragraphs 231 to 250 below) (1) What was Edward’s reaction when PDT pulled out of the Tooley St project?

[145]An outline of this issue has been given at paragraphs 32 to 34 above. In brief, PDT, who were experienced in running scare attractions, were central to the original Tooley Street project. It was anticipated that they would bring not just expertise and active participation but also funding. Some idea of the extent of the Scrivens’ reliance upon their participation can be gleaned from the agenda prepared for what proved to be the final meeting with them. This included the following items: shareholdings, directorships, work required to be carried out at the premises, IP rights, insurance, financing and other items required to advance the project.

[146]The issue raised concerns the Scrivens’, and in particular Edward’s, reaction to PDT’s announcement at that meeting that their heart was no longer in the project. Edward’s case is that they were all essentially happy to lose PDT and keen to go ahead without them. Danny’s evidence is that it was a significant blow to their plans and a disappointment, and that whereas he and Lee wished to go ahead notwithstanding PDT’s absence and to raise funds from other sources, Edward expressed considerable misgivings about proceeding without PDT’s expertise and finance, stated that he would not be in a position to raise funds himself, and advised Danny and Lee not to go ahead themselves.

[147]Myra Clarke, in her witness statement, refers to Edward’s and his sons’ reactions to the news that PDT were not going to be part of the project. She describes them as all being “very upset”. I accept her and Danny’s evidence, which I consider much more plausible than Edward’s in the light of the circumstances. It is perfectly clear that PDT had been regarded by all of them as crucial to the project. It was clearly a disappointment and a case of “back to the drawing board” when it became clear that PDT would not be involved.

[148]Danny’s evidence is also supported by what Edward himself is recorded as having told Mr Armstrong, Merlin’s in-house solicitor, and the other representatives of Merlin on 5 May 2009, namely that Danny and Lee had decided on the “scare attraction against my advice” (see paragraph 83 above). Notwithstanding Edward’s early attempt to challenge Mr Armstrong’s memorandum of that meeting, I believe it is an accurate record of what was said by Edward and Donna. I so find, and I therefore reject Edward’s denial. I also reject his later assertion, in an email to Mr Samson of Rosenblatt solicitors, that certain passages (including the one to which I have just referred) were fabricated by Mr Armstrong. There is no conceivable basis or justification for that allegation. Edward’s equally unsubstantiated and wholly implausible assertion, in the same email, that Mr Armstrong had agreed to retract part of the memorandum in a telephone conversation with Edward, I also find to be untrue. (2) Did Edward know in April 2007 or thereabouts that Kirstie was to be LTL’s company secretary?

[149]Edward denies the account of the LTL Family Meeting as pleaded by Danny/Lee, including that they had informed him of their plan to remove him as company secretary and appoint Kirstie in his place. However, Myra Clarke, both in her witness statement and in cross-examination, spoke of a conversation she had had with Edward at this time, in which she recalled Edward telling her that Kirstie was now going to be company secretary, and speaking about Kirstie in unflattering terms, to the effect that she would not make a good company secretary:

“I don’t know why they want her.”

Day 11, pp.181-6. Myra also said in her evidence that Danny and Lee had told her, not only that they had agreed with Edward that they would pursue the new project themselves in view of Edward’s lack of funds, but also that Kirstie would be their new company secretary.

[150]Kirstie Meredith herself also gave evidence that Edward was well aware that she was being appointed company secretary, as they had spoken about it (see paragraph 156 below).

[151]As I have said, I found Myra to be a truthful and reliable witness. The same applies to Kirstie. I accept Myra’s and Kirstie’s evidence on this. I conclude that, despite his denial, Edward was aware in March/April 2007 that Kirstie was to replace him as company secretary of LTL. I also find that this was because he had been so informed by Danny and/or Lee, almost certainly at the LTL Family Meeting. Day 8, pp.175-6. I do not believe that Edward could have forgotten that he was so informed. Therefore, it is clear that Edward is not telling the truth, and the question arises why he would lie about knowing that he was to be replaced as company secretary of LTL. One obvious inference is that Edward feared that if he accepted that he was told about it at that time, it would provide support for Danny and Lee’s account of what took place at the LTL Family Meeting, and thus for the conclusion that he had then agreed to play no part in the new project, as they allege. (3) Edward told Myra not to pay Tooley St expenses from E& C income.

[152]As mentioned already, Myra’s evidence is that after the new LBEL project had been initiated Edward instructed her that she was not to pay for anything associated with the Tooley Street site from the payments that he had been receiving from the E&C property. In cross-examination she confirmed this, and said that the Tooley Street expenses discussed at the time were the wages of Michael Buxton. Myra’s evidence on this was not challenged in cross-examination. In his witness statement Mr Buxton confirms Myra’s evidence, and also states that Edward added by way of a reason that he was “not involved in the new project”. However, I explained earlier in this judgment that Mr Buxton could not be cross-examined. Had he had an opportunity to do so Mr Weatherill would no doubt have challenged Mr Buxton on the words quoted above, and I place much less weight on this than would be likely if it had been maintained in cross-examination. (4) Myra’s evidence as to Edward’s lack of involvement in the new Tooley St project

[153]Myra was clear in both her written and oral evidence that once PDT had pulled out Edward had no interest or involvement in the project other than as the father of Danny and Lee. In her witness statement she said:

“However, I was aware that, after Daniel and Lee said that they would be pursuing the business on their own, Edward no longer participated in it. The business was run by Daniel and Lee, without Edward. They planned the layout of the building, selected and instructed the builders and so on. Edward had no involvement in this or any part of the business and I [was] surprised that he now claims to have done so. He simply didn’t.”

[154]In cross-examination she confirmed her statement, and clarified that the conversation with Edward about non-deduction of any Tooley St expenses from E&C income had occurred after PDT had pulled out:

“… after they couldn’t get funding from the Spanish people, they then, without Eddie, they decided to do London Tombs….Eddie wasn’t involved with the London Tombs.”

Day 11, p. 104. Myra also stated that she had been told by Danny that Edward would not be involved with Tooley Street as he was short of funds, and that Lee and Danny were going to take it on alone.

[155]She was extensively examined and cross-examined about the extent of Edward’s participation in the project after PDT had departed the scene. She was unwavering in her evidence that he had no involvement and that LTL/LBEL was run by Danny and Lee alone. She stated that he was not the kind of man who would be prepared to take a back seat, no matter how ill he was. The following interchange took place in the course of Myra’s cross-examination:

“MYRA: Because Eddie – Eddie is the sort of person that he – if he had anything to do with anything, he would have made his voice known. He wouldn’t sit back and take anything, and actually, as I say, they come in and said that they’d spoken to Eddie, and I never heard from Eddie much. He never asked about the London Bridge Experience. Q. Would that be normal for Eddie? A. No, because he would want to know about things. Q. So if he was involved – A. He would have told me, he would have spoken about it, and told them where they was going right or wrong. Q. So you say it was plain to you that he was no longer involved? A. Yes. Q. You say it’s plain because of how he – A. How he was, yes, yes. Q. So that came from Eddie as far as you’re concerned? A. Sorry, what – Q. Eddie made it plain to you? A. Eddie – yes, he never spoke about it. He didn’t say he was involved or whatever it was, and I didn’t see him much after that, because as I say, his hip was bad, then he had cancer so it was just one long session for Eddie of illness. But he wasn’t involved. Plus the fact that he didn’t put any money into it. Danny and Lee had to take out – Lee mortgaged his house again. Danny used the majority of his money to pay on his credit cards. So Eddie put no money in.”

Day 11, p. 101-2. Q. Would that be normal for Eddie? Q. So if he was involved – Q. So you say it was plain to you that he was no longer involved? Q. You say it’s plain because of how he – Q. So that came from Eddie as far as you’re concerned? A. Sorry, what – Q. Eddie made it plain to you? (5). Kirstie Meredith’s evidence

[156]Kirstie gave written and oral evidence. As already mentioned, she confirmed that Edward knew that she had replaced him as company secretary; this was the background to a discussion she had had with Edward about the accounting systems, and his preference for QuickBooks over the Sage system which she favoured. Kirstie said that in the course of this conversation with her uncle he said “I can’t fund this and the boys are going to do this on their own.” She added that “he sort of said, well it’s up to – up to them now, isn’t it?” Day 12, p. 61-2. She stated that she had never thereafter been asked for financial information by Edward, nor supplied any to him.

[157]She had agreed to help Danny and Lee with the new project when they visited her in hospital the day after a mastectomy operation. That operation was on 27 March 2007. She said they told her that everyone, including PDT and Edward, had pulled out, but they wanted to do it themselves. When they asked her to be company secretary and to do the book keeping she sought confirmation that Edward was not involved and that he knew they were asking her to help. They gave that assurance and Edward later confirmed it to her. She explained in cross-examination why she needed to be assured of this: Q. Okay. You say in paragraph 15 that he would have been very vocal about his contribution, I think that's what you just said to us, and he wouldn't have allowed you to set up SAGE, and I think you've explained why that was, or indeed deal with VAT. So you're saying he wouldn't have allowed you to deal with the VAT; why? A. Because originally when they were talking -- when it was the Oliver Twist Experience, I suppose if my involvement had sort of -- I didn't have very much involvement with the Oliver Twist thing, because in the -- in the discussions that were had, Eddie was going to be sort of involved, but he would have wanted to set it up. He would have wanted to have done -- and it's what he told me: oh, you can work these things out on the back of a fag packet; and I went: mm, no, I don't think so, it needs to be done properly. And he just would not have let me deal with it. He would have wanted to have overseen it, had he had any interest in the London Bridge Experience, and that's it. Q. Even though he was ill? A. Well, he wasn't ill for the whole time and certainly I had breast cancer, but, you know, it's -- he -- the bookkeeping system had to be set up. He was not ill when that happened, and when the initial bills started coming through for the London Bridge Experience. He had a bad hip, I had a bad leg as well. I had a torn cruciate, so it is a six of one and half a dozen of the other and if he wanted -- he never rang me, he never came to see me and he would have done.” Day 12, p. 65-6.

