Notus Group Limited v British Engineering Services Holdco Limited [2025] EWHC 1391 (Comm)

[2025] EWHC 1391 (Comm)IN THE HIGH COURT OF JUSTICE Claim no. CC-2023-MAN-000040Venue BUSINESS AND PROPERTY COURTS IN MANCHESTERCIRCUIT COMMERCIAL COURT (KBD)
Between
NOTUS GROUP LIMITEDClaimantBRITISH ENGINEERING SERVICES HOLDCO LIMITEDDefendantJAMES AZAM MOHAMMEDFirst Third Party/Part 20 DefendantRICHARD WESLEY WALBERGSecond Third Party/Part 20 DefendantBEFORE HIS HONOUR JUDGE BEVERSITTING AS A HIGH COURT JUDGEManchester Civil Justice Centre1, Bridge Street WestManchester M60 9DJTrial – 10,13,14,15,16,17,20,23 and 24 January 2025D raft Judgment circulated- 10 April 2025Judgment handed down – 17 April 2025JUDGMENTPaul Chaisty KC and Napthens LLP Solicitors for Claimant and the Third Parties/Part 20 DefendantsMohammed Zaman KC and Jason Perrin of Counsel and Pinsent Masons LLP Solicitors for DefendantDate 2025-04-17
[1]This is my reserved judgment following the trial of this action between 10 and 24 January 2025.

The Parties

[2]The Claimant (Notus) is a limited company, the entire shareholding of which is owned by the Third Parties/Part 20 Defendants, James Mohammed (Mr Mohammed) and Richard Walberg (Mr Walberg).[3]Mr Walberg and Mr Mohammed established and incorporated a consultancy business, Notus Heavy Lift Solutions Limited (NHLS), on 17 November 2015.[4]NHLS specialised in providing consultancy and guidance in relation to lifting management and undertaking heavy lifting safely and in accordance with UK regulations. In particular, it provided engineers and lifting specialists to large scale projects and to clients which did not have their own in-house technical lifting expertise. Siemens Wind Power plc (Siemens), where Mr Mohammed and Mr Walberg worked together before they established NHLS, was one of the company’s first customers.[5]Notus, Mr Mohammed and Mr Walberg (together the Notus Parties) have a unity of interest in this litigation and they share the same legal representation.[6]The Defendant (BES) is part of the BES Group of companies (the BESGroup) which is a provider of risk management, inspection, testing, certification and consultancy services.[7]This litigation arises out of the sale of NHLS by Notus to BES on 27 May 2022.

Cast List

[8]I am grateful to Mr Perrin for providing me with a Cast List, which I take the liberty of reproducing in full below (although I have not referred to each of the listed individuals/entities in this judgment). Name Role Andrew Roberts Senior Associate at Benchmark Andy Kinsey Technical Risk Team at BESH Armstrong Conducted interviews with customers of Notus to assess value Ashley Daniels Head of Lifting & Temporary works at EDF/NBB Hinckley Point C AD Plant Limited The Claimant pleads payments were made to Ashley Daniels for the sale of shares in this company from Mr Daniels to Mr Mohammed and Mr Walberg Azam Mohammed James Mohammed’s father Benchmark International Brokers for sale of Notus British Engineering Services Holdco Limited Defendant Cortus Advisory Financial advisor to BESH Cuqui Farrell Mr Milledge’s partner David Speight Head of Construction at EDF David (Dave) Vaughan Now Managing Director of Community & Specialty Brokers at David Roberts & Partners (Insurance Brokers). Previously Managing Director of Testing & Consultancy at BESH EDF Group Notus supplied personnel to EDF (via Rullion) EnerMech Competitor of Notus. Supplied workers to EDF Garrick Nisbet Former Senior Lift Engineer at Notus Heavy Lift Hannah Mather Group HR Director for BES Henry Pocock Defendant’s expert witness James Azam Mohammed Former shareholder of Notus. First Named Third Party James Reeves Chief Financial Offer who had oversight for BESH of purchase of Notus Heavy Lift John Campanaro Rullion employee John Lennox Group COO of BES (replacing Paul Hirst in November 2022) Lee Holmes Senior Project Manager at EDF Michael Parsons Commercial Manager at EDF Mike Milledge EDF Head of Lifting at Hinckley Point C. Previously worked at Siemens NNB Generation Company Subsidiary created by EDF Energy Napthens Claimant’s/Part 20 Defendants’ solicitors Notus Group Limited Claimant Notus Heavy Lift Solutions Limited Acquired by Defendant Oakley Farrell Pseudonym of Mr Milledge Paul Hirst Former CEO of BES Peter Bennett Claimant’s expert witness Peter Kendall EDF Commercial Manager Phil Holt NNB Commercial Manager Phil Stec HR employee at BESH Pinsent Masons Defendant’s solicitors Richard Probert Notus Business Development Director / General Manager Richard Wesley Walberg Former shareholder of Notus.

(i) Events leading to the sale of NHLS

[9]Mr Walberg and Mr Mohammed instructed a consultancy to market NHLS in May 2021 after Mr Walberg had encountered difficulties working with their co-director, Garrick Nisbet (Mr Nisbet).[10]In late 2021, NHLS was identified by BES as a successful candidate for acquisition. NHLS’s turnover had increased from zero in 2015 to £2,845,000 in 2021.[11]Sebastian Lomax (Mr Lomax), the Group Director of Acquisitions for the BES Group and a former director of BES, was responsible for the project management of the acquisition of NHLS. Other key staff at BES were involved in the acquisition, along with external advisers.[12]An external company (Armstrong) undertook a customer satisfaction survey to understand the relationship between NHLS and its customers. Armstrong conducted interviews and provided Mr Lomax with a report. Ashley Daniels (Mr Daniels), to whom I refer below at some length, was interviewed in the course of the process.[13]According to Mr Lomax, the due diligence process was unremarkable and did not result in an adjustment to the purchase price agreed by Notus and BES. Mr Lomax says that he was impressed by the standing of some of NHLS’s customers, including Hinckley Point C (Hinckley) and British Aerospace. However, he had noted, as a potential risk of the acquisition, that NHLS’s revenue was derived from a small number of customers.[14]There was a financial due diligence report produced for BES dated 24 May 2022, along with a document entitled “investment paper” dated 18 May 2022 (BES’s Investment Paper), which was prepared by Mr Lomax and which noted:- “[NHLS] is a UK-based consultancy, which specialises in advising customers on how to plan and carry heavy lifts in accordance with UK rules e.g. Lifting Operations and Lifting Equipment Regulations (“LOLER”) As such, [NHLS] allows BES to expand our service offering in the machinery asset class, building upon our extensive knowledge in the sector given that currently over 50% of BES’ periodic physical inspections are carried out under the LOLER regulations, and also benefit from cross-selling to both BES and [NHLS]’s customer bases… The business employs 21 people, the majority of whom are lifting specialists based upon customer sites, who are charged out at day-rates (c £550-850) on medium term contracts. Customers are primarily based in the Nuclear, Construction, Infrastructure and Renewables sectors, with particular concentration on the nuclear power station at Hinckley Point C. Historically, performance has been driven by projects of a mid to long term nature, such that the business delivered FY21 (Dec) turnover of £2.8m and EBITDA of £0.9m. Current trading indicates LTM EBITDA to April 22 is £950k… [NHLS] competes with a small set of competitors, many of which are much larger lifting equipment providers with varying levels of consulting capabilities… Some customers e.g. Siemens have in house capabilities but still rely on [NHLS] for specialist work or for capacity reasons. NHLS is referenced as highly specialist in heavy lifting, providing a high quality expert service that is difficult or not commercially interesting to replicate internally. [NHLS] is typically selected on the back of e.g. Hinckley Point recommendations or referrals, as well as its reputation in the market. Other players are involved at Hinckley Point, including EnerMech and Osprey, but are considered Tier 1 contractors, providing lifting equipment. [NHLS] is still seen as necessary alongside these providers and have a close partnership with EDF/ Hinckley Point decisionmakers… [NHLS] is seen as consistent, reliable and responsive. The experience of [NHLS]’s engineers and their attitudes are seen as differentiators, as is [NHLS]’s narrow focus on lifting consultancy and assurance, where others often provide equipment as well. This is not considered a weakness, as [NHLS] is considered best of breed in what they do, where competitors lack experience, site knowledge, and understanding of regulatory and lifting norm requirements at that level.”[15]The report also noted that NHLS’s customers were considered “risk fanatics” and that NHLS had an “attractive and high-quality customer base, such as Hinckley and BAE Systems”. It noted that customer feedback rated NHLS highly in the market, with customers considering it “best in breed” with “few, if any, direct competitors.” It was also observed that NHLS’s shareholders had pushed customer relationships to second-tier management.[16]In his live evidence, Mr Lomax acknowledged that Mr Mohammed and Mr Walberg had “done their best to answer all of [his] questions” during the due diligence process and that they had treated it as “almost a day job”. Mr Lomax acknowledged that the due diligence paper was “a very positive report” and that NHLS was “an attractive business”.[17]BES’s first bid of £4 million for NHLS had been rejected by Notus. Following negotiations and discussions, a higher purchase price was agreed. (ii). The Share and Purchase Agreement[18]A Share and Purchase Agreement was entered into by Notus and BES on 27 May 2022 (the SPA), pursuant to which BES purchased from Notus the entire share capital of NHLS.[19]The consideration for the acquisition of NHLS was £5,688,241.70 (thePurchase Price), together with additional consideration payable in accordance with the terms of the SPA (the AdditionalConsideration). Payment of the Additional Consideration was conditional on NHLS achieving an earnings before interest, taxes, depreciation and amortisation (EBITDA) figure of £1,200,000 by 21 December 2022. It is common ground that that figure was achieved and that, in principle, the Additional Consideration, therefore, fell to be paid to Notus by BES. (iii). The Claim and Counterclaim[20]Notus brings a claim for payment of the Additional Consideration, which remains outstanding. BES admits that claim, but contends that it is entitled to offset its Counterclaim against it.[21]The Counterclaim is based on what BES alleges are breaches of commercial warranties contained in the SPA, namely Clauses14.1 and14.2 of Schedule 3 to the contract. Those clauses relate to bribery.[22]In essence, BES alleges that, prior to the SPA being entered into, Mr Mohammed and Mr Walberg bribed two individuals, namely Mike Milledge (Mr Milledge) and Mr Daniels, to benefit NHLS on a high profile project at Hinckley, a national nuclear power infrastructure project operated by Nuclear New Build (NNB), part of the EDF Group of companies (EDF), for which NHLS provided contractors/engineers. Mr Milledge was EDF’s Head of Lifting at Hinckley during 2017 and 2018. He had previously worked at Siemens with Mr Mohammed and Mr Walberg. Mr Daniels took over Mr Milledge’s role when he left EDF and he remained in post until 2023. His title was Head of Lifting and Temporary Works. (iv). The SPA and its terms[23]As noted above, the SPA was completed on 27 May 2022.[24]The relevant definitions set out in the SPA are:- -. “the Covenantors” are Mr Mohammed and Mr Walberg -. “the Warrantors” are Notus, Mr Mohammed and Mr Walberg -. “the Commercial Warranties” are those contained in Schedule 3 -. “Wilful Non-Disclosure” is defined as “the provision of a Warranty by a Warrantor where that Warrantor(a) has actual knowledge of a fact, matter or circumstance which is a breach of that Warranty and that Warrantor actually knows that it constitutes a breach; and(b) wilfully and deliberately chooses to conceal such fact, matter or circumstance by omitting it from the Disclosure Letter.” -. “Bribery Legislation” includes “the relevant common law or legislation from time to time in force in the United Kingdom including….Criminal Law Act 1977 as amended and the Bribery Act 2010…and the Proceeds of Crime Act 2002”[25]The key clauses in the SPA are as follows:- “8.1. The Warrantors warrant to the Buyer that (subject to Clause 8.2) each Commercial Warranty is true and accurate as at the date of this Agreement in respect of each Group Company…”[26]The relevant warranties are:- “[Schedule 3]14.1 No Covenantor nor, so far as the Seller is aware, any person (including any employee, officer, subsidiary or any third party) who performs or has performed services for it or on its behalf has done or failed to do any act or thing the doing of which does or could contravene Bribery Legislation”. “[Schedule 3]14.2 No Covenantor nor, so far as the Seller is aware, any person (including any employee, officer, subsidiary or any third party) who performs or has performed services for it or on its behalf is or has been the subject of any actual, pending or threatened complaint, action, investigation, enforcement proceedings or prosecution under Bribery Legislation and, so far as the Seller is aware, there are no circumstances which might reasonably be expected to lead to such a complaint, action, investigation, enforcement proceedings or prosecution.”[27]Clause 9 of the SPA imposes limitations on warranty claims, as does Schedule 5. By Clause 9.1.3, “the Warrantors’ maximum aggregate liability in respect of all claims for breach of Commercial warranties (excluding interest, costs, fines, penalties and surcharges) is limited to 75% of the Consideration [including the Additional Consideration] actually received by [Notus]”.[28]However, Clause 9.6 provides that “none of the limitations contained in Clause 9 or Schedule 5 apply to any claim under the Commercial Warranties or the Tax Deed where there has been fraud or, in the case of the Commercial Warranties, Wilful Non-Disclosure”.[29]Warranties are typically capable of being qualified by disclosure. However, there was no such qualification in Notus’s Disclosure Letter in relation to the warranties at Clauses14.1 and14.2 of Schedule 3 to the SPA.

