“repercussions of bouncing everything yesterday had now meant that Barclays are completely spooked […] I have been informed we are ‘at our credit limit’ with ADI until they receive another payment […] Other creditors who’s cheques bounced are now withdrawing credit terms, namely our steel provider, which now means we are unable to fulfil orders that have been forecasted for this month […] I have now just been informed that all of our engineers fuel cards have been cancelled due to the direct debit for the fuel bill being rejected yesterday as well and we have engineers stranded all over the country on garage forecourts. This situation is fast getting out of control now and I need to very carefully review my next steps.”
“At the meeting each person present had a hard copy of the Agenda. We went through all of the points on my Agenda, including the redemption of the redeemable shares. As this was planned as a redemption of shares, KSG needed to have sufficient distributable reserves each year to carry out the annual redemptions. I was concerned about this and sought specific protections to maintain KSG's reserves to ensure the redemptions would take place. These protections included no dividends (which reduce distributable reserves) until the B Shares had been redeemed. This is reflected in my note of the meeting, on the page that starts ‘1. Structure’ -, on that page there is reference to ‘redemption of prefs’ (‘prefs’ being a redeemable B Shares) and there follows ‘ e/out [earnout] on Trust - subscribe for shares for nil consideration’. In a box under those words appears the word ‘reserves’. The following page I believe records a list I made, in the meeting, which includes the words ‘1. Trust sells/ redeems’ and ‘5. E/outprotections’ and is a reflection of topics and issues discussed in the meeting. This discussion is also recorded in Claire Rollo's notes of the meeting and a subsequent email from Claire Rollo on13 December 2013 at 14:09, where she confirmed the Investors would agree to provide the protections I had sought on the previous day. If the deal had included a deferred payment for shares by Primekings I would have been seeking different protections, to ensure Primekings had funds to finance the payments. I was satisfied that this was explained in the meeting in such a way that someone in Anthony's position would understand.”
“No div -£3m redeem - Then 1/3 Pref shares - 1/3 be redeemed at 1/3 of that figure”
“7 Today I’ve been through the SPA, Articles and Shareholders’ Agreement with TS, Anthony and the buyer.” and mentioning as one of the headline terms of the proposed transaction: “4 Trust’s shares can be redeemed if£3m EBITDA hit in y/e31 March 2015 at a multiple of EBITDA.”
“We understand that there have been some further discussions regarding the purchase price/redemption monies as follows: -[…] 2. Redemption figure for B shares -£2,499,000 – so up to£833,000 per relevant financial year- 3. Minority protection to be added that the company shall not declare or pay any dividend or repay any capital monies to the Lender, save on a refinancing of the Loan, until the B shares have either been redeemed in full or cancelled in accordance with the Articles”
“Again will call you. A lot of paper here but I’m just keen to get to the bottom of whether this accurately reflects the discussions you’ve had.”
“Minority protection - AK proposing that his consent will be required to certain decisions of the Company - this will restrict the Investor even it owns 80% of the Company. Decisions include forming /acquiring subsidiary or merging business (Cougar/Defence), issuing further shares, changing auditors, accounting policies etc. These need further consideration and I recommend shouldn't apply if the investor becomes 80% shareholder on basis that at that point the Company has not performed; UNACCEPTABLE - MAKE DECISIONS IN THE BEST INTERST OF THE COMPANY.AGREE ARTIFICIALLY EFFECT THE ebitda - Barry - maybe for 3 yrs until the parents pd off - but cant merge the businesses this way??” and § 9 read: “Treatment of the Loans - we had amended the Articles to provide that for 3 years from 2015, 1/3 of shares be redeemed at maximum of£833k - DWF has said this should be “grossed up”
“Just spoke to Anthony - said not happy with the changes - especially with time restraints” iii) Anthony King replied on16 December 2013 : “Morning Robin I don’t see anything on here that can’t be resolved. I will go back to Lester on this.”
“The meeting on Thursday 12 December heads of terms were discussed and there was a big push to complete the deal before everybody went on holiday in December they were aware that Barry was leaving on 15th and Robin was leaving on 19th and in light of these deadlines they knew that they had to have the deal concluded by the 18th. LWI was involved in the meeting and said that it was late and Robin was there but nobody else was present. LWI said that Robin was unbelievable aggressive and at the meeting with their lawyers who were Dov Katz and a Claire Rollo, he had been swearing at the solicitors and he'd got the sense that they were trying to change the deal. LWI said he can recall saying i.e. sure about what we are signing up to however it was just at this point nothing had changed and they were still looking at the same price. It was discussed that whilst the£1m payment to JK and SK had not been nailed down it had never been discussed that this would be coming from the company. It was also said that there had been no provision for the B shares and those coming out of the business …”
“Even if I had read this email, absent a thorough refreshing of my memory of the Transaction, delving back into the correspondence and historic draft documents, and bearing in mind that numerous changes had occurred on the day of completion, I am not sure I would have realised that Anthony was making a mistake in asserting that one of the ways in which the deal changed was that KSG was made to pay the deferred consideration, rather than Primekings”
“I believe that I dialled in to this meeting from DWF’s Newcastle office and I recall that during the call a partner at the Newcastle office (Ed Meikle) came into the room and I spent time talking to him, with the phone on mute and the volume turned down. Otherwise, I do not recall the conference at all so I do not remember what was said. As I have previously stated, I do not think I would have realised that Anthony was mistaken in his belief that the deferred consideration mechanism had changed, if the matter was discussed in this conference. Had I heard and realised what was said was wrong I would have said something, as I eventually did. I was also in significant discomfort at around this time. I had broken my collar bone in the Dalby Forest on12 April 2015 and I underwent an operation on25 April 2015 . At the time of this conference, I was taking heavy pain killers which left me drowsy and unable to concentrate. In retrospect, I should not have been working.”
“Keeping the deal alive without a process, I think is ‘prize one’ we have all the power, I am not for one minute saying we should use that power to disadvantage The Kings family and gain advantage to the ‘Kirsh way’ but we need some reality around the deal, it is clear Anthony has no understanding of the true position or that our deal represents the best value by a country mile even if we paid zero to the family. (I think the 1M is almost because we can and we are honourable)”
“I was not present at the meetings on16 December 2013 described by Mr Anthony King at paragraphs 116-119 of his witness statement (and paragraphs 37-40 of that of Mr James King). On the afternoon of that day I was at my son’s school play. I recall that it finished at approximately 2:30pm and that I took my son home after school about 3pm. I believe, but am not entirely sure, that we went out for dinner later.”
“Anthony King is incorrect to say at paragraph 116 of his witness statement that the meeting which I and representatives of Baker Tilly attended at KSG’s offices on Monday 16 December was attended by Mr Swain. He was not there. It would appear from his account of the meeting that Mr Anthony King did not understand the purpose of that meeting.”
“Hi, Peter Swain is in reception but he is still waiting on two others.”
“Goodness me - does he [Anthony] not talk to his lawyers? It's us or admin no in between, if we pull out tomorrow trust me GE will appoint and quickly, (whole other plan B story around that with upside) Today Mike Mattok got me to talk to GE to release 152K cash on the back of 'we are proceeding' it was an overpayment so GE have now frozen the facility, no more cash the message. GE asked me about the Crown debt, I think I will have to give an undertaking we will clear areas [sic] or produce a written agreement from HMRC (which is unlikely to happen tomorrow) before they agree to support in writing - we cant sign deal until then, might be another long day or you might be in SA when completed.”
“Forgive me, Robin is completing the deal, I am supporting, (meeting GE tomorrow at 1pm) and trying to agree HMRC/creditor pressure. We have moved mountains in less than three weeks to get close to a deal. Robin and Barry have accommodated every unexpected 'change' and not used the worsening position to disadvantage the King family. (Moved£1.2m ) quite the opposite have been very generous. The reality is GE froze the facility today, no more cash they await our completion to support Kings continuation, we are the only option to keep the business entity alive, if we do not complete tomorrow I believe GE will appoint [an administrator]. I honestly do not think Anthony and his father understand the position or have conveyed this to [their] lawyer - no deals”
“12.6 The Co-operative Group is in breach of its payment terms by an average delay of 45 days. The Co-operative's average debtor payment is 60-75 days, whereas the contractual terms are 30 days of payment. 12.6.2 An arrears of revenue is an event of default under the GE facility. […] 12.7 The Company is in breach of its facilities with each of GE (see Document [ ]) and Barclays. Please see Disclosure [ ] above in respect of the Co-operative Group in respect of the service level agreement. 17.2.4 GE is allowing the Company to make essential payments only due to a breach of the GE facility. 17.5 The Company owes the Inland Revenue£2,000,000 (see the Creditors List at Document [ ]). The Company is in discussions with the Inland Revenue to pay this amount over a [six/ten] month period. UK Monitoring Limited is owed and seeking payment of the sum of£148,000 and the Inland Revenue are seeking a restraint on the Company's assets. UK Monitoring is currently obtaining a valuation of the Properties with a view to taking security over the assets of the Company in the next 5 days. The Company will speak to UK Monitoring to arrange payment once they have confirmation from the Inland Revenue as to whether the Inland Revenue is prepared to accept the Company's proposal for delayed payment. 19.1.8 The creditors of the Company and each of the Subsidiaries are not being paid within the applicable periods agreed with each relevant creditor - please see the Creditors' List at Document [ ]. The Company has a credit facility with Gardiners of£2,000,000 , which is repayable at£75,000 per week. Gardiners have extended this credit on the existing terms (please see Document [ ]) [Anthony - I don't believe we have had sight of this facility. Please can you send it over to me?].”
“Just picked up your message and tried to call you back. Peter and Alison are coming to meet with you tomorrow at 2.00pm to discuss how we move forward post completion. I understand from your message that you are looking to apply further reserves and not to allow the full amount of draw down today. I am not best placed to discuss this with you as Peter and Mike have been dealing with the cash flow and I have had no sight of it at all.”
“I have spoken with Peter and confirmed that we will make todays payment request of£152K to ensure business stability remains and is an ongoing demonstration of GE's support. We have discussed that the level of advance above our 85% formula is something that must be addressed immediately post completion and will require this to be brought back into formula promptly. Given the level of over advance we have approved today consideration of any subsequent payment request tomorrow will be required as to how this will be met.”
“Lester we are in this position because my lawyers have had other commitments and have been unable to deal with this. We should have been on with this all day today lining up where the documents don't work and the conference call should have been first thing this morning as requested by Clare from their side not at 7.30 tonight to then expect them to work through the night. If this deal doesn’t happen tomorrow GE will cease to advance us anymore monies and my business will be placed into administration. This has nothing to do with Robins holiday it is being forced by GE. As a client I feel incredibly let down by all these years of working together, when at the time I really need your support, even I can't get any communication of what's going on let alone their side. There are 600 jobs on the line here and the livelihoods of a lot of people.”
“If enough resource was not going to be available at DWF to complete this deal as agreed, then this should have been pointed out much earlier than now.”
“Q: Did you take that to be a genuine e-mail when you received it? A. No, I didn't. I thought it was Anthony trying to get my attention because I did let him down very badly at the meeting on the 12th and I thought that was Anthony trying to get my attention to make sure I was doing the job. I didn't take that as a genuine threat at all. Q. Not a threat, but a perception of his -- his genuine perception of what the situation was. A. No, I didn't”
“Q: I want to ask you a few questions about this document, Mr King. This was disclosed fairly late in the day, wasn’t it? A. Yes. Q. How did it come about that this document was not disclosed until very recently? A. I don’t know. Q. You don’t know? A. No.”
“Anthony. I’ve not seen this email exchange before. It is relevant and has to be disclosed. It is not at all helpful. […] We need to explain this.” iii) Mr Hall Taylor also said: “We need to determine quickly: -whether it has been disclosed -if not, why it was not disclosed (where is it and what searches of AK’s, Lester's and David's emails were done and why it did not show up/fall to be disclosed then) -whether it falls to be disclosed (looking at any question of privilege, which I doubt, or which has probably been waived) -whether there is a category of docs that has been missed, or whether there are other docs (identification of which may be triggered by this) which now fall to be disclosed - and if so what/where they are We also need to consider and advise on its likely impact - which I have been giving some thought to.” iv) Anthony King’s explanation was: “This was me getting stressed with Lester and David as I felt they weren't giving the attention to the deal it needed to get it over the line. I had no basis for saying this as GE and no one else said this to us at any time, it was a comment under pressure to try and get my lawyers attention and focus.”
“Given the pressure being applied from GE which they are acutely aware of, these people are still offering a very favourable deal with very limited due diligence. They have ignored external advice to do a ‘pre pack’ and have chosen a solvent route with money out to the family. We have to be seen to be entering into the same spirit of the deal and working just as hard to meet GE’s deadline as [they] are.”
“As was advised to the company yesterday given the level of over advance above our 85% formula that approving yesterday’s payment created, consideration of any additional payment request would need their consideration as to how this would be met. We have been pushing for confirmation for the last few days as to when post completion the cash injection would be available to the company. As we understand the transaction is set to complete today and would expect the cash to be deposited immediately thereafter and available for drawdown. Until we understand the timing of such cash injection, availability of such cash for the company to utilise and how promptly the GE facility is brought back within formula I am not in a position to approve another payment outside of our lending criteria. If we can obtain acceptable understanding prior to our payment cut off time today then will seek to approve the drawdown request.”
“As to paragraph 28 of the Particulars of Claim, it is admitted that Mr Swain spoke on the telephone with Mr Fisher at approximately 15:50 and related what he had been told by GE as to its position at the meeting he and Ms Lord had attended with them. Whilst the exact words used in the Statements (as defined) are not admitted the gist of them is admitted save that: a. He stated that GE had told him that KSG's account was frozen and would remain frozen unless a deal was done. b. He did not say the words in parentheses in paragraph 28.2 of the Particulars of Claim or any words to similar effect, and probably used the words “Kings” as opposed to “the management of KSG and the Kings”. c. He stated that GE had told him that there would be no further funding support unless a deal was done. For the avoidance of doubt Mr Swain’s statements were true and in all material respects represented the position that GE had taken with them at the meeting. Save as aforesaid paragraph 28 is denied.”
“GE frozen – unless py tax + do deal”
“HMRC - Clough - written demand - Want full amount£2 . 2m - Failed to adhere previous plan - Writing - Formal proceedings against - Anthony & Anthony's father - not moving on their money£2m fath[er] No deal done today - Meet in London today - this evening to agree way forward - They talking about total cost of deal being£10m ”
“The King family were absolutely hoodwinked but thanks to some master strokes from King Snr and tenacity from Anthony we averted disaster and got him a far better deal than it might have been. The alternative today of administration doesn’t bear thinking about for the King family…”
“Changes came again at about 3am in the morning on 19 December. I believe Teacher Stem explained the legal mechanics to David and I verbally. Following us all getting clear on how the deal had changed again I explained it to Anthony and James, who were in a different meeting room. I know that the Kings claim that at this time I represented to the Kings that one of the changes was that the deferred consideration would be paid by KSG, not by Primekings. This is not the case, I recall a conversation I had with Anthony and James at around that time when I went through the revised transaction and explained the mechanics of the deal as a whole. As part of that conversation, I recall telling them about the B Shares being redeemed. I remember Anthony saying "Eh?" to which I responded by saying Anthony, we’ve talked about this, they’ve always been there’, or something like that. He did not object, ask any further questions about it or raise it again. I just assumed he had made a mistake or forgotten. My memory of this conversation was pricked on the morning of7 May 2017 when I uncovered the mistake in my statement. I looked back and thought how could Anthony have possibly thought this?”
“Q: And the idea of doing that deferred consideration by redeemable B shares came from DWF, didn’t it? A: I believe so.”
“Lester then replied that he had in fact explained [the B Share Mechanism] to my father and I prior to the 18th and he hadn’t realised we didn’t understand the mechanism. I’m afraid I have to suggest that Lester lied on the stand to cover his own failings, you will find no record of any meetings with my father and I between the 12th and 18th of December, or telephone conversations, in fact you will find records of chasing and requesting updates and information and frustration at the lack of engagement. I believe Lester had not even realised that it was in the draft documents on the 12th until he was shown the evidence on the stand, as he would have pointed it out right at the beginning of this case that it was not an actual change on the night and couldn’t form part of our pleadings. His lack of attention to detail and advice on the original deal meant he simply missed it and failed to advi[s]e us a family…”
“…during the trial we learned as a family that on the twelfth of December 2013 you instructed your Lawyers to change the (A) shares to (B) something our Lawyers missed and was never mentioned to Anthony or myself at any of our meetings with you both…”
“the Sellers shall: deliver or cause to be delivered to the Buyer the documents and evidence set out in Part 1 of Schedule 3;” ii) Schedule 3, 1.19: “At Completion, the Sellers shall deliver or cause to be delivered to the Buyer the following: […] all charges, mortgages, debentures and guarantees to which the Company or any of the Subsidiaries is a party and, in relation to each such instrument and any covenants connected with it: [letters of non-crystallisation].”
“From our review of the finance documents received so far, I expect that consents will be required from GE, Santander and Barclays. How are you getting on with obtaining these and also letters of non-crystallisation from all charge holders?”
“Anthony/Mike, I have been speaking with the contact at the investor's lawyers as regards the investor's security requirements for its loan to KSG which I understand will be a debenture from KSG and a share charge from KSG over the shares in UK Monitoring. Investor is currently requiring: 1. Consent to change of control form each of the existing funders (Barclays, GE and Santander) 2. Confirmation that existing security has not crystallised 3. Consent to investor security/intercreditor with each relevant funder 4. Release of UK Monitoring shares from KSG debenture security”
“Dov, Signed letter attached. The letter is released to you once we receive: - a signed copy of the comfort letter we agreed last night - a signed and dated copy of the loan agreement between 'KiFin' and Kings Solutions Group Limited - confirmation that the share sale has completed.”
“If we are to complete now, then please confirm in writing to me on behalf of the Buyer that you are waiving as Completion deliverables […] the ‘letters of non-c[]rystallisation’ in Sched 3 Part 1 para 1.15”. (emphasis added) and later at 13.32: “Dov: When can we expect the Waiver of the particular Completion Deliverables itemised for this purpose on my earlier email?”
“Can we please ensure as fellow directors that we communicate and act as a unified board and management team. I appreciate that you have taken the initiative to speak to HMRC on the companies behalf and arrange a meeting with, but let's do these things together so we all understand the position. As MD I would like to attend with you on Monday to meet GE, having just returned Tom [Weedall]'s phone call he confirmed that no request was made by GE for there not to be a Kings representative at the meeting on Wednesday and he has no issue with any existing person of the management team being involved. The decision for Steve not to be at the meeting came from yourselves.”