[158]In answer to a later question Kirstie said “I can assure you that if my Uncle Eddie was involved in [the project], even though he was ill, he would have made it very plain to me.” Day 12, p.88. I have already noted that Kirstie’s husband, Mr David Meredith, gave evidence that his wife had informed him in March/April 2007 that Edward had pulled out of the project, and would not be providing funding, and would not be a director, company secretary or shareholder or otherwise involved. A contemporaneous manuscript note by Mr Meredith dated 30 April 2007 confirms that he was so informed at that time (see paragraph 49 above).

[159]Kirstie stated that with some help from Myra she attended to the bookkeeping for LTL/LBEL from then until about April 2008 when she had to undergo further medical treatment, and Danny appointed Harold Abrahart to take over her role. In her witness statement she said:

“Whilst the project was to be called the “Oliver Twist Experience”, Edward was involved in discussions. But once the Spanish Company had pulled out, Edward had no further involvement. My meetings thereafter were with Daniel and Lee alone. As bookkeeper, I would [sic] was well aware that Edward had no financial interest in the business.”

Paragraph 9.

[160]I have already said that in my view Kirstie was a straightforward, accurate and truthful witness. (6). James Kelly’s evidence

[161]The involvement of Mr Kelly, and his company HPI, has already been described in the narrative section of this judgment at paragraphs 41-3 and 67 above. As well as providing a witness statement on behalf of Edward, Mr Kelly gave oral evidence from the United States by video link. In his statement the witness outlined his contact with the Scrivens from late March 2007 until the final breakdown in relations at the beginning of 2008. In the earlier period he said he formed the impression that all three were the owners of the proposed project, that Danny was the spokesperson who did most of the talking and was “very energetic” and “full of ideas”, and that Edward “seemed to be in charge” and “always seemed to be involved where financial matters were discussed”. Mr Kelly noted that the first cheque he received in respect of the first instalment for work on the project was drawn by Edward in the sum of £53,613 on 23 April 2007. However, the witness stated that most of his dealings were in fact with Danny: it was to Danny that Mr Kelly sent his costed plan, draft agreement and invoices, Danny who signed the agreement in the US, Danny who arranged for payment of his hotel expenses, and Danny with whom all contacts about payments under the contract and other negotiations took place. It was also Danny who in the final stages “gave us a number of excuses regarding payment”. Mr Kelly considers that he was misled by Danny in relation to a payment, which is still in his view outstanding, and clearly retains a sense of grievance against Danny, but not apparently against Edward. Mr Kelly stated that he has never requested the outstanding payment from Edward.

[162]It is clear from Mr Kelly’s evidence that after the initial cheque was provided by Edward in April 2007, he had little if any further dealings with Edward, until he was contacted by him in relation to this claim. As I said earlier, Danny’s evidence is that HPI did not receive full payment because they had not complied with their contractual obligations and had effectively left LBEL with an unfinished/defective attraction which could not be opened to the public without further work on it.

[163]I formed the impression that Mr Kelly was a straightforward and honest witness. However, it was clear from both his written and oral evidence that his recollection of much of the detail about his dealings with the Scrivens has faded with the passage of time. (7). The evidence of Harold Abrahart

[164]Mr Abrahart gave written and oral evidence on behalf of Edward. Having previously worked as a bar manager at one of the Scrivens’ bars - Ruby Tuesdays/Bar South Central, where he says he came to know how the three Scrivens interacted in business - in April 2008 the witness was recruited by Danny to work as a bookkeeper for LTL/LBEL. Mr Abrahart states that he shared an office in E&C with Myra Clarke. He says he reported to Danny, who was his principal contact at the office, and had little direct contact with Edward who preferred to deal with Myra. He formed the impression that the business was owned and run by the three Scrivens “as a whole”, although no-one ever told him this. He had this impression because he regularly (weekly or monthly) saw them discussing the business and making decisions together at the office, and he had understood that this was how they conducted other “family businesses”. Mr Abrahart said that he “saw [Edward] doing the book keeping and he would always be asking [the witness] about the cash and sales position” and seemed to have more of a “general oversight” role. According to the witness Edward’s involvement decreased and disappeared by the end of 2008 or early 2009. Mr Abrahart said that Edward’s sons were always telling him to go home and rest, and seemed to resent him coming to the office.

[165]In cross-examination it was put to Mr Abrahart that in his own oral evidence Edward had referred to the rarity of his visits to the office in 2008 because of his operation in March of that year, to his consequent lack of mobility generally, and to the complete cesser of his involvement after October 2008. Edward had stated that he may have only come back to work for one day, that being the day when the row blew up with Mrs Jackson and Lee (see paragraph 71 above). When Edward’s evidence was put to him Mr Abrahart appeared to concede that he must have been mistaken in saying that he had seen Edward at regular meetings at E&C during 2008, as it would appear that between March and September 2008 Edward did not go there. It was also put to him that if Edward was doing the book keeping in that period, as the witness had suggested, there would be little need for the witness’s services.

[166]Myra did not confirm Mr Abrahart’s evidence. Her evidence was that Edward had not been involved in the Tooley Street project in 2008, and had not attended the E&C offices during the period of Mr Abrahart’s employment. She said that the latter could have had no dealings with Edward, having only started work at E&C in April 2008.

[167]Mr Abrahart’s evidence as to Edward’s role and interest in the project appears to have been based on impression alone. Moreover, his evidence was in certain key respects clearly mistaken and unsatisfactory. Where there is a difference between them I prefer Myra’s evidence to that of this witness, the accuracy of whose recollection I do not find reliable. (8) Evidence of Mark Lempriere

[168]I have referred to Mr Lempriere’s evidence at paragraphs 57 to 58 above. He was Edward’s bank manager. This witness said that he formed the view from what Edward told him that it was Danny and Lee who were doing the project, and that Edward himself was not an investor. Mr Lempriere also noted that Edward’s personal bank account was “under some pressure.” Danny and Lee were the only signatories to the accounts which Mr Lempriere opened for LTL and LBEL. He said he and his colleague had been given a business plan by Danny on their visit with Edward to Tooley Street. According to Danny this was the May 2007 plan, in which only Danny and Lee are identified as shareholders and directors, and Edward is no longer mentioned as a participant. (9). John Brittain’s evidence

[169]This witness has had experience in the tourist and entertainment industry. He originally assisted LTL/LBEL as a consultant and was later employed in the business. The thrust of his evidence was that as far as he was aware Edward had no involvement in LTL/LBEL, that he had no contact with Edward, and that Edward was not referred to or treated as an owner or participant at the opening of the attraction in February 2008. This witness had given the main speech on that occasion and did not refer to Edward because he had no idea that Edward was claiming an interest in the attraction. He said he reported to Danny and Lee on all financial issues, and it was they who controlled the purse strings. Over a period of about 18 months he took part in weekly meetings, which were attended by Danny and Lee and other staff; in that period he met Edward only twice: once on the day of his interview, and then at the opening ceremony. (10). Simon Bourn’s evidence

[170]Mr Bourn was one of the original potential investors, who had decided not to go ahead. He is an experienced businessman, and after he ceased to be involved as a possible investor he provided “on-going advice on marketing and advertising” to Danny and Lee. This witness told the court that in over a hundred meetings which he had attended for this purpose he had had no contact with Edward, and had never seen him at the premises. He said he was not surprised, as he had understood that Edward had withdrawn from the project. (11) Ken Brennan’s evidence

[171]Like Mr Bourn, Mr Brennan was one of the original potential investors in LTL. He is now Lee’s son-in-law. He said that the original plan was for each of the six then investors to contribute up to £25,000 by Christmas 2006, and to have equal shares in the business. However, he reluctantly withdrew, along with Mr Bourn, after it became clear that the necessary investment would be much more than that. He later heard from his then fiancée, Lee’s daughter, that in late 2006 or early 2007 Edward too had withdrawn for the same reason, and that only Danny and Lee were left owning and running the attraction. (12) James Kislingbury’s evidence

[172]Mr Kislingbury was taken on by Danny and Lee as general manager of LTL/LBEL in January 2008. He said in evidence that Edward had taken no part in his job interview, that he never reported to Edward, and that Edward had had no input into the business at Tooley Street. He had neither seen Edward nor taken instructions from him. The persons to whom he spoke in relation to finance or other matters were Danny and Lee. In cross-examination Mr Kislingbury said “Danny and Lee collectively were very much my point of contact in regards to any financial questions.” “….it was quite evident in the way the company was run that the decisions were being made by Danny and Lee, and Eddie was not involved in any of that communication. So to be quite frank to you, as far as I’m concerned, Eddie was not involved at all”. Day 12, pp.124 and 128. (13). Malcolm Pawley’s evidence

[173]Mr Pawley is a qualified architect engaged by the Scrivens for various projects, including Tooley Street. He had also been retained by the previous owner of Tooley Street and was familiar with those premises, having prepared the plans for the previous owner’s development, which did not come to fruition. He stated that in the middle of 2007, Danny asked him to act as the architect for LTL/LBEL, and told him that Edward was no longer involved in the project. Mr Pawley said that he did not recollect meeting Edward on site at any time in this latter period. (14). Witnesses whose evidence was read

[174]In addition to Michael Buxton, to whose witness statement I have already referred, a number of other witnesses, whose statements were read, commented on Edward’s involvement in the LTL/LBEL project. I refer very briefly to their evidence.

[175]Robert Holliday: I have already referred to the evidence of this witness, who states that he has only ever had dealings with Danny and Lee in connection with the £600,000 loan to the business by Ruffler Bank, and has never met Edward (see paragraph 60 above).

[176]David Robson: this witness worked for a marketing company. He refers to meetings at Tooley Street with Danny, Lee and Mr Brittain in 2007 and 2008, in the course of which he advised LBEL on ticketing and merchandising. He says he never met Edward or heard mention of him.

[177]Phil Smith: this witness worked for a photographic company. Between 2007 and 2011 he had regular meetings with Danny, Lee, Mr Brittain, Mr Kislingbury and others to set up and maintain a souvenir photo system for the attraction. He does not recall ever seeing or meeting Edward.