(v) Bribery Legislation

[30]Section 1 of the Bribery Act 2010 provides as follows:- (1). A person (“P”) is guilty of an offence if either of the following cases applies. (2). Case 1 is where-(a) P offers, promises or gives a financial or other advantage to another person, and(b) P intends the advantage (i) To induce a person to perform improperly a relevant function or activity, or (ii) To reward a person for the improper performance of such a function or activity[31]Section 3 provides that a “function or activity” includes “any activity connected with a business [or] performed in the course of a person’s employment” which the person is expected to “perform in good faith” and/or “impartially”.[32]BES’s case is put on the basis of Case 1. (vi). NHLS’s activities at Hinckley[33]NHLS supplied engineering staff to EDF at Hinckley via a recruitment agency, Rullion Limited (Rullion). NHLS’s engineers provided engineering and heavy lifting services at the site. Their role was to provide lifting solutions at Hinckley, which was a risk-intensive site, to analyse lifting plans and to oversee lifting operations on the site.[34]NHLS had been introduced to Rullion by Mr Milledge. (vii). Developments after completion of the SPA[35]Following completion of the SPA and payment of the Purchase Price, and in line with the contracting parties’ agreement, the directors of NHLS, namely Mr Mohammed, Mr Walberg and Mr Nisbet, resigned from their directorships, although Mr Mohammed and Mr Nisbet remained as employees of the company.[36]At that time, David Vaughan (Mr Vaughan) was the Managing Director of Testing and Consulting at British Engineering Services Limited, a company in the BES Group (although he no longer works for the group).[37]Following the acquisition, NHLS became one of the businesses which Mr Vaughan managed on behalf of BES. He understood that Mr Daniels was the decision-maker at EDF in relation to sourcing personnel from NHLS and that he had full authority to decide which engineers were employed on site. However, he only met Mr Daniels once, and he spoke to him by telephone on one other occasion. Mr Vaughan describes his own involvement in the selection process of engineers as “light touch”.[38]Prior to the acquisition, Mr Vaughan had been engaged by BES Group’s Mergers and Acquisitions (M&A) team to meet Mr Mohammed and to introduce him to BES. He met Mr Mohammed on two occasions with a view to gaining an understanding of the structure of, and personnel at, NHLS.[39]Post-acquisition, Mr Vaughan had regular contact with Mr Mohammed, who became one of his direct reports. He describes that relationship as “decent” and Mr Mohammed as “responsive and engaged” and “honourable”.[40]Mr Nisbet contacted Mr Vaughan, asking for an urgent meeting, which took place at BES’s Warrington office on 18 August 2022. At the meeting, Mr Nisbet alleged that Mr Mohammed had been making payments to Mr Daniels prior to BES’s acquisition of NHLS to assist in the procurement of personnel on site at Hinckley. Mr Nisbet brought with him to the meeting documents apparently supporting his allegations, but he would not allow Mr Vaughan to take copies of them.[41]Mr Vaughan recalls that the meeting lasted approximately 90 minutes/2 hours and that Mr Nisbet’s “whistleblowing complaint” was not the sole topic of their conversation. His impression was that Mr Nisbet was unhappy about how he had been treated on the sale of NHLS (in which he only had a 5% shareholding). Mr Vaughan told me in his live evidence that Mr Nisbet “could be difficult at times [and]…could be assertive and rub people up the wrong way.” Mr Nisbet made clear to him at the meeting that he wanted to remain working for NHLS/BES.[42]Mr Vaughan prepared a note of the meeting, in which he recorded that Mr Nisbet referred to Mr Mohammed and Mr Daniels as being involved in the arrangement. There was no reference in the note to Mr Milledge. The note does indicate that Mr Nisbet had suggested that, if the alleged bribery were to cease, then NHLS could lose work as a result. It also records that Mr Nisbet alleged that Mr Mohammed had used illicit drugs.[43]Later that day Mr Vaughan notified Paul Hirst (Mr Hirst), the BES Group Chief Operating Officer, of what he had been told. Mr Hirst asked him to leave the matter with him. Mr Vaughan was aware of the investigation subsequently carried out by BES, but not of the detail of it.[44]Mr Vaughan told me that Mr Mohammed continued in the same role after Mr Nisbet’s allegation was made and that Mr Mohammed retained full control of the financial side of Notus. Mr Mohammed remained free to engage with Mr Daniels. Mr Mohammed says that, following the sale, new contracts were secured with Babcock Nuclear and BAE.[45]Mr Mohammed left NHLS on 13 January 2023. There was then a restructure and Mr Nisbet was moved to a new role, which Mr Vaughan says could have been considered to be a promotion.[46]However, Mr Nisbet was subsequently dismissed by NHLS for misconduct on 12 April 2023 on the basis of allegations (amongst others) relating to the quad bike referred to later in this judgment . Mr Nisbet brought a claim for unfair dismissal against BES in the Employment Tribunal, which was tried in October 2024. That claim was rejected by the Tribunal. A copy of the Employment Judge’s judgment has been included in the trial bundle. (viii). BES’s investigation and subsequent events[47]BES undertook its own investigation (Project Pimlico), resulting in the submission of a self-report to the Serious Fraud Office (theSFO) on 18 January 2023 which concluded that “the conduct potentially revealed by the investigative steps taken to date includes red flags relating to possible breaches of a range of criminal prohibitions, including the Bribery and Fraud Acts”. No EDF staff were interviewed as part of the investigation, nor were Mr Mohammed, Mr Walberg or Mr Nisbet.[48]The Project Pimlico investigation suggested that the alleged bribery dated back to 2017 and implicated both Mr Milledge and Mr Daniels, as well as Mr Mohammed and Mr Walberg.[49]I understand that the authorities’ investigation is yet to be concluded.[50]The witness called by BES to address the factual allegations of bribery made by BES is Walter Rowe (Mr Rowe), who is BES Group’s Technical Director and a director of BES. He has been the person at BES with responsibility for its investigation into the allegations which it makes against Mr Mohammed and Mr Walberg. He joined the BES Group in November 2022 and so he was not in his role at the time of the meeting between Mr Nisbet and Mr Vaughan in August 2022. .[51]Mr Rowe has been instructing BES’s external solicitors (Pinsent Masons) in connection with this matter. He says that he has seen documents which tend to suggest that cash payments and other gifts were made to Mr Milledge and Mr Daniels over a 5-year period in return for NHLS obtaining preferential treatment on receiving contract work, raising NHLS’s profile on the Hinckley project, approving labour rates and payments and sharing confidential competitor tender submissions.[52]In his trial witness statement, Mr Rowe sets out many of the allegations made in this litigation.[53]Mr Rowe maintains that the alleged bribery has tainted the reputation of the BES Group and that it has delayed its plans for NHLS. In his trial witness statement, he says that BES has also incurred professional costs of over £500,000 in investigating the matter and he maintains that, had BES been aware of the alleged bribery, then it would not have acquired NHLS and he “cannot see why someone else would buy [NHLS’s] business”.[54]On 31 March 2023, BES gave notice to Notus, confirming that the EBITDA target figure under the SPA had been achieved by NHLS such that the Additional Consideration requirement had been met. At that point, the Notus Parties were unaware of any investigation into, or complaint about, any wrongdoing on their part. BES maintains that it was unable to share that information with the Notus Parties owing to the serious consequences of tipping off. However, on the same day, 31 March 2023, the SFO approved the disclosure of the relevant information to Notus.[55]On 3 April 2023, which was the next working day, Pinsent Masons wrote to Notus, setting out allegations of breaches of warranties contained in the SPA and confirming that, as a consequence, not only would BES not be paying the Additional Consideration but it also sought compensation for its losses arising out of the alleged contractual breaches. Mr Rowe was the person at the BES Group who gave instructions to Pinsent Masons in relation to that letter.[56]The allegations made in the letter of 3 April 2023 were more wide-ranging than those which are now actively pursued. Mr Rowe accepted in the witness box that there is no evidence of NHLS having overcharged Rullion/EDF or of their deploying staff who were not required at EDF. (ix). NHLS’s financial performance since 2022[57]Mr Vaughan told me that NHLS and its income “changed” in 2023 and that its revenue from Hinckley reduced. He did not know the 2023 EBITDA figure. There had been growth in its contract with BAE (due to “massively expanded” slinger work), but NHLS reduced its personnel and did not replace them. The company did not meet its budget target and there had been “a flattening” of the business driven by a loss of personnel at Hinckley. Mr Vaughan suggested that it could be that NHLS’s 2023 EBITDA matched 2022 levels.[58]Mr Rowe told me that NHLS’s revenue for 2022 had been £4.2 million, increasing to £4.5 million in 2023. In 2024, it was “over £3 million but [had not been] signed off.”[59]EDF was notified of the matters raised in this litigation, but they/Rullion did not terminate their relationship with NHLS. NHLS continues to work at EDF’s site. Mr Mohammed says, in his trial witness statement, that “BES have confirmed they have not been off hired or had any contracts terminated by ANY clients, not just EDF.”

The allegations concerning Mr Milledge

[60]Mr Milledge was Head of Lifting for EDF at Hinckley between March 2017 and late 2018. He was self-employed in that role.[61]BES alleges that he was provided with an Audi A5 car (the Audi A5) valued at £21,394, that he was paid commission for personnel placed on site at Hinckley, which was invoiced under a false name “Oakley Farrell”, and that, in both cases, those benefits were given to him as bribes to further NHLS’s business interests.[62]BES also alleges that Mr Milledge provided NHLS with confidential tender documents submitted by its competitors in a tender process for a permanent role providing staff at Hinckley (GENCO25) and that he discussed those tenders with Mr Mohammed and Mr Walberg.[63]There is an email from Mr Milledge to Mr Walberg dated 30 May 2017, in which he acknowledges that Mr Walberg was not able to attend his wedding. In that email, he says, “I’ll just expect a massive expensive wedding present hahahaha”. Whilst that email has been drawn to my attention, I am not invited to make any findings about it.