“Tom has also clarified that he has put in writing already to yourselves how the facility will work going forward with weekly reserves for advance billing and that they have no intention of not honouring the 85% agreed advance rate on other fundable invoices. So the perceived uncertainly presented on Wednesday of them potentially pulling the account is not there.”
“Yes GE have been informed of the completion I have just come off the phone with Tom who had been informed 45 minutes ago. Tom informed me that GE have already made their position going forward clear to the investor in writing and that the account was only frozen until additional funds invoices were uploaded or monies received to bring down the reserves. Therefore their position to release the account was not dependent on this deal, however if the deal hadn't happened they would have had to consider their options.”
“Please allow me to share with you the beginnings of our future partnership together which started on Wednesday the 18th of December […] Then during the meeting Robin receives an e-mail from Peter who had arranged with our Director the night before to go together and meet with GE our Finance Company in Manchester, Peter reported to Robin that they were considering withdrawing their funding, making the total investment required 9 million pounds, as against the possible original 5 million, [Robin] went into a panic, Anthony then telephoned our Director Mr Steve Evans who had arranged the meeting with GE updating them on the way forward, only to be told that our Director Mr Evans was contacted five minutes before arriving at GE that he wasn't wanted at the meeting, and that only Peter was to represent Kings and our future funders […] we tried to get something to eat, Anthony and myself had no appetite, but as for Robin he had a ferocious appetite which was wonderful, […] in closing I can’t see any way forward, for our partnership, and maybe there is a Honourable way for us to part, in closing can I sincerely thank you for your part in bringing us together, but we cannot ever work with Peter [Swain] and Robin [Fisher] in the future you and Natie [Kirsh], we would love to.”
“In closing Anthony doesn’t know that I have written to you, and despite everything that has taken place, I just wanted to say that I am so very grateful and appreciate all what the Kirsh Family has done for Kings, and that I am personally deeply indebted to you, words will never be able to express my sincere thanks, we look forward to working together with you in the future, on behalf of my wife Susan and myself can we wish you all a happy healthy and joyful new year,”
“the revised deal that was done under duress on the night of December 18th […] Gentleman you remarked that mistakes were made on that night and promised that things would be reverted to the original deal […] Gents can I now please ask you to look at re-instating our original deal and restoring back to my family what should be theirs.”
“My father and I do not believe you are the sort of men to hijack our family business and what happened at Christmas was through lack of knowledge and pressure, lets please put that behind us and now that the business is on a solid foundation lets please place the trust and honour in the same place.”
“as we discussed, the agreements as they stand presently are (for better or worse) all we have…we respect signed contracts and I am sure you do likewise”
“there is not a doubt in my mind that with the Kirsh family as our partners, we can take Kings further than my vision or dreams would have ever taken it and so I promise that the events of the 18th of December will never be mentioned again”
“The provisions of the Agreement [i.e. the Kings-Primekings SPA] shall, save as amended by this variation agreement, continue in full force and effect.”
“For returning back to us the shares, is like I said last night, something that reaches far beyond just me and my family, but many others watching on like, lawyers, staff, suppliers and customers who look at this as a very positive move, but even more so it sends a message of who you are as people and how you do business and treat your partners, so a huge thank you for what you have done. This Christmas will be very different to last Christmas, its amazing how much can change in a year. You know I will continue to build and drive Kings forward to£100M and beyond, its an amazing journey with amazing partners.”
“Lester: […] Desperately sorry that you’ve been exposed to these people and what they’ve done. Obviously very helpful for our position but the seemingly despicable, scheming, calculated acts of these people has me seething. […] Anthony: […] Can’t believe just how much they planned this”
“I have had lengthy discussions with Robin regarding the meeting at Defence and the apparent negative approach adopted by both you and Mark. We are your partners and have always carefully considered the impact of what we propose on all stakeholders. Would we really propose a transaction that was detrimental to our partners and stakeholders? You clearly think so. To say I am deeply disappointed would be a gross understatement. This is the second time that we tried and failed and I guess you think that the combined Grouping is not in your interest. The upshot is that you now have a competitor with backing of your controlling shareholder. So unnecessary. So short sighted.”
“Good Afternoon I would like to wish my partners a happy anniversary on the day of our coming together a year ago today. Sir I emailed you before going to this meeting asking for your thoughts and guidance as when I met with you last Tuesday in London you were still giving this potential merger further consideration. 1 never heard back from you. It seems one year later on some things still haven't changed and the accusations towards Mark and myself for being a little cautious and unsure of what was being put in front of us are just shocking, If you would like to have a sensible conversation around this then I am more than happy to do so, sir at some point you will learn to trust me.”
“If someone has lied to gain advantage AK, does it not seem reasonable to go back to the original plan?”. ii) On19 May 2016 , a report indicates that Mr Fisher was “talking about appealing any decision (before the case was even heard) and that this will drag on for another 2 or 3 years with them [Primekings] in control”
“7. Counsel will find enclosed 3 lever arch files comprising a bundle of relevant documents. Files 2 and 3 are the Corporate bible and they are repeated in the same format. File 1 contains a copy of (at the respective dividers): […] 7.4 Emails and correspondence passing between the parties from13 December 2013 to date (with some narrative from the Claimants in parts); […] 8. Counsel is requested to: 8.1. Consider the documents referred to above (in terms of the Corporate bible, we refer Counsel to the shareholders' agreement (divider 9 of file 2), share purchase agreement (divider 1 of file 2) and articles of association (dividers 26 and 29 of files 2 and 3 respectively); and 8.2. Draft the Particulars of Claim. AK and JK would like to issue proceedings as soon as possible and Counsel is requested to let Instructing Solicitors know when they can expect a draft.” 7.4 Emails and correspondence passing between the parties from13 December 2013 to date (with some narrative from the Claimants in parts); […] 8.1. Consider the documents referred to above (in terms of the Corporate bible, we refer Counsel to the shareholders' agreement (divider 9 of file 2), share purchase agreement (divider 1 of file 2) and articles of association (dividers 26 and 29 of files 2 and 3 respectively); and 8.2. Draft the Particulars of Claim. AK and JK would like to issue proceedings as soon as possible and Counsel is requested to let Instructing Solicitors know when they can expect a draft.”
“that the new company (Primekings) would provide£1 million funding to KSG by way of subscription for the additional 503 [CHECK] shares, therefore providing an immediate cash injection to shareholder funds;”
“Can you make sure that you trawl through the emails/other docs around the time - and speak to Lester and to the clients to get to the bottom of what the original deal actually was - as I am concerned this is not right.”
“Please see the attached slightly revised particulars of claim - please can you review these again and ensure that you are happy with the content and that it is accurate. In particular -please can you consider the provisions of paragraph 23 (i.e. the terms of the "Original Deal") and ensure that this is right.”
“OK one more thought Section 39 the new deal meant the£3M earn out over 3 years was to be paid out of the business and not paid from Prime. We always believed this payment would come from them and get entrepreneur's tax relief and not the tax implications it now has. I reaffirm this belief in my email in April 2014 when I say they should pay my mother and father the full£4.25M owed straight out. I only say this because in the worse case scenario that we don't get the contract rescinded, then this gets them back to paying mum and dad out directly and also shows they have not reinstated the original deal.”
“Anthony/ James Please find attached further revised Particulars of Claim which I think should now capture everything. I'll liaise with Alex to see if he's happy with the amendments.”
“39.4. Primekings would "pay" further consideration of£3 million to Mr and Mrs King over three years at a rate of£1 million per annum provided KSG's EBITDA was£3 million or more in each of those years such payment to be made by KSG by way of share redemption”
“39.4 Can we not add brackets like in 39.3.3 (in other words the funding was to be provided by KSG not Primekings and only payable determined on KSG's financial position) just to emphasize the point.”
“Further to our exchange of emails yesterday and further comments from the client received yesterday we've revised the draft further and I attach a comparison (against yesterday's draft) together with a clean word version. […] Added a new paragraph dealing with the£3million earn out by way of share redemption at para 39.4.”
“Primekings would “pay” further consideration of£3 million to Mr and Mrs King over three years at a rate of£1 million per annum provided KSG’s EBITDA was£3 million or more in each of those years. Such payment was to be made by KSG by way of share redemption (in other words the funding was to be provided by KSG not Primekings and was to be delayed and determined by KSG’s financial circumstances).”
“Well, obviously there has been a lot of discussion about this and at the time, had I read that [§ 39.4 of the Particulars of Claim in the Misrepresentation Proceedings], had I realised and put it all together, I would have said something because, Mr Newman, when I did find out on 7 May [2017], that’s exactly what I did. Nobody told me. Nobody tipped me off. I found out myself and I said something. So every time you come back to this I will come back to saying what I positively did, what was in my mind and what was reflected in what my actions were was absolutely clear. When I found the mistake out I said something. Rather than looking at what I inactively allowed to have happened or alleged to allow to happen, look at what I actually positively did. And what I positively did was scream and shout there’s been a mistake when I found it out, and that was the first time I realised that mistake had been made.”
“An issue of shares to James and Mary [sic] King which could be redeemed over a period of time following completion for up to [£1,000,000 ] depending on the Kings group’s financial performance. Teacher Stern’s drafting did not work on this as they had deducted the King family’s indebtedness from the amount to [be] paid and included an indemnity for the loans in the Share Purchase Agreement. The agreed position was that the loans would be repaid over a period of time after Completion. 3 years I believe and mechanically the Teacher Stern drafting did not work.”
“Q. If we go on the right-hand side, please, to {F1.3/12}. And you can see there that you signed on19 December 2016 with a statement of truth the witness statement and the line which is incorrect is on the same page. And I want to suggest to you, Mr Wilson, that it is just not plausible that you wouldn't have carefully checked all of that witness statement including paragraph 49.6 before putting your signature on it? A. At the time as I said yesterday, I'd relied on Mr Blakey to get this correct. He'd told me not to worry about paragraph as it was now 49 because it was taken from the particulars and had been checked. I relied on others. That was why I was so cross. I was very cross that I'd relied on others and not put myself into the detail until 7 May. When I signed it I believed it to be true based on my reliance on a very experienced solicitor.”
“Mr Cole and I did not say that KSG's funding facilities were "frozen". I recall that Mr Swain did use that word and I explained that there was nil eligible availability for funds within GE's 85% advance formula to be drawn by the KSG business. By this I meant that KSG's funding facilities were fully advanced and in fact I believe that at the time of the meeting the drawn percentage was around 92%. I also confirmed that it would be very difficult to authorise further overpayment drawdown requests until there was clear confirmation that the proposed transaction, including, crucially, the expected KI capital injection, would be completed within precise timescales; I do not recall that either Mr Cole or I said that GE had lost complete faith in the management of KSG and the Kings Group. We did however confirm that GE was becoming increasingly concerned with the current trading position and the short term distressed nature of KSG's working capital requirements. We also made specific reference to the fact that drawdown requests continued to be made in excess of agreed cashflow forecasts that the business had provided to GE and that this had a negative impact on the credibility of the current management team; Steve Evans ("Mr Evans"), KSG's Sales Director, did not attend the meeting but this was not at the request of GE: GE did not request or restrict access to the meeting of any of KSG's shareholders or employees. During the meeting, Ki's advisors told us that Mr Evans had requested to attend the meeting but that they had suggested he didn't as the meeting was to discuss only the progress of the transaction and timelines. They implied that Mr Evans' agenda differed from this and that he wanted to renegotiate the parameters of the GE facility and interrogate specific facility ineligible balances in an effort to improve cashflow availability; Mr Cole and I did not say that GE was no longer prepared to support KSG or the Kings Group and that there would be no further funding. Over a period of around 5 weeks prior to the meeting, GE had been allowing certain essential payments to be made even though this took the facility over the 85% threshold. GE could not allow further overpayments and required the facility to be brought back within the 85% formula. In addition, the KSG business was in a critical condition and needed the transaction with KI to complete very quickly so that the required cash injection would be made. […] Mr Cole and I confirmed GE's intention to continue to make KSG's existing facilities available to it post completion despite the change in ownership, provided the transaction was completed and the investment went into the company so that it was properly capitalised by20 December 2013 . If a deal could not be concluded by this date then GE had no ability to provide an additional overpayment to meet the identified cash shortfall. GE agreed to provide a formal letter of comfort to KI confirming its support as part of the transaction closing process.”
“Think it makes certain points very clear in our favour, but opens a couple of cracks that they will try to exploit as being perhaps a "misunderstanding", that said I think the underlying misrepresentation of what GE said is still very much in our favour and for them to explain and defend. We believed that all funding and support was pulled, as did everyone else in the room and clearly GE did not say this. There is no way from anything GE said that Robin can make the statement that he believed he needed another£4.5M to replace GE.”
“Yes - I agree with this analysis - there is some helpful stuff in there but they will seek to say they misunderstood what was said - but if they do try that presumably we can say that there was nothing doubtful about what they said to AK/JK/LW and what they did say did not reflect what GE had said - nor could it reasonably have been based upon what was said or any reasonable misunderstanding of it... I think that some discomfort will be created by this - and by the fact that he did it voluntarily in his own words.”
“It went well - Howard essentially confirmed the content of his conversations with you and his view that GE would not have "pulled the plug" had the deal not gone through at the time. We're going to write a letter to Teacher Stern outlining what Howard has said and let Howard have the draft before it goes to make sure he's happy with what we are saying and obviously we'll let you see the draft too.”
“As the Christmas break approached, I recall that I discussed with GE the likely strategy if the investment from Defence was not forthcoming, I cannot recall specifically who I spoke to but it would have been either Tom Weedall or Andy Cole as they were my key contacts at GE. We informally agreed that there appeared to be sufficient funds available to enable staff salaries to be paid for December. Once these were paid, KSG was likely to be able to trade through to January. Accordingly, KPMG would have a small number of staff on standby to re-commence a marketing process but not to take an administration appointment over KGS. Another factor taken into account was the nature of KSG’s business i.e. providing security, in some cases, to banks. If the security systems at certain client’s premises had been withdrawn during the final week of December, this could have caused significant disruption that would impact on GE’s major assets, book debts.”
“Your clients' position is that whilst the gist of the words used at paragraph 28 of the APOC is admitted, they are qualified by the addition of "unless a deal was done" (paragraph 28 of the AD). […] The true position is that your clients represented that it was "game over” with GE, there was no possibility of ongoing financial support full stop. As you are aware, we have spoken with GE's Tom Weedall and Andy Cole and their evidence is as stated in paragraph 18.7 of the AR. Further, it was not in GE’s interests to pull funding either on the day of completion or in the near future. GE had, its email of 12:34 on18 December 2013 referred to at paragraph 18.5 of the AR, already said that it would provide further drawn down if given an update. If the evidence of GE is not sufficient, we have now spoken with Howard Smith ("Mr Smith") of KPMG who were engaged by KSG/KSSL, at the request of and with a reporting line into GE, to, amongst other things, monitor the situation with KSG/KSSL and for Mr Smith to be in a position to act, if required, as a possible administrator. Mr Smith has confirmed that KPMG were not requested by GE to prepare to take an imminent administration appointment at any time prior to completion of the sale transaction. His recollection is that once negotiations commenced around the KSG/KSSL investment, GE wished to provide reasonable support to give the transaction every opportunity of completing. Accordingly, the strategy adopted was to monitor progress with a contingency plan that should the transaction not complete then KPMG would re-visit the other interested parties with a view to transacting with an alternate party early in the New Year. Given the Christmas break, it was considered unlikely that any party would be prepared to carry out due diligence over Christmas, therefore, no staff were mobilised to either assist with a sale process or deal with an administration appointment prior to the first week of January 2014 at the earliest, GE did not want KSG/KSSL to go into administration, it was at risk of losing money if it did. GE was potentially exposed and it wanted to manage its exposure with KSG/KSSL. It strikes us that the only defence your clients have (to their misrepresentations) is that the statements made were true. Irrespective of what our clients say, based on the independent evidence of both GE and Howard Smith of KPMG, that position is untenable and we fail to see how your clients will not lose on liability. […] Our clients are quite prepared to continue to trial, they have no hesitation in standing up and telling the truth. However, it is not in the interests of KSG/KSSL for this shareholder dispute to continue; our clients would rather be focussing their efforts on the business than this dispute. Therefore, an alternative way to proceed and one that it is incumbent on the parties to consider is to explore whether the parties are willing to mediate.”
“Interest levels amongst potential alternative investors remained very high up to and beyond the date of completion with the Ds, only having been turned away by C3 once the original deal was done with the Ds or having fallen out of the running due to immediate time pressure. The Cs will say one of the many interested parties would have invested or provided finance to KSG/KSSL and that GE would have continued to support them until that was done. The losses consequent on an insolvent outcome was such that any alternative was commercially not viable for GE.”
“I have just been informed by Grace that you have submitted a draft witness statement of my position to the other party. To be 100% clear, this is completely without my authority and goes against all our conversations. I am very, very concerned that DWF has chosen to take this approach. I am passing the matter to KPMG practise protection.”
“I don't quite understand your email and/or the surprise. You know we have provided the summary/statement as reflected in our exchange of emails on19 December 2016 . My understanding was that you had approved your evidence as drafted (I know that you had been discussing and finalising the statement with Grace through November and December 2016, had provided an amended version and discussed it with Grace on the telephone a few times) but was not able to sign it due to your illness and absence from the office in the week before (12 December 2016 ). Further, as reflected in your email of19 December 2016 at 11.03, you awaited internal approval. I understood both of these were formalities; on the latter you had said back in November that it needed to go through risk and we naturally presumed you were on with that. In any event Howard, as I said in my email of19 December 2016 , my instructions were and are to summons you to appear at the trial as a witness for the King family irrespective of whether you have given any authority or not.”
“I have now reviewed the email communication between DWF and Howard Smith together with a copy of the draft Witness Statement/Summary that you have provided. Having discussed the matter with Howard, he has explained to me that he made it very clear to you that he was not in a position to confirm whether he is able to provide a Witness Statement to support your client without referring the matter to the firms internal Practice Protection Team. This is something that he has repeated more than once in his email communications with you. […] The internal approval of the witness statement was therefore clearly more than a "formality" as you suggest. I am therefore very surprised that your firm deemed it appropriate to serve a Witness Summary on the Defendants without first having obtained approval from Mr Smith that he was willing and able to be your witness and to provide a statement. I am also concerned with the nature of the email communication whereby you appear to have set out the position of Howard providing a Witness Statement as a fait accompli rather than a choice. Our KPMG position remains as above, I therefore confirm that Howard will not be providing a voluntary Witness Statement in these proceedings in accordance with the firm's position. If you do decide to proceed via a Witness Summons then we will as always, fully co-operate with the decision of the court.”