[178]Amanda Stocks: this witness is the MD of a publicity company. With her business partner, Nicola Appleby (see below), she met Lee, Danny and Mr Brittain in autumn 2007. Thereafter she had numerous meetings with them in her role as PR consultant for LBEL, at Tooley Street and elsewhere. All her company’s publicity for the attraction, including TV coverage, focussed on Danny and Lee as the two brothers who had created the attraction. She did not meet and does not recall mention of Edward, including at the launch. All financial transactions were authorised by Danny and Lee.

[179]Andrew Houldsworth: this witness is a director of a graphic design company. He met Danny and Lee through Mr Brittain, and in May 2007 was engaged to design the web site, the business plan and other material for LBEL. He understood from Mr Brittain, Danny and Lee that the only two principals in the business were Danny and Lee. He never met Edward who he said was not mentioned at the launch ceremony.

[180]John Graham: this witness is a businessman who was a shareholder with Danny and Lee in a company called Poop Freeze Ltd, and with Danny in St Florence (Holdings) Limited. He was aware of the falling through of the project involving PDT, and of the new project involving LBEL. He became involved in the latter by discussing a ticketing system for the attraction, at various meetings with Lee, Danny, Mr Brittain and others. He was acquainted with Edward and stated that at no time was he ever present at any of these meetings, or ever referred to as a co-owner of LBEL.

[181]Bruce Hill: This witness, who is a production designer and art director, met the three Scrivens in about November 2006 and was asked to assist with a design for an OTE themed restaurant. He says that in March or April 2007 he was told by Danny and Lee that their Spanish partners had pulled out and that Danny and Lee were going to go it alone with a new project with assistance from a company in the US. In about October 2007 Danny and Lee contacted him again and asked for his help with the LBEL project. Mr Hill states that Danny and Lee were obviously struggling with cash flow, and he agreed to take reduced payment for his work in 2008. He states that Edward had no involvement in LBEL and that he only ever received payment and instructions from Danny and Lee.

[182]Omar Abdulgani: first met the three Scrivens in 2006 in his capacity as an employee of a marketing company at a time when PDT were still on board. He says that when they dropped out he had no contact with the Scrivens for about 4 months. He became involved again when Danny and Lee told him they were going ahead with a different business. Thereafter he was in regular contact with Danny and Lee, attending weekly management meetings with them until the summer of 2008. Mr Abdulgani states that at no time was there any mention of Edward or any suggestion that he was a partner, investor, owner or manager of the project.

[183]André Trepel: Mr Trepel states that he had known the three Scrivens since about 1998 through Mr Pawley. He attended the opening of the attraction, but did not see Edward there and says that he was not mentioned or referred to as a partner or part of the business. After the launch, at Danny and Lee’s request, the witness let a box office space on Duke Street Hill to LBEL. He was asked to be a guarantor for a loan to them by Clydesdale Bank, but declined. He states that they struggled to pay bills, and at one point he agreed to defer payment of the rent for the box office site. At no time was he ever aware of Edward having any financial interest in the Tooley Street attraction.

[184]Gary Thomas: this witness is a security consultant who met Lee and Danny in August 2007. He attended the Tooley Street site on many occasions to carry out work there and only ever received instructions or payments from Lee and Danny. He was unaware of Edward having any involvement with the business and only saw him once, when he was having a drink in the café following the launch.

[185]Nicola Appleby: This witness is the business partner of Amanda Stocks (see above), whose evidence she confirms.

[186]Andrew Craddock: Mr Craddock is a finance broker who attempted to secure third party finance for the Scrivens before PDT pulled out. At that stage he met Edward, Danny and Lee. After PDT pulled out, he became involved again and recalls presenting in August 2007 a new proposal for finance for a new project, which he understood involved Danny and Lee alone. He attended several meetings at Tooley Street in 2007 and 2008 with Danny and Lee. On one of these occasions representatives of Lloyds TSB were in attendance. He also met Kirstie at her house in November 2007. At none of the meetings the witness had with Danny and Lee from August 2007 was Edward present. The witness did not understand Edward to have any share or interest in the new project. (15) Did the three Scrivens save £184,000-£200,000 in cash from Labrett, which was spent wholly or mainly on excavation work at Tooley Street? (paragraphs 19 and 64 above)

[187]These issues are identified in the narrative section (paragraphs 19 and 64 above). Edward maintains that when he and his two sons had each taken an equal share of the rental income from the Labrett businesses, the balance in cash would be taken home by Edward and kept in a safe which was situated under the stairs of his house. His written evidence is that these joint savings were made during 2005 and 2006, and that all or most of the savings, eventually totalling some £184,000-£200,000, had been used-up by early 2007, chiefly in paying for excavation work which was carried out at the Tooley Street premises. In the course of cross-examination he said, for the first time, that in 2006 some £51,000 of the savings were used to pay him and his sons £1,000 per week each. Day 16, pp.145-7. According to Edward the savings were recorded in a hard-back Collins account book, which was kept in the safe at the E&C office.

[188]The existence of any such savings, record book, or excavation work, are all disputed by Danny, Lee and Gary. I now examine, under a number of headings, the main evidence which I consider to have a bearing on these questions.

(a) Edward’s and Myra’ s evidence as to the alleged savings

[189]As to the existence of the savings and the record book, Edward’s evidence was contradictory and changeable. In his written evidence he stated that only he had a key to the office safe where the book was kept until April 2007 when he gave it to Danny. In cross-examination Edward agreed that Myra also had a key or had access to the office safe and could have seen the Collins record book there. Day 4, pp.79 and 83. He then said that he never gave a key to Myra, and that she never had a key to that safe. Day 16, p.153. When it was pointed out that if that was the case it was difficult to explain his written evidence that “Any remainder was left in the petty cash tin in the safe which Myra looked after”, Edward said “Well, if Danny gave her the key I don’t know, but when I was in charge there no-one had keys there. Myra had an office key and that is all she owned. The one key was kept by me…..She was never allowed in the safe unless I was on site.” Pressed again about the inconsistency of this with his written statement, he appeared to change his evidence once more, saying “..Myra could use the key of a day time. I would leave it on the side and if she wanted to go to the safe she would go there by all means.” Day 16, pp.153-7.

[190]Myra’s evidence was put to Edward, namely that on Mondays the Labrett income, any expenses, and the equal three-way split of the remaining cash between Edward and his sons were all recorded at the office by Myra and/or Edward on handwritten sheets, and then each of them took away his own share of the cash. He was asked why the alleged savings were not recorded on these manuscript sheets along with everything else. Edward’s answer was not really comprehensible. Day 16, p.150. He then told the court for the first time that the record book was kept at his home and was only taken to the office “when we started spending the money”. Day 16, p.152. Edward later gave this as a reason why Myra would not have seen the record book in the office safe. Day 16, p.157. This new account was inconsistent with his written evidence, which was to the effect that the book was kept at the E&C office when the money was being saved. At one point he also said, contrary to his own written evidence and that of Myra, that the Labrett money was sorted out and shared between him and his sons in the car in the absence of Myra, rather than in the office. Day 16, p.152.

[191]In her written and oral evidence Myra consistently maintained that all the net income from Labrett was shared out equally between the three Scrivens when it came in, usually on Mondays. She stated that Edward counted it, dealt with any expenses and divided the cash between them. She said that no cash was taken home by Edward as savings. Indeed, Myra stated that the Scrivens were extravagant and as a result were always short of money, sometimes even borrowing from her; they never saved money, but spent what they had; expenses were taken out of the gross income and occasionally sums were banked when this was required; details of the gross income, of any expenses, of any sums to be banked, and of the three-way split were all recorded in manuscript on the Labrett sheets by Edward and Myra. All this, she said, took place in the office. Myra also stated that no book recording cash savings and payments towards LTL/LBEL was ever kept in the office safe. She said the only items in the safe were a petty cash tin, an old company seal for Glenfields, and the cheque and paying-in books. She also stated that she had “free range to go to the safe”, that in the absence of Edward she had the key, and that Danny did not have a key. Day 11, pp.75-80, 85-88, and 120-6.

(b) Edward’s “angry letter”

[192]I also note in relation to this issue that Edward’s “angry letter” of 13 March 2009, which sets out his claim against the defendants in very considerable detail and seeks reimbursement and compensation of various amounts, makes no mention of joint savings of £184,000-£200,000 or of such savings being invested in LTL.

(c) the Labrett manuscript record sheets

[193]In the course of the evidence and closing submissions I was taken to a good many of the Labrett manuscript records, in which Edward and Myra appear to have meticulously accounted for every pound which was received in income, including how much was used for expenses, or banked, or put in the safe or shared between Edward and his sons. No hint of the alleged savings appears in those sheets. The only savings referred to are very small sums, of no more than a few pounds (eg £15), which are put in the petty cash tin in the safe in the office. It is clear that all the gross Labrett income was recorded and accounted for down to the smallest amount, as Edward at one point appeared to accept. In those circumstances it is difficult to see what scope there could be for savings from Labrett income on the scale alleged by Edward.

[194]The existence of such a large pot of spare cash is also hard to reconcile with the fact that the Scrivens were so short of money that they needed to borrow from Myra and were still repaying this debt (along with a substantial sum of interest) in instalments in November/December 2005, as the Labrett manuscript record sheets demonstrate. They also show that at periods Danny felt it necessary to borrow against his future share of Labrett income, and they duly record when the sum borrowed is repaid by him. Again, this borrowing would hardly be necessary where each of the Scrivens had a one-third share of a substantial cash sum sitting in a safe. Similarly, Edward’s bank statements show him to be in overdraft at times, and to be paying into the bank account his share of Labrett income in order to reduce the overdraft. It would hardly make sense to run an overdraft if one had a substantial amount of cash doing nothing in a safe.

[195]Edward stated in his evidence that the savings had already been spent by the time he had to borrow £25,000 from Birmingham Midshires “to see me through”. Day 5, p.131. However this loan was in October 2006 whereas Edward’s evidence was that the savings were only spent by end of March 2007.