Mr Milledge’s relationship with the Notus Parties/NHLS

[64]Mr Milledge first met Mr Walberg and Mr Mohammed when they all worked together for Siemens between 2012 and 2015 where Mr Milledge was Mr Walberg’s line manager. Mr Walberg recruited Mr Mohammed to work under him at Siemens.[65]In July 2016, Mr Milledge, who was still working for Siemens, approached Mr Walberg to express an interest in joining NHLS. He submitted a business proposal to NHLS that same month. His plan was to undertake business development activities for NHLS via a separate business. Mr Walberg and Mr Mohammed decided that, rather than take up Mr Milledge’s proposal, NHLS would advertise for a business development manager. Mr Milledge responded to the advertisement, asking whether NHLS would consider a freelance/self-employed arrangement. At that time, he had an imminent opportunity to work at Hinckley for EDF, albeit as a contractor via Rullion.[66]Mr Milledge put a written proposal to NHLS on 4 January 2017, in which he advanced 2 alternative options: his stated “preferred option” of employment by NHLS with a base salary and commission of 2.5% on all sales generated, along with other benefits, including an Audi A5 car; and a “second option” where he was to accept a role with EDF at Hinckley as Head of Lifting and offer new business to NHLS at Hinckley and, once new business was achieved (within 6 months), he would be employed by NHLS. He described this option as “high risk” and said that he would require a retainer of £25,000 which he would repay when he was employed by NHLS.[67]Mr Walberg replied on 6 January 2017, proposing a variation of Mr Milledge’s “second option”. He was to accept the role at Hinckley, ensure that NHLS became approved suppliers to all relevant clients and contractors and facilitate “preferred personnel rates and payment terms”. He would then be offered employment by NHLS either after 6 months or when a minimum level of business was achieved. He was to be paid 2.5% commission on sales he generated as a bonus when he joined NHLS. Other benefits were detailed, including an Audi A5 car “or similar”.[68]A meeting with Mr Milledge was subsequently arranged but did not take place.[69]There is an email from Mr Walberg to Mr Milledge dated 30 January 2017, in which he observes:- “First of all, I appreciate your point of view however I was always hopeful of you coming on board with us at some point soon! However, when reading between the lines and taking on board the tone of your text it appears that we were somewhat miles apart?... I think it is also fair to say that I have never said Notus would not employ your services and in fact was very much the opposite. We were and remain equally keen to consider your proposal of employment, which comes with the potential works in [Hinckley] (certainly for starters as it’s a “no-brainer”) and to also help us to continually grow the business in the future. The only real questions I had surrounding the proposal was:[1]How would you actually facilitate the Hinckley Point works if employed by Notus and:[2]How we managed your appointment (given the fact that we wish Siemens to remain a client of ours). This is of course somewhat a strange scenario which I believe we are all happy to manage with caution in the short term. With Point 1 in mind your offer of two options made the decision quite easy in terms of multiple-choice, given the fact that you would be able to virtually guarantee a “route” into Hinckley Point (in a capacity of Head of Lifting)! I’m now not sure if option 2 was ever available Mike? Similarly, I feel as though I am behind the ball if the options tabled are not valid, considering these were your terms. If I am mistaken, then please reconsider sitting around the table (face-to-face as you originally wanted to) and give me the time to understand and explore how you would intend to bring the Hinckley Works to life working for Notus?... I would however ask that you let me know either way and likewise, I would still kindly ask for your support in facilitating a contact for Hinckley (assuming that the HoL job @ Bristol is also not your choice).”[70]It appears subsequently to have been agreed, in principle, that Mr Milledge would receive 2.5% commission on any fees received by NHLS as a result of Mr Milledge’s introductions. However, Mr Milledge told me that he could not recall agreeing terms and that no binding agreement was reached, other than for the 2.5% commission.[71]On 21 February 2017, Mr Milledge was provided with an employment pack by NHLS, but his evidence is that he did not sign the contract (although he indicated that he would do so).[72]Mr Milledge took up his post at EDF in March 2017. He told me that his role was to reduce incident rates and to manage the contractors on site. He said that he did not have authority to approve timesheets, rates or sub-contractors, and that EDF’s head of construction, David Speight (Mr Speight), and his seniors would have attended to those tasks

The commission payments

[73]Mr Milledge introduced NHLS to John Campanaro (Mr Campanaro), the account manager at Rullion, which had a contract to supply personnel to EDF at Hinckley. The Notus Parties’ evidence is that EDF did not have experts on site to deal with technical issues.[74]After discussions and a successful pitch, Rullion appointed NHLS to provide 2 or 3 lifting specialists (including Mr Mohammed) to join the Hinckley team on an interim basis. Mr Milledge, Mr Mohammed and Mr Walberg describe NHLS’s role as being that of “interim service provider”, producing solutions to ensure that lifting operations on site were managed correctly. Mr Mohammed says that, at that time, EDF had no lifting management assistance, technical and statutory review processes in place. The first NHLS staff began working at Hinckley on 24 April 2017, by which time Mr Milledge was already in his new role at Hinckley. Mr Walberg and Mr Mohammed say that Mr Milledge’s only involvement in NHLS’s appointment by Rullion was making the initial introduction.[75]Mr Mohammed produced monthly lifting reports for Robert Jordan (Mr Jordan), EDF’s project director, and Mr Speight, which revealed that its lifting operations were not being managed properly. He says that this resulted in Mr Jordan and Mr Speight increasing NHLS’s headcount at the site.[76]NHLS recruited Mr Nisbet in April 2017, with a view to his becoming the senior person at the Hinckley site.[77]On 22 May 2017, Mr Milledge requested an advance on his commission because he was having matrimonial issues. NHLS had not intended to pay the commission until Mr Milledge joined the company, but it agreed to pay 5 months’ sales commission based on the sales secured with Rullion. NHLS asked him to provide an invoice. He confirmed that he would do so and that he was registering himself as self-employed for that purpose.[78]According to Mr Milledge, he raised his invoices in the name of “Oakley Farrell” because he wanted to conceal that income from his ex-wife, pending the resolution of financial issues arising from their divorce.[79]However, there was an email from Mr Walberg to Mr Milledge in which Mr Walberg warned him to “be mindful whose name it is in”.[80]From October 2017 onwards, Mr Milledge submitted monthly invoices to NHLS generated from continued sales to EDF via Rullion. He was also paid for successful leads to other companies. Mr Walberg continued to press him to join NHLS on a permanent basis.[81]NHLS maintained its interim role at Hinckley and then went on to bid for the work on a permanent basis in August 2017 in the GENCO 25 tender process.[82]As recorded below, in September 2017, Mr Milledge contacted Mr Walberg with a view to persuading him to increase his rate of commission (and to offer him additional benefits) in the event that NHLS was successful in the GENCO 25 tender process.[83]On 8 September 2017, Mr Mohammed sent an email to Mr Walberg:- “Yes however should we add something about how we pay the commission? It’s all a bit messy and I’m not even sure it’s a valid solution long term. The intention originally was always to pay him his commission through PAYE when he joined the business. Obviously that changed when he asked for it upfront! Or may this be a discussion for later on? We should speak with tax company to seek advice?”[84]On 26 August 2018, Mr Milledge emailed Mr Walberg:- “With the above now in place, I would like to think that Notus now feel that they are far enough into this role, confident and established in that this is for the long term. Therefore, I would like to discuss the increase of my monthly % payment from 2.5% to 4% starting July 2018. I am fully aware that there is no specific contract and that was part of the original agreement. On the other hand, I can safely say as I am sure you can that Notus are in this for the long haul. I also know that you may be reducing rates and am aware that this will also be relevant for the payments to me.”[85]The GENCO 25 tender process continued but was not concluded by the time Mr Milledge left NHLS. In August/September 2018, NHLS was informed that Mr Milledge was leaving his role at Hinckley. However, he did not join NHLS and so the arrangement was terminated and communication with him came to an end soon afterwards. Mr Milledge told me that his role at EDF had been very stressful and had involved a great deal of travelling and that it had “taken its toll” on him.[86]On 18 September 2018, Mr Milledge sent an email to Mr Walberg:- “I just wanted to say that I am sincerely hoping that I can continue to invoice for the guys at HPC until I get sorted with a new job, which should only be within two or three months (maybe even less), then happy to stop no problem at all. It will just provide the much-needed support with the use of the car too…”[87]In his witness statement in the Employment Tribunal proceedings, Mr Nisbet suggested that Mr Milledge was dismissed in October 2018 on the grounds that he offered a bribe to another provider (Sarens).[88]Mr Milledge sent an email to Mr Walberg on 15 January 2019, telling him that he had been out of work for longer than he had expected and that his wife had been ill, “hence why I really need to be able to invoice for this month just to assist over the next couple of months while she gets better as neither of us are working.” There were then internal emails between Mr Mohammed and Mr Walberg in which Mr Walberg described Mr Milledge’s request as “a fucking begging letter” and Mr Mohammed replied, “completely agree mate…I wouldn’t give him a penny!”[89]Mr Mohammed also observed, “the reality is that he wouldn’t be asking us for anything, had we not been involved with him at Hinckley. Full of Shit!”[90]It is common ground that Mr Milledge received payments of at least £38,659.30 by way of commission payments.

The Audi A5

[91]It is uncontroversial that, in March 2017, NHLS sourced an Audi A5 vehicle for Mr Milledge. This was acquired under a Hire-Purchase Agreement dated 11 March 2017.[92]In their Defence to Counterclaim, the Notus Parties say:- “… It is admitted that such car was acquired, and that Mr Milledge was allowed the use of the same. The car was provided in anticipation of Mr Milledge taking up employment with [NHLS]. As the business development manager, Mr Milledge would as part of his financial package have been provided with such things as a company car. Mr Milledge was allowed to continue to use the car while the discussions as to his employment continued. Once it was clear that such discussions were at an end and would come to nothing, [Notus] required the return of the car.”[93]In his trial statement, Mr Milledge said:- “I knew, from what [Mr Walberg] was telling me, that Notus were very keen on me joining them and I think that is why they provided me with a car before I had joined although this was not specifically told to me. A car was going to be part of my employment package with Notus so it just seemed to me that they were giving me the car in advance of me joining them because at this point in time, in early 2017, the intention of both me and Notus was that I would be joining them sooner rather than later, subject of course to overall terms being agreed.”[94]In his live evidence, Mr Milledge confirmed that he had not shared the news that he had received a new car with his colleagues at EDF because he “just didn’t believe it was anybody’s business.”[95]Mr Mohammed stated in his trial witness statement:- “We also provided [Mr Milledge] with a car. This was part of the package we were offering as an employee of Notus. Because we were not expecting him to be at [Hinckley] for too long, we were happy to get the car when we did. We also felt that this would show him our good intentions and encourage him to join us as soon as possible.”[96]There is an email in the bundle from Mr Mohammed’s father to Mr Mohammed in which he questions “why would you be looking to buy an Audi A5 instead of an A4 for the Hinkley guy, I guess if the return is good then it’s worth it.”[97]After Mr Milledge questioned Mr Walberg in an email about an aspect of NHLS’s business performance, Mr Mohammed sent an email to Mr Walberg on 1 August 2018 saying, “I’ll [be] driving that fucking Audi back with me tomorrow if he carries on.”[98]As noted above, on 18 September 2018, Mr Milledge sent an email to Mr Walberg asking if he could continue to use the car after he had left Hinckley. Mr Walberg’s response was, “I would ask that you take care of the car whilst in your possession and again we can arrange to collect in three months.” Mr Milledge’s response was to ask if he could keep the car until shortly before Christmas.[99]On 2 November 2018, Mr Walberg emailed Mr Milledge telling him that the dealership had confirmed that they would collect the car from him on 3 December 2018. It became apparent during the trial that this was not the case and that NHLS kept the car for a further year after it was retrieved from Mr Milledge.