“The Claimants have permission underCPR part 32.9 to serve and to rely upon the witness summary of Mr Howard Smith served on19 December 2016 and to call Mr Smith to give evidence at trial.”
“Our internal records suggest that I was informed at short notice (on the eve of expecting to give evidence on 5 May) that I was not required on the Friday. It appears I provided details of my availability during the trial period, and that my own commitments meant that Wednesday 10 and Monday 15 May were my next available dates, with the latter being more convenient for me as I was travelling on the Wednesday. It was on the evening of Saturday 6 May that DWF informed Kennedys (who as you may recall were providing KPMG with some external legal support) I would be required to attend to give evidence on Monday 15 May.”
“MR JUSTICE MARCUS SMITH: So Day 8 remains largely unchanged. MR HALL TAYLOR: In fact remains unchanged, subject to us sliding over slightly with anyone from the Monday. What I would then propose, my Lord, because all of the witnesses currently on Wednesday the 10th can actually do the 11th, subject to one person, which is Mr Smith, Mr Smith, you will remember, is a KPMG witness, and he has actually said at the moment, although we are impressing upon him that this is not a terribly acceptable answer, that he cannot now do next week.”
“I am not in a position to advise you whether you’d win […] Initial concerns: Knew about this almost immediately – how it was dealt with […] ratified the agreement […] positivity towards deal […] Key facts are strong in your favour Can’t tell you until I see a hell of a lot more”
“A. Can I just -- when we come to these notes, just because it is going to be a point that I am going to have to make time and time again, these transcripts -- firstly, let's start with a fundamental point. These are not very good notes, as a general rule. I don't want to be too harsh to DWF, but as attendance notes go, almost every single one of them is not very good, and that is putting it mildly in some cases. They are not complete. They do not accurately reflect who is speaking in certain particular moments.”
“On December 18th 2013 a terrible injustice, born out of deceit and lies was committed towards my parents and family. […] the agreement that you and our family shook hands on at your offices on December 13th, before you left for your vacation. This was all undone and betrayed when Peter Swain and his colleague Alison phoned into Robin at the lawyers saying our funding had been frozen by GE and they had refused Steve Evans entry as they had lost faith in Kings Management team. It was put to us that the deal would require a further£4.5M to capitalize the business and replace GE, you know that we have proved all that to have been a lie. I met with Robin just last Friday and he confirmed yet again that he even spoke to GE and in Robin's own words he admitted he had personally spoken to them and 'they were about to withdraw funding'. There is a huge difference in what we believe someone is about to do and what someone has actually done. Had we have known at the time that the statement made by your side was a lie, we would have not agreed to the alterations to the agreement done between you and my father.”
“Just spoken to Jason who relayed your conversation. Desperately sorry that you've been exposed to these people and what they've done. Obviously very helpful for our position but the seemingly despicable, scheming, calculated acts of these people has me seething. I can only imagine how you must feel.”
“Thanks Lester Can't believe just how much they planned this and had us over ! Let's just get them in front of a judge and held to account for their actions. Very saddened that these people got any where near us, feel gutted they got to even put there names on our books !! Let's 'ave em !!”
“As I said…top floor for dinner! I’ve signed the claim form.”
“Yep bubbles on the top floor when we get the business back !!!”
“I clearly recall Mr Blakey had been making a lot of comments to me about the budget of PKH (which was£2 . 7m) stating it was laughable and an impossible figure and was not true and was being used to intimidate us and frighten us. I recall Mr Blakey and Ms Connor laughing about how it would equate to a lawyer working on the case every day full time and that wasn't possible. Our Counsel Mr Hall Taylor seemed very pleased with how the CMC went as PKH were told to resubmit new budgets and we went for drinks at a bar round the corner (I believe it's called the Refinery) and Mr Hall Taylor said to Mr Blakey and I, that he believed PKH would be on the phone by the end of the month to do a deal. I recall Mr Blakey and I weren't quite as optimistic given how aggressive PKH are and we had a joke about who would buy drinks if he was correct.”
“JBL said that they [Primekings] are really struggling on liability particularly with the evidence from Howard now which collaborate [sic. corroborate] what GE say. However, as JBL has said before, the risk for AK and the family is on the remedy which the court orders…..He and the family would still be protected on costs, JBL confirmed that would be right as we would win, but that would at least give us something to think about if a damages offer is made.”
“we should not offer them a penny, we will get the business back for a f***ing pound.”
“Q. And you made a comment like "we should not offer them a penny. We will get the business back for a f***ing pound". Do you agree? A. No, I certainly don't. What I do remember very clearly is Anthony King saying "How will we get the shares back?" and as part of a settlement I said we would be able to transfer the shares back for a pound. He said, "Really?”, I said yes, for the shares you only need nominal consideration to transfer the Primekings shares back to the family. It was in that context that I said it.”
“Anthony: Well just had a meeting and just to let you know Robin has offered£2.5m to drop the case. Had to tell you x James: Your mum and I would like to take it! Anthony: Sleep on it ! X James: Think about a Disney cruise! Take the money Anthony: Think about the rest of our life’s !!! X James: Ok it’s back to Butlins! Anthony: Barry doesn’t believe we can raise the money to pay them off and that the business will have to be sold. God is going to shock them. Robin is just terrified !!”
“Gambling – assume you win at trial + you have to pay them Go to trial you lose + haven’t got what you wanted. No win in going to trial No additional win in going to trial. Just make them an offer”
“I know but it has led them to believe that even our own Barrister does not believe that what we are asking for is reasonable. I do have concerns about Alex sometimes.”
“Understood re mediation - but it is necessary to have some form of formal discussion about resolving this even if that is just between AK and Barry – and for that he needs the valuation (where are we with that) and some idea of funding availability. I am not convinced "just" offering them their money back is going to work - unless they also accept the company is worth less and not likely to recover (unlikely to be accepted, I suspect, and not reflective of reality as we know). May be possible to go in at that level but AK needs to be ready to pay a decent price to get what he wants which is to get them out - and he needs to factor in his own views about the prospects of turning things around... Anyway - lecture over(ish) - I have said the same thing from the outset...let's see where he gets with it - but he needs to factor in that trial is not that long away, their views are likely to harden particularly once it becomes apparent that the critical GE evidence is not being volunteered, the company is likely to be looking more valuable by then, and costs will be over£3m ... He needs to sort this this month or next either through negotiation or mediation – it can't really drift much longer.”
“We've told him that our (DWF) position is that we will win on liability. He asked me what I saw as our biggest risk and I said whether we could get rescission or not. He thinks from the conversations he has had with Barry etc (hereafter the BGs) that is where they are at; they don't expect to win but will appeal if we get rescission. He understands that if we don't get rescission we are into damages and the question then is what loss have we suffered. I have told him that if I were the BGs I would make an offer to reflect that which would really put some pressure on us in terms of costs. AK and JK are prepared to make an offer. […] I've told them it has to be sensible to make an offer now, the company is in a position where it "appears" to be struggling and may not be worth very much (we await KPMG valuation) and any deal will take away the risks of litigation, expense and their time. […] AK and JK are not quite on the same wavelength in what they want now. AK does want the company back but needs time to find the funding. He told me yesterday that he can do it but, as you will have seen yesterday re D&B, does he really believe that? JK seems to want his day in Court. He's not had his£3m and so is out of pocket. He wants the deal tearing up but then what...?”
“Next – there are some very serious concerns about this case irrespective of whether we prove that they lied on the day (and some of these points are clearly driving the other side's thinking at present). I have pointed all this out before but will just recap because it seems to fade from the forefront: we may very well fail on rescission - and this could happen for a number of reasons - first because the Judge has to be satisfied that he can put the parties back in the prior position - he may not believe that can be done - because things are very different now from when the investors came in. Second the Judge may consider that the Kings have affirmed the position or waived the right to rescission both because of delay generally and because they knew or suspected the position with regard to the misleading report of the GE position soon afterwards but did not in fact take action – preferring to see how things panned out and also to renegotiate (this is what the other side are hinting at) - we have to present a very clear evidential case on what could or would have happened if the Kirsh investment had not come in – they will argue forcefully that the business would simply have collapsed/been lost – we need to show what other options would have been available to save it - that they would have saved it - and that the company would be in the same position (or near enough) as it is today irrespective of whether they had come in - even if the Judge does order rescission, given the recovery of the company, he is very unlikely simply to order that they should get back what they paid plus interest. It is far more likely that he will order them to be bought out at current market value - to which no minority shareholder discount would be applied. Offers realistically need to be based around the market value - which may have to take account the value on a trade buyer sale. - if we lose on the evidence as to the lying - then obviously the Kings will end up paying all the costs (which I believe would then exceed£3.5 million ) - if we win on the lying/duress but lose on rescission - then the costs are likely to be split - and that may be on the basis (say) of the Kings getting 60% of their costs but against that the Kirsh lot getting (say) 50% of their costs - which may well be more - damages by that route might be significant but not massive (not like the full value of the shares) - so all that would probably do is provide some form of discount if they were then prepared to sell back the shares – but the starting point would still be current market value”
“I have to admit I am not happy with the below statements by Alex, none of this was set out before us like this at the beginning. If you believe it was can you please remind me and resend it to me, so I can remind myself how we were advised of the risks below and still proceeded believing we were going to win. Costs have doubled from the£400K we were told this would cost and now we are being advised we probably don't really have a great case. Even I am starting to believe the reason Kirsh are sat there so smug, is because they have got better legal advice than us.”
“I did say that a con would be an opportunity to discuss all this stuff etc but AK said he had had enough of talking! I'm not quite sure what is going on”
“Alex has asked me to apologise if the approach taken was unwelcome and to emphasise to you that he was not being negative about the case but rather pointing out some essential considerations that should not be far from any of our minds in preparing this case”
“AHT said that he thought that we had the better side of the evidence on a number of points but that it was not necessarily black and white and that he was not convinced that we would necessarily win and/or if we were to win, that we would get the outcome that we wanted.”
“Alex and Anthony had an argument on the day of the PTR on27 February 2017 . The detail is recorded in Grace Connor’s notes and my handwritten notes. Alex said that he thought the Kings had the better side of the evidence but that it was not necessarily black and white. Anthony kept saying that it was. The conversation went round in circles in the terms above. Anthony refused to accept that it was not black and white. On the walk back to Court, Anthony said to Alex “I need to know that you are 100% willing to fight”
“Met with Barry today (at his request) thought it might have been some sign of movement, but he basically sat and told me how we had zero chance of winning, his words were 'not a snow balls chance in hell!' How our family came from nothing and will go back to nothing and be ruined and destroyed. Said we had been badly advised and they were 100% certain they will win. I didn't realise he was so worried !!”
“you need to get a grip of this now as we discussed J We're basically exposed as a firm to over£200k (£60k to third parties who we can't just write off) and have funded this since Sept already with no up side for us. Unless the client has an answer to the below position (have they replied?) - ie it is exposed to us for£200k and can pay, we surely cannot incur the fees you have set out 1 mediator (well we won't be allowed to because they will want that paying up front) 2 Counsel 3 Expert When we know the client can't pay but the primary liability to pay rests with DWF - it's basically incurring third party liabilities when we know the client can't afford it - why would we expose DWF to that (on top of the£200k we're in the hole for if they can't pay)?”
“I set out below an update on the costs position. These figures are up to and including24 January 2017 . Current position DWF has work in progress of£114,284 . Grace has£28,780 , Lester£3,500 , Oliver (our current trainee)£11,925 and I have£67,282 (which leaves just under£3,000 consisting of other fee earners' time). The time covers the period27 September 2016 to24 January 2017 . In addition, Alex has unbilled work of£30,662.50 , there is our travel from the conference last week and a Court fee of£100 .”
“So looking at your figures, we owe circa£200K now With a further£116K of disbursements after that to go to court, can I ask where are you on the£230K SIP fund my father asked to be put into the Menston property ? We are putting everything we have into this, but we are actually relying on you to release this money sat in Dads pension. The speed of that being released is in your hands not ours.”
“Jason if we lose, if Alex doesn't have the passion and conviction to convince a judge of the merits of the case (which he seems to struggle to convince me of sometimes !) and to get the courts to find in our favour, then we the King family lose everything, not just the business, but our homes, our shares, B shares, pensions the lot. It's not your costs I'm worried about, it's their costs that concern me. It's the£1.7M we would need to find if we lose.”
“I've spoken to Matt Brown on the potential preference issue. It is unlikely that a preference claim could be successful because: 1. A preference requires a "desire to prefer" on the part of the charger. DWF are saying to Anthony King that for us to continue representing him/the family in the litigation, we require a charge over the property i.e. he is not giving it to us by choice and there is no "desire to prefer" us over anyone else. And 2. There is a second defence that at the moment of giving the charge i.e. now, he is not insolvent and will not become insolvent as a consequence of granting the charge. He reasonably believes that he will succeed in the litigation (we and Alex have advised that he has good prospects on liability but the remedy is more difficult (rescission and ability to repay/put the Defendants back in the position they were pre deal)) and, therefore, that he will not be liable for their costs. So the contingent liability (the likelihood of being responsible for£2m of the other side's costs) is sufficiently remote that it need not be taken into account in assessing his solvency at the point of granting the charge to us. For completeness, it is possible that if we don't get rescission and damages are awarded then there may be some split order as to costs or each party pay their own.”
“So that's£246,600 before the trial just for counsel, with£62,400 being due next Monday. I have huge concerns we are not going to be 'liquid' in time to meet these payments. As mentioned before I have my property at Menston up for sale and had a lot of interest and viewings but no offers yet. It's up at£725,000 and I owe£225,000 against it, even if I sell at a discounted rate of£525,000 it won't be done in time. Mum and Dad are re-mortgaging their home and have£100K on the way but are not in control of the timescale. Dads pension worth£230K is proving very difficult to get invested, in light of all this I don't see how we can instruct a junior at this time, we are going to be all on keeping Alex covered.”
“Steve is hoping to have the£100K before the end of the week and will be paid onto you straight away. Mum and Dad have just signed to release£80K from their home, waiting for this to go through the system so could be still a couple of weeks, again this is eared marked for DWF. Yes you can have a charge against my Menston property, that's not a problem.”
“Lester, as you'll know, lock up is well on the agenda and I can't effectively sign off a "debt plan" of >£200k over an unknown period. The up shot is that Graham will not support DWF funding this. So we therefore need to be cash funded or we can't proceed I'm afraid. If the£250k from the friend can be used for us or he can use the shop or his shares as security for a loan? I know this isn't what you want to hear but I have to say I fully understand G's decision”
“My view 1. Dispassionately and commercially: a. if we drop them we will be giving up (as a worst case) a secured position on up to£380k (£180k +£200k ) of fees in favour of an unsecured position on£180k . Recovery of the£180k will require suing King and months of delay to recover possibly very little (we will also have little prospect of recovering the£50k of Counsel/KPMG fees). We will be increasing our risk of recovery and potentially worsening our cash-flow position. Not sure this is the best thing for us. b. We are not incurring any further direct costs in going to trial (there'll be some disbs). We already have the overhead which will not be 100% utilised if we miss this trial. There is no opportunity cost in going to trial nor any real "loss" (save for disbs) to us. c. We lose the client - whilst not FTSE 100 King's is not a tiddler (£50m t/o, 600 employees). There will be a corporate deal to do in the aftermath of the trial and lots of ongoing work. We've seen/been involved with correspondence from 3 interested parties who want to look at the refinancing and purchase of the South Africans' interests (Business Growth Fund, Stanley Security and Contract Fire and Security). 2. On the softer side: a. Morally and reputationally we should not be dropping a client at this late stage. b. This client is not [client x] or [client y]. I have acted for them for over 20 years and they are honourable, decent people. We trust them.”
“Jason you got£100K yesterday. […] I repeat, your original estimate to trial was£440K , it's now close to£1M . Had we had known that from the beginning then we wouldn't have started this, we are doing everything we can to cover this.”
“Steve just transferred the£100k ”
“Great – many thanks – massively appreciated!”
“Just seen Jason's email, you guys may be getting some pressure but I'm starting to get seriously hacked off !!”
“Understand. It's not coming from us. Happy to have a chat.”
“In terms of anything beyond pure housekeeping, unless there is further corresp/concession I am not aware of, it looks as if we will be pressing our app for email searches/disclosure by Swain, Fisher and Stiefel after 20 Dec asking for the docs by next Fri. Is that objected to?”
“My position is that we need further time to address the scale of this exercise. We are deeply sceptical that it serves any useful purpose, but are trying to work out what is involved. The chaotic bundling has been a massive logistical exercise this end, so if you want us to get into that - we shall be asking that your application be adjourned on grounds that we are not in a position to address it because we have been fire-fighting on the documents front.”
“The disclosure and the bundling are separate issues. I have previously apologised and will apologise again to you, your solicitors and the Judge for the bundles. As you know we have been doing all we can to improve them as requested. […] That is all entirely aside from your clients' disclosure obligations and the fact that a statement made in each of their disclosure statements, to justify limiting their electronic disclosure, was untrue. We acknowledge the silent admission of that in the work that has been done to date to search and provide further disclosure, but plainly that is not enough. There is no justification for stopping the exercise at 20 Dec, nor have your solicitors provided one. I imagine the Judge will be surprised by the suggestion that that is where it should stop - and will expect your clients now to be doing everything possible to comply with their obvious obligations. The disclosure is plainly more useful than much of what your clients have been seeking - and should in any event already have been given if they had in fact complied with their obligations. We are prepared to allow you some time to deal with it provided we have the disclosure in good time to prepare any cross-examination based on it. That should give your solicitors a week. […] If we don't have a commitment to the searches and disclosure sought beyond 20 Dec then we will advance our application this morning.”
“MR JUSTICE MARCUS SMITH: To what extent would it be sensible to have the witnesses out of court, or in court? I am conscious that you are going to be making some fairly serious allegations against Mr Downes’ witnesses. […] MR JUSTICE MARCUS SMITH: That was my issue, because there could be, for instance, a surprising recollection on the part of a witness which one might want to not have witnessed by someone who is giving witness evidence later on.”
“Q: And the idea of doing that deferred consideration by redeemable B shares came from DWF, didn’t it? A: I believe so. Q: Have you made any complaint against them? A: No. Q: You haven’t? A: No. Q: You’ve not intimated a claim against them in any regard? A: No.”
“Q. All right. Now, the period between October to December, you blamed GE for the increased pressure on the business because of them reneging on this way of drawing down, and Mr Mattok, Mike Mattok, comes into the company as your interim FD. […] Q. Why is he not giving evidence? A. I don’t know, sir.”