[196]From about October 2006 the manuscript records show certain relatively small amounts for expenses of the original LTL project being paid out of the Labrett income. One therefore asks rhetorically why there would need to be another book recording such payments, as Edward maintains.

(d) evidence of Kirstie, and Messrs Bourn and Brennan

[197]No other witness supports Edward’s allegation as to the existence of these savings. On the contrary, Kirstie, the company secretary and book keeper for LTL, had no knowledge of these funds or of any investment in excavation work. Day 12, pp.58-9. Nor were the original potential investors, Mr Bourn and Mr Brennan, informed that the three Scrivens had already invested, or were in a position to invest, anything approaching such a sum. Day 10, p.87 and Day 13, p.15. The need for each investor (including the Scrivens themselves) to contribute £25,000 by Christmas 2006 was all that was mentioned to these witnesses at a meeting on 22 October 2006 (see paragraph 25 above).

(e) Edward’s QuickBooks documents

[198]Edward placed reliance on sets of documents which he had prepared himself, probably with a view to making this claim, although Edward was not entirely clear about why he had created them and at one point said that he did it because he was at home and bored. I have referred to these earlier in the judgment. They were called the “QuickBooks” documents, that being the computer accounting programme he used. They were said by Edward to be an auditing exercise, one set of which was designed to itemise all the Labrett income and all transactions associated with Labrett. It became clear in the course of Edward’s cross-examination that these documents contained many substantial errors, too numerous to record here. Some of these errors emerged when they were compared with the manuscript Labrett record sheets. For example, in the Labrett QuickBooks documents Edward recorded rents demanded rather than rents received, in at least one week the rents received were duplicated, a very large figure which in fact represented rent arrears was treated as income received, and bank balances recorded in the documents were incorrect. Such errors created a false and inflated picture of the income received via Labrett. On several occasions Edward was unable to explain discrepancies between the Labrett manuscript sheets and the QuickBooks, although he maintained the essential accuracy of the latter. There were also inaccuracies in other QuickBooks sets. For example, payments to Tooley Street attributed to Edward which were in fact made by his sons.

[199]In my view the QuickBooks documents prepared by Edward are inaccurate and cannot be relied upon to provide an accurate account of the income or payments they purport to record.

[200]In any event, as far as the £184,000-£200,000 savings are concerned, the Labrett QuickBooks documents contain no reference to them. In cross-examination Edward could give no satisfactory explanation for this. Further, the Overview does not include the alleged cash savings.

(f) Glynn Moore’s business plans

[201]Edward also placed reliance on certain business plans and overviews prepared by Glynn Moore as supporting the existence of these savings, and in particular a draft “Business Overview” dated December 2006. 2nd WS, para 101. There appear to be at least two drafts of this document. In one draft, under the heading “Key Objectives” it is stated “The key objectives of London Tombs over the next two years are to: Raise £200,000 capital from the directors’ own resources and £600,000 from bank loan to develop infrastructure of business….” A second, more developed, draft bearing the same date, in a section headed “Financial Highlights”, states:

“The management team is investing £200,000 of their own funds and believe a further injection of loan capital of £600,000 will accelerate growth….The Injection of £800,000 will be used to fund: premises re-design and refitting; marketing and brand development….”

. A later passage under the heading “Our Products and Services” includes the statement:

“Prior to completion of this business plan, £200,000 was allocated to annual marketing expenditure.”

In another passage, under the heading “Key Objectives” the draft states:

“The immediate and key objectives of London Tombs are to: Raise £200,000 capital from the directors own resources and £600,000 from bank loan to develop infrastructure of business.”

[202]I do not consider that any real weight can be placed on such statements. They are unspecific as to what resources are being referred to – we know, for example, that for the new project Lee later raised money via a second mortgage on his and his wife’s house. The statements are expressed in future, aspirational, terms and are precisely what one would expect to see in a business plan designed largely to persuade potential investors of the viability of the project; to achieve this it is presumably desirable to see some financial commitment to the project on behalf of the directors and management team. In any event, as mentioned above, Edward stated that the £184,000-£200,000 savings had all gone by the time Donna took out the Birmingham Midshires loan. On that basis they had gone well before these drafts were prepared in December 2006.

[203]Nor do I consider that a later draft business plan dated March 2007 supports the existence of the alleged savings. This contains a schedule entitled “Cash Flow Forecast 2007” which shows as “Capital Introduced” £145,000 under January 2007, £37,000 under February and £2,000 under March – a total of £184,000. In cross-examination Edward stated that these were projections created for banks, “made up” figures which “are not ever going to be true… that’s why they are called “projections”….They are never accurate because you are trying to predict something you don’t know….you know you need it. You’ve got to come up with this money, or you might have already come up with that money.” Edward stated that the money in question had to come from him and his sons. Day 3, pp.147-9; see also Day 4, pp. 77-8. It appears that the figures used in the Glynn Moore draft business plans and overviews came from Edward himself. There was no evidence of verification by Mr Moore of any figures in these documents he prepared. Mr Moore did not give evidence.

(g) Evidence of Gary, Mr Pawley and others as to excavation work

[204]As to Edward’s contention that a substantial proportion of the cash savings was spent on excavation work carried out by LTL at the Tooley Street premises, Gary and Mr Pawley gave relevant evidence.

[205]Gary, who is a builder, stated that he helped the Scrivens with the preparation work at the Tooley Street premises. Day 10, p.157ff. He told me that the previous tenants had carried out excavation work to lower the floor level of the basement area of the premises, and had done so unlawfully in that they had cut off the corbels of the foundations, thereby undermining the structure’s integrity. They had then installed drains, and back-filled ready for a concrete slab to be put down. After that they abandoned the project. Gary stated that when the Scrivens gained access to the premises it would have been impossible as well as unnecessary to lower the floor level further, as the excavation work already done by the previous tenant had revealed a main sewer passing through the property. In those circumstances all that could be done was to lay a damp-proof membrane and a concrete slab.

[206]Gary’s evidence was supported by that of Mr Pawley, an architect whose role I have mentioned at paragraph 173 above. Mr Pawley stated that he had been instructed by the previous tenant of the Tooley Street premises to oversee works, including excavation works to the basement of the property. This work involved lowering the floor level of the basement:

“because the arches’ headroom was pretty low, we had to lower the ground floor, the ground level by about 600 millimetres to get to a footing level”

. Mr Pawley stated that this work took place, “between 2004, finishing early 2005”. Day 13, p.105. He stated that any further excavation would have been impossible “due to a main brick sewer running diagonally across the site, plus some other minor drainage works, but it was the brick sewer that was the main obstacle that prevented any further excavation.” Ibid, p.109-110. All that was necessary to complete the work was the laying of a damp-proof membrane and a concrete slab to cover it. He said that this, and not excavation work, was the work begun by the Scrivens in late December 2006. Ibid p.112-114.

[207]I was shown a DVD of the Tooley Street premises. I do not believe it to be disputed that this was filmed on 28 September 2006. Mr Pawley, who had also seen the DVD, stated that the excavated condition of the basement area shown in the DVD was such that no further excavation work could be done after that date. Day 13, pp.108-110. I am satisfied that Mr Pawley was familiar with the basement in question, that his evidence related to the premises with which we are concerned and not some different set of arches in Tooley Street, and that he was not mistaken about all significant excavation work having been done by the previous tenant. I do not consider that the comments by Mr Meredith that he observed “some digging” in December 2006, or the evidence about the discovery of human bones on the premises, affects that conclusion. On the evidence I heard I am satisfied that the bones had been discovered before the Scrivens occupied the premises.

[208]Reliance was placed by Edward on various invoices relating to skips, as indicating that some of the £184,000-£200,000 was spent on excavation work. He contended that skips were used to carry away the excavated spoil from Tooley Street. Gary’s evidence was that, although not working at the site full time, he visited frequently and was familiar with what operations were being carried out there. He stated that nothing like as many as the 175 skips referred to by Edward were actually employed, and they were mostly 12–yard skips which would have been unsuitable for removing earth, as they would be too heavy when loaded. He said that any skips at Tooley Street were used to clear the site of the debris and rubbish left there by the previous occupants, and had nothing to do with excavation and removal of earth. Day 11, pp.2-5.

(h) Conclusions on alleged Labrett savings and excavation work

[209]In the light of the evidence I conclude that there were no such joint cash savings from Labrett, and no book, either in the office safe or at Edward’s home, in which the savings (and what they were spent on) were recorded. There is not the slightest doubt that had these savings been made, and had there been a book in which they were recorded, Myra would have been aware of this. I have no hesitation in accepting Myra’s evidence that they did not exist, and that the Scrivens did not save but spent what they received. I therefore do not accept Edward’s evidence, which he appeared to change when he felt it was helpful to his case to do so. I find that he has invented the £184,000 - £200,000 joint savings and the record book. It follows that I also accept Danny’s evidence that neither the savings nor the record book ever existed. Day 8, pp. 97-8 and 196-7.

[210]In reaching this conclusion I have taken into account all the submissions, including the elaborate arguments made in Chapter 13 of Edward’s written closing submissions. This aspect of Edward’s submissions refers to(1) an “Opening Balance Sheet” relating to LTL dated 9 March 2007, prepared by EM;

(2) LTL’s unaudited accounts for year ended 31 December 2008, prepared by EM, which also include figures for year ended 2007, which in turn include figures for the last 3 months of 2006;

(3) abbreviated accounts for LTL for year ended 31 December 2008, containing 2007 figures as well, prepared by EM;

(4) LBEL’s unaudited financial statements for 10 May 2007 to 31 December 2007 prepared by Busbys;

(5) LBEL’s detailed financial statements for 10 May 2007 to 31 December 2007 prepared by Busbys;

(6) LBEL’s abbreviated unaudited accounts for 10 May 2007 to 31 December 2007 prepared by Busbys;

(7) LBE’s unaudited financial statements for year ended 31 December 2008 prepared by EM;

(8) LBE’s abbreviated accounts for year ended 31 December 2008 prepared by EM; (8) an incomplete set of Busbys working papers, relating partly to LTL and partly to LBEL;

(9) various schedules prepared by Busbys.