GENCO 25

[100]Mr Walberg says that, shortly after NHLS began working at Hinckley, the NNB Commercial manager, Phil Holt (Mr Holt), asked if NHLS would be interested in tendering for the GENCO 25 contract for “Lifting Management Services”, but that Mr Holt had reservations about NHLS’s prospects of success, given that it was such a new company. NHLS was providing monthly reports to EDF’s senior management team, as part of its role as the interim service provider. NHLS remained in that role at the time of the SPA in May 2022.[101]GENCO 25 was put out to tender in June 2017. Submissions were to be made by 4 September 2017 The four tenderers were NHLS, Lifting Gear UK (LG), Lloyds British (LB) and EnerMech (EM).[102]On 21 June 2017, EDF produced “Instructions to Tenderers” which stipulated:- “Tenderers must not try to obtain any information about any other party’s Tender or proposed Tender”[103]Tender Questionnaires were issued and sent to the tenderers on 10 June 2017.[104]Mr Milledge was one of the 3 Technical Assessors on the GENCO 25 evaluation team. The evaluators’ “Kick-off Briefing” document stated:- “…the competition and evaluation process must be fair, balanced and impartial…Please ensure confidentiality during the evaluation so as not to prejudice the competition. Do not discuss the evaluation with anyone outside the evaluation team.”[105]On 13 July 2017, and during the course of the tender process, Mr Milledge sent an email to Mr Mohammed and Mr Walberg saying that his wife, Cuqui (Ms Farrell) was “more than happy to be on your website as HR Manager” and “if you require any HR support or HR Policy support then she can definitely assist you anytime”.[106]On 15 August 2017, Mr Milledge emailed Mr Walberg, suggesting that Ms Farrell could be included in NHLS’s organogram as its “HR Manager”.[107]On 3 September 2017, having been contacted by Mr Mohammed, Mr Milledge commented on a draft of NHLS’s tender submission and the following day he sent an email to Mr Mohammed proposing new terms for his potential employment by NHLS. Those terms were based, in the alternative, on the tender being successful and unsuccessful.[108]On 4 September 2017,Mr Milledge sent an email to Mr Walberg, which begins:
“Following our conversation last week regarding the discussions relating to Cuqui potentially joining Notus as HR Manager and further to my imminent employment with Notus, I have attached a revised proposal that we would like you to consider. We have submitted separate offers based on the outcome of the tender.”
[109]The email goes on:- “As you know I am very much looking forward to joining Notus in the very near future to assist in building a successful company. It’s an exciting time and, all being well, Notus will win the tender but, even if we don’t win the tender, there is still plenty out there that can be tapped into.”[110]Attached to the email was a document headed “Proposed New Terms”, in which alternative terms and conditions were proposed, based on whether the tender was successful. On the basis of a successful tender, Mr Milledge’s salary was to be £85,000 and he was to receive commission of 5% on all sales, and Ms Farrell was to receive £50,000 per annum as an HR professional. In the event that the tender was unsuccessful, Mr Milledge was to receive a salary of £70,000 per annum with commission on all sales of 2.5%. In that event, Ms Farrell was to work on a consultancy basis for a minimum of two days per week at a daily rate of £300. In either case, the arrangement was to begin in November 2017.[111]On 6 September 2017, Mr Milledge received internal emails at his EDF email address, attaching the tender documents (excluding the commercial pricing rates, which he did not receive) of LG, LB and EM. That day, he forwarded the documents to his private email address.[112]The following day, he sent the documents from his private email address to Mr Mohammed.[113]On 8 September 2017, Mr Mohammed replied to Mr Milledge’s private email address, making observations about each of the pitches. Amongst other comments, he was critical of LG’s submission, which he described as “a painful review” and he also wrote “BLA BLA BLA BLA!” and “FAIL FAIL FAIL”. In relation to LB’s tender, he made a series of criticisms.[114]Turning to EnerMech he observed, “I failed EnerMech on 6 of 19 responses with another 4 that were marked very poor but just about provided a couple of lines that were acceptable…So I can see where this is all going already.”[115]On the submissions generally, he observed, “none of them have devoted any part of the response to actual lifting operations. Just keep quoting LOLER [the applicable lifting regulations] in the hope that that will do it…”[116]Mr Milledge maintains that NHLS was offering comments in their capacity as interim service providers and that this was well known to those working on the tender at EDF. He told me that NHLS’s involvement in the technical review was known to his supervisors and that David Speight was party to conversations with Mr Mohammed.[117]In response to my question enquiring of him who had asked him to undertake the evaluation of other tenders, Mr Mohammed told me:- “I was in an open plan office with Mr Milledge and Phil Holt [NNB Commercial Manager], Richard – we used to have conversations about the tender and I carried out a lot of these reviews in the office. I also had an EDF email address, as did Garrick [Nisbet], as did all the team, and obviously I don’t have access to that. It’s the security on Hinckley, but there will be communications on there.”[118]Mr Mohammed told me that he had done the majority of this work on the site, whilst sitting next to EDF staff.[119]There are no separate invoices for the review work undertaken by Mr Mohammed on NHLS’s behalf and I am aware of no email or text communications evidencing that NHLS was instructed to do this work.[120]On 3 October 2017, Mr Walberg replied to Mr Milledge’s proposal relating to his engagement by Notus. Within that response, Mr Walberg stated that Notus was “happy to ring fence this EDF HPC contract and set a project specific commission at 3.5%”. He indicated that Notus was not in a position to employ Ms Farrell at that stage. He went on to say:
“With regards to the start date we envisage this being a sensitive time for the business and whilst we don’t want to, we would expect that you will need to maintain a low profile.”
[121]Mr Milledge’s response the following day proposed “EDF HPC contract commission at 4.0% of sales…. All other the commission at 2.5% of all sales based on the original proposal”. He went on to say, “Haha am sure I can keep a low profile Wes, no problem. As far as HR goes then I personally don’t see an issue as all are professional but understand that you’re not ready at the moment to justify it".[122]Later that day, Mr Walberg emailed Mr Milledge, as follows:- “… we have no formal visibility of any contract award date or when the contract will even start. We also believe that there is a real risk to us if you leave too early and, in fact, think that NNB may well approach Garrick [Nisbet] direct? At least if you are there for a little longer, it gives us stability and allows us some time to cement our position is and appoint the core project team (upon contact award).”[123]On 22 November 2017, Mr Milledge emailed Mr Walberg saying, “I still believe that Hinckley is one of the most important opportunities that Notus will have for many years and it is my sole intention to see the contract through to a happy conclusion and then join Notus… I won’t leave Hinckley until I know everything is in place using my influence here.”[124]Ultimately, NHLS was unsuccessful in the GENCO 25 tender process. Mr Milledge maintains that he did not send any commercially sensitive information to NHLS relating to the tender process.[125]There is an email from Mr Mohammed to Mr Walberg dated 15 February 2018 in which he sets out the draft of an email which he was proposing to send to Mr Milledge. In that email he says:
“I’m also extremely concerned that with this disaster of a tender process, the reality is we are on two weeks’ notice at any point for any one personnel.”
HPC emails about gifts and hospitality[126]After receiving an email from HPC/EDF dated 31 January 2018 about its Gifts and Hospitality Policy, Mr Nisbet forwarded it by email to Mr Walberg, saying, “Do you think someone has grassed him up??, to which the reply was “Haha”.[127]Mr Nisbet received a reminder email from HPC on this topic on 5 July 2018, which he again forwarded to Mr Walberg and Mr Mohammed, commenting, “Evening Gents, Thought you might like the attached!!!”

NHLS Anti-bribery policy

[128]On 24 February 2017, Mr Walberg sent an email attaching NHLS’s “Anti-bribery and Corruption Policy” to a third party. That policy had been verified by Mr Mohammed and approved by Mr Walberg. It set out a definition of bribery with reference to the Bribery Act 2010 and it contained a section on “Gifts, Entertainment and Hospitality”, stipulating that any offer of the same must be “for a genuine purpose” and “reasonable and proportionate”. On 14 May 2019, NHLS then completed a Bribery Act compliance form for Skanska UK Plc. That form certified that there was “regular management checks of compliance.”

The allegations concerning Mr Daniels

[129]Mr Daniels was Head of Lifting and Temporary Works at Hinckley from September 2018 until April 2023. He was not employed by EDF. He was self-employed and had a contract with Rullion. Mr Daniels says that, in his role, he received information, guidance and services from NHLS. He was not a signatory to contracts with suppliers, but “was there to adhere to a budget on a monthly basis.”[130]BES alleges that he was given sponsorship of £700 for a local hunt which took place in May 2019 and that, in July 2019, NHLS gave him a new quad bike (the Quad Bike) at a cost of £10,388.80. A Montblanc pen refill was also ordered for Mr Daniels on 9 July 2019 and, at approximately the same time, Mr Mohammed and Mr Walberg were looking into providing him with expensive tickets for boxing events. At one point, there was an allegation that Mr Milledge had improperly had a flight paid for by NHLS, although that complaint appears no longer to be pursued.[131]On 25 May 2019, Mr Mohammed emailed Mr Walberg saying, “ This is the boxing Ashley wants to see mate. Think we’ll get the next couple of headcounts off him. He’s told EnerMech this week that they’ve missed the deadline for the role that Paul Wade is taking…”[132]It is also alleged that commission based on headcount was paid to him directly to “AD Consulting” and indirectly via Ashley Daniels Limited, disguised as invoices for “temporary works”, and that later a substantial payment was made to him as a “tidying up exercise” when the business was sold.[133]An anonymous complaint was made to EDF on 9 September 2019 that NHLS was being paid “an obscene amount of money”. Mr Daniels forwarded this confidential report to Mr Nisbet and Mr Mohammed. Mr Mohammed replied, “Thanks for the heads up…Wonder who we’ve upset…”, To which Mr Daniels responded, “Fuck um I say”. Mr Mohammed finished the exchange with “Amen to that mate”.[134]On 17 June 2020, Mr Mohammed wrote to Mr Walberg concerning a “brief update from Ashley”, setting out the budget for NHLS and noting “budgets have been signed off by Ashley…EnerMech will have 2 people throughout 2020 and no more than 4 people at any one time…”[135]In his witness statement, Mr Daniels noted:- “I could have done so much more; I could have made Notus millions of pounds if I wanted to, by engineering bigger budgets, but in fact every year I underspent. I could have placed more personnel on site. I could have agreed with any rate increases they wanted to propose. In fact, I was part of negotiations to lower rates and reduce costs while I was in position.”[136]On 18 May 2022, Mr Nisbet wrote to Mr Mohammed about a potential placement stating, “I’ve discussed with Ashley, EnerMech haven’t even acknowledged the request yet, he’s asked not to reply with Jason’s CV yet, wants to look like it wasn’t pre-empted…”