“30. By mid-December the only remaining party interested in investing in KSG on a solvent basis - i.e. to invest in the existing Group companies so that they could continue trading and thereby seek to continue to honour and pay in full all the liabilities to all creditors was the Kirsch [sic] family “the Investors”. 35. In the absence of such a deal and with no prospect of any other solvent solution it was apparent that if the Directors were to fulfil their fiduciary duties and not further increase the losses to creditors then in accordance with insolvency law the Directors would have had to immediately file a Notice of Intention to appoint an Administrator to secure a one week to two week moratorium over the Christmas period to seek to achieve a business and asset sale of KSG to safeguard and maximise the return for creditors and to try to maintain service levels for customers and continue to safeguard the jobs of employees. 36. This would have crystallised multi million pounds of losses to creditors and finance providers, the King family shareholding would have been lost, the Directors over drawn loan accounts would have had to be personally repaid to the appointed Administrator, Directors personal guarantees would have been called and there would be the potential for significant loss of employment.”
“We (Alex, Grace and I) have discussed Mike's evidence and the call Grace had with him at 4pm. Mike is not prepared to change his statement so that he leaves out the bad bits; it is all or nothing. On that basis, we should not in fact cannot call him as a witness. If you have had chance to read his statement (and I had not really read it when I passed it on) it is damning to our case; there are various examples of this in it (GE; language used - so severe, insolvency, financially distressed situations, investing in KSG on a solvent basis, pre-pack admin; para 33; and paras 36 and 371). Even if we could get him to put in a "good" statement, his evidence at trial (under cross-examination) would be what he says in his statement so he is just too dangerous for us. As I say, if his evidence is correct and that is established at trial, we are in trouble full stop. His evidence is basically that the company was doomed, already insolvent, the only deal we could get was with the Defendants failing which we would immediately go into insolvency and so on. This is totally at odds with what you, Howard, GE etc say but I must reiterate that if what Mike says was the true position, and the Defendants can establish that, we really are in difficulties. We're not quite sure why Mike has changed his tune. He has told us he has not been contacted by the other side. Anyway, just to minimise any risk of him contacting the other side, we are not going to tell him until after Monday that we are not calling him.”
“Q. So she’s trying to cheat Robin, is she? A. Looking at this it looks like something’s going -- something’s been thought through, yes. Q. But not you? A. Not at this time, no. Well, not at this time, no, there isn’t. Q. So, if anything, in your head this supports another conspiracy? Doesn’t it? It’s another conspiracy. There are a lot of them, aren’t there, Mr King? A. Well, there’s a lot of deviousness going on, yes. Q. Yes. All right, so we agree this isn’t the conspiracy that we’re talking about in this claim. A. It’s the build-up to it, yes.”
“Q. Yes, I quite see that. But what you’re suggesting here is that there is a conspiracy between the two of them that if they can’t get the deal they think ought to be done with Mr Fisher ---- A. Yes. Q. ---- they can procure a situation where he will walk away and they will exploit the opportunity for themselves. A. That’s what they’ve said, yes. Q. Right, okay, that’s how you read it. Where are they going to get the money from for this other deal? A. It doesn’t say in here. Q. Any idea? Any theory on that? A. You would have to ask ---- a word with Alison as to how she was going to advise that was going to happen. Q. But you don’t know of anything? A. I’m not aware of anything, no.”
“Q. You don’t. So you accept that one of the mysteries in this case is the motive for the lies. They didn’t appear to have any reason or need to lie? A. Because I don’t think they believed that they could get my dad to change his mind. They could have tabled it, as I’ve said, but they don’t believe they can get dad to change his mind […] Q. So never mind what the truth is, it's what they believe that matters. They believe you have no choice. So if they believe that, they think the only alternative to their money is insolvency; you agree with that logic? A. I believe they believed that at that time, yes. Q. Yes. I think you say you believe ---- A. They believe it. Q. ---- they thought that throughout? A. Yes, they believed that, yes. Q. So when we come to the 18th and they are going to lie to you to get you to sell the business, you think they think they need to lie to get your dad to change his mind. A. Yes. Q. Now, presumably what they are thinking is that your father would rather go into insolvency rather than do the deal, because if they think you’ve got no choice and they walk away, the company’s going to fall. They must think that.”
“Q. Well, let me try and help you, because I’m going to submit at the end that this is a real problem for your main conspiracy theory. Let’s assume that there’s a meeting between the conspirators just before they hatch the plan and they go into action, and somebody says, "Look, we’re going to have to somehow get them to do this revised deal we want," and somebody says, "Well, I know how we’ll do it, we’ll lie to them, we’ll tell them that GE are pulling the plug so they need our money". A. Okay. Q. And somebody else says, "Well, why do we need to bother to do that, because they need our money anyway, just go in and say that’s the deal", and somebody else says, "The problem is James King. We’ve got to try and bring him round." This matches up with your theory of things so far. What I’m suggesting to you now is the reason that doesn’t work is that if they believe that insolvency is, in truth, the only alternative, why do they need to lie to your father when the only thing the lie does is bring home to him that insolvency is the only alternative?”
“MR JUSTICE MARCUS SMITH: So what was your plan if the investment didn’t take place? A. If the investment didn’t take place ----we were always assuming it would get an investment, sir. MR DOWNES: Let me show you a document ---- MR JUSTICE MARCUS SMITH: So there was no plan B? A. There was not a plan B to --- after we realised we needed to get the investment in, there wasn’t a plan B that we would be able to somehow produce all this money from nowhere, no.”
“MR DOWNES: Mr King, there’s a point that’s been floating around, I want to try and clear it up with you now, and it was the point about part of your complaint is that the£3 million deferred consideration, the million, then the million, then the million, the B shares ---- A. Yes. Q. — part of your complaint is that after the fraud you were placed in a position where you had to take that from KSG rather than from Primekings, the purchasers. A. Yes. Q. I just want to show you that that actually had happened before the fraud, the alleged fraud. […] Q. But the important thing is at this stage, on any view, that deferred consideration is coming out of KSG? A. That’s not the way it’s portrayed to us, no. Q. It’s a redeemable share, this is the articles of association, the only way a redeemable share can be paid for is by the company paying that money out to the shareholder? A. As I say, the only thing I can tell you is that’s not the way the negotiations took place. Q. What, specifically, do you have in mind where somebody said: That will be new money coming from Primekings and not money coming out of KSG? A. When we had the negotiations it was just simply that there would be a million pounds paid to mum and dad if I hit my target. It was never discussed further than that, and whether it was a wrong assumption or a right assumption, it was just that money would come to mum and dad. We did not at any point envisage this would come out of the business. […] Q. I will be corrected if I am wrong, but let’s work on the basis that these articles of association are in draft on 14 December and work on the basis that this provides for the million, whatever the figure is, to be paid to you ---- paid to your parents if you hit the targets and it’s to come from KSG. Can we work on that basis? A. Okay. Q. If that is the right reading of these documents, it’s wrong, isn’t it, to complain that that is in any way connected to the fraud? A. It was not put to us in that way. Q. No. No. A. I don’t know whether this is ----- all I can tell you is the fact that I do not ever recall having a conversation that this was coming out the business. The negotiations that we agreed never mentioned anything about money coming out of the company to mum and dad. It was just a million, million ----- the first time I believe my father and I become aware that it’s going to be coming out of the business is about 3.00 in the morning. I can’t comment on the drafting of these documents because I wasn’t involved in how they were drafted. […] MR DOWNES: I’ll tell your Lordship, just so that my learned friend understands, our reading of these documents is that at a very early stage, the idea that this deferred consideration should be by way of redeemable B shares came from DWF and that mechanism was settled, in fact before the 14th. MR JUSTICE MARCUS SMITH: Yes, I see that. It may be – […] MR JUSTICE MARCUS SMITH: Yes, I understand that, and if that’s right that you have this mechanism embedded in the transactional documents at the time, then I understand the implications you’re drawing from that, but it may be that this was seen as a technical detail that the witness wasn’t troubled with, or it may be that there was an explanation and he’s forgotten it. MR DOWNES: That may be, it passed him by, but it would still mean, whether this witness knew about it or not, it would still mean that logically it cannot be attributed to the fraudulent conspiracy. MR JUSTICE MARCUS SMITH: I understand that, and that's really why I am picking you up on, because that’s in a sense a[] logical consequences that follows irrespective of what Mr King says. MR DOWNES: It’s his case. MR JUSTICE MARCUS SMITH: Yes, I understand. MR DOWNES: I don’t know whether he will have some other ... anyway. […]”
“When the transcript comes through from this afternoon - read it as soon as you get chance...and let's speak later.” ii) Mr Hall Taylor at 18:10: “Tried calling - lunch is at page 107 so read on from there if you can. Call me back when you have chance - in chambers for now.”
“The barristers have now admitted that what Mr Downes pointed out might have been 'actionable' by us after the trial. I am sure they realised that at the time but chose not to mention it to us and instead in breach of fiduciary duty chose to hide it from us. Court finished at 4.40pm and I now know that around twenty minutes later Mr Hall Taylor prompted Mr Blakey to read the transcript of the afternoon session of Day 4 and asked to speak with him. I was then copied into an email by mistake where Mr Hall Taylor emphasised to Mr Blakey that he needed to read the afternoon's transcript and I now know Mr Hall Taylor later mentioned just how 'bad' it 'felt at the time' and yet still it was still not even mentioned to me or my father at all. The consequences of this problem for my own witness statement and the pleadings in breach of fiduciary duties were hidden from my father and I and never discussed with us. I was not told my own witness statement was wrong on this point and so needed to be amended. There was no mention of it to us at all, even in a two-hour conference with me on9 May 2017 , or in the 36-page advice we were given a week later, or in the conferences with my father and I on12 May 2017 and15 May 2017 .”
“Q. So are you positing that Mr Swain and Ms Lord had the plan to spook GE but Mr Fisher was unaware of that? Is that - A. I don’t know. I’ve said they had a plan that as a collective, I believe they asked Robin whether it is appropriate for Steve to attend, so they are working as a collective around what the strategy is going to be with the GE meeting. I don’t know what is discussed and what is that agreed strategy. Q. But is Mr Fisher involved in that strategy for the GE meeting? A. I don’t know. He’s involved — I believe ---- Q. What do you believe? I agree - A. I don’t know, again, whether Mr Swain went rogue or whether Robin agreed to the strategy. Q. You don’t believe Mr Fisher was involved in the conspiracy, do you? A. I don’t know when he becomes aware of it. Q. You don’t really believe Mr Fisher was involved at all — A. He knew what was said was wrong --- Q. No. A. — but I don’t know when he became aware of it. […] Q. Do you believe that Mr Fisher was involved in this fraudulent conspiracy at any stage before the phone call on 18 December? A. I don’t know. Q. Do you believe that Mr Fisher was involved in this conspiracy at any point up to midnight on 18 December? A. Yes.”
“But -- well, he says that there. You have to have experienced what that was like to watch, and it wasn't very credible, again, and it is not the totality of his evidence on it either. I mean, all I can say to you is by Saturday morning, Peter and I felt that we were having to give up a lot of our -- you know, potentially, at least, a lot of our case on conspiracy against Mr Fisher. That is what I was thinking about.”
“MR JUSTICE MARCUS SMITH: And the other thing which may be more difficult and is less urgent: the comparison of old and new terms, it might be worth trying to agree simply what the old terms and the new terms say. I appreciate that there is a matter of controversy about what Mr King may have understood about those terms, and I wouldn’t want either party to go into that in an attempt to agree a document, I think that is a matter for the evidence, but simply in terms of what the old terms said and what the new terms actually agreed, that might be something which, rather than having to trawl through what may not be controversial in a judgment, it might be worth seeing if that can be agreed , I don’t know. MR DOWNES: My Lord, I’m sure it can. My Lord, that table I handed up was deliberately taken simply from my learned friend’s pleading. MR JUSTICE MARCUS SMITH: I see that. MR DOWNES: But it would be helpful, the main point being: do the claimants accept that before the 18th, the concept of redeemable shares was already in the drafts. MR JUSTICE MARCUS SMITH: Was somewhere in the transactional documents ---- MR DOWNES: Indeed. MR JUSTICE MARCUS SMITH: --- irrespective of what anyone may have thought was in there, simply what was in there and what wasn’t, that would, from my point of view, be quite helpful. MR DOWNES: I’m sure that’s achievable.”
“Anthony was much more nuanced and much more, I suppose in the thick of it, is probably the best way of putting it, but the problem with that was that he then -- he gets into the thick of it almost and tries to solve the problem. He tries to find a solution and that -- you can see that throughout his evidence in the trial. And I get it, and I understand why he does it, and I understand why he felt wronged, but it caused immeasurable problems in his evidence because he was arguing, analysing, re-thinking, rejigging, changing his case, changing his evidence. It was absolutely disastrous from a credibility perspective.”
“R, please read and destroy […] 1. The day before the deal (17th) Mike Mattok (Kings own Interim Finance man) called me to advise that GE had frozen the account. […] 4. I secured the payment, GE would overpay to support the deal (the money was for an essential payment) but this would be the last one - the account 'remained' frozen, it took some negotiation. […] 9. It was decided that if we were talking about different outcomes it would not be appropriate for Steve Evans to attend, I stopped Steve's attendance. […] 11. I had then requested if any discounts were available. GE were then very specific to state "that Kings Directors, not GE would be expected to appoint before Christmas if a deal was not finalised quickly, the account remained frozen, no discounts" 13.I advised twice once to Robin and once to all parties on loud speaker 'GE, the account remains frozen, they are annoyed they made an overpayment based on completion, and that if a deal was not completed they expected Kings Directors to appoint' everyone heard that, it could have been verified immediately by any call to GE, I had no reason not to say it as it was, anyone could have verified with them directly. Immediately. 14. I also told Mike Mattok who said that this met with his understanding. 15. Please verify with Mike Mattok, account was stopped/frozen, no more money 07779 260524 or GE. 16. I invited Steve Evans and I stopped his attendance. This made no difference to the position or truth, only that Steve never heard it first hand, on reflection it would have been better if he was present, it would not have changed the reality and not led to conspiracy theories. 17. Kings or there representatives were welcome to call GE in person at any time between our meeting at 1:30pm and the 15 hours after it took to conclude the deal, but they knew the position, Mike there man did as well.”
“Info - this is the day before I was kicked out of Kings so Barry/Robin must have bought the Kings line. Likewise, it was Kings who wanted me removed as a Director not Robin, Robin asked me to do it. If someone has lied to gain advantage AK, does it not seem reasonable to go back to the original plan?”
“I've read the Swain emails this morning and a couple of them might actually be very helpful tactically if we need to drop conspiracy against RF. We may also want a witness statement from TS as to when during AK's xx they knew about these documents. I'll isolate the emails I'm talking about and send them over once I'm back at my desk.”
“This is my pared down version of the PS additional disclosure - takes out about 100 pages (although you may eventually want to read the whole lot). Key points: […] I think this final one is very confusing - can be read as RF being involved in a conspiracy but not necessarily (not sure what Robin asked PS to do – lie about GE? Or become a KSG director?). But there is a lot here to suggest that PS and AL "went rogue" and that they were either keeping RF in the dark or manipulating him.”
“Mr Morcos and Mr Hall Taylor began drafting the written advice to discontinue … on or before8 May 2017 , because they knew that they intended, in breach of fiduciary duty, to pressurise their clients into discontinuing and would need a written advice to do that. In breach of fiduciary duty, no attempts were made to use the Weekend Disclosure to assist the Kings, because the legal team had already decided that the Kings would be forced to discontinue the case.”
“Further disclosure was due to be received from Mr Fisher (‘the Fisher Disclosure’) but it was never received. In breach of fiduciary duty the legal team made no efforts to obtain the Fisher Disclosure and the Kings were not advised to wait for such potentially helpful disclosure. That was because their legal team had already decided that the Kings would discontinue the case.”
“I was completely zonked – although I woke up early and then tried to force myself to doze, which I managed on and off for a couple of hours - but my mind was racing a bit too much - our client really has messed up in the witness box so we are going to have to concede that we cannot proceed with part of our case at some point next week...not good!”
“Somewhat surprisingly both Anthony and James King also gave evidence that was at times very favourable to Mr Fisher and Mr Stiefel, such that it would in any event have been unlikely that a Court could make a finding of dishonesty or conspiracy against either man.”
“There was nothing new in the redeemable shares or KSG paying for the redemption.”
“At some time after the cross-examination referred to in paragraph 43 above took place, a member of the legal team contacted Mr Wilson to bring to his attention the fact that Primekings had identified in Court facts which showed that the Particulars of Claim, the witness statements and opening submissions (all of which had been based on his instructions) were wrong. That caused Mr Wilson to prepare with the assistance or input of at least Mr Blakey, Mr Hall Taylor and Mr Morcos a word processed list of corrections to his witness statement (‘the List of Corrections’). The effect of those corrections was to make Mr Wilson’s evidence irreconcilable with the witness statements of James and Anthony King, the Particulars of Claim, and the opening submissions.”
“10.5 hours. In court, travel to/from Court and chambers, discussions with witnesses, discussing LW’s amends, action points etc.”
“The Particulars allege that one of the legal team contacted me during Anthony King’s cross-examination to tell me that Primekings had found facts which showed that the Particulars of Claim, the witness statements and opening submissions in the Primekings Litigation were wrong, all of which were based on my instructions. As I have already said in this witness statement, I did not give instructions regarding the Particulars of Claim or witness statements in the Primekings Litigation. I did not give instructions about opening submissions either. I was not contacted by a member of the legal team about the above matters. The first time I realised that a mistake had been made in my witness statement regarding the redeemable shares was on the morning of Sunday7 May 2017 . On the Friday (5 May), I had printed out a lot of the relevant documents from my inbox (using Mimecast), so that I could take them home to prepare for giving evidence in court the following week. I wanted to get the deal clear in my head as well as the chronology of events as I could remember very little detail. I started looking at them on Sunday morning. I remember noticing an error which didn't correspond with something I'd read in the correspondence. I can't remember exactly what this was. I therefore undertook a checking exercise of each paragraph in my statement against the correspondence and documentation I had printed. I found several errors including the error regarding the deferred consideration. I felt physically sick when I realised there were mistakes in my statement. I will never forget how I felt that morning; I was appalled and furious and I was kicking myself. I felt very angry with Jason for not checking the details. My wife came in and I told her about the mistake and that my witness statement was wrong. I realised I had to do something about it but I didn't know what to do exactly. I'm not used to dealing with witness statements or litigation and I was in some distress. I believe I may have tried calling Jason that morning. On the Monday morning (8 May 2017 ), I couldn’t speak to Jason as he was in trial. I think I got Grace’s number from one of her colleagues in the office and managed to get a message to her saying I needed to speak to her and Jason urgently. When I spoke to Jason and Grace I told them my statement was wrong and asked ‘what do I do?’ I was told they couldn’t talk to me about it. I insisted ‘what do I do?’ I think Jason said that I should send them a list of my corrections. So they were expecting the list of corrections when I sent it to them.”