[211]In the light of an analysis and comparison of these documents I am asked to infer, as the only possible conclusion which can be drawn, that Danny and Lee did not possess the funds necessary to have enabled them to meet the payments said to have been made by the relevant dates, without recourse to the cash savings of £184,000-£200,000 and therefore that such savings must have existed in the amount and from the source (Labrett) alleged by Edward. In the face of what I consider to be overwhelming evidence to the contrary, I am not prepared to make any such inference on the basis of material and figures which are in many cases piecemeal, incomplete, unbroken-down, and inconclusive.

[212]As to the alleged excavation work, even leaving aside my conclusion that the savings allegedly used to pay for that work did not in fact exist, I am satisfied that no such work was carried out by LTL or the Scrivens. Edward’s evidence as to the timing and nature of this work was vague and unconvincing. I find Gary’s and Mr Pawley’s accounts to be truthful and accurate. (16) Other funding issues

[213]At this stage, having determined that no investment was made by Edward or his sons via cash savings from Labrett, I continue to focus on the question of Edward’s investment in the project, which has a bearing on the major issue currently under consideration, namely whether at the LTL Family Meeting Edward agreed that he would not participate in the project.

[214]In addition to the Labrett savings, Edward claims in the Amended Particulars of Claim to have invested individually in the project as follows: £30,000, mostly in paying for the building and cleaning works at Tooley Street; joint borrowing of £300,000 by way of the re-mortgage of Lee and his wife’s house – said to be secured informally on the E&C property; further unspecified cash and other financial contributions; rent-free storage use of the premises at Amelia Street; his share of £190,000 received from Multiplex via SCH UK; and cash from Milten Limited totalling about £11,000 in the period to March 2007. Amended P/C, paras 36-39. Further, in his written evidence Amended P/C, para109. Edward also claims credit for payments made by cheques totalling about £7,800 in late 2006/early 2007, drawn on his Lloyds TSB account.

(a) Lee’s re-mortgage

[215]In the light of my finding as to the terms of the Purchase Agreement, at the time the re-mortgage of Lee’s home was completed on 17 May 2007 Edward had disposed of his interest in the E&C property/SCH Jersey to Danny and Lee. It follows that Edward could not at that stage have provided, formally or informally, any part of the security for the loan. No other means of his providing such security has been asserted. Moreover, I do not accept Edward’s contention that there was an agreement to which he was a party in the terms referred to in paragraph 38 of the Amended Particulars of Claim. I accept Danny’s and Lee’s evidence that the mortgage loan was an investment by Lee in the project. I therefore find that Edward made no contribution to the project by way of these funds borrowed by Lee.

(b) Multiplex payments

[216]Similarly, by virtue of the Purchase Agreement Edward had no right to any of the Multiplex monies which were paid by that company to SCH UK on behalf of SCH Jersey, which owned the lease of the E&C property (see paragraphs 23 and 43 above). Those funds were beneficially owned by SCH Jersey, in which Edward had no interest after the Purchase Agreement.

[217]Nevertheless, Edward accepted in the course of cross-examination that, from the funds in the bank account of SCH UK, over which he had control, he had repaid himself money that he regarded as owing to him in respect of the Tooley Street project. Day 6, p.132; day 17, pp.152-160. The sums in question totalled £13,200, and consisted of the following: £3,200 by way of cheques which Edward drew to cash; a cheque for £4,000 which was paid into Donna’s account; and the remainder by cheques paid into Edward’s Lloyds TSB account. Each cheque stub referred to LTL and “repayment”. The one paid into Donna’s account refers to “Mortgage”. These cheques were all drawn in April/May 2007, soon after the first payment from Multiplex. I assume, in the absence of any evidence to the contrary, that these “repayments” were made with Danny and Lee’s knowledge and consent. (c) £25,000-£30,000, and the cheques drawn on Edward’s Lloyds account

[218]As to Edward’s claimed contribution of £30,000, I note that in the Overview (see paragraph 200 above) the sum apparently referred to in this context is £25,000. This is consistent with Edward’s and Donna’s evidence that in October 2006, by way of a re-mortgage of the house they live in, Donna raised £25,000 “for the Project, which were primarily used to make cash payments to various suppliers.” Edward stated that some of the mortgage loan was used for living expenses but said that he was also making payments from “my existing savings” and was “putting all money I could access into the Project…” Edward’s 2nd WS, para 103. Donna also stated in her written evidence:

“I know that these funds were used to make cash payments to various suppliers at LT/LBE by Edward, Danny and Lee, but I do not know the details.”

Donna’s WS, para 19.

[219]In cross-examination Donna’s evidence on this fluctuated. She appeared to accept that at least a significant proportion of the money raised by the re-mortgage was used to pay off Edward’s overdraft and other personal debts, but still maintained that “as far as I’m aware we put in our £25,000 and then whatever money we had in our house…” After a certain amount of hesitation she said she didn’t know whether the money was spent on the project or not. Day 7, pp.39-41. In my view Donna’s evidence takes the matter no further.

[220]Edward was cross-examined about this. He first said that all the £25,000 mortgage monies were used for the project. Day 6, p. 47. However, it became clear in the light of documents put to him that the Birmingham Midshires loan was received into Donna’s account and then transferred to Edward’s Nat West account. Edward’s bank statements show that c.£3,300 of the loan was used to clear his overdraft, and that a number of other personal bills were then paid including Sky, gas and electric bills, effectively using up £5,000 of the £25,000.

[221]£20,000 was then transferred to Edward’s Lloyds TSB account, where it was credited on 20 October 2006. He claims that various cheques thereafter drawn on that account had been payments by him on behalf of LTL, but he was unable to produce the cheque stubs in question, or provide any details of precisely on what the sums in question were spent, although he produced other cheque stubs, as appears below. In the light of all the evidence I do not consider it likely that they were spent on the project. I am certainly not satisfied that they were.

[222]Edward claimed that certain other cheques drawn on the account, for which the stubs are available, were payments made by him towards the project. However, he appeared to concede in cross-examination that these were in fact covered by cheques in equivalent amounts paid to Edward by Lee. Edward then stated that they were “Lee’s share into the business”. Day 5, pp.41-3, and Day 6, p.56. Edward accepted later in his oral evidence that Lee had paid into his account cheques to a value of £18,800. Day 17, p.159. He also claimed that some £6,000 of this was in respect of sums which Lee owed him in connection with the demise of a business called Dandi Little Horses. In any event, I am satisfied on the evidence that Edward cannot claim credit for these cheques, as he has sought to do in his written evidence.

[223]I also note that in his “angry letter” of 13 March 2009 Edward makes reference to Donna’s re-mortgage loan. He complains that Lee had left him “to dispose of Dandi Little Horses (Europe) Limited” and had let “my wife work and borrow from her family to clear any expenses and pay creditors for this company and knowingly [left] her with an outstanding loan against her house for which we have struggled to pay each month”. Edward’s letter clearly implies that at least some of the Birmingham Midshires loan funds was used to pay the debts of Dandi Little Horses rather than to invest in the Tooley Street project.

[224]In the light of all the evidence I do not consider that any of the £25,000 loan was likely to have been invested by Edward in the Tooley Street project.

(d) Amelia Street

[225]If and to the extent that any use was made of these premises for the purpose of storing items from or destined for Tooley Street, I am not aware that any sum has been placed on the value of such use. In any event, the premises were part of the Milten Limited business in which Lee and/or Danny also had an interest, and I cannot regard this aspect as having any significance for this issue.

(e) Milten Limited

[226]This aspect of the alleged contributions by Edward is also shadowy. There is no mention of any contribution via Milten Limited in Edward’s Overview (see paragraph 200 above). In another set of QuickBooks documents (created by Edward at about the same time, in July 2008, when he had already consulted solicitors) we see a schedule of what purports to be “start up costs” paid by Milten Limited in the first half of 2007, mainly in respect of Mr Buxton’s wages. This schedule totals £8,305.28 rather than £11,000 as stated in the Amended Particulars of Claim. Further, it emerged in the course of Danny’s evidence that the amounts recorded as Mr Buxton’s wages in the Milten schedule were in fact duplicated in the Labrett QuickBooks documents prepared by Edward, which shows them as paid by Labrett. Mr Weatherill submitted that it mattered not whether they were paid by Milten or Labrett, as Edward had a one-third share in both companies. However at the time in question the only income coming into Labrett was the fluctuating rent paid by the tenant of Bar South Central, called Raj. This property was subject to the Purchase Agreement, and therefore it is difficult to see how Edward can claim credit for expenses paid out of this income. In any event, the substantial sums which Edward paid to himself from the SCH UK account containing the Multiplex monies would more than cover a one-third share of £8,305. (f) Conclusions on the main elements of funding relied upon by Edward

[227]In the light of all the evidence I find that none of the following alleged investments or payments by Edward into the project were in fact made:(1) a one-third share or any of the alleged Labrett savings of £184,000-£200,000;

(2) a one-third share or any of the mortgage loan taken out by Lee and his wife;

(3) a one-third share or any of the Multiplex payments;

(4) any of the £25,000 re-mortgage loan taken out by Donna;

(5) any of the cheques drawn on Edward’s Lloyds TSB account referred to in paragraphs 221 and 222 above;

(6) any of the alleged payments of expenses in the Milten or Labretts schedules totalling £8,305. (17) Was there a meeting at EM’s office on 27 February 2007?

[228]I have already described the issue of whether, on the date the lease for Tooley Street was signed (probably 27 February 2007), there was a separate meeting at the office of EM, at which Edward, Danny and Lee were present, along with Mr Mockler (see paragraphs 39 and 40 above). Other than Edward’s assertion, there is no evidence, documentary or otherwise, that any such meeting took place. Danny, Lee and Mr Mockler emphatically deny it.