The Quad Bike

[137]It is uncontroversial that, in July 2019, NHLS paid for a new quad bike for Mr Daniels at a cost of £10,388. It was delivered to Mr Daniels’ home address.[138]In the Notus Parties’ Reply and Defence to Counterclaim it was stated that the Quad Bike “was given to Mr Daniels as an act of friendship” and that “the cost of such was repaid by Mr Daniels.”[139]In their Reply to BES’s Part 18 request, they state:- “Payment was not made to Notus Heavy Lift. Mr Mohammed paid 50% to Mr Walberg as an act of friendship to Mr Daniels. Mr Mohammed and Mr Daniels reached separate agreements as to the remaining 50%.”[140]In his witness statement, Mr Mohammed stated:- “[Mr Daniels] on one occasion was talking to me about the fact that he needed to get rid of his existing quad bike and buy a new one, but he didn’t want to pay VAT. I said that Notus could buy the quad bike to save him the VAT which we did and then he paid us back. I paid half of the cash due to Wes and Ashley paid everything back to me by some cash, some art and a Rolex watch.”[141]On cross-examination, Mr Mohammed told me that Mr Daniels had paid him “some cash to start with” and subsequently said, “I think it was £1,000”. The Rolex watch and the artwork were provided “maybe a few months later”.[142]When asked why he had not referred to the specific sum of £1,000 in his witness statement, he replied that he “probably didn’t think about it until today”. He told me that he had explored with Notus’s accountants whether the VAT paid on the quad bike had been reclaimed but that the position had not been confirmed.[143]Mr Walberg acknowledged that, in hindsight, the outlay for the Quad Bike should have been refunded to NHLS. He described the purchase as “a favour” based on Mr Mohammed’s good friendship with Mr Daniels.[144]In his trial witness statement, Mr Daniels said:- “…I did not want to pay the VAT. I know it is wrong and I could have bought the quad bike through my own money rather than asking James to buy it through Notus. I paid James back through a small amount of cash and some belongings. The belongings were a Rolex watch and some art which had been done by a well-known artist who is a friend of mine…This was all done through James and not only do I think that I have paid back James for the quad bike, but I think I have paid him back more than the value of the quad.”[145]In his live evidence, Mr Daniels told me that he did not know whether Mr Mohammed was going to buy the Quad Bike personally or through NHLS. He then went on at one point to tell me that “if you take a loan on APR, you wouldn’t get a loan on VAT.”[146]He went on to tell me that the cash payment which he made to Mr Mohammed was “no more than £1000” and then “£950 to £1000”. He said that the agreed value of the Rolex watch was “£5000 or 6000”and that he had written out a receipt relating to the transaction. The artwork which he had given to Mr Mohammed had a value of between £1000 and £5000.[147]It is common ground that there are no documents, such as emails, WhatsApp messages or texts, passing between Mr Mohammed/Mr Walberg and Mr Daniels evidencing the basis on which the Quad Bike was purchased or the basis or terms of repayment.[148]There are WhatsApp messages from Mr Walberg to Mr Mohammed on 31 May 2019 in which he says, “Don’t suppose we can [buy hospitality boxing tickets for Mr Daniels] if he now wants a Tonka Toy” and “maybe he could give us some of that training budget in return”.[149]There is a further reference to the Quad Bike in an email from Mr Walberg to Mr Nisbet on 4 August 2019, in which he comments, “I would expect the purchase of an £11K quad bike to give us a bit of breathing space! He can’t expect to use your company expenses as a personal bank. It’s too easy. Liberties.” Mr Nisbet replied, “I agree mate, he’s a wee piss taker, to be honest he’s hard to say no to, but I’ll be stricter with him going forward.”[150]In the same email chain, Mr Walberg had said, “it’s not about a pen refill. It’s this hint of self-entitled approach which doesn’t sit well. We just need to remember that he’s not exactly squeaky clean here either and I don’t want him to just take liberties and expect a “yes” every time he fancies something. We can’t let the tail wag the dog.”[151]Mr Walberg and Mr Mohammed deny that NHLS ever delivered any training to EDF.[152]During the course of the trial, the Notus Parties disclosed a document headed “To Document the Sale of the Quad” recording Mr Daniels’ gift of the Rolex watch to Mr Mohammed. In his live evidence, Mr Daniels told me that Mr Mohammed had been given a copy of the document. However, he did not include it in his disclosure.

Commission Payments

[153]Mr Mohammed sent an email to Mr Walberg on 10 March 2020, setting out proposed terms for Mr Daniels’ “consultancy” arrangement:- -. Actively raise and promote the profile of Notus as much as possible -. Allow us to swap out personnel with no risk of losing the position to EM. We will ensure fully badged replacements moving forward and/or holiday cover roles will be able to take on these positions with no disruption to our service or the project -. Allow us to have up to 1 badge up person per 2 headcount roles via 6 code -. Keep the wolves away with regards to noise from RJ [Rob Jordan, EDF Project Director], NNB [a subsidiary of EDF] and EM [EnerMech] -. Notus to maintain the Lifting Manager role beyond GN’s time on the project. GN to remain on the project until end of 2021? Any invoicing from AD to us would be for Temporary works consultancy services. Probably to his personal a/c as the limited company is split between 3 directors. Let me know your thoughts please mate as if we are going to do anything then now is prime time to push the button as AD has a £600K budget and is actively engaged with EM for several roles. Worth noting that I believe EM will have to be given some of the roles but if we can limit this to LS [lift supervisor] roles then this will benefit us…”[154]The following day, Mr Walberg confirmed his agreement to these proposed terms.[155]It is common ground that Mr Daniels was subsequently paid £43,856 in settlement of invoices delivered to NHLS either by “AD Consultancy” or by his company, Ashley Daniels Limited. The first invoice dated 20 March 2020 referred to work undertaken between 1 December 2019 and 30 April 2020. The invoices were stated to be for temporary works services, save for one which referred to “property maintenance”.[156]It is the Notus Parties’ case that these invoices were legitimate and that, initially, they initially related to specialised temporary works services (Temporary Works), including the development of an app (the App), provided by Mr Daniels to NHLS and that, later on, they related to investments or loans made by NHLS in/to Mr Daniels’ company, AD Plant Limited. Mr Mohammed says that Mr Daniels had insisted on being paid for his work and that an hourly rate had been agreed, but that it was made clear to Mr Daniels that he could only be paid what NHLS could afford.[157]On 16 March 2020, Mr Walberg sent an email to Mr Mohammed in which he expressed concern about invoices coming from Mr Daniels’ company, Temptag Limited:- “Is Temptag the right thing to do? This will mean that 2 other people, other than Ashley, will know something?”[158]BES’s case is that the documentary evidence demonstrates that the alleged invoicing arrangement was a sham and that, in reality, Mr Daniels was being paid commission for the NHLS staff who were working at Hinckley. During the course of the trial, I was shown a number of spreadsheets apparently relating to the payments made to Mr Daniels which referred to “Current Headcount”, “Monthly Commission”, “Additional Headcount”, “AD to invoice for professional TW services” and “Due to AD as per agreement”. Those spreadsheets set out payments correlating to the sums paid to Mr Daniels during the relevant period.[159]On 10 February 2021, Mr Mohammed sent an email to Mr Daniels, attaching one such spreadsheet headed “Current Headcount Agreement” and referring to “headcount” and “monthly commission”. In the email, Mr Mohammed confirmed that “it can be tweaked as and when new headcount is assigned.”[160]On 17 November 2021, when NHLS was for sale, Mr Mohammed sent an email to Mr Walberg marked “Private”:- “I have spoken with AD and he was okay with us committing to a max of two years for our existing agreement with him as you and I discussed. … With regards to anything beyond what we currently have he said that our existing agreement still stands per person.”[161]At that point, the invoices for Temporary Works came to an end. Mr Mohammed’s evidence was that it was agreed with Mr Daniels that the loan payments would be frozen pending the sale of NHLS.[162]A total sum of £97,968 was then paid to Mr Daniels by Notus (not by NHLS). This equates to 24 instalments of the monthly commission amount of £4,082. The first instalment of £48,984 was paid on 31 May 2022. Subsequently, a further 6 payments of £8,164 were made between 1 July 2022 and 5 December 2022. The Notus Parties’ position is that these payments represented an investment in Mr Daniels’ company, because he could not afford to start repaying the loan. In his trial witness statement Mr Mohammed says, “instead of being paid back along with interest, we would get shares.”[163]BES’s pleaded case is that “it is to be inferred that they were “tidying up payments as Mr Daniels would not continue to receive bribes from [NHLS] once it was under the control of new shareholders and directors. The Notus Parties’ pleaded response was that “payments were made to Mr Daniels in respect of the sale of shares in a company called AD Plant Limited from Mr Daniels to Mr Mohammed and Mr Walberg.”[164]In support of that position, they rely on 3 documents which were not referred to in their pleaded case or in their trial witness statements, namely a loan agreement dated 7 March 2021 (the LoanAgreement), a heads of agreement document dated 31 May 2022 (theHeads of Agreement) and a declaration of trust dated 31 May 2022 (the Declaration of Trust). Their case is that these documents evidence that the payments made to Mr Daniels and his company were legitimate loans and investments.[165]The Loan Agreement records that payments are to be made at the request of Ashley Daniels Ltd for a loan of up to £50,000. Repayments were to begin on 27 May 2022 and the applicable interest rate was to be 0%.[166]The Heads of Agreement is intended to explain the payment of £97,968 by Notus. It refers to an “investment loan” of £36,738 and it refers to converting the investment loan into share options of 12.3% and £97,968 for 32.7% of the share capital of the company.[167]The Declaration of Trust declared that Ashley Daniels Ltd will hold on trust for Mr Mohammed and Mr Walberg 22.5% each of the share capital. There are no narrative documents relating to these matters.[168]During the course of the trial, Mr Daniels produced a document which purported to show that, at the relevant time, he had been inviting investments in AD Plant Limited.[169]Mr Daniels finished working at EDF in April 2023. He was removed from his role because of the allegations concerning NHLS.

Procedure

[170]Notus issued its claim on 14 June 2023, seeking payment of the Additional Consideration under the SPA or, alternatively, damages.[171]On 16 August 2023, BES filed its Defence and Counterclaim for damages for the Notus Parties’ alleged breaches of warranties. Simultaneously, BES brought a Part 20 Claim against Mr Mohammed and Mr Walberg.[172]Each party put a Part 18 request to the other, which was in each case responded to.