“It was a Sunday morning and I remember that Lester was due to go down to London later that week to give evidence, but I don’t remember the date. I can remember Lester sitting on the bed with his head in his hands saying something about his witness statement being wrong and that “Blakey” (referring to Mr Blakey) had got it wrong, and he needed to speak with him. I also remember him pacing up and down the landing and trying to contact Jason Blakey. I can’t remember if he was successful or not as I was running round getting us all organised to leave the house. I can’t remember timings or much else other than the feelings I had, as these feelings don’t leave you. I remember two distinct thoughts / feelings. I remember feeling angry at Lester as we needed to get the children up and out to activities that they had on. I remember they needed to be in two different directions, so it needed both of us. It has often been the case that work has interrupted our personal lives, interrupting holidays etc, and on this occasion, I could see it doing that again, as Lester was clearly distracted and not engaged in family life. I also remember being annoyed and frustrated that Lester had managed to get to a position whereby he had signed his witness statement and was now noticing that it was incorrect. I remember getting quite vocal as to how he could have got himself in that position; how could he have not had the required attention to detail? As I said above, I qualified as a lawyer myself and, whilst that was not in litigation, I know that a witness statement is something that you should not be signing off unless you have read it in great detail and are absolutely sure of the contents.”
“There was an order made by the judge that there was not to be discussion amongst witnesses regarding the evidence which had been given by witnesses who had gone before them, and we were not to share copies of the transcripts or other similar information. We were very conscious of this order and did not want to inadvertently breach its terms; I did not contact Lester about Anthony’s evidence and I don’t recall having any input into the list of corrections. I was not aware of Jason having any input either, or the barristers.”
“as far as I’m aware, no money has been paid under this provision.”
“I do not recall specifically how that change came about. However, having recently been referred to the emails sent to me by Grace Connor at 18:23 and 18:26, attaching the witness statements of James King and David Armitage (for the first time since I originally received them) I now have a vague recollection that I had a discussion with Grace Connor about whether this payment had been made. Either I asked whether it had been paid and she told me that it had been and that it was covered in one of the witness statements, or she told me this unprompted; I cannot remember now. I understand that this issue was never contentious in the Primekings Litigation.”
“Mr Hall Taylor and Mr Morcos in breach of fiduciary duty refused to provide a copy of the List of Corrections to the Kings pre-action because they understand its significance in that regard.”
“Morning. I know you want me to ask Anthony again for a contact at Barclays but please can you see/try anything further to progress this. Can we get Anthony to sign a charge anyway pending Barclays' approval? Can we finalize anything? What do we need to do? We really need to sort this for the firm urgently. We are back in court from 10ish today. Anthony finishes his evidence later today so he will be able to deal with stuff if you send it through to him. Thanks”
“132. At about 3.50pm or so Mr Fisher left the room to take a phone call. A couple of minutes later Mr Fisher returned and placed his mobile phone on the table putting it on speaker phone. It was Mr Swain on the end of the line. Mr Fisher asked Mr Swain to repeat what he had just told him. 133. Mr Swain said that he'd just come out of the meeting with GE (Andy and Tom) and that they had said that KSG's accounts were all frozen, that GE had lost complete faith in the management of the Kings Group and GE was no longer willing to support the Kings Group or provide any further funding. I immediately asked whether Steve had been at the meeting and Mr Swain said that GE had refused to let him into it. […] 140. My solicitors have asked me if Mr Swain or Mr Fisher qualified the statements referred to at paragraph 132 above with the words "unless a deal was done" as alleged in the Defendants' Amended Defence at paragraph 28. I confirm that neither Mr Swain nor Mr Fisher used these words either on the call, in the meetings that followed or at any other time.”
“My Lord, when I briefly looked at this on Friday I felt a little bit embarrassed on the train home, to be honest. I just thought, "Dad, this is all over the place, what's happening here”
“Q. Now, I assume that you want to change [your witness statement] now, do you? A. Yes. Q. So just, you are saying, are you, that we have to really delete the last sentence, or say "at the time of the call", although Mr Fisher later did make it clear that GE's position was conditional on the deal not being done? A. No, Mr Fisher came back in and said he'd spoken to GE and that unless — he'd managed to convince them to stick with Kings, stick with the deal, but a deal now had to be done — that - he confirmed that what Peter Swain had said was true, that GE's position was absolute, but he had now spoken to them and that if we do a deal, they will continue to support. But he said under no way can I continue to do this deal now under these terms, with this uncertainty. […] Q. So have I got it right: Mr Fisher says that the position - he's spoken to GE and the position stated by Mr Swain was correct, but he's sort of talked them round? A. That's the way it was put to us, yes. Q. Right. Let's pause there a moment. It follows from that, doesn't it, that Mr Fisher at that stage when he confirms Mr Swain's earlier statement, must be lying? A. He must have - he must be, yes. Q. So he has had the call with GE, he has found out the truth, and he knows that it was never the position that GE were going to pull the plug? A. Yes. Q. So what he does is he comes in and says - and lies and says: what Mr Swain said earlier was true -- that's a lie -- but I have talked them round to a slightly more reasonable position. A. Yes. Q. And that's a lie as well, isn't it? A. He -- he ... yes, he hasn't talked them round. Q. So he is lying on both fronts, but the odd thing is that where he gets to at the end of his statements, albeit he has told two lies, he gets to the position which is precisely what the evidence suggests the position was, ie that GE were not going to advance further funds unless a deal was done. A. No. No. He does not say that it was only a position of overadvancing. He supports exactly what was told to us by Peter, that whole bombshell that everything's over, everything's finished, but he's now talked them round. Q. Yes. A. He doesn't confirm "Oh, that was a misunderstanding". Q. No, no, I'm giving you that one for the moment, at least, for the purposes of this debate, Mr King. But what I'm saying is the end point, what Mr Fisher says is the position we are now at is that GE will pull the plug unless the deal is done. He says that? A. They've pulled the plug but he's now talked them round. […] MR JUSTICE MARCUS SMITH: Understand, Mr King, I think what counsel is asking about is the end position, in other words, he is accepting, for the moment -- he will put to you his clients' case - he is accepting for the moment that there was a statement that GE had completely pulled the plug, but what he is trying to understand is what position you ended up after this second conversation with Mr Fisher. I wonder if you can just try and answer that for us. We don't need the history as to how you got there. A. Sorry. MR JUSTICE MARCUS SMITH: But just see if we can work out what you thought at the end of this second conversation that you have recollected? A. Is that we -- we just have to do a deal. The only thing to save the business is a deal. […] MR JUSTICE MARCUS SMITH: So just looking at what you said earlier, [draft] page 12 of the transcript: He says he's spoken to GE, he's managed to convince them to stay with us, but only if a deal is done. A. Provided -- yes, yes. Which is why when I spoke to the lawyer later I said it wasn't ever conditional on a deal being done. I spoke to David Armitage, he showed me an e-mail, and I reflect back to David Armitage and I've said to David: it was never conditional even on this deal being done. Even that wasn't the truth. MR DOWNES: So apart from the fact that obviously we don't accept there was ever a lie, we don't accept that Mr Swain told a lie, we don't accept that Mr Fisher told a lie, but apart from that, where we come to at that point in time, so about 5.00 pm on the 18th - A. I imagine so, yes. Q. - is that everybody is really on the same page; that if no deal is done, you can't survive, and if a deal is done, you can survive. A. Yes.”
“MR DOWNES: My Lord, can I just raise one housekeeping matter I just mentioned to my learned friend. It occurs to us that there may be — and I put it no higher than that — a need for the claimants to revisit the pleading and what I've suggested to my learned friend is a sensible way forward is that we wait and see what the claimants' evidence is as a whole, see what the other witnesses say. Obviously they can't be told about what Mr King has said in the witness box and I hope - I am sure my learned friend does, but I hope all those sitting behind will understand how important that is. We then finish the most part of his witnesses on Thursday -- only Mr Smith, but he really doesn't affect things one way or the other. He then has the long weekend to decide if he wishes to make any amendment to his pleading and, if so, what it is. My only request is that we do get to see that case before my witnesses go in the box. I don't intend to be difficult about it. If we can deal with the case as matters stand, obviously it is in the interests of everybody to do so. So long as it doesn't bring in some huge other factual issue that we need to investigate. If that doesn't happen, I do reserve the right at the end of the day case to say: this new case isn't pleaded and you can't succeed on it, so I am just giving everybody fair warning.”
“Q: It's all very lovey-dovey, isn't it, between you and Mr Fisher? A. I hugged Mr Fisher on Tuesday when we started this court case, sir. I still love the guy. I still love the guy. Q. What, the fraudster? The liar? A. Yes, I still love the guy. I still hugged him on Tuesday when I saw him outside the courtroom.” ... “Q. No, you can persuade yourself of exactly how you should feel or did feel or thought and then it just becomes a reality in your own head, is that how it works? A. No, not really, no. Q. I'm asking you, is this a genuine statement? A. This is genuine. This is absolutely genuine. Q. "You are my trusted partners and friends and I thank God for bringing you into my life.”
“I think it is necessary at this point to provide some brief but important advice on the present situation arising from Anthony's evidence. I have discussed matters with Peter, and this email has been seen and approved by him. While I am leading and taking responsibility for our case, this advice should be considered to come from us both and to be an expression of both our independent and collective views. Last week Anthony's evidence was, as you know, very disappointing. Ignoring for the moment, the unfortunate and evasive manner in which some of his evidence was given, there were certain aspects in which he seriously undermined and narrowed our case. Examples include but are not limited to effective exonerations of Barry and Robin and concessions affecting adjustments on rescission. There were also serious credibility and causation issues arising from his evidence. I have had to adjust my intended approach to cross-examination of a number of witnesses as a result. At the end of last week, Peter and I were left very flat, feeling that Anthony's evidence had undershot our pleaded claim. That claim was, I had felt in pleading it, already a restrained version of what Anthony and his father wanted to run. If he wanted to run the 100% case, I probably pleaded the 75% case, and his evidence last week undershot that considerably. It was probably well below 50% of the case he and his father originally wanted to run and it was hard to reconcile his previous instructions with the evidence he gave last week. Having reviewed the transcripts over the weekend, even without the negative "tone" of seeing/hearing the evidence "live", the substance has supported that view. Today, however, an even more serious issue has arisen. In effect Anthony has returned from the weekend with a completely new version of events for18 Dec 2013 which he has never previously mentioned (and indeed expressly contradicted). He has also sought to revoke his exonerations of Barry and Robin (whilst this may be understandable, it further undermines the credibility of his evidence last week). The new version of events does state for the first time that the "unless a deal was done" phrase was used by Robin - despite numerous examples of prior evidence/pleadings to the contrary (as PDQC was able to make much of). It will be obvious to you, I know, and we have briefly discussed that this creates even more serious credibility issues as well as the need to consider amendment and/or whether (and on what basis) certain aspects of the claim can now be maintained. PDQC has already flagged at least one submission he can now make that completely undermines our existing pleaded case (and it is one that had occurred to me long before he first mentioned it this morning). We will have to see how the remainder of the evidence plays out this week. There are obviously a number of possibilities, some of which may raise further credibility, pleading and even professional issues. I need say no more about that for now. We cannot, it seems to me, take a proper and full view on how this leaves the case until after the evidence has been given. We will then have to advise. Given that this will be advice that has to be given to Anthony and both of his parents, this is another reason why it must wait until after their evidence has been given, even if we have some prior discussions with Anthony alone. What is imperative, and I know you will emphasise this to Anthony, is that the Judge's order concerning the witnesses/evidence is respected and adhered to. There must be no indication to any witness of any prior evidence given (or any advice relating to it), and no discussion of the case with any witness in the box. Any failure to comply would constitute contempt and carry very serious consequences, as well as potentially further undermine credibility and/or our case.”
“AK: - I told the truth – I understand – Knew the risks JAB: - Not believed – Did not support the evidence – hugging RF – BS – RF conspiracy – Why didn’t you say statement? – We have serious problems – We are in real trouble AK: - If we lose then we’ve told the truth”
“Q. And the amount that's available, if you follow it down 2 to 11 December, we're now down to 4,000 available? A. Yes. Q. So that's virtually nothing. Then on the 12th, you go into the overadvance position of 103. The 13,250 — I mean, this must be the point at which you are starting to feel extremely uncomfortable? A. Clearly we are advancing beyond our agreed 85 per cent formula so, again, I think it demonstrates that we were trying to assist, where possible, and making drawdown requests above our 85 per cent. From memory, the reasons why we — I took the decision, and obviously ratified it through my director at the time, was that we had line of sight potentially to a solution being found and new, fresh monies being injected into the company by 20 December, and therefore we felt that we should make the payments over and above the 85 per cent advance rate, put ourselves into an overdrawn position, because, as I say, we felt we had good line of sight and then an agreed timescale to deal with necessary funds being injected into the business. Q. That was my next question, was that you were only prepared to go into that overadvance facility because you believed there was an imminent deal going to be done – A. Yes. Q. -- to bring money in and sort the problem out? A. Correct. Q. And you wouldn't have allowed it to go into overadvance if that had not been the position? A. I think, more than likely no. […] Q. And that other solution was administration? A. One of, yes, agreed. […] MR JUSTICE MARCUS SMITH: Mr Weedall, again, a few minutes ago you said: "We felt we had a good line of sight". Which is why I asked you about the lines of communication, and then you said: "... an agreed timescale to deal with necessary funds." Was that, again, an informal communication about when the transaction, the funding transaction, might be expected to be achieved, or are you thinking of a more formal communication? A. No, so our communications to the company were saying — and, again, there's an e-mail from myself advising the 20 December - the reason why 20 December was the appropriate time was because the cash flow forecast significantly had a substantially larger overdrawn position than what we could manage leading up to that time period. I think we wanted the assurance from all parties, whether that was KPMG, the company, or the investors, that the timescales would be achieved of the 20th. So in terms of formal correspondence, I suppose that was being done via e-mail or telephone. MR JUSTICE MARCUS SMITH: Yes, so all three parties, the purchasers, the company itself and KPMG were aware of the 20th as being a really rather important date - A. Yes, no, absolutely, yes.”
“Q. So, so far as they are concerned at that meeting [the GE Meeting], they learnt that the account had been temporarily suspended? A. We had advised that we had been, and obviously, it's again in the documents showing we'd demonstrated our ongoing support and continued to make a number of overpayments beyond their 85 per cent approved level, and that we were making those overpayments on the basis that the funds would come in by 20 December. I think what we ensured was that the message was clear that the account wasn't frozen. To freeze the account, from a lender bank language and terminology, would mean that we have, you know, we've completely — our facility is terminated and therefore we've kind of stopped and given the business the time to get the necessary funds in place. We hadn't done that. Q. Why are you going and dealing with freezing. That's not what I asked you. A. Only because, as I say, that was in my witness statement. Q. No, but I've asked you a very simple question that you have done a long speech about. Let me ask it to you again: "So far as they are concerned at the meeting they learned that the account had been temporarily suspended." A. "Suspended", "frozen", I don't know - that's the language that we used. Q. No, no, I didn't say – A. "Suspended", then. I used the word frozen because you said suspended, but suspended, no. It wasn't suspended. What we didn't have was any availability to make drawdowns, but the account was still live, it wasn't suspended, but we didn't have any availability to make any payments. Q. No money was going out? A. Because of no availability. Q. And do you say "frozen" is your word? A. No, not my word. Q. Right. Whatever is discussed at this - have you had witness preparation training? A. No. Q. You haven't? A. No. Q. It's just that you've got this technique that you won't just say yes or no in answer to my questions, so you insist on putting it in your own words. Let me - let's try again. You agree with me that it's probable that they were told that the drawdown request had been refused? A. Yes. Q. Yes. And do you agree - you don't agree that Mr Swain might have taken the impression that that amounted to a temporary suspension? That he might have taken it that way? A. Yes, I agree it could be in - it could be taken that way. Q. And so if he goes away and says to somebody: the account's been frozen, and he means by that temporary suspension, you wouldn't say that he's taken away an unfair impression from the meeting, would you? A. No, just a difference of words. Q. No, and we don't say that you used the word "frozen", just so you're clear. I don't doubt that.”
“Q. It paints the same picture that you have said Mr Weedall says in his statement that if a deal couldn't be done, GE were not going to fund the cash shortfall by overpayment. A. That's a fair statement. […] Q. So I suggest to you again that, given the circumstances and given what we now know to be the case, if Mr Swain and Ms Lord went away from that meeting with the impression that, as matters stood, there was no more money from GE unless a deal was done, that had to be a fair impression, didn't it? A. I don't think we specifically said that, you know, that that was no more money if - unless the deal's done. But, you know, we would have had to reassess our situation, and - Q. I'm not asking you about what you said. I'm asking you about whether you will accept that they may genuinely have taken that impression away; do you accept that or not? A. It's ... Q. Why are you so reluctant? This is pretty obvious, isn't it? […] A. I think it's just the way that you're saying there's no more money unless the deal is done. Q. Their impression. That's their impression. A. Impression. Well, if that's their impression then I'm fine with that, you know, that, you know, from what we communicated to them then that's - I can't remember, you know, what was and what wasn't, to be honest. […] Q- Yes, and so if they're told that the account has been, for that day, effectively suspended, it wouldn't be unfair for them to go away with the impression that there had been this temporary suspension on the account, would it? A. Yes, that's — I think they would - just the words "suspension" and "frozen" and things like that, there's just - there wasn't a payment made. Q. Nobody says that you said the account was frozen. Nobody says that. I don't suggest that to you. A. Right. Q. All that I suggest is that for Mr Swain and Ms Lord the impression that they had, genuinely, was the account had been temporarily suspended and they described that as frozen. That's all I'm suggesting. A. Okay. […] Q. Right. I mean, for example you wouldn't say, "The liars, they're lying"; you wouldn't say that, would you, if they had used that word to describe the situation? A. No. […]”
“Q. If they're providing you with these cash flow forecasts, and the drawdown requests and they can't even stick to their own forecasts, that's going to cause a loss of confidence in them. A. Yes. Q. And if we couple that with HMRC arrears, if we couple that with EBITDA forecasts not hit, if we couple that with Winterhill Largo having to go in, if we couple that with KPMG having to help them with their cash flow, it's not surprising, is it, that Mr Weedall’s recollection is that these -- the picture was such that there was a negative impact on the credibility of the current management team? A. Yes. Q. You no longer had complete faith in what they were telling you? A. We had lost confidence in the performance that they were - the business was - with regards to the short term cash flows and delivering those to target, and obviously they caused, you know, swings in the cash flow and swings in the overadvance position that alarmed us. Q. And, again, if the impression they got from this meeting is that there had been this loss of confidence, that would be a fair impression, wouldn't it? […] A. A loss of confidence, yes.”