[229]Further, it is inherently unlikely that the Scrivens would wish to have a meeting to inform Mr Mockler that they had agreed to set up LBEL as the operating company for the Tooley Street project, and would wish to instruct him to arrange their shareholdings and directorships, given that it is common ground that neither Mr Mockler, nor EM nor any of the Highstone companies were involved in the incorporation of LBEL, which Busbys incorporated only a few weeks later on 10 May 2007.

[230]I find that no such meeting took place. It is possible to mistake the date of a meeting. However, given the nature of Edward’s evidence about what is said to have taken place at this meeting, I do not see how he could be confused about whether it actually occurred. I regret to say that once more Edward’s evidence appears to be invented in order to support his case.

The LTL Family Meeting: Conclusion

[231]In the light of all the evidence, and in particular that to which I have referred in this judgment, I have reached the firm conclusion that in the course of a meeting at Edward’s home, which probably took place in March 2007, Edward agreed with Danny and Lee that he would not have an interest or a management role in LTL or in any new Tooley Street project which his sons were then contemplating. In my view the evidence which has been put before me leads overwhelmingly to that conclusion, as I will indicate briefly.

[232]First of all, as already stated, I prefer the evidence of Danny to that of Edward. Edward’s was evasive, variable and untruthful on several occasions. Wherever their evidence differs, I prefer the evidence of Danny, whom I found more straightforward and credible as a witness. In particular, I accept as accurate Danny’s account of the LTL Family Meeting. Similarly, I prefer the evidence of other witnesses, and in particular Myra’s, Gary’s, Mr Mockler’s and Kirstie’s, wherever theirs differs from Edward’s.

[233]I have found that Edward has been untruthful about events which are material to his claim to an interest in LTL/LBEL, including in at least the following respects:(a) about what happened at the 5 December 2006 meeting, and in particular his claim that he had given instructions to Mr Mockler about shareholdings in LTL which were not carried out by EM;

(b) about his reaction to PDT pulling out, and in denying that he had advised his sons against going ahead with the project themselves;

(c) about what he had told Merlin’s solicitor, Mr Armstrong, at the meeting in May 2009, and in stating that Mr Armstrong had agreed in a telephone conversation with him to retract parts of Mr Armstrong’s note of that meeting;

(d) his assertion that he was unaware in spring 2007 that Kirstie was going to replace him as company secretary of LTL;

(e) his claim that £184,000-£200,000 in cash had been saved from Labrett income and had been recorded in a hard-back book;

(f) his claim that this money was spent in part on excavation work at Tooley Street;

(g) his assertion that substantial excavation work had been carried out there by LTL/the Scrivens;

(h) his claim that all the £25,000 raised by Donna’s re-mortgage had been spent on the Tooley Street project, when in fact no significant amount had been so spent;

(i) his claim that various cheques, whose stubs referred to LTL, represented contributions by him to the project, whereas they were in fact covered by payments by Lee;

(j) his assertion that there had been a meeting at the office of EM on 27 February 2007 at which instructions were given to Mr Mocker relating to the incorporation of, and shareholdings in, LBEL. The above are specific examples, and are not intended to represent the full extent of Edward’s untruthfulness.

[234]The fact that Edward has been untruthful about these and other matters does not necessarily mean that his account of the LTL Family Meeting is untrue. Lies can sometimes be told to bolster a case which is otherwise genuine. However, I do not consider that to be the case here. These untruths, combined with my other findings and the totality of the evidence, lead me to a firm conclusion that Danny’s account of that meeting is accurate.

[235]Edward had no funds available to invest in the project, and he made no or no significant financial contribution to it. However, he sought in his evidence to make out a case that he had contributed significantly. One particularly striking example is his evidence relating to the alleged cash savings from Labrett income.

[236]By way of contrast, I note that when a loan in the region of £600,000 was made by Ruffler Bank, Danny and Lee alone gave personal guarantees. It is accepted that Lee re-mortgaged his house in order that c.£300,000 could be used in the business. I find that Danny, too, borrowed a similar sum from Templecourt Limited for this purpose, and that both Lee and Danny invested other substantial sums in LTL/LBEL.

[237]I find that as well as having no funds of his own to invest, once PDT pulled out he advised Danny and Lee not to go ahead alone. Despite Edward’s denial it is perfectly clear that the departure of PDT was a blow to all the Scrivens, and that for Edward it was almost certainly the main reason he accepted that he could not afford to be involved. Without PDT a significant source of funding as well as expertise was lost, and there would clearly have to be much greater financial commitment for those who decided to pursue the project. It seems likely that Edward’s poor health was also factor in his decision not to do so himself, but it is clear that he was not in a position to contribute to the funding that was likely to be required.

[238]I find that from the time that PDT dropped out Edward’s actual participation in what his sons were now planning was effectively non-existent. Even taking into account that he was ill for some of the time between PDT’s departure and the final breakdown of relations between his sons and himself in October 2008, the evidence clearly demonstrates that he was not interested or involved, save to the extent that any father would take an interest in what his sons were doing. I do not accept Edward’s evidence that in this period he carried out useful work of a financial or book keeping nature for the project, either at Danny’s request or at all. I find that whatever documents he prepared in this period were created for his own purposes.

[239]I accept Myra’s and Kirstie’s evidence, as well as Danny’s, that given Edward’s character there is no question but that if he had had a financial stake in the project he would have behaved very differently, and would have pursued a pro-active role, notwithstanding his illnesses.

[240]I accept Kirstie’s and Mr Lempriere’s evidence that in separate conversations with Edward he led them to understand that the new venture was his sons’ and that he was not involved.

[241]It is very significant that so many witnesses who are to a greater or lesser extent detached from the Scriven family and who worked in or had contact with the project, testified to Edward’s lack of involvement, both in terms of his more or less complete absence from the office or Tooley Street and the lack of any contact with him in connection with financial matters or any of the many other arrangements relating to the launch and running of the attraction.

[242]For example, Mr Brittain attended weekly meetings over an eighteen month period and never saw Edward. Mr Bourn, too, estimated he had been to about a hundred meetings with Danny, Lee and others but had not seen Edward. Other witnesses gave evidence to the same effect, including Mr Kislingbury, Mr Pawley, Mr Holliday, Mr Robson, Mr Smith, Ms Stocks, Mr Houldsworth, Mr Graham, Mr Hill, Mr Abdulgani, Mr Trepel, Mr Thomas, Ms Appleby and Mr Craddock (see above). All who had financial dealings in relation to the project stated that those matters were invariably dealt with by Danny or Lee. The periods when Edward was ill at home cannot in my view account for this lack of involvement. With the exceptions of Mr Abrahart and Mr Kelly, none of the witnesses believed that Edward was a co-owner or had any stake in the business.

[243]Mr Abrahart’s written evidence provided some support for Edward being actively involved, but when tested in cross-examination it proved unsatisfactory and erroneous.

[244]Mr Kelly’s evidence was in large measure consistent with the picture painted by most of the other witnesses, in that virtually all his dealings on the project, including matters of finance, were with Danny. To the extent that he formed an impression that Edward had financial responsibility, it seems likely that this was, at least in part, because the first cheque to HPI was drawn by Edward. This, of course, was necessary as the funds in question consisted of the Multiplex money, over which Edward had control for the reasons discussed earlier.

[245]This is not to say that Edward was wholly detached from what was happening. It is clear that when his health permitted Edward was willing to help his sons where he could, for example by introducing them to his own bank manager when they were in need of finance, or running them around in his car from time to time. But I find that his participation and assistance went no further than what would be expected from a father, who had for many years worked closely with his sons, who had a close family relationship, and who wanted to keep abreast of what progress they were making in a new and interesting venture.

[246]It is significant that after about June 2007 the Labrett manuscript records no longer show Mr Buxton’s wages being taken from the rental income as a joint expense. Thereafter there are entries indicating that Mr Buxton (who worked first on Amelia Street and latterly on Tooley Street) is being paid by Danny from his own share, and there are also entries where the wages disappear from the records altogether. Towards the end of July 2007 the wages re-appear in the sheets as an expense shared by Danny and Lee alone.

[247]The evidence of Myra that Edward specifically directed her not to take any Tooley Street expenses from his share of the Labrett income provides further reinforcement for Edward having agreed not to be a participant in the new project.

[248]Edward’s untruthful denial that he was told in March/April 2007 that Kirstie was going to replace him as company secretary of LTL is significant. From that denial I draw the inference to which I have referred (paragraph 151 above). Edward realised that if he admitted this it would cast doubt on his assertion that he only discovered he had been ousted from the business in about October 2008. In fact, as I have found, at the time of the LTL Family Meeting Edward was aware, and had agreed, that he was not part of the envisaged Tooley Street venture, and that Kirstie would be replacing him as company secretary of LTL.

[249]There are further indications that his evidence about being in the dark until October 2008 is not true, in that he consulted solicitors and was putting together material for his ultimate claim much earlier than October 2008 (see, for example, paragraphs 68 and 69 above).

[250]I emphasise that my conclusion on this issue relating to the LTL Family Meeting is based on the totality of the evidence. The specific factors mentioned above are simply some of those which have played a significant part in that conclusion. The meeting at EM on 3 April 2007, the allotment of further shares, and the ending of Edward’s appointments as company secretary and director of LTL

[251]What happened at the meeting at the office of EM on 3 April 2007 and the events thereafter are discussed at paragraphs 44ff above. At that meeting only Danny, Lee and Mr Mockler were present. Minutes put in evidence purport to record resolutions of a meeting of directors of LTL to appoint Danny as chairman and to issue and allot a further 999 paid up shares in the company, 499 to Danny and 500 to Lee. The effect of this when implemented was that each would have 500 shares. On 10 April 2007 forms dated 3 April 2007 were filed at Companies House recording the further allotment and the termination of Edward’s appointment as company secretary. The new shares were issued on 20 April 2007. On 3 May 2007 Danny or Lee instructed Rhys Evans to file with Companies House forms recording Edward’s resignation as director and Kirstie’s appointment as company secretary, and this instruction was confirmed in the email which I have cited at paragraph 51 above.