Broad Outline of the parties’ respective positions

(i) The Notus Parties

[173]The Notus Parties deny that any arrangement existed whereby financial and other advantages were given to Mr Milledge to induce him to perform his duties at EDF improperly or to reward him for doing so. They contend that the emails on which BES relies have been taken out of context and that BES’s focus has been on avoiding paying the Additional Consideration.[174]The Notus Parties say that the commission payments made to Mr Milledge arose from a legitimate agreement which was reached with him before he began to work at Hinckley.[175]They argue that the Audi A5 was provided for him and that the commission payments were made to him in anticipation of his becoming an employee of Notus.[176]Mr Chaisty KC complains that the allegations made by BES that Mr Milledge performed his duties improperly are vague and unclear.[177]In relation to the GENCO 25 tender, the Notus Parties’ position is that NHLS worked at the site as an interim site provider and assisted EDF with the technical aspects of the tender process. They say that there was nothing improper in their doing so and that their involvement was endorsed by senior EDF staff. In any event, there was no benefit or advantage to NHLS materialised.[178]The Notus Parties also reject BES’s allegations relating to Mr Daniels.[179]They contend that the point-to-point sponsorship was entirely legitimate and that the pen refill is a matter of no consequence.[180]They accept that NHLS purchased the Quad Bike for Mr Daniels but they say that its cost was reimbursed, as was always intended.[181]They also maintain their argument that any payment made to Mr Daniels’ companies were made legitimately (either for Temporary Works and related services or for loans/investment in Mr Daniels’ business) and had nothing to do with EDF or the Hinckley site.[182]Mr Chaisty KC describes the allegations that Mr Daniels performed his duties improperly as hopelessly broad and generalised.[183]In relation to the allegations made against the Notus Parties in general, Mr Chaisty KC points out that: the emails on which BES relies were openly passed on to it on the sale of NHLS, which is inconsistent with covert activities; at all relevant times, NHLS was trying to persuade Mr Milledge to work for it, rather than to remain at the Hinckley site for NHLS’s benefit; and BES’s evidence reveals no benefits derived by NHLS from the alleged arrangements of which BES complains, such as receiving a contract as a result of the GENCO 25 tender process or preferential treatment in terms of labour placement or rates paid.[184]Mr Chaisty KC complains that Mr Rowe has merely adopted the evidence of others and that BES’s other witnesses added nothing to the picture. He says that there is no evidence of any loss suffered by BES and that, in fact, NHLS continues to thrive. The upshot is that, if BES were to succeed in this litigation, then it would have received a windfall. (ii). BES[185]BES contends that this is a simple case of the Notus Parties having given warranties which were false and that the contemporaneous documentary evidence points overwhelmingly to that conclusion.[186]Mr Zaman KC says that the Notus Parties’ case is inadequately pleaded. The Loan Agreement, the Heads of Agreement and the Declaration of Trust are not pleaded. He says that those documents have appeared in a vacuum, and are not supported by witness evidence. The scheme of investment in, and loans to, Mr Daniels’ company are not pleaded and there is no pleaded reference to the development of the App.[187]He complains that the note “to Document the Sale of the Quad” and the investment document relating to Mr Daniels’ company were only disclosed during the course of the trial.[188]He points out that bribery is made out by the offer of an inducement and that it is not necessary to show that the inducement generated an advantage.[189]Mr Zaman KC rejects the Notus Parties’ explanations for the provision to Mr Milledge of the Audi A5, the use of the name “Oakley Farrell” and NHLS’s engagement in assisting EDF with the GENCO 25 tender process.[190]Turning to Mr Daniels, Mr Zaman KC rejects the Notus Parties’ explanations and notes that they appear to be suggesting that NHLS’s purchase of the Quad Bike was a VAT fraud.[191]As for the invoices, he says that the documentary evidence clearly contradicts the Notus Parties’ case and thatthere is no reference to investments and loans in the Reply and Defence to Counterclaim in response to the table of payments set out in the Defence and Counterclaim.

Approach to the witnesses’ evidence

[192]I have read the witnesses’ statements and I have listened carefully to their live evidence. I have reflected on that evidence, and I have taken full account of the written and oral submissions made by Mr Chaisty KC, Mr Zaman KC and Mr Perrin.[193]Mr Zaman KC has referred me to the observations of Males LJ in Simetra Global Assets Limited v Ikon Finance Limited [2019] EWCA Civ 1413:- “ In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including emails and instant messaging. Those tend to be the documents where a witness’s guard is down and true thoughts are plain to see. Indeed, it has become a commonplace in judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents.”[194]Leggatt J sounded a warning in Gestmin SGPS v Credit Suisse (UK) Ltd [2013] EWHC 3560 about the interpretation of evidence, especially in the context of the passage of time. He observed that:- “…an obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory.”[195]He went on to say:- - “[there is] a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten when retrieved” - “memory is especially unreliable when it comes to recalling past beliefs” - “civil litigation itself subjects the memories of witnesses to powerful biases… [which is] obvious where the witness is a party or has a tie of loyalty” - “[a party’s witness statement] is made after the witness’s memory has been “refreshed” by reading documents.”[196]I, therefore, remind myself to be cautious about the witnesses’ oral testimony and only to make findings of fact after considering all the evidence, both oral and documentary, and after reflecting on the inherent probability of what I am being told.[197]I bear in mind the helpful guidance given in Phipson on Evidence 20th Ed at 45.18, namely that, when assessing the reliability of a witness’s evidence, I should take account of:- (1). the consistency or otherwise of the witness’s evidence with what is agreed, or clearly shown by other evidence, to have occurred; (2). the internal consistency of the witness’s evidence; (3). consistency with what the witness has said or deposed on other occasions; (4). the credit of the witness in relation to matters not germane to the litigation; (5). lies established in evidence or in the context of proceedings; (6). the demeanour of the witness; and (7). the inherent probability of the witness’s account being true.[198]I have been assisted by the documents to which I have been referred and I am grateful to the solicitors for producing the helpful, but very extensive, trial bundles.[199]I shall need to make findings of fact. In doing so, I remind myself that I must only find a fact established if I am satisfied on the evidence that I have heard and read that it is more likely than not to be true. In other terms, each such fact must be proved on the balance of probabilities.

The witnesses

[200]I should begin by making observations about the impression which I formed of the witnesses’ evidence.[201]My knowledge of the witnesses comes only from their presentation in the witness box, the manner in which they responded to questions on cross-examination and the witness statements to which they put their names.[202]Mr Rowe, Mr Lomax and Mr Vaughan have given evidence on behalf of BES and Mr Mohammed, Mr Walberg, Mr Milledge and Mr Daniels have given evidence on behalf of the Notus Parties.[203]BES’s first witness was Mr Vaughan. I found him to be a very straightforward witness. He no longer works for BES and I accept that he is essentially an independent witness who has little to gain or lose from giving evidence. He made it clear to me when he was not in a position to answer a question. He was also candid in telling me that he had a very good working relationship with Mr Mohammed and that he thought highly of him.[204]I am satisfied that Mr Vaughan was an honest witness who was doing his best to assist me.[205]I have no doubt that Mr Lomax was telling me the truth, as he recalled it. He was clear and straightforward in his answers to Mr Chaisty KC’s cross-examination.[206]However, it became apparent that his knowledge of NHLS’s business was limited and related almost entirely to his involvement in the acquisition process. For example, he had remained a director of the company after the acquisition but he was unable to recall when his directorship came to an end, even though it did so reasonably recently.[207]Mr Lomax was able to add little to the evidence because he had no direct knowledge of the disputed issues.[208]In his trial witness statement, he was robust in his view of whether BES would have continued with the acquisition of NHLS had it known of the alleged bribery. However, in the witness box he said that he would have had “some difficulty recommending” the acquisition if he had been aware of the allegations. He did not descend into detail as to which allegations would have led BES to abandon the transaction.[209]However, he made some concessions, including acknowledging that he came through the due diligence process satisfied that Mr Mohammed and Mr Walberg had tried their best to answer his questions.[210]Mr Rowe’s evidence was impassioned. He clearly feels strongly about what he considers to be the wrongful activities of Mr Mohammed and Mr Wahlberg.[211]However, on any view, he has no first-hand knowledge of the disputed issues. He began his role some 2 months after the meeting between Mr Nisbet and Mr Vaughan. At that point, having been briefed by Mr Hirst, he effectively took over day to day management of the matter and was responsible for instructing Pinsent Masons to investigate it.[212]Whilst I have no doubt that, in the witness box, Mr Rowe was being honest and candid, I had the impression, at times, that he was arguing BES’s case, rather than giving evidence on its behalf on the factual issues. For example, in response to a question put to him by Mr Chaisty KC, he replied, “we rely on the expert evidence” and, having said at the beginning of his cross-examination that there was nothing to correct in his witness statement, he then went on to accept that the complaint about the flight taken by Mr Daniels (an allegation made in his witness statement) was without foundation.[213]My overall impression of Mr Rowe’s evidence was that he was wedded to the case advanced by BES and that he lacked objectivity in what he told me. That is perhaps understandable, given that he has been closely involved in BES’s investigation. Inevitably, he will have formed a view about the contentious issues in this litigation.[214]However, there were aspects of Mr Rowe’s evidence where he appeared to persist in making what I considered to be unjustified allegations against Mr Mohammed and Mr Walberg. A case in point was a comment in an email concerning a wedding present for Mr Milledge, which he considered to be evidence of bribery but which I regard to have been nothing other than a good humoured aside. Another example was Mr Rowe’s insistence that the pen refill given to Mr Daniels was a bribe intended to secure a benefit for NHLS.[215]Mr Rowe had a solid knowledge of the case being advanced on behalf of BES and he made several references to evidence which supported that case. However, when Mr Chaisty KC referred him to, for example, documents which tended to undermine that case, he appeared to have limited knowledge of them. Examples included the 2019 Hinckley monthly progress report which indicated that there was a legitimate explanation for the flight ticket purchased for Mr Daniels, and the email from Mr Nisbet to Mr Daniels about whether staff could be “swapped out”.[216]Given these observations, I shall treat Mr Rowe’s evidence with a measure of caution. That said, there is little that he has been able to say about the key factual issues.[217]Mr Milledge was a reasonable witness. However, there were aspects of his evidence which caused me some concern.[218]His evidence was punctuated regularly by his observation that matters put to him needed to be considered in context. Whilst, on the face of it, that is not an unreasonable proposition, my impression was that Mr Milledge had a tendency to raise this point when he was uncomfortable explaining events or documents about which he was being questioned.[219]Perhaps of greater concern was Mr Milledge’s admission that he had been misleading Mr Walberg and Mr Mohammed and that he did not seriously intend to join NHLS. He told me that he had been “kidding them along quite a lot” and that he had told them “a few white lies”. This appears nowhere in his witness statement and perhaps reveals a willingness on his part not to be entirely candid in his dealings with others, as did his admission that he was concealing evidence of his income from his ex-wife.[220]Mr Milledge also told me that he was VAT registered in the name of Oakley Farrell, but went on to acknowledge that the invoices recorded, “VAT not applicable”.[221]I also found Mr Milledge to be somewhat vague in his account of his receipt of the Audi A5 and of the basis on which it had been given to him.[222]Those points made, I acknowledge that the events about which Mr Milledge was giving evidence date back up to 8 years, and that he was in the witness box for a full day, which cannot have been an easy experience. I have also noted that he was giving his evidence voluntarily, having travelled from Spain to do so.[223]Mr Walberg was a confident witness who made very few concessions.[224]Some aspects of his evidence were persuasive, but I found his account relating to the payments to Mr Daniels to be unconvincing.[225]Mr Walberg conceded that some of Mr Daniels’ invoices were based on untruths, either because VAT had not been charged when it appeared on the invoices or because the text of the invoices did not reflect the true position.[226]I shall return to this issue below but suffice to say that his evidence on this issue undermined his credibility generally.[227]Mr Mohammed was an engaging witness who clearly had an ability to work well with others. For example, Mr Vaughan spoke highly of him in the witness box. However, I found aspects of Mr Mohammed’s evidence unconvincing.[228]For the reasons set out later in this judgment, I have been unable to accept his evidence on the payments to Mr Daniels, which mirrored that of Mr Walberg.[229]I was not persuaded by Mr Mohammed’s evidence concerning the Quad Bike. There were inconsistencies between the Notus Parties’ pleaded case (on which Mr Mohammed signed the statement of truth) and what I was told in the witness box. Again, I address this issue more fully below.[230]Overall, I have decided to treat the evidence of both Mr Walberg and Mr Mohammed cautiously.[231]Given my misgivings about aspects of the evidence of Mr Milledge, Mr Walberg and Mr Mohammed, I have not always found it easy to establish the true nature of their business relationship.[232]I found Mr Daniels to be an unsatisfactory witness.[233]He was evasive in cross-examination and I was far from persuaded by the evidence which he gave in relation to the Quad Bike and the invoices which he produced. I return to those issues, and to his evidence about them, below.