“1. Inconsistent with everything we’ve ever said about case. 2. Inconsistent with earlier evidence. 3. Other witnesses who don’t recall in the same way of your recollection.” “Judge could conclude lightbulb moment but very unlikely” iii) As a result: “We have to change our case. We don’t know if we can. […] May mean we can’t win the case.” iv) It was necessary to: “assess impact […] advise on impact of way forward. May not be possible to do it by Monday. Told PDQC we definitely need until Monday – we may need to reassess. I’ll [Hall Taylor] tell PDQC by lunchtime on Friday. Weekend – lot of work” v) Mr Hall Taylor did not have much confidence in the Fisher Representations: “AHT Do I believe there is credible evidence that RF joined a conspiracy with PS to mislead you further? No. AK I think there is… AHT No that’s speculation, putting words into his mouth. AK Argue AHT Going to hold you down. I’ve pushed you on what you’ve recalled, you haven’t said he said PS true, I understand why you conclude what PS has said is true but doesn’t lead to conclusion that RF further misled you. He was just telling you something else. The problem is - I cannot, I am professionally prevented from advancing a case against RF in relation to fraud or conspiracy. It has a big impact on the case for obvious reasons. It is important that you know I don't not believe you. Your recollection is new. It's not a blame thing - it's an impact thing. The impact it has on our case and what I can't/can't do. Going forward. 1. Assume what you say we'll believe you, it's taking what you said and dealing with it. I wish you'd recollected it earlier - because you didn't it has an impact and we have to deal with it. 2. See through our evidence because we can't determine. Vitally important that you don't talk to your dad. I know you haven't and I know you won't. Not going to talk to anyone. Until your mum and dad are through the witness box. If PDQC doesn't finish with James by Thursday we'll need a break. AHT - it's impact - we'll work it out - what you want to do. From this evening - put it down, let it go. You are an observer - just watching, don't worry about it, don't over analyse it. Go through the motions. Once we know where we are we will decide.”
“AHT Remains may be only element [case - PS misrepresented position on phone. Wipes out conspiracies. Just left with misrep claim. Still a debate on evidence as this was said. * credibility * Withdraw large part of case * cost consequences * Later convo [conversation] with R.F. * Reliance on those misreps [are] undermined … AK * We might have got this wrong*. It is what it is. I have to stand by what I've said - it’s the truth. AHT Because of one thing - it’s the impression. Later on it the day. I still believe they knew. It is still true that P.S is misleading evil git - but no one else did know. Because of what [he] did – [loggerheads]. PS has caused - you to react in different [way] – [they] may fully understand. Doesn’t equal fraud from [us]. Reluctant [to run]. - find it difficult not to [understand]. You may find - they fully understand but don't take responsibility. AHT You’ve [hit] the [nail] on the [head] Fraudsters – have to say”
“and accordingly, there must have been a discussion between Mr Downes and AHT (which AHT told us about) regarding how the Kings would be proceeding with the Primekings Litigation, in light of how the witness evidence, up to that point, had played out.”
“My apologies - I am literally just out of conference with my client (who came out of the witness box today after 5.5 days) - the trial is in a serious crisis which may result in discontinuance - and I am afraid has been occupying every moment of my days for some days now. I will catch up on emails on [redacted] matter asap but it may have to be later on this evening as the trial requires some immediate actions now. Would you still want to speak tonight even if it is very late on - or would you prefer to speak in the morning before court (the Judge is sitting at 10am so it would have to be concluded before about 9.30am)?”
“Mr Swain said to everyone in the room that he had just had a meeting with GE and GE had said to him that all of KSG's accounts were frozen, that GE had lost complete faith in the management of KSG and the Kings Group, that GE was no longer prepared to support KSG and the Kings Group and there would be no further funding. I have been asked by the solicitors for the King Family whether, during the telephone "conversation" with Mr Swain, Mr Swain used the words "unless a deal was done". I do not believe those words were used. I remember thinking that this was extremely odd at the time. There was something about it that seemed unnatural. Knowing what I know now, I firmly believe that the whole thing had been concocted by those seeking to invest in the Kings Group in an attempt to negotiate a far better position for themselves at the expense of the King Family. I’m also fairly certain we were not able to discuss matters with Teacher Stern in the morning as they had been instructed not to engage with us as the Defendants wanted to change the deal in their favour so it would be a waste of time to engage lawyer to lawyer.”
“Q. Now, doing the best you can, based on what you actually remember today - it's difficult, I accept - A. Yes. Q. - but just doing the best you can, what's your recollection of what he said, the words he used? A. I haven't actually quoted anything in my statement here because I can't remember the words he used. It was words to the effect of that I'd put in my statement, and I just cannot remember the actual words at all. Q. So he may not have even used the word "frozen"? A. Exactly, I don't know, I'm saying - that's my words. Q. He may have said that there was no more money unless the deal was done? A. I can't remember that. Q. Well, you say in your statement at paragraph 36: "I have been asked by the solicitors for the King Family whether, during the telephone 'conversation' with Mr Swain, Mr Swain used the words 'unless a deal was done'." Then you make a positive statement: "I do not believe those words were used." A. I don't believe it; I just can't remember. Q. Why don't you believe it, then, apart from the fact it would help your client's case? A. I don't believe it, I just can't remember. Q. Your evidence is, sitting here now: I do not know whether those words were used, isn't it, truthfully? A. I can't remember. Q. Therefore your evidence is today: I do not know whether those words were used? A. I think that's probably accurate, yes. Q. So you should not have put in this statement: "I do not believe those words were used." Should you? Because you can't say? A. No, I can't say that those words were used. I can't say.”
"I do not believe those words were used."
“Not gone good with Lester !”
“O no! Why? What was bad or stood out as bad?”
“Everything!!! Call later”
“Q. So if we go back to the pleading at paragraph 39. Did you see this document - A. I can't recall seeing it, Q. - before today? A. I can't recall seeing it”
“MR DOWNES: Can we agree that it is improbable, Mr Wilson, that the first time that Mr Anthony King understood or was told about redeemable B shares was at 3.00 in the morning on 19 December? A. I can say that he was certainly told about them before then. Whether he actually understood what they meant, I don't know.”
“During the next break we came out of court I went into a conference room I believe with Ms Amy Franks, Ms Connor, Mr Morcos and Mr Hall Taylor. I said openly (and I admit probably quite passionately) Mr Wilson had just lied on the stand, he never explained to me or my father that the earn out was coming out of KSGL prior to the19 December 2013 . I remember Mr Hall Taylor saying to me something like: "I can't talk to you about it, DWF are my clients" and physically turned away from me. I can recall this quite clearly because it was so shocking to me that Mr Hall Taylor would not talk to me about it, I then again repeated that Mr Wilson had lied on the stand and Mr Hall Taylor became even more animated and agitated and wouldn't even discuss it and physically raised his hands in a defensive posture to signal I needed to stop talking about it. I do not believe there is a single note or email between the lawyers of me making this very serious allegation about Mr Wilson a Partner at DWF, I believe it was all taken "off the record".”
“If you feel Lester advised you something or didn't advise you something, you're going to have to ask someone else about it. You know, here we are, firstly in the middle of this trial, dealing with this case, let's deal with that. If you want to go and ask someone about that, if there's something you can do about that, if you feel that you've got a claim against him about that, fine, it's nothing to do with this case but, you know, it's not for now. Deal with it afterwards. I can't advise you on it because I'm here dealing with -- firstly, I'm dealing with this case, which was constant in its need to be shepherded, and, secondly, I'm instructed by DWF, so it is not appropriate for me to go into that area which doesn't impact on this case.”
“Q. No, but as a lawyer and as a citizen you would expect if you make a statement in evidence, in written evidence, to be able to remember that statement when cross-examined, wouldn't you? A. Nobody's perfect. Nobody's perfect. I'm not sure what it means whether I'm a citizen or a lawyer. […] Do you accept, Mr Wilson, that if you have given evidence in a sworn statement such as "I do not believe those words were used" then it would be expected that that would remain your position under cross-examination? A. Not necessarily.”
“Q. If we go on the left-hand side to {B/1/27} [in Anthony King’s witness statement]. You can see at the top of the page it starts: "I now believe Mr Wilson lied on the stand to help the discontinuance happen, because he had been tipped off about that plan by someone, possibly Mr Blakey. It appears all the text messages have been deleted between Mr Wilson and Mr Blakey." A. No. Q. I have to put to you that is correct? A. No, no.” "I now believe Mr Wilson lied on the stand to help the discontinuance happen, because he had been tipped off about that plan by someone, possibly Mr Blakey. It appears all the text messages have been deleted between Mr Wilson and Mr Blakey." Q. I have to put to you that is correct? A. No, no.”
“229. DWF’s counsel did not object to that characterisation of what Mr Wilson did. For a person to sign a witness statement stating they believe a certain fact to be true when in fact have no genuine recollection of that fact is almost certainly a contempt of court under CPR32: “Proceedings for contempt of court may be brought against a person who makes or causes to be made a false statement in a document, prepared in anticipation of or during proceedings and verified by a statement of truth, without an honest belief in its truth.” 230. To then affirm such statements on oath is almost certainly perjury:Perjury Act 1911 - If any person lawfully sworn as a witness or as an interpreter in a judicial proceeding wilfully makes a statement material in that proceeding, which he knows to be false or does not believe to be true, he shall be guilty of perjury, and shall, on conviction thereof on indictment, be liable to penal servitude for a term not exceeding seven years, or to imprisonment . . . F1 for a term not exceeding two years, or to a fine or to both such penal servitude or imprisonment and fine. R v Mawbey: “In stating such a crime in an indictment, it is not necessary to set forth that the defendants knew at the time of the conspiracy that the contents of the certificate were false; it is sufficient that for such purposes they agreed to certify the fact as true, without knowing that it was so.”. 231. Where there is no evidence of ill health, the Kings say that is far more likely on the evidence that Mr Wilson did in fact believe the facts in his witness statement to be true (they were supported by his own contemporaneous email, and he inputted into some of key passages using his own choice of words ) and came under enormous pressure to assist a discontinuance as set out by Anthony King in his evidence paragraphs 86 and 87”
“If he knows that the King case is going to be discontinued and that there is going to be advice saying that this was all the right thing to do because the case has failed essentially, then it is obviously going to help with that plan which is what the King case is that the evidence goes as badly as possible.”
“Q: Let me ask you about this. Paragraph 55 of your statement: "My solicitors have also asked me if Mr Swain or Mr Fisher qualified the statements made with the phrase 'unless a deal was done' as alleged ... in the amended defence. I can categorically confirm that neither Mr Swain nor Mr Fisher used this phrase at any time whether on the call, after the call or during the negotiations that followed." I assume that remains your evidence, does it? A. Yes. Q. Yes. How sure are you about that? A. Absolutely.” […] “Q. Possible -- what about this, possible that somebody later on says it's unless the deal is done, the position? A. I don't remember any of that. Q. But is it possible? A. Well, it certainly wasn't said in our room, it might have been said in theirs. Q. No, to you? A. No. No, it wasn't said at all. Q. Or Anthony? A. No. Q. Anthony maybe has another conversation with somebody and says to you, no, it's actually unless the deal is done; is that possible? A. He never left my side that night, apart from when I left him to go into Robin. Q. What about when he called GE himself? A. That day? That night? Q. He accepts that. A. Then I don't remember Anthony calling GE. Q. I know you don't, and I'm not suggesting you are being untruthful. A. No, I don't even remember him making a phone call to GE. Q. That surprises you, does it? A. Yes, if he phoned GE, yes. Q. If he did speak to GE - sorry, I've got that wrong. Let me just correct that. His evidence is that Mr Fisher spoke to GE and then Mr Fisher spoke to him. I'm so sorry. A. Right. That's - that's possible. But I didn't know Mr Fisher was speaking to GE. Q. No, well I see that. Is it possible that your son spoke to Mr Fisher about GE's position and then came to you and said, "Actually, it's unless the deal is done"? A. No. Q. If those words were used, let's just assume that for some reason you are wrong about that, either that Mr Swain said it or Mr Fisher said it, but in some way it was clear at some stage in the evening that the position was only that there was no more money unless the deal was done; do you still maintain that you have been misled? A. There was no mention that there was no money until the deal was done. None at all.”
“AK is a liar AK’s recollections from Monday – not true – never said ‘unless a deal is done’ PS’s statements fair statements. […] RF is not a fraudster AK accepts where we are If there is any case whatsoever he wants to continue”
“Q. You believe he is a fraudster, Mr King? A. No, I don't believe he's a fraudster. I believe that what happened that night was fraud. I believe that was wrong. Q. And that Robin Fisher was knowingly involved in that? A. No, I didn't say that. I said what happened that night. I didn't know that they were in possession of a letter from GE giving comfort. I didn't know that they were even talking to GE. I didn't know anything was going on between Robin and GE, and Teacher Stern, I didn't know. Q. I'll come to that. I'll come to that. So what you think, looking back, do you think that Robin went into a panic that he was play-acting? A. No, I think Robin was as stunned as we were.”
“Q. Yes. Can I tell you, it's not in dispute that the mechanism for the earnout was by way of redeemable shares at the outset. A. That wasn't my understanding. Q. And can I tell you that, and you can take it from me that as a matter of company law a company can't redeem shares unless it's got accumulated profits to justify that redemption? A. I was surprised that the company was paying for the shares. Q. That was always the case, Mr King. A. Well, I'm sorry, I was surprised that they were paying for the shares. Q. Yes, but I can tell you now, you can take it from me, we have gone through this in the documents, I put it to your lawyers, they both accepted, Mr Wilson and Mr Armitage, that right from 12 December that money was coming from the company. A. I'm sorry I didn't - I wasn't told that. Q. I'm not criticising you, Mr King.”
“MR HALL TAYLOR: My Lord, there is one potential issue there which my learned friend has raised, whether he might recall Mr Anthony King. MR JUSTICE MARCUS SMITH: Yes. MR HALL TAYLOR: For what needs to happen in the next few days, it is essential that we are able to speak to Mr Anthony King and that Mr James and Mr Anthony King can talk to one another. MR JUSTICE MARCUS SMITH: Yes. MR HALL TAYLOR: I hope that won't cause any issue. We won't cover the ground of what might be the subject of any recall, but we do need to talk about other matters and the evidence that's been given today. MR JUSTICE MARCUS SMITH: Given the fact that both Mr Anthony King and Mr James King have been cross-examined, Mr Anthony King in some detail, I'm not going to put any fetter of any kind. MR HALL TAYLOR: Thank you. They are both parties, which is the other issue. MR JUSTICE MARCUS SMITH: I quite understand that you need full latitude to discuss all matters. MR DOWNES: I do agree with that and would endorse that. There's one proviso I would like to suggest, is that if out of those discussions another recollection springs up, I would just ask that we have some sort of notice of that, some form of short statement or something, because it's inevitable in that process that the points that I've been making, and the way the evidence pieces together is discussed, and I don't complain about that, it is not inconceivable that somebody at some stage says: actually, hang on a moment, this is the answer. So I'm just asking that that is not sprung on me. MR HALL TAYLOR: No, and I understand that, my Lord.”
“I would like to understand if we can lodge a complaint about misleading the court and witnesses. We could have paid the wages and had money left over.”
“Need to call Jason on way in – apparently AK has been on to him. Looks to me like irrelevant clutching at straws is going on…” ii) PM: “Yes…if there was 700k cash at bank why wasn’t it used to pay hmrc? If they weren’t going to pay hmrc did they expect no winding up petition?” iii) AHT: “Also…even if correct…so what?”
“texted you. Not really. I don’t know what was said today yet and I’d rather do it all together?”
“We've come to the reality that this is over. AK: If we got them to crack on the stand would it change? AHT: No-GE's evidence. Can't even ask them. Professional misconduct. Where we were Tues/Weds - we wouldn't have been able to continue. (1) We'll look for any case Replead --> hard to see what it could be. (2) Permission - application (3) If there is nothing we can do - discontinue. - they will ask for indemnity costs, almost inevitable on fraud case. Practically - not to resign + not convinced. Apologise to them - I can do it in court. Saving - more than£ 1 /2 million (maybe more) if we stop now. […] You have to do all you can to build bridges. PDQC -> point in having W.P. discussion all his clients -> discontinuance You have to say "we were wrong" […] The evidence isn’t there [illegible] prove a fraud. Another way of looking at it - relationship [took] a misturn since Dec 2013. This process given a basis to reestablishing a new relationship. All this process has been about is finding out you were wrong. If you can put it behind you, which you can, let’s hope we can always do what you intended to do by taking the Co to the next level. We’ve decided --> the [foundation] the [cornerstone] has gone + that’s fine. Decision not to call Howard Smith. AK: All done your best. It's the truth.”
“We were told that with the Judge indicating the case was over there was now no point calling Howard Smith from KPMG. I remember saying the Judge seemed to be helping us (as Judge Marcus Smith seemed very engaged and he even mentioned his "optimism" about the case not being held up) and I was told by Mr Blakey the Judge was just being 'polite'. I believe that was another lie in breach of fiduciary duty and that Judge Marcus Smith would not have been involved in some sort of pantomime court.”
“AK – this is over PS or RF? AHT – Can’t ask them (in light of GE) AHT – The J thinks its over. Discontinue Automatic costs consequences – indemnity”
“MR HALL TAYLOR: […] Now, that may be that we need to present an amended case of some kind. It may be possible to do that before we hear Mr Smith, or it may have to be at some point on the day on Monday. But, whatever happens, my learned friend is going to need time to consider that and consider with his clients what they wish to do about any application we may make to amend at that stage. […] MR JUSTICE MARCUS SMITH: That is, of course, assuming there is an application. MR HALL TAYLOR: Assuming there is. MR JUSTICE MARCUS SMITH: It may be that there is not. MR HALL TAYLOR: It may be that there is not, my Lord, but in light of the way the evidence has developed I think it is inevitable that some recasting of this case would have to happen. MR JUSTICE MARCUS SMITH: Yes. MR HALL TAYLOR: And so, my Lord, I think it's quite - let's put it this way: it's quite likely that either that will happen or something else will happen. MR JUSTICE MARCUS SMITH: Mm. MR HALL TAYLOR: My Lord, I just don't want there to be a situation in which we are looking -- or people are making arrangements to be here to give evidence on a day when they are very unlikely to be needed. MR JUSTICE MARCUS SMITH: I understand. I’m minded to give an indication that apart from Mr Smith and Mr Evans, who I assume we are not dealing with now, but at the same time as Mr Smith on Monday, there will be no further evidence on Monday? MR HALL TAYLOR: Yes. MR JUSTICE MARCUS SMITH: I would like to keep the position open as to Tuesday, ever the optimist, it may be that even if, and I understand why, there may be changes to your clients' pleaded case, that may not be as much of a hold up as one might think.”