[252]Edward’s case against Danny, Lee, and EM depends upon these events as constituting and/or evidencing breaches of the fiduciary and other duties owed to him by these defendants. They were the means whereby, as Edward contends, his sons implemented their plan, in effect, to cheat him out of his stake in LTL/LBEL, and EM negligently and in breach of duty failed to alert him to what was happening. However, I find that the steps taken by Danny and Lee (and by EM and Highstone, pursuant to Danny and Lee’s instructions) do no more than carry through what was agreed between Edward and his sons at the LTL Family Meeting, namely that Edward would have no interest or management role in the project which his sons were going to take forward. In these circumstances I consider that it is academic whether the formalities were precisely adhered to in all respects. Effect of my findings on the claims Claims against Danny, Lee and Gary in respect of E&C, SCH Jersey and SE17 Properties Limited

[253]In the light of my findings about the terms of the Purchase Agreement, Edward’s claim against Gary fails in its entirety. Edward is not entitled to the declaration or account sought in the Amended Particulars of Claim or to any relief against Gary.

[254]Similarly Edward’s claim against Danny and Lee for declarations and an account of their dealings with SE17 Properties Limited fails. He is not entitled to any relief relating to the E&C property or relating to any company holding the lease thereof, or relating to any income or funds deriving therefrom arising after the Purchase Agreement. In particular, Edward has no claim in respect of the Multiplex payments. Claim against Danny and Lee in respect ofLTL/LBEL

[255]Edward contends that the FBA and/or the Company Agreement gave rise to fiduciary and contractual obligations between him and his sons, and that they are in breach of those obligations by excluding him without his knowledge or consent from his right to participate in LTL/LBEL as an equal shareholder and director. It follows from my finding that no such FBA or Company Agreement ever existed, and from my other findings, in particular as to the agreement which was reached at the LTL Family Meeting, that no such fiduciary or contractual obligations arose as between Edward and his sons in relation to LTL/LBEL. Therefore the alleged breaches of duty by Danny and Lee did not occur, and Edward is not entitled to the relief sought by way of further declarations, damages (compensatory or exemplary), equitable compensation and/or repayment of specific sums, or to any relief against Danny and Lee. Further, in the light of my findings that none of the alleged investments were made by Edward, no claim for repayment or restitution is established.

[256]It follows that the claim against Danny and Lee fails. Claim against EM

[257]It is an essential ingredient of the case against EM that Mr Mockler knew or ought to have known or deduced, because of the instructions that were given to him by Edward at the 5 December 2006 meeting, and/or because of what he heard Edward state at that meeting, that the shareholdings and management of LTL and LBEL were to be dealt with in accordance with the FBA and/or in accordance with the (essentially identical) Company Agreement. Further, it is alleged that Mr Mockler was or ought reasonably to have been familiar with the FBA and with its terms and method of operation, as a result of a long course of professional dealing with the Scrivens and their companies. These factors gave rise to the specific fiduciary duties and duties of care which are said to have been owed by EM to Edward, whether or not he was strictly a client of EM. These specific duties included, in particular, a duty to act in Edward’s best interests as a director, shareholder and beneficial co-owner of LTL/LBEL, not to treat him less favourably than Danny and Lee, and to keep him informed about any development that might affect his interest in those companies.

[258]My findings include the following:• neither the FBA nor the Company Agreement existed;

• at the 5 December 2006 meeting Edward did not give Mr Mockler the instructions he claims to have given, nor did he state at the meeting that the shareholding and/or beneficial ownership in LTL was to be held equally between Edward and his two sons;

• Mr Mockler was informed by Danny that the single subscriber share was to be allotted to him, and Mr Mockler was told that this was because the shareholding position was very fluid, some investors had pulled out and it had not yet been decided what the project or the shareholding was going to be;

• what Mr Mockler was told represented the true position at that time;

• Highstone carried out to the letter the instructions conveyed at the 5 December 2006 meeting;

• no meeting took place in February 2007 at the office of EM with Edward, Danny, Lee and Mr Mockler in attendance, concerning the setting up of LBEL and its ownership;

• on about 3 April 2007 Mr Mockler was informed by Danny that Edward was not participating in the proposed project and had agreed to resign as company secretary and director;

• what Mr Mockler was told reflected what was agreed at the LTL Family Meeting;

• Edward had no investment, interest or management role in LTL or LBEL.

[259]In the light of these findings, the foundations of the fiduciary and other duties relied upon by Edward, and his allegations of breach of those duties by EM, have not been established and the claim against EM fails.

[260]Although it is not necessary for my conclusion, I also find that over the years a practice had grown up between the Scrivens and EM whereby Danny would be the main point of contact and spokesman, even in cases where he was not an officer of or involved in a particular company’s business. Mr Mockler explained that this practice arose partly because Edward and Lee were by no means reliable in responding to communications from EM, whereas Danny was. I was shown evidence of examples of such non-responses, and of EM’s resort to Danny for action or information. I find that EM and Mr Mockler were therefore used to accepting instructions from Danny, and that this practice was clearly known and approved by Edward and Lee. Edward stated in evidence that Danny always represented them in their dealings with EM in connection with the companies with which they were concerned. Day 6, pp.8-19.

[261]I therefore consider that if he received instructions from Danny relating to shareholdings, directorships and other company matters affecting Edward and/or Lee, Mr Mockler would have been acting reasonably in assuming, and was entitled to assume, that it was authorised by them and would have had no reason to suspect otherwise. I find that Mr Mockler had no reason to suspect there was any conflict of interest or disharmony between Edward and his sons until long after the events of April/May 2007.

Issues which do not arise or are academic in the light of the findings

[262]In view of my findings a number of issues do not arise or are academic. These include:• Whether on any material occasion one or more of the Highstone companies was acting as agent of EM

• Whether at any material time Edward was a client of EM, and if so in what capacity

• Whether the alleged breaches of duty/contract caused any loss to Edward, and if so, what is the appropriate measure of that loss.

[263]On certain aspects of these issues I have been able to form a view. Where that is the case I will express my view, albeit briefly. Were the Highstone companies agents of EM?

[264]In brief, it is alleged that Highstone was an agent of EM when:(a) transferring the single subscriber share to Danny;

(b) filing the documents relating to the allotment of shares; and

(c) filing on-line the record of termination of Edward’s directorship. These questions are now academic since, whatever the answer(s) may be, it cannot affect the outcome of the case against EM.

[265]In support of the allegations Edward points to a number of features including the following: that the Highstone companies are wholly-owned by Mr Mockler, Mr Toghill and Mr Evans, who also own EM; that the Highstone companies used the same offices as EM and shared other facilities, such as filing, billing and a website; that the website describes HCF as “our sister company”; that Rhys Evans is described on EM’s website as the managing director of HCF; that he has his own webpage under EM’s homepage; that in a section entitled “About Us”, he is said to provide “…a reliable support service for our clients…”; that the latter part of his email address was @evansmockler.co.uk; that his contact telephone number was the same as EM’s; and that he wrote to EM clients using EM-headed paper. Further, in the course of his oral evidence Mr Mockler stated “For company formations we use Highstone Company Formations as our agent….”

[266]EM denies that any of the Highstone companies perform services “on behalf of” EM or act as agents of EM in the legal sense.

[267]It is clear from the evidence that the Scrivens neither knew nor cared what the relationship was between EM and Highstone. The Scrivens were obviously familiar with Rhys Evans and Highstone generally, and appear to have been aware that in relation to particular functions it was to Rhys Evans that they (or EM on their behalf) would turn.

[268]It is also clear that as well as having common shareholders and working closely together with Highstone, EM made explicit reference to the independent existence of the Highstone companies, as in, for example, the letter from EM to Edward dated 7 September 2006 referred to in the latter’s written closings, Chapter 30, paragraph 14. and in the reference to “sister companies” on EM’s website. Further, as an accountancy firm the core work of EM is distinct from that of the Highstone companies. This is a feature capable of indicating co-agency rather than sub-agency: Bowstead & Reynolds (19th edition), paragraph 5-11.

[269]None of the factors relied upon by Edward is necessarily indicative of agency, still less are they conclusive. Although they certainly demonstrate the very close association between EM and the Highstone companies, it is well-established that even a wholly-owned subsidiary is not ipso facto an agent of its parent: Ebbw Vale UDC v South Wales Licensing Authority

[1951] 2 KB 366

, at p. 373-4.

[270]I discount Mr Mockler’s reference to “agents” in his oral evidence. He is not a lawyer and there is no reason to suppose that he was referring to “agent” as a legal term of art, as distinct from a company to whom work of a particular kind was usually referred by EM.

[271]In relation to the specific transactions in question: as to transaction (a), it does not appear to be in dispute that Highstone renounced the single subscriber share in September 2006, at about the time LTL was incorporated. Thereafter the 5 December 2006 minutes record that Highstone was requested to transfer that single share to Danny. Highstone, not EM, had the right to that share. Although EM were present at the meeting in the form of Mr Mockler who took the minutes, the only instruction given was to Highstone. It is difficult to see how in complying with that instruction Highstone could have been acting as agent on behalf of EM.

[272]As to transaction (b), it appears to be accepted by EM that it, and not Highstone, made the filing in relation to the allotment of further shares following the meeting of 3 April 2007. The agency allegation does not therefore seem to be relevant to this transaction.

[273]As to transaction (c), it does not appear to be in dispute that on 3 May 2007 HCF filed on-line Edward’s resignation as director, Rhys Evans having been instructed directly by Danny to do so. Certainly this was Danny’s evidence in cross-examination, Day 8, p.179. supported by emails between Danny/Lee and Rhys Evans in which written confirmation of the instructions was provided. The fact that Mr Mockler was copied-in does not assist either way. The evidence does not justify a finding that in so acting Rhys Evans and/or HCF were agents for EM.

[274]In the light of all the evidence, I consider that the Highstone companies and/or Rhys Evans were not, in relation to the specific transactions relied upon by Edward, acting as agents for EM so as to render EM liable for their actions. Was Edward a client of EM?

[275]My findings render academic also the issue whether, and if so in what capacity, Edward was a client of EM at the material times.