General observations

(i) The emails and contemporaneous documents

[234]I accept that the emails and instant communications principally passing between Mr Mohammed and Mr Walberg were sent whilst their guard was down. Those communications do not necessarily give me the whole picture, but, where they tended to undermine the Notus Parties’ case, they needed to provide credible explanations for them.[235]There are several such emails and communications and, as I have concluded below, in some instances, I have not been satisfied with the explanations given by Mr Mohammed and Mr Walberg. (ii). The Notus Parties’ disclosure – instant communications[236]I make the observation below that I have found it surprising that there is so little disclosure from the Notus Parties of contemporaneous correspondence in the form of email, text and WhatsApp messages evidencing interactions between Mr Mohammed and Mr Walberg and between them and Mr Milledge and Mr Daniels. It is not the case that they were not in the habit of using these means of communication. Such evidence might have been very helpful to me and its absence does not strengthen the Notus Parties’ case on certain key issues. (iii). BES’s evidence[237]It is probably uncontroversial that BES’s witnesses take many of the disputed issues little further. They have no direct evidence concerning the allegations of bribery made against Mr Mohammed and Mr Walberg.[238]I note that BES has not called or relied on the evidence of any witnesses from EDF which, of course, might have assisted its case. I accept that there may have been tactical or commercial reasons for that decision.[239]This renders them reliant on the documents that have been disclosed, on the evidence given by Mr Mohammed, Mr Walberg, Mr Milledge and Mr Daniels, and, particularly, on the cross-examination of those witnesses.[240]One issue which BES’s witnesses address (which may be of little consequence) is whether BES would have proceeded with the acquisition of NHLS if it had known of the allegations made against Mr Mohammed and Mr Walberg. In this respect, BES has relied principally on Mr Lomax’s evidence.[241]I have some reservations about BES’s evidence on this point.[242]Firstly, whilst Mr Lomax would have made recommendations to the holding company, he would not have been the ultimate decision-maker as to whether the acquisition was to proceed and none of the directors of the holding company are witnesses in this litigation. Secondly, Mr Lomax’s assertion that the transaction would have been aborted if BES had known of the allegations was not nuanced and did not detail which allegations, if any, would have been determinative in reaching that conclusion. For example, there was no analysis in Mr Lomax’s witness statement, or indeed in his live evidence, of how the clear appeal of NHLS (“best of breed” etc) would have impacted on that decision. Lastly, as I have noted above, Mr Lomax seemed less clear in his live evidence than in his trial statement that BES would have abandoned the acquisition, had it been aware of the allegations being made against the Notus Parties.[243]Another issue relates to GENCO 525. There is no evidence from anyone at EDF about the tender process and whether it was relaxed in its approach to the exercise in the way suggested by Mr Milledge and Mr Mohammed. (iv). The Project Pimlico Investigation[244]I accept that, after Mr Nisbet had brought to BES’s attention his allegation that Mr Mohammed had bribed Mr Daniels, an investigation was necessary to establish whether there was any truth in what Mr Nisbet was alleging. Given the potential ramifications, it was not unreasonable for that investigation to be conducted by BES’s lawyers.[245]However, I have some sympathy with Mr Chaisty KC’s observation that the investigation did not extend to interviewing anyone at EDF or at Rullion, or indeed Mr Mohammed or Mr Walberg (although, owing to the risks of “tipping off”, it may not have been possible to interview them at one stage). The upshot is that the investigation was not as all-encompassing as it might have been and primarily relied on documents generated by searches.

(v) The Loan Agreement, Heads of Agreement and Deed of Trust

[246]BES alleges that these documents have been manufactured by the Notus Parties to support the case which they now advance.[247]However, the metadata of the documents was made available to BES’s solicitors and they have had access to the native documents. There is no expert evidence supporting BES’s suspicions about the authenticity of the documents.[248]The best evidence available to me is the metadata, which suggests that the documents were all modified by Mr Walberg on 28 February 2024. That, in itself, raises questions.[249]I am not sufficiently persuaded that the documents were created in order to establish the relevant parties’ respective rights and obligations.[250]Firstly, there are no emails, WhatsApp messages or text messages passing between Mr Mohammed, Mr Walberg and Mr Daniels relating to these documents. Such interactions might have indicated the extent of any negotiations behind, or explanations for, the documents. I find it unlikely that any such discussions would have happened exclusively on a face to face basis.[251]Secondly, neither Mr Walberg nor Mr Mohammed accepted that they had created the documents. In my judgment, that is not credible. One of them must have done so. I am confident that whichever of them created the documents would remember doing so.[252]Thirdly, neither Mr Mohammed nor Mr Walberg (nor indeed Mr Daniels) appeared to have a clear understanding of the purpose and effect of the documents.[253]Fourthly, I would have expected Mr Mohammed and Mr Walberg to have taken expert legal advice in relation to any loan/investment they intended to make in Mr Daniels’ business and to have instructed a lawyer to produce the appropriate documents. On their case, this was a substantial loan/investment.[254]Fifthly, there are a number of difficulties with the documents, not necessarily restricted to the following highlighted points.[255]The Loan Agreement sets out an interest rate of 0% and yet, in his trial witness statement, Mr Mohammed said that the loan “was to be paid back along with interest” (although he dismissed this as a “typographical error” in his live evidence). The contract also set a first repayment date of 27 May 2022, being the date of the sale of NHLS, which was perhaps a surprising date to select.[256]The Heads of Agreement appears to be based on an accepted valuation of Mr Daniels’ company. However, there has been no documentary evidence of any such valuation and none of the witnesses was able to give me a credible explanation for it.[257]The Declaration of Trust refers to Ashley Daniels Limited holding on trust for Mr Mohammed and Mr Walberg 22.5% each of the share capital, and yet there was only one share issued, and that was held by Mr Daniels personally.[258]Lastly, there is no reference to these documents in the Notus Parties’ pleaded case and they are not specifically referred to in the trial witness statements of Mr Walberg or Mr Mohammed. (vi). Mr Nisbet[259]Mr Nisbet has not been called to give evidence which is perhaps unsurprising given that he evidently did not have an easy relationship with Mr Mohammed and Mr Walberg (and others) and that he brought an (ultimately unsuccessful) Employment Tribunal claim against BES.[260]It would have been interesting to have heard from him because he might have been able to offer a different angle on some of the allegations made by BES.[261]Given my observations about the quality of Mr Vaughan’s evidence, I accept that the note which he made after his meeting with Mr Nisbet on 18 August 2022 was an honest and fair one.[262]It is perhaps worth recording that, in that note, there is no mention of Mr Milledge but that reference is made to Mr Nisbet being enthusiastic about remaining in BES’s/NHLS’s employment. The note also records that Mr Nisbet made an unsubstantiated and uncorroborated allegation about Mr Mohammed’s use of drugs and that he was unhappy with the way in which he had been treated by Mr Mohammed and Mr Walberg at the time of the SPA.[263]Mr Nisbet, therefore, appears to have had a motive for denigrating Mr Mohammed. Coupled with the observations made about him by other witnesses (including Mr Milledge and Mr Vaughan, who described him as “difficult”), and given that I have not had an opportunity to assess his evidence, I propose to attach little, if any, weight to any statements or observations which have been attributed to him.[264]I also ought to make the rather obvious point that, in arriving at my conclusions, I place no reliance on the documentation from the Employment Tribunal proceedings. They were conducted by a different tribunal, adopting different rules, applied to different evidence. Neither Mr Mohammed nor Mr Walberg were called to give evidence to the Tribunal and they did not have an opportunity to make submissions to it. Lastly, the Tribunal presumably did not have access to the extensive documentation provided to me for this trial. (vii). BES’s access to NHLS’s documents[265]Mr Chaisty KC stresses to me that Mr Mohammed and Mr Walberg did nothing to conceal the emails on which BES relies when they sold NHLS. They essentially gave BES access to all of NHLS’s documents. He argues that they would not have done so if they knew that the documentation implicated them in acts of bribery.[266]I do not accept that argument. Tens of thousands of documents were apparently given to BES when the sale of NHLS took place. It would have been extremely challenging for Mr Mohammed and Mr Walberg to have identified any potentially prejudicial documents and correspondence. In any case, in my judgment they may well have thought it unlikely that those documents would be searched for or that the issues in this litigation would be investigated. (viii). Mr Milledge’s/Mr Daniels’ authority/influence at EDF[267]I am satisfied that Mr Milledge and Mr Daniels were in positions of authority and influence at EDF which they could exercise in NHLS’s favour.[268]In Mr Milledge’s email of 4 October 2017, he said:- “Obviously, I’ll approve anything that’s required in relation to plans for a member of the Notus team to work offshore”.[269]In the context of the GENCO 25 tender he said in an email, “it is my sole intention to see the contract through to a happy conclusion and then join Notus to develop the business and develop your plan” and “I won’t leave Hinckley until I know everything is in place using my influence here.”[270]Mr Daniels was essentially in the same role as Mr Milledge and in Mr Walberg’s email to Mr Mohammed of 25 May 2018, he said, “ [I] think we’ll get the next couple of headcounts off [Mr Daniels].”[271]In an email to Mr Mohammed, Mr Nisbet wrote:- “Sorry for the delay. Please find attached Notus CV for Jason. I have discussed with Ashley and EnerMech haven’t acknowledged the request. He’s asked not to reply with Jason’s CV. Wants it to look like it wasn’t pre-empted.”[272]In his email to Mr Walberg on 25 May 2019, Mr Mohammed wrote, “this is the boxing Ashley wants to see mate. Think we’ll get the next couple of headcounts off him.”[273]In his trial witness statement, Mr Daniels wrote, “I could have done so much more; I could have made Notus millions of pounds if I wanted to, by engineering bigger budgets, but in fact every year I underspent. I could have placed more personnel on site. I could have agreed with any rate increases they wanted to propose.” (ix). Benefits to NHLS[274]However, there is no firm evidence that NHLS derived any benefit or advantage from the alleged acts of bribery, and so I do not find that it did so. For example, and as accepted by Mr Vaughan in cross-examination, there is no evidence that NHLS was paid improper rates for its work or that they personnel were improperly assigned to work at EDF.[275]However, I also accept Mr Zaman KC’s point that he does not need to prove any such benefits in order to establish that bribery has taken place within the definition of the Bribery Act 2010.

Findings of Fact: Mr Milledge

[276]Having made my initial observations and findings, and with them in mind, I make the following findings of fact.