“Q. It wasn't true, was it, that the judge was indicating that the case was over? A. It depends what you mean. I mean, did he say: Mr Hall Taylor, would you mind just standing there for a moment while I tell you that the case is over; no, he didn't do that. Judges don't do that. But they do other things. And, I mean, Mr Justice Marcus Smith was a very new judge at the time of this trial, I can't remember even -- it may even have been his first trial. He'd only been appointed quite recently beforehand. He -- as a judicial personality, he fits a more modern mould of judges, that he is not terribly interventionist. He keeps his own counsel to a large degree. I mean, to be fair, I have only appeared in front of him on this occasion, so this is me judging him from that trial. He doesn't weigh in a lot, or didn't weigh in a lot, but there were a number of things which, if you add them together over the course of standing where you are standing and looking up at the bench as you do from time to time, and put them together, you as an advocate at least sense the mood of the court. And the mood of the court was, I think, a sort of gentle surprise at where we were, because I don't think anyone would suggest that this was a normal situation to arrive at in any trial. It was very, very unusual. I think there was a degree of sympathy from him for the position that we as counsel and the Kings as parties found themselves in. I mean, whatever you may think of someone's evidence and whether it was truthful or credible or whatever, you know, it's not hard to have sympathy for people who find themselves in an awkward situation. And you could see from the way he was questioning, when he did intervene and when he did question, he was -- his angle was all one way, which was against us. […] Q. So you accept that neither during the cross-examination nor the oral submissions, had the judge given any indication that he'd made up his mind? A. That he had reached a decision about the case, is what I say. He gave some indications as to some of the difficulties, and his questions, if you look at them carefully, give an idea of what he might have been thinking, but, no, it doesn't give an indication that he had reached a final decision, no.”
“Given the disaster unfolding in front of him, any advocate would have expected Marcus Smith J to have appreciated the serious difficulties the case was in, and it is therefore hardly cause for comment that trial Counsel formed the view that he was so aware. His interventions in the evidence were (with respect) scrupulously fair, but revealed (again with respect) a keen and consistent appreciation of points of difficulties for Cs’ case, and as a result tended to clarify matters in a way which was adverse to the Kings. A number of damning answers given by C1 were direct results of judicial interventions: ...”
“At the end of the conference, we agreed to reconvene on Monday morning. I insisted on following through with preparing the written advice. I was conscious that the discussion had been a lot to take in, and I wanted everyone, including us, to have time to take stock and make sure they were comfortable with the decision. I also wanted one last chance to reflect privately on whether there was any way we could plead a case and go through the discipline of committing our views to writing. I also perceived Anthony King to be capable of participating in a discussion, but leaving with a different understanding of what had been discussed and agreed, so I felt that committing it to writing could be important for the others who were involved in the client decision-making process.”
“Please ask Alex and Peter not to spend any unnecessary time this weekend. We need to get back as much as we can on the refreshers fees”
“Robin & Barry do not believe they are fraudsters. Think about whether Robin and Barry did not know about this and it was Peter.”
“It is important to emphasise that, in addition to our duties to our clients and in particular to act and advise competently, there are professional duties that we cannot ignore. Breach of them is a disciplinary offence that may lead to us being disbarred. Our professional conduct rules require that: a. we must not make a serious allegation against any person, or suggest that a person is guilty of a crime unless we have reasonable grounds for the allegation; b. we must not draft any statement of case, witness statement or other document containing any allegation of fraud, unless we have clear instructions to allege fraud and we have reasonably credible material which establishes an arguable case of fraud. The seminal case on counsel having a sufficient evidential basis for pleading and advancing a case in fraud is the House of Lords’ judgment in Medcalf v Weatherill[2002] UKHL 27 . That case makes clear the importance of counsels’ professional obligations and their inability to advance a case in fraud without a credible evidential basis for doing so. It is not enough merely to have instructions to advance a fraud claim, counsel must themselves exercise objective professional judgment as to whether such a case can be advanced on the facts. The following excerpts make that and how the professional obligation may compete with duties and obligations to clients very clear.”
“AHT, PM, JBL, GAC, AK, JK Any questions arising from advice? No. AHT – I did think about dropping AK – but the problem is then the GE guys JK – we have to ignore the scheming behind the scenes? AHT – I think we know that P.S. is a scheming, conniving, git + A.L. is a professional, those in insolvency – always slightly conflicted. A.L. pushing a pre-pack agenda. A.L. encouraged P.S. He wanted to give you guys a bad impression. They were sharp but not dishonest. […]` They exaggerated but didn’t lie – but took advantage of the situation What they’d said in statements was consistent with what they’d said to A.K. Nothing you can do. Couldn’t re-examine G.E.”
“Guys sorry we dashed off, as you can imagine that court room has not become our favourite place to hang out and right now we just wish to get home to our families and loved ones. Once again I would like to thank you all for your hard work on this, you have been diligent and hard working, but we just got it wrong, a very expensive and hard lesson to learn and as hard as it is to say about 'others', this was the right and just outcome for Barry and Robin. It has been a pleasure to work with you and alongside you, even Alex's gallows humour ! But it will be a relief however to return at least to some normality, whilst we do however now face new challenges.”
“pressure continues but the trial from he’ll [sic hell] should hopefully end today!” ii) Email on16 May 2017 at 11.20: “the trial has ended – we had to discontinue after our client’s own evidence wrecked his case… anyway just dealing with aftermath […]”
“I am now aware that you did not go straight back to Leeds on the15 May 2017 , the Monday after court when we were forced to discontinue our case. I now know that you stayed over that night travelling back on Tuesday,16 March 2017 . I am also aware that that was a day when some members of the legal team still felt under continuing personal pressure, even though the trial had ended the day before. I have good reason to believe that matters arising from the case were still continuing and discussions were still on going, all completely hidden from my family. This meant no draft order was circulated until Friday19 May 2017 . Please can you let me know: • 1. What time was your train back to Leeds on16 May 2017 and why did you not travel back on15 May 2017 . • 2. The details of the further work that continued after the trial had ended on15 May 2017 , and why it was not brought to my attention. As a client, I am entitled to know everything that happened. • 3. DWF have told me that your mobile and text messages all have gone missing - is that your understanding as well, have you really lost every text with all your contacts? • 4. How far back do your text records go, with Lester and Alex Hall Taylor, do you have any at all? • 5. How far back do your text messages go with your other contacts go. • 6. Do you recall when you lost the mobile phone and the data and how it happened?”
“Can you update on the charge please. Its imperative that is signed asap.”
“We haven’t communicated directly on this but I’ve seen the fringes of the fall out from kings from graham [Dagnall – another senior litigation partner]. I think that needs to be your priority in the immediate term and let’s catch up when we have that under control please”
“I need to place on record that I feel very uncomfortable about what happened on Friday. I signed the papers without any legal explanation about what I was signing. I asked what all the paperwork was and was informed it was a standard legal charge. I was simply told to sign and was placed under tremendous pressure to do so by those present. It was put to me that DWF wants to help us but this needed to be done in order for that to happen. A lawyer was then sent to my home to see my wife and explained that DWF now basically own the property and anything in it. Can you please explain what would be the position now for the other debts that I have who are also secured on this equity.”
“Following our meeting on Friday 9 June, I am writing on behalf of my clients Primekings Holding Limited (“PKH”) to let you have their proposals. As you are doubtless aware, the date for payment of the sum of£1.7 million on account of the indemnity costs awarded in favour of PKH is now due. The estimated costs […] come to a total of£2.7 million which is likely to be your total liability to PKH. […] At the meeting we discussed the amount outstanding to DWF and what steps you might take in view of the fact that you tell us that there was, a) no engagement letter, b) no written advice as to the merits of your case, c) a verbal opinion that your prospect of success were around 100% and d) that costs were incurred by DWF way and beyond their original estimate and your ability to pay them, or any awarded against you. In order to achieve the objective of a ‘clean break’ PKH propose as follows: […] In conclusion I wish to make clear that this offer is on the basis that you have made full and frank disclosure to Barry Stiefel and Robin Fisher. They have no intention of seeking to enforce their rights against any other party such as your funders and must leave you to take whatever action you see fit in respect of DWF.”
“(a) There was an engagement letter provided to you. It was sent in the post on9 September 2016 to James/Susan and Anthony. (b) The merits of your case were discussed at length with you in conference and on the phone and including emails about the same on many occasions. As I reminded you Anthony, you actually got to the point where you did not want to hear from Alex any further on the merits. (c) We did say that we thought we would win on liability but we never said (and would never say) that our prospects of success were 100%. Again, you were well aware of the risks and prospects. Of course, our opinion was on the basis that Anthony and GE particularly came up to proof. (d) You knew about the costs; Anthony you came to the hearings including the costs one and were sent the costs budgets (including TS's budget). You also appreciated the position on costs if you lost. (e) "whatever action you see fit in respect of DWF." I'm not sure what this refers to our means.”
“it does sound as if a not entirely accurate picture was presented to TS - so thank you for correcting - particularly the point re not wanting to hear my advice. Of course (at least in terms of advice I gave or that you gave that I know about) the picture is much broader and more nuanced than just a question of "winning" or "losing" as if there is only one issue in the whole case - they were advised by both of us that the "misrep" facts were only one part of the case […] On everything else (which made up the other necessary "rungs" of the ladder to get the case to a win) I repeatedly advised that we had the weaker side of the arguments - and indeed highlighted the three main problem areas on a number of occasions. They always downplayed the concerns about that and failed repeatedly to do anything about the necessary evidence in those areas. My recollection is that you always agreed with me on those areas being problematic for us, albeit perhaps you were not quite as harsh as I was about it at times no doubt to maintain reasonable client relations! […] In any event - on the critical issue of the misrep - as you say it could not have been foreseen that both AK and GE would do such a hatchet job on our factual case. We (you and I) had anticipated risk being there - and had said so - but Anthony was absolutely convinced they would "win" on that point. Had he come up to proof, not changed his evidence, and not come up with the late recollection which his father then shot down, and had GE actually supported rather than torpedoed the case then we would have had a decent shot - still subject to exactly the problems previously identified. But that is not where we ended up. […] Sorry - rant over - I am just displeased and disappointed to see the way things are being put across to TS (perhaps I shouldn't be too surprised in light of how things panned out...but it is saddening to see that kind of thing).”
“Having considered the specifics of your/ your family’s concerns I do not consider that they fall within the aspect of a client service complaint but rather you have intimated that you have a potential professional negligence claim against the firm. [….] As solicitors we have a duty to act in the best interest of a client and given the intimation that you may have a claim against this firm I do not consider that it would be in your/ your family’s best interests for us to attempt to continue to act, especially given that you have made serious allegations concerning undue influence, which for the avoidance of doubt is disputed […] Should you wish to pursue a claim you should send us a letter of claim pursuant to the pre-action protocol.”
“whilst I did mention we had considered if we, as the King family had a potential negligence claim against DWF, we also went to great lengths to say that we would prefer not to pursue that line and would like DWF to consider a proposal to help the King Family in this very stressful and distressing time. I’m saddened that you have not even considered tabling a proposal to assist us, but instead have chosen to effectively ‘dump’ us.”
“I'm sorry I do not accept your explanation and to date you have offered no evidence or proof to support your position, I would ask you to do so.”
“Recently on the 16th of June I was pressured and put under duress at DWF’s offices to sign legal charge papers over this property. I was told DWF wanted to help our family through this mess, but could not do so without these papers signing, I asked what I was signing and what did it all mean and was simply told it was a standard legal charge.”
“The poor service I have identified is firstly that this instruction – the decision to sue the defendants – should not have got off the ground. My view is that the evidence shows it went too far before the allegations were properly examined and tested. In particular, and in light of counsel’s opinion of14 May 2017 , I am critical that evidence from GE was not available to support Mr King’s claim. My conclusion as to why this was the case is because of the involvement of Lester Wilson of DWF in the litigation. He was present at all key stages of the building of the case, and at no stage challenged Mr King’s version of the events of 18/19 December 2013 . In fact his witness statement (which did not come up to proof) unequivocally supported it. The allegation of misrepresentation was a serious matter and the basis for those allegations should have been tested much more rigorously before any significant costs were incurred by either side. It is more likely than not, in my view, that if Mr King had instructed a firm other than DWF they would have advised him that considerably more evidence to support what went on in the completion meeting of 18/19 December 2013 was required.”
“O(1.2) you provide services to your clients in a manner which protects their interests in their matter, subject to the proper administration of justice; … O(1.5) the service you provide to clients is competent, delivered in a timely manner and takes account of your clients' needs and circumstances”
“any situation where: (i) you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict (a "client conflict"); or (ii) your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter (an "own interest conflict").”
“You can never act where there is a conflict, or a significant risk of conflict, between you and your client. … Outcomes You must achieve these outcomes: … Prohibition on acting in conflict situations O(3.4) you do not act if there is an own interest conflict or a significant risk of an own interest conflict;”
“O(1.1) you treat your clients fairly; … O(1.11) clients' complaints are dealt with promptly, fairly, openly and effectively; … O(1.16) you inform current clients if you discover any act or omission which could give rise to a claim by them against you.”
“…it is a rule of universal application that no one having [fiduciary] duties to discharge shall be allowed to enter into engagements in which he has or can have a personal interest conflicting or which possibly may conflict with the interest of those whom he is bound to protect.”
“It is surprisingly difficult to identify an authority which holds in terms that a barrister owes a fiduciary obligation of loyalty to the client. Perhaps barristers do not often nowadays seek to buy property from their clients. Although the barrister does not handle client money, it seems clear that the barrister does owe a fiduciary duty to the client, and no-one seems to have doubted it. The Code of Conduct imposes what amounts to a fiduciary obligation on the barrister at rC15 by providing: “ Your duty to act in the best interests of each client, to provide a competent standard of work and service to each client and to keep the affairs of each client confidential includes the following obligations: “l .you must promote fearlessly and by all proper and lawful means the client’s best interests 2. you must do so without regard to your own interests or to any consequences to you (which may include, for the avoidance of doubt, you being required to take reasonable steps to mitigate the effects of any breach of this Handbook) 3 .you must do so without regard to the consequences to any other person (whether to your professional client, employer or any other person) 4 .you must not permit your professional client, employer or any other person to limit your discretion as to how the interests of the client can best be served.”
“l .you must promote fearlessly and by all proper and lawful means the client’s best interests 2. you must do so without regard to your own interests or to any consequences to you (which may include, for the avoidance of doubt, you being required to take reasonable steps to mitigate the effects of any breach of this Handbook) 3 .you must do so without regard to the consequences to any other person (whether to your professional client, employer or any other person) 4 .you must not permit your professional client, employer or any other person to limit your discretion as to how the interests of the client can best be served.”
“the public profile of a person is not a material consideration…….. That is because it is fundamental that all persons are equal before the law of England and Wales, as embodied in our common law, our legislation and the Conventions to which this country has subscribed. … No person in this country can enjoy a different status because he holds a public position. It is important to stress that. ….. Even if there was a perception that this might be so, particularly in the case of a person who holds any form of judicial office, it would inevitably undermine confidence in the open and public administration of justice and the fundamental principle of equality before the law.” ii) Takhar v Gracefield[2020] EWHC 2791 (Ch) : “I should add that the point was made by Mr Sullivan in submissions that the Defendants as professional people would not have forged the document, and that they did not object to the Claimant’s application for permission to call expert handwriting evidence made shortly before the trial before Judge Purle. However, though the court will naturally be slow to find fraud, it is not limited to the manual classes.”
“However, as I said in the course of submissions whilst it is not necessary to show a motive, as a matter of common sense the court is likely, when considering the issue of dishonesty, to ask itself why Mr Mather should knowingly or recklessly have made a false representation. If it is difficult to answer the question: what motivated someone such as Mr Mather, a man with an unblemished reputation, to write something which was untrue, either knowing that it was untrue or not caring … whether or not it was true, then it is difficult to conclude in a case where there is genuine scope for doubt that it is not simply an innocent or careless mistake.”
“At some point in the period between lunchtime on4 May 2017 and 10:00am on10 May 2017 , Primekings sought to exploit the mistakes which had been made by Mr Hall Taylor, Mr Morcos and Mr Blakey and the fact Mr Wilson’s evidence was wrong. Primekings had chosen not to reveal the facts demonstrating those things prior to the trial to maximise their psychological impact on the Kings’ legal team. Primekings did so by intimating to the Kings’ legal team the possible personal consequences for them if the case continued to a judgment. In breach of fiduciary duty, such matters were not disclosed to the Kings.”
“What is happening on Monday afternoon? Are you admitting the point about Steve Evans departure from Manchester in time to arrive for a meeting at 130pm, which would put his departure at about 1245pm? If not I assume that I will be recalling him to deal with the parking ticket point? Are we recalling Anthony King? Also when will we know what is happening about the pleadings and whether you want to XX Robin Fisher on Tuesday?”
“Q. You said "the allegation that Mr Downes put pressure on me or that we reached some sort of understanding is completely untrue". A. It is completely untrue. We did not. Q. Last week – A. I barely spoke to him during the trial, as I think is pretty obvious from the documents. We probably spoke maybe three to five times in the entire course of the trial, most of which took place in court and is on the transcript.”
“PDQC -> point in having W.P. discussion all his clients -> discontinuance” in the notes made at the Friday Conference quoted in § 351 above. Mr Hall Taylor explained in his witness statement, and in oral evidence, that it reflected his having advised the Kings about how to position their discussion with the Primekings side after the discontinuance, and what he could say to Mr Downes to tee that up for them. He said he did have that discussion, but only after the discontinuance had occurred. I accept that evidence, which is in my view consistent with the notes and with the overall context of the discussion. By contrast, had Mr Hall Taylor reached an improper understanding with Mr Downes to force or persuade his own clients to discontinue a valuable claim, it seems very unlikely that he would openly have referred to it in a conference with the clients. all his clients -> discontinuance”
“I think a judge might have said: well, it's become clear on the documents what the real position was, do we really need to go through the effort of it, we all know what we're talking about now and the pleadings have been overtaken by the way things have developed at trial. So I want to make it pretty clear, I don't think that's a very major pleading issue, and I didn't at the time”
“Email GE Andy/Tom not wanting to speak to us”), attaching an email from Mr Cole of GE. Ms Connor was asked about this and thought she was probably updating the file. Again, no link with the B Shares Mistake can be inferred. iv) On the same day Ms Connor emailed herself with the subject “email referring to posting engagement letter”
“It was discussed that whilst the£1m payment to JK and SK had not been nailed down it had never been discussed that this would be coming from the company. It was also said that there had been no provision for the B shares and those coming out of the business.”