[276]Edward alleges that at all material times he was a personal client of EM and/or a client in his capacity of promoter, director, shareholder and beneficial owner of what were alleged to be “Family Business Companies” ie companies to which the FBA applied. The “material times” appear, for this purpose, to be the period between the 5 December 2006 meeting and May 2007 when Edward’s resignation as a director of LTL was filed with Companies House.

[277]It is common ground that Edward had retained EM as his personal accountants from about mid-2003 until about mid-2004, and that in that period EM had prepared and submitted Edward’s 2002 and 2003 tax returns and had also prepared a capital statement for him. It is also common ground that these are the only items of work EM has done for Edward in his personal capacity. Edward’s evidence was that after the 2003 tax return he did his own returns and that if he needed any help he would have gone to Mr Stevenson whom he regarded as his personal accountant. Day 6, pp. 119-120. He also made clear that he was averse to using EM, whom he regarded as expensive, and in November 2006 he decided to move to Busbys. Edward stated that he and his sons moved to Busbys in late 2006, and it is agreed that by then Busbys were also LTL’s accountants. Day 6, pp.17 and 21.

[278]Mr Mockler stated in his evidence that when Edward came into the office to sign his tax returns he told Mr Mockler that he was retiring and did not want EM to act for him any more. Mr Mockler said that in view of this EM did not thereafter seek information from Edward for use in his tax returns in future years. Day 13, pp. 41 and 63-5.

[279]Although Edward denies so informing Mr Mockler and states that EM were told this by Danny, I am satisfied that Edward did tell him. I accept Mr Mockler’s evidence as accurate. It is also consistent with other aspects of Edward’s own evidence, including that thereafter he did his own tax returns and that EM no longer sought relevant information from him.

[280]In view of this it is clear that whatever retainer or commission existed between EM and Edward in his personal capacity was terminated in 2004. There is no evidence that it was thereafter revived.

[281]Was Edward a client of EM in any other capacity at the material times? At trial it was argued by Edward that he was a client and was owed a duty of care as a promoter of LTL. It is common ground that in September 2006 Danny alone instructed EM to incorporate LTL. Mr Mockler stated that at that stage he was given the impression that the project was Danny’s and that Danny would be the only shareholder. Edward disputes that EM gained this impression, and alleges that in any event it would have been removed as a result of what was said at the 5 December 2006 meeting.

[282]I have already found that, although all three Scrivens were appointed directors at that meeting, Mr Mockler was informed that the single share was to be allotted to Danny and that everything else, including the ownership and structure of the project, was in flux. I do not therefore see how any impression gained in September 2006 would have been dispelled or how it could be said that Edward was presented to EM as a promoter. Further, the role of promoter is generally understood to end once the directors are appointed: Twycross v Grant (1877) 2 CPD 469, at page 541. There is no evidence to suggest that at this meeting EM were engaged to act for Edward personally qua promoter of LTL or at all.

[283]As far as it is suggested that Edward was a personal client of EM in the capacity of director and/or shareholder and/or beneficial owner of various companies (and was owed duties accordingly), that is inconsistent with basic principles of law. In the absence of some special factor or a separate retainer, it is the company itself, and not its directors, shareholders or beneficial owners, which is the client of a professional engaged to act or advise. This appeared to be common ground between the parties’ expert witnesses, Ms Kay Linnell See paragraph 94 above. (who was instructed by Edward) and Mr Sat Plaha, (a forensic accountant in the firm of BDO, who was instructed on behalf of EM). See paragraph 3.49 of Mr Plaha’s Conduct Report, and Ms Linnell’s evidence at Day 19, p. 88. In my judgment no special factor or separate retainer has been established here so far as Edward and EM are concerned.

[284]Finally, it is clear in the light of my findings that Edward cannot be owed any duties, whether as a client or otherwise, by virtue of the FBA or the Company Agreement.

[285]It therefore follows that Edward was not a personal client of EM, nor was he owed any of the alleged duties by EM at any material time. Causation of loss

[286]These issues clearly do not arise in view of my findings, and I will therefore comment only very briefly on certain aspects.

[287]In very broad terms, Edward alleges that his wrongful exclusion from the Tooley Street project caused him substantial financial loss in terms of both his share in the past and future profits of LTL/LBEL and the capital value of his rightful shareholding in LTL. He claims that EM’s alleged breaches of duty also caused this loss: had EM informed him in April/May 2007 of what his sons were doing, then there would have been an almighty family row but relations with his sons would have been repaired, and he would have been admitted to the project which would have proceeded on the basis of an equal three-way share in management and ownership. Moreover, it is argued that with the benefit of Edward’s management skills and business acumen, the LTL/LBEL would not have become insolvent and gone into administration, as in fact occurred in 2012. By the time Edward discovered what his sons were doing, in October 2008, it was too late to rescue the situation.

[288]It is also alleged by Edward that to avoid him getting back into the project Danny and Lee were compelled to act “in secret and to ensure EM did not spill the beans.” Edward’s written closing submissions, Chapter 22, page 278.

[289]Of course, I have found that no question of acting in secret ever arose. Further, it would have been very difficult to keep the matter secret given that a good many people in contact with Edward, including Myra Clarke, David and Kirstie Meredith, Mr Lempriere, Mr Mockler and other witnesses to whose evidence I have referred, were under the impression that the Tooley Street project was Danny’s and Lee’s alone and that Edward was not involved at all. Nor is there the slightest evidence of his sons attempting to conceal what they were doing, or asking Mr Mockler or anyone else not to “spill the beans” to Edward.

[290]As to the chances of Edward being able to get into the business if he had discovered his sons’ misconduct sooner, there is something unreal about an attempt to assess this on an assumed basis, namely on the basis that, contrary to what I have found, Edward’s sons had actually been conspiring to exclude him from his rightful participation in and ownership of the project, and that he had discovered this plot in April/May 2007 rather than in October 2008. I doubt that it is sensible for me to make the attempt.

[291]In any event, such speculation would be unlikely to advance this aspect of Edward’s case. For there is considerable force in the argument of EM that, given Edward was unable to make any headway in persuading his sons to “let him back in” in October 2008 when he says he discovered the plot, there is no convincing reason why his chances of success would have been any better in April/May 2007. In my view the force of this argument is not diminished by the points made in Edward’s written closing submissions, including the fact that at the earlier period Edward was in control of the E&C UK bank account into which the Multiplex funds were paid. These monies belonged to E&C Jersey which, on my findings, was beneficially owned by Danny and Lee. Further, if there had been a row at that stage it seems unlikely that Danny and Lee would have allowed the second payment (made by Multiplex in November 2007) to be paid into that account. If EM’s argument is correct it would be sufficient to defeat Edward’s claim that EM’s alleged breaches of duty caused him loss as a result of the delay in discovery of his exclusion.

[292]As to the liklihood that, if Edward had been allowed back in, his participation in the management would have prevented the insolvency/administration of the business, an assessment of this would also not be helpful to Edward’s case.

[293]Even if one assumes for the sake of argument (and contrary to my finding) that Edward believed he was a co-owner and co-manager of the project up until October 2008, there is no evidence that he disagreed with or even queried the way in which his sons were setting up and managing the business up to that point. Therefore, even if the “discovery” of his sons’ misconduct had taken place in April/May 2007, and even if Edward had been able to “get back in” at that stage, there is no reason to suppose that he would have done anything differently in terms of the initiation and development of the business. Consistently with this, no damages are claimed in respect of any period prior to the alleged discovery of the plot in October 2008. So, Edward getting back in earlier (in 2007) rather than later (in 2008) apparently made no difference to Edward’s chances of saving the business from insolvency. This finding would also appear fatal to Edward’s claim for compensatory damages against EM.

[294]In any event, the suggestion that once he had taken the helm he would have steered the ship in a different, more prudent and successful direction, is simply not supported by the evidence as a whole. There was no evidence, and certainly none which I found convincing, to suggest that Edward has any business, financial or book keeping skills which would or might reasonably have enabled him to save this business if it was otherwise failing. Indeed, there was evidence indicating the contrary.

[295]For example, Myra testified to Edward’s and his sons’ disinclination to save, and inclination to spend whatever they received. Edward himself accepted that he had little formal education, and none in book keeping or business. In fact, he has not been notably successful in his business activities, a good number of which have ended in insolvency or have otherwise failed. Since 2008 and thereafter he has been in considerable personal financial difficulty. His lack of book keeping skills was underscored by the multiple significant errors in the documents he prepared in support of this claim, to which I have referred in more detail earlier in this judgment. The financial projections which he claims to have prepared at various stages were, on his own admission, based on numbers which he made up “out of my head”. His main business experience has been in the pub trade, and in the acquisition of properties from which he could earn rental income rather than run the underlying businesses. He has certainly had no experience in setting up and managing anything remotely like the Tooley Street scare attraction and associated business.

[296]For at least these reasons, if this issue had arisen, I would have found that no matter when Edward had succeeded in “getting back into” the LTL/LBEL business (2007, 2008 or any other time), it is extremely unlikely that his active participation in the management would have made any significant difference to whether or not the business became insolvent or went into administration. Such a finding would have very significantly reduced if not entirely extinguished the value of Edward’s claim against all the defendants, even if he had established liability. Other issues

[297]In view of these observations on causation and my earlier findings of fact, it is not necessary or a sensible use of judicial resources to consider further matters which do not arise or are academic. These include the questions debated between Ms Linnell and Mr Plaha in their written and oral evidence, in particular the issues with which their respective conduct reports were concerned, the cause(s) of the insolvency/administration of LTL/LBEL, and the appropriate measure of Edward’s alleged loss.

Conclusion

[298]For the reasons set out in this judgment, the claim fails as against each defendant, and Edward is not entitled to the relief sought or any relief against the defendants.

[299]The parties should seek to agree any consequential order and supply the same to the court for approval or, to the extent that agreement cannot be reached, are asked to supply rival drafts for the court’s consideration.

Postscript

[300]Finally, I am grateful to all counsel and their teams for the assistance they have provided in what has been a difficult and troubling case for all concerned.