“It was discussed the fact that the£1m payment to JK and SK had been ................................ but that it had never been discussed that this would be coming from the company. It was also said that there had been no provision for the ............. shares and those coming out of the business.”
“a) Not telling their clients what they had realised on Day 4 13. In breach of the duty to inform the Kings and the duty to disclose misconduct, the legal team failed to tell their clients [POC 44, 45, 46] what they realised on Day 4. That failure created a conflict of interest which caused the legal team to breach the duty to avoid a conflict. Those breaches continued for the duration of the case.”
“44. Mr Hall Taylor’s email at 17:58 [on day 4] led to discussions between at least Mr Hall Taylor, Mr Morcos and Mr Blakey about [the B Shares Mistake], the possible consequences for them personally, and what could be done. The Kings were never told about such matters in breach of fiduciary duty. Pre-action the defendants have in breach of fiduciary duty failed to address directly the issue of what conversations followed the 17:58 email because each of them does not wish the detail of what happened to emerge. 45. By the end of the first week of the trial, each of Mr Blakey, Mr Hall Taylor and Mr Morcos were aware that: (i) the pleading, witness statements and opening submissions were wrong, as a result of incorrect and (at minimum) negligent instructions given by Mr Wilson; (ii) Mr Hall Taylor had been negligent by pleading a case and approving witness statements which were inconsistent with the contemporaneous documents; and (iii) Mr Morcos had been negligent by drafting opening submissions contradicted by the contemporaneous documents. 46. Each of Mr Blakey, Mr Hall Taylor and Mr Morcos, in deliberate breach of fiduciary duty, chose not to bring those matters to the attention of the Kings.”
“16. 1. They chose (in breach of the duty to inform the Kings and the duty of good faith) not to discuss with their clients further relevant disclosure received from the opponents on Friday5 May 2017 [POC 54, 56 – to be amended in due course from 67 May 2017 to5 May 2017 ] and Tuesday9 May 2017 [POC 57 – to be amended in due course from never received to received on9 May 2017 ]. 16.2. Mr Hall Taylor in breach of the duty of good faith told the Court that the case had narrowed when that was untrue [B Reply at 115], and by doing so made a concession which damaged his clients’ case. [POC 59] 16.3. Mr Hall Taylor in breach of the duty of good faith did nothing to stop Mr Downes misleading witnesses about the cash flow spreadsheet. [POC 84, and DWF Reply at 156 – 158] 16.4. The legal team in breach of the duty of good faith did nothing to correct the misleading impression given to the Court about the cash flow spreadsheet even after clients asked them to on11 May 2017 . [POC 85] 16.5. Mr Wilson (on whose evidence the claim was in part based) in breach of the duty not to mislead purported to forget seeing the Particular of Claim [Particulars of Claim 77,], and Mr Weedall’s evidence [POC 78], both of which he knew he had seen, and wrongly stated he had explained the B Shares to the Kings [Particulars of Claim 79]. 16.6. In breach of the duty of good faith, from around4 May 2017 the legal team began to plan steps to move Howard Smith in the timetable to15 May 2017 , a day he would not be needed, and then told him on12 May 2017 that he would not be required to give evidence, before the Kings had been given the choice either to discontinue or continue with the case as litigants in person. [B Reply 14, 15, 16, 17, 18, 93, 134.2, 161, 162, DWF Reply at 185], 17. Each of those acts was done in breach of the duty of good faith because the legal team intended to force their clients to discontinue. [POC 51, 52, 53]”
“He then has the long weekend to decide if he wishes to make any amendment to his pleading and, if so, what it is. My only request is that we do get to see that case before my witnesses go in the box. I don't intend to be difficult about it. If we can deal with the case as matters stand, obviously it is in the interests of everybody to do so. So long as it doesn't bring in some huge other factual issue that we need to investigate. If that doesn't happen, I do reserve the right at the end of the day case to say: this new case isn't pleaded and you can't succeed on it, so I am just giving everybody fair warning.”
“For my part, having now heard a lot of Mr King's evidence at perhaps some length and seeing how his recollection has developed, I do think my cross-examination of witnesses is actually more curtailed than it would have been without having heard what he has said in the witness box. I don't think I will be as long with some witnesses as I might have thought I would be, because in fact, the case has narrowed, I think, quite considerably in some respects. So I don't think it will disrupt us too unduly if we need to spend some time dealing with that on Monday, but, yes, I accept what my learned friend is saying, and that this needs to be revisited before any of the defendants' witnesses are called. We will deal with it as soon as we can and we will let my learned friend know as fast as we can.”
“84. On Thursday11 May 2017 at 17:47 Anthony King provided Mr Blakey, Mr Hall Taylor and Mr Morcos with evidence provided by the KSSL company secretary (‘the Cash Flow Evidence’) which showed that witnesses had been misled by the questions of Mr Downes concerning cash flow and the alleged inability of KSGL to pay employee wages. Those misleading questions had given rise to seriously contaminated evidence. 85. Anthony King requested at 18:33 that DWF and counsel take steps to remedy that. In breach of fiduciary duty Mr Blakey, Mr Hall Taylor and Mr Morcos did not try to use the Cash Flow Evidence because they had already decided that they would ensure that the Kings would discontinue the case, and in light of that they did not perceive it to be in their interests for the state of the evidence to be improved in any way.”
“Q. … So the question Mr Hall Taylor is this: why didn't you stand up and say, hang on, if we have to take account of the 764 and the 812 then surely both numbers should be put to each witness? A. Well, it is a matter for Mr Downes putting questions based on the documents that are in front of the witness. There is nothing particularly significant or objectionable in it. They have the opportunity to answer him by saying, this is what I read or -- you have got to remember these are two people who should know the financial position of this company and be able to speak to it.”
“75. During his evidence Mr Wilson told the Court that as a result of reading his statement over the weekend, he had noticed that it contained some mistakes, and that it needed clarification. That evidence was misleading. In fact Mr Wilson knew that his statement was wrong when he signed it, and he changed his evidence because he was prompted to do so by members of the legal team as set out above. The List of Corrections detailed a substantive change to the Kings’ case, not clarifications. 76. Mr Wilson was now aware that facts had emerged in Court on Day 4 which showed that the Particulars of Claim, witness statements and opening submissions based on his instructions were wrong, and so (in an attempt to protect his own position) he sought to distance himself from the preparation of the case by giving two pieces of evidence which he knew were misleading. 77. In relation to the Particulars of Claim which he had approved he said he could not recall seeing it. In fact Mr Wilson could recall seeing it - he had given instructions to Mr Hall Taylor about it, had been the overseeing partner at the time, and he had signed the Statement of Truth on the Claim Form attaching the Particulars of Claim as detailed above. 78. In relation to the witness statement of Mr Weedall, Mr Wilson said that he had not seen or looked at it. That was wrong and Mr Wilson knew it was wrong. He had been sent Mr Weedall’s witness statement by Jason Blakey on23 November 2016 and he must have read it and discussed it with Mr Blakey as it contained important evidence. He had also been copied into the subsequent emails about it from Anthony King and Mr Hall Taylor, and it was discussed at the mediation which he attended on8 February 2017 . 79. Mr Wilson then gave evidence that the term providing for the Deferred Consideration to be paid by KSGL had been in the documents prior to the Swain Representations, and that he had explained it to the Kings prior to the Swain Representations. That evidence was false and Mr Wilson knew it was false for the reasons set out above.”
“In breach of the duty not to mislead, the following untrue statements were made to the Kings to pressurise them into accepting the advice to discontinue and apologise: 20.1. The Judge had indicated that the case was bound to fail. [POC 102] 20.2. That even though the defendants had exaggerated, been sharp and taken advantage of the situation [POC1I4] it would involve professional misconduct to ask any questions of the defendants in cross-examination [POC 101] and the Court process should be viewed as having been about the Kings finding out that they were wrong. [POC 104] 20.3. It was best for the Kings to refrain from trying to analyse the evidence. [POC70]. 20.4. It was relevant that Mr Stiefel and Mr Fisher did not subjectively consider themselves to be fraudsters. [POC93], 20.5. The barristers were professionally embarrassed and the Kings would have to represent themselves if they wanted to continue with the trial. [POC 99 and 110.2]”
“A. No. I mean, it is not correct. We wouldn't have said not one question. It was not one question about the case in fraud effectively and the misrepresentations. I mean, as it were, not one question about our case, you know, the actual core elements of our case. I mean, you can ask -- if you're able to advance a case, you can go and ask witnesses questions about other things and what did you mean by this document, and you know, did you have cornflakes or Frosties for breakfast that day, and things like that that don't make any difference. What you can't do is advance a case which doesn't have an evidential foundation by the time you get there, which ours didn't.”
“In an improper attempt (in breach of fiduciary duty) to persuade the Kings that the claims lacked merit, Mr Hall Taylor made the wholly irrelevant assertion that Mr Fisher and Mr Stiefel did not subjectively consider themselves to be fraudsters, and implored the Kings to think about whether Mr Fisher and Mr Stiefel might have not known about what was going on, and that it was only Mr Swain.”
“As to paragraph 28 of the Particulars of Claim, it is admitted that Mr Swain spoke on the telephone with Mr Fisher at approximately 15:50 and related what he had been told by GE as to its position at the meeting he and Ms Lord had attended with them. Whilst the exact words used in the Statements (as defined) are not admitted the gist of them is admitted save that: a. He stated that GE had told him that KSG's account was frozen and would remain frozen unless a deal was done. b. He did not say the words in parentheses in paragraph 28.2 of the Particulars of Claim or any words to similar effect, and probably used the words “Kings” as opposed to “the management of KSG and the Kings”. c. He stated that GE had told him that there would be no further funding support unless a deal was done. For the avoidance of doubt Mr Swain’s statements were true and in all material respects represented the position that GE had taken with them at the meeting. Save as aforesaid paragraph 28 is denied.”
“Robin then asked me how the meeting with GE had gone. I do not recall the precise order of my response but I believe it was as follows. I told Robin that GE were annoyed because they expected the deal to have been completed by 14:00. I then told Robin that they had said they had lost faith and confidence in Kings’ management, expressing concerns about the performance of the account. I told him that the account remained frozen and that GE had said that there would be no more money from GE unless a deal was done. I cannot be completely certain of the exact words that I used but this is certainly the gist and meaning of what I said.”
“I have a very clear recollection of the next part of the conversation. I clearly recollect (although I am not entirely certain of the exact words that Peter used, I clearly recollect that he said words to this effect) that Peter then said that GE had told us that they had lost confidence in Kings’ management and that the account was frozen unless the deal was done.”
“without looking at your statement…what do you remember about what Mr Swain – just what stuck in your mind here and now, what Mr Swain said?”
“I did precisely what Robin had asked and repeated as accurately as I could what I had just reported to Robin. I said that we had had a meeting with GE. I reported that GE had said that they were not happy with the running of the account and had lost confidence in Kings, the account remained frozen and there would be no more money from GE unless the deal was done. These are, I believe, the words I actually used although I cannot be exactly certain of that […] I believe I did use the word “frozen””
“I believe that Mr Weedall is correct to say that he did not use the word “frozen” in relation to KSG’s facility with GE at our meeting on 18 December.”
“Q: I think you have accepted that there was a potential that GE would withdraw support altogether. A: If the deal fell away, yes. Q: Well, on any basis. There’s always a potential, isn’t there? A: There’s always a potential. Q: Yes. And if all Mr Swain had said was that there was a real risk that GE would withdraw their support, you couldn’t have any complaint. A: Probably not. Q: Your complaint is he went further than that? A: Yes. Q: Because simply saying there is a real risk that they will withdraw their support was obvious in any event. A: Yes.”
“we look forward to working together with you in the future”. ii) Anthony King’s emails of 8 and16 April 2014 referred to earlier asked Primekings to put the disagreement behind them, and promised that the events of18 December 2013 would not be mentioned again. iii) Anthony King made demands for payments to be made to his parents under the Final Deal, attended board meetings and was drawing a salary of£250,000 per year from KSG. iv) Perhaps most compellingly of all, the Variation Agreement executed in November 2014 specifically provided that “The provisions of the Agreement [ie the Kings-Primekings SPA] shall, save as amended by this variation agreement, continue in full force and effect.”
“As the Christmas break approached, I recall that I discussed with GE the likely strategy if the investment from [Primekings] was not forthcoming, I cannot recall specifically who I spoke to but it would have been either Tom Weedall or Andy Cole as they were my key contacts at GE. We informally agreed that there appeared to be sufficient funds available to enable staff salaries to be paid for December. Once these were paid, KSG was likely to be able to trade through to January. Accordingly, KPMG would have a small number of staff on standby to re-commence a marketing process but not to take an administration appointment over KGS [sic]. Another factor taken into account was the nature of KSG’s business i.e. providing security, in some cases, to banks. If security systems at certain client’s premises had been withdrawn during the final week of December, this could have caused significant disruption that would impact on GE’s major asset, book debts.”
“We were told that it was in our best interests to apologise to 'build bridges' and that's what PKH wanted and that we should agree to indemnity costs. I can recall Mr Hall Taylor stated something along the lines of "I want encourage Mr Downes to encourage them to be mature". I also remember Mr Hall Taylor saying the Judge would actually expect us to apologise, given the discontinuance, as my father and I were very reluctant to do this, as we still had no doubt about the facts showing our case was correct, but we were being told by those we trusted that GE were to blame for the collapse of the case, and that we needed to 'build bridges'. However we insisted that the pre-drafted apology about Peter Swain was changed to remove the words "the Kings no longer believe that he fraudulently represented GE's position or that they themselves were subject to an unlawful means conspiracy". We did not want to say any of it, but that sentence about Peter Swain and the conspiracy was just a step too far and unacceptable to us, on reflection I can't believe our legal team even proposed we should agree to say that.”
“Met with Barry today (at his request) thought it might have been some sign of movement, but he basically sat and told me how we had zero chance of winning, his words were 'not a snow balls chance in hell!' How our family came from nothing and will go back to nothing and be ruined and destroyed. Said we had been badly advised and they were 100% certain they will win. I didn't realise he was so worried !!”
“Primekings’ solicitors were Teacher Stern LLP (“Teacher Stern”). I have some recollections of the meeting referred to in the Particulars, which took place on23 September 2016 , regarding Teacher Stern’s costs which followed the provision of a revised costs budget. Lionel Marcus, an in-house costs lawyer at DWF, was also in attendance at that meeting with Jason, AHT (I think by telephone) and myself. I remember that Teacher Stern’s costs were in the millions. I have looked at an attendance note of the meeting which I made, including the comment “I don’t believe they have actually done the work”
“I have become accustomed to the numerous and baseless allegations of dishonesty and impropriety which have been variously made against me and my Associates during my conduct of these proceedings by the Kings, their solicitors, and their counsel Mr Newman, but I should address the allegations at paragraphs 6.2, 6.3 and 57 of Mr Newman's skeleton argument that we and Clydes have chosen deliberately to breach a Court Order so as to bring about a situation whereby we wrest control of the preparation of the trial bundles from the Claimants. This is unfounded and untrue.”
“14. This case demonstrates why those obligations [the professional obligations on counsel] are so important. As Lord Hobhouse explained in Medcalf at [53] – [54], the advocate is in a privileged position, with a right of audience and immunity from suit for defamation. That carries with it certain duties, including the duty to exercise appropriate restraint when making allegations of serious misconduct. Ds 2 and 3 (as well as Ms Connor, Mr Blakey, and Mr Wilson) are professional persons who have spent the last four years under the shadow of allegations of the utmost seriousness made in public – allegations which if made out would destroy their reputations and end their careers. However misconceived they may be, the stress of living with those allegations, and the risk that third parties may if only in passing think that there is something in them, are both heightened by the fact that they carry the imprimatur of Counsel. That is, in part, precisely the state of affairs that Counsel’s duties exist to prevent by the exercise of his informed professional opinion conscientiously formed and having identified whether or not there is admissible evidence that can objectively be said to support the making of such serious allegations. Disregard of those obligations has in this case been deeply unfair on Ds2 and 3.”
“… the approach of the Court to the claim, is that because the defendants are lawyers, the claim must be implausible”
“74. Now the Court is being asked to believe that through mere oversight: 74.1. Mr Hall Taylor, a professional litigator, allowed his mobile device to be ‘rendered inaccessible’ after he had written in an email in response to a text message: “what is this talk of new lawyers”, and after a discontinuance which was a first for Mr Hall Taylor, ‘a big deal….a huge deal’. 74.2. Mr Morcos, who was a professional litigator at the time, allowed his mobile device to be destroyed after the end of the only trial he has ever been involved in which was discontinued. 74.3. Mr Blakey, a professional litigator, gave no warning about preservation when handing in his phone to be wiped and destroyed, even though that post-dated his involvement in a litigation privileged note, and having sent a crucial text “texted you” on11 May 2017 . A discontinuance was something which was a first Mr Blakey: “I've never had to do it before”. 74.4. Ms Connor gave no warning when handing in her phone to be wiped and destroyed, even after emailing to Mr Wilson and Mr Blakey the advice to discontinue on1 August 2017 and to Mr Wilson an extract from Day 9 on2 August 2017 She was then allowed to search her own personal phone, contrary to the rule that “The best way for the solicitor to fulfil his own duty and to ensure that his client's duty is fulfilled too is to take possession of all the original documents as early as possible. The client should not be allowed to decide relevance—or even potential relevance—for himself ….”. 74.5. Ms Amy Franks, a key custodian, was allowed to search her own phone: “We have asked her direct whether or not she had a DWF phone at the time and/or used her personal mobile phone and, if so, to search for any relevant messages.” 74.6. It appears that Mr Armitage, a key custodian, was not even asked about his personal phone: Mr Armitage’s DWF mobile phone would have been handed in and taken away for destruction when he left the practice. DWF obviously does not have control over his personal phone. 74.7. DWF told the Kings all the devices had been destroyed: – “As you will also note from our client’s Disclosure Certificate, no mobile telephones used in May 2017 time by any of our client’s custodians survive, including those of Mr Blakey and Mr Wilson”, when it later emerged in early 2023 that in fact some phones used in May 2017 survived. 74.8. DWF did not take steps to request that mobile phones be retained even when insurers were notified on1 September 2017 , and even though: “Anthony King’s email of26 July 2017 and his subsequent email of27 July 2017 raised serious allegations against DWF, in particular that they had allowed the Kings to pursue hopeless litigation at enormous costs and financial risk to the Kings and that Mr Wilson had given false evidence at the trial.”