Commission Payments

[277]For the following reasons, I do not find that the purpose of the payments made to Mr Milledge was to induce him to perform his duties at EDF improperly.[278]I should begin by saying that I have found it difficult to piece together the sequence of events and to establish exactly what happened given the passage of time and Mr Milledge’s evidence that he had not been entirely candid with Mr Mohammed and Mr Walberg.[279]I accept that there was no formality in the arrangement between Mr Milledge, Mr Walberg and Mr Mohammed. They had worked together at Siemens, where Mr Milledge had been the most senior of the three men. NHLS’s discussions with Mr Milledge about joining the company began in mid-2016 and continued until 2018.[280]The emails passing between Mr Walberg and Mr Milledge did not culminate in any firm agreement in writing. Mr Walberg’s email of 6 January 2017 did not advance a firm offer, but referred to a proposal which he had discussed with his colleagues. It is clear from his email of 30 January 2017 that negotiations were continuing at that point. The email correspondence, which was instigated by Mr Milledge, may have set out his and Mr Walberg’s aspirations for their working relationship but it did not culminate in a concluded agreement on all issues. Any aspirations expressed in the emails were just that and did not form part of any agreement subsequently reached.[281]In fact, the emails passing between Mr Walberg and Mr Milledge indicate that they may have had a divergence of views as to how their working relationship was to progress.[282]Contractual employment documentation was sent to Mr Milledge, but he did not sign it. That is consistent with Mr Milledge’s evidence that he was not entirely frank with NHLS about his intentions in terms of his future employment with the company. The employment contract appears to have been taken from a standard template. It refers to Mr Milledge’s proposed salary of £65,000 and to 2.5% commission payments, but no other aspect of it appears to be tailored to him.[283]I, therefore, do not find that an agreement was reached by NHLS and Mr Milledge in which all terms of his proposed employment were captured.[284]I do accept that Mr Milledge agreed to take up a role at NHLS at a later date and that an agreement was reached that he would receive 2.5% commission for work generated by any introductions which he made to NHLS. That is evident from the witnesses’ evidence and from the documentation which I have seen. The email correspondence suggests that the agreement was reached by mid-February 2017.[285]For the reasons I have given, I do not find that any other agreement was reached (for example, in relation to how Mr Milledge would carry out his role at EDF) or that any conditions were placed on the commission arrangement, save that Mr Milledge would ultimately join NHLS.[286]I find that the arrangement between NHLS and Mr Milledge was not restricted to Rullion. It extended to other organisations such as Skanska and Costain, as evidenced by the invoice referred to above. At one point, it was suggested that Mr Milledge would visit a potential customer in Sweden (Fred Olsen) on NHLS’s behalf in his business development role.[287]I accept that Mr Milledge introduced NHLS to Rullion and that that introduction was made before Mr Milledge began to work at Hinckley. Mr Campanaro sent an email to NHLS on 20 February 2017 and Mr Milledge did not begin working at EDF until March 2017.[288]Moreover, there is no evidence that Mr Milledge played any part in the appointment of NHLS to the Hinckley site, other than introducing the company to Rullion in the first place. NHLS had an informal meeting with John Campanaro of Rullion in March 2017. Shortly afterwards, they were contacted by Peter Kendall, the Commercial manager at EDF, who invited Mr Walberg to provide proposed day rates for NHLS’s engineers. Mr Milledge was, therefore, not in a position to approve NHLS as a supplier to EDF, even if he might have put a good word in to Rullion for them.[289]I find that NHLS wanted and intended to employ Mr Milledge, that he was reluctant to commit to working for them (and ultimately decided not to do so) but that he led Mr Mohammed and Mr Walberg to believe that he would do so. The email correspondence makes it clear that this was the case, as does the evidence of Mr Mohammed, Mr Walberg and Mr Milledge. Mr Walberg even sent a contract of employment to Mr Milledge as a mark of his intentions. I am satisfied that the reason why NHLS agreed to make the payments to Mr Milledge was to encourage him to join the company in early course.[290]I accept that it was originally agreed that Mr Milledge would be paid his commission when he joined NHLS, that he subsequently asked for the payments to be made to him in advance of his arrival at NHLS and that Mr Mohammed and Mr Walberg acceded to his request. This is consistent with their being keen for Mr Milledge to join the company as an employee, in due course. It is also consistent with Mr Mohammed’s unguarded email to Mr Walberg dated 8 September 2017 in which he refers to the advance payment arrangement.[291]In that same email, Mr Mohammed suggested that NHLS should seek tax advice in relation to the commission payments, which I would not have expected him to have done had the arrangement been improper.[292]I have some difficulty with Mr Milledge’s evidence relating to the Oakley Farrell invoices. He told me that he was VAT registered. There is no evidence of that and, in any event, I would be surprised if his company reached the income threshold triggering the requirement for VAT registration.[293]There was also some confusion over whether Mr Milledge or Mr Walberg had decided that care needed to be exercised over how the invoicing was to be undertaken.[294]However, the reality is that these issues date back 7 or 8 years. I am not surprised that there are discrepancies in the evidence given by, and the recollection of, the witnesses.[295]Moreover, I have no reason to doubt Mr Milledge’s explanation that he raised his invoices in the name of Oakley Farrell because he wanted to conceal the receipt of those payments from his estranged wife, given that financial remedy proceedings were apparently underway. Whilst such conduct cannot be condoned, in my view, this represents a credible explanation for the invoicing arrangement.[296]Similarly, I do not accept that the termination of Mr Milledge’s commission arrangement after his abrupt departure from EDF demonstrates that the payment arrangement was a corrupt one.[297]I was not given a clear picture of Mr Milledge’s departure from the scene in September/October 2018.[298]There was a suggestion that he had been dismissed after attempting to bribe Sarens but there is no credible evidence of that. The only reference to it is attributed to Mr Nisbet and is to be found in the Employment Tribunal papers which, for the reasons I have already given, I am not taking into account.[299]I accept from the evidence given by the witnesses who worked at EDF that their working environment was pressured and challenging. I also note that Mr Milledge was working a considerable distance from his home. I think that it is understandable that he wanted to leave his role, even in the absence of another job offer.[300]As I have already noted, Mr Milledge led Mr Mohammed and Mr Walberg to believe that he was intending to work for NHLS, even after he had decided not to do so.[301]In August/ September 2018, Mr Milledge must have communicated to Mr Mohammed and Mr Walberg that he was not intending to be employed by NHLS, despite his earlier assurances. It was only to be expected that, shortly afterwards, the payments to Mr Milledge would come to an end. In theory, he might have argued that his payments should continue as long as NHLS received payments from Rullion. However, his commission payments were originally not to be made until he joined NHLS and his entitlement to them could have been argued to be conditional on his taking up employment with the company. Mr Mohammed and Mr Walberg had agreed that he could receive the payments in advance. It would, therefore, have been untenable for him to expect to receive those payments indefinitely.[302]I cannot, and do not, interpret Mr Milledge’s request for payment on 15 January 2019 and Mr Mohammed’s and Mr Walberg’s subsequent comments as evidence of bribery. I accept that the loose ends of the commission arrangement had not been finalised and that, given the position as set out in the preceding paragraph, Mr Milledge might not have considered it unreasonable to ask for a further payment.[303]Lastly, whilst the emails relating to EDF’s gifts and hospitality policy are relevant to Mr Mohammed’s and Mr Walberg’s knowledge and understanding of issues of bribery, I do not accept that they represent firm evidence of Mr Milledge having been bribed by NHLS. He is not referred to by name in the emails. Even if the emails did refer to him, they did not necessarily relate to any arrangement which he may have had with NHLS. The author of the key emails was Mr Nisbet.[304]Drawing these points together, I do accept that there was a legitimate basis for the arrangement to pay commission to Mr Milledge. I am also satisfied that the purpose of the payments was to comply with the agreed arrangement and to encourage him to join NHLS, not to induce him to improperly perform his duties at EDF, or to reward him for doing so.

The Audi A5

[305]It is an undisputed fact that NHLS acquired the Audi A5 pursuant to a hire-purchase agreement dated 11 March 2017 and that the total cash price of the car was £21,394. It is also uncontroversial that, at that time, Mr Milledge was not employed by NHLS and that he took up his post at EDF in March 2017.[306]The question for me to determine is whether the Audi A5 was provided to Mr Milledge as an inducement to improperly perform his duties for EDF.[307]I have decided that, on the balance of probabilities, that was not the case, and that, in fact, it was given to him in advance of his employment by NHLS and to encourage him to join the company. I have reached that conclusion for the following reasons.[308]I am satisfied that, when Mr Milledge was provided with the Audi A5, Mr Mohammed and Mr Walberg expected that he would join NHLS on a permanent basis in the near term and that they were keen for him to do so. In his trial witness statement, Mr Mohammed said that they “were not expecting him to be at [Hinckley] for too long”. In his email dated 6 January 2017, Mr Walberg referred to Mr Milledge being employed by NHLS after 6 months of being at EDF or when a minimum level of business had been achieved. The subsequent email correspondence between Mr Walberg and Mr Milledge makes it clear that Mr Walberg and Mr Mohammed were keen for him to join the company.[309]It was Mr Milledge who was delaying. He admits that he led Mr Mohammed and Mr Walberg to believe that he was intending to join the company, even when that was not his intention. He misled them and I accept that they believed what he was telling them.[310]Given their enthusiasm for Mr Milledge to join NHLS, I accept that Mr Mohammed and Mr Walberg regarded the Audi A5 to be an incentive for him to do so and as an investment in him in anticipation of his joining the company. I find that that was their motivation for providing him with the car. They were keen to recruit a business development manager and they knew Mr Milledge from their previous working relationship with him.[311]I read nothing into Mr Milledge’s comment in response to a question from Mr Zaman KC that he had not told his colleagues about the car because he “didn’t believe it was anybody’s business”. If the car had been given to him in anticipation of his move to NHLS, then it is understandable that he would not have told his colleagues at EDF about it.[312]I also place no significance on Mr Mohammed’s father’s comment about the Audi A5. His reference to the “return [being] good” could very well relate to the expectation that Mr Milledge would join NHLS in due course. I do not think that it is likely to refer to Mr Milledge generating advantages for NHLS at EDF.[313]Similarly, I do not find that the email from Mr Mohammed to Mr Walberg on 1 August 2018, namely that he would “drive that fucking Audi back with me tomorrow if he carries on”, sheds any further light on the issue. In my judgment, that email is entirely consistent with Mr Mohammed being disappointed by the tone of Mr Milledge’s email and expressing his frustration to his close colleague by reflecting on the fact that Mr Milledge had the free use of a vehicle whilst they were waiting for him to join NHLS.[314]I do not require expert evidence, or other examples, to persuade me that employers provide benefits to their employees ahead of their taking up their roles. It may not be an orthodox way of doing business but Mr Mohammed and Mr Walberg had no previous experience of running a business before they established NHLS and their expertise lay in providing the services which they were offering to their customers.[315]I note Mr Milledge’s (written and oral) evidence was that he was not specifically told the basis on which he would be receiving the car and I agree with Mr Zaman KC that it might be expected that such a benefit would only be conferred after an express agreement had been reached. However, for the reasons I have given above, I am not entirely confident in Mr Milledge’s evidence and I think it likely that, with the passage of time, his recollection of this issue has faded. Mr Mohammed has been consistent in his evidence on this point and I accept that evidence.[316]Lastly, I think that it is inherently more probable that NHLS’s motivation for providing Mr Milledge with the car was to encourage him to join the company. The business was a very lucrative enterprise. Mr Mohammed and Mr Walberg knew Mr Milledge from their work with him in the past. They were clearly keen to employ him and they anticipated that his arrival would boost their business. The provision of a car was a modest price to pay. In my view, it is far less likely that their motivation was to encourage Mr Milledge to work to NHLS’s advantage whilst he was at EDF.[317]For all those reasons, I find, on the balance of probabilities, that Mr Mohammed and Mr Walberg provided Mr Milledge with the Audi A5 in advance of, and with a view to, his commencing employment with NHLS, and not to induce him to perform his duties at EDF improperly, or to reward him for doing so.

GENCO 25

[318]EDF’s internal written instructions to members of its GENCO 25 evaluation team made clear that tenderers’ submissions were to be kept confidential and were not to be shared with anyone outside the evaluation team.[319]There can be no question that those instructions were not complied with by Mr Milledge. He forwarded the other tenderers’ submissions to Mr Mohammed.[320]He had emailed those submissions to his private email address and then sent them to Mr Mohammed from that email address.[321]Mr Milledge told me that he did so because of difficulties with his EDF email address and that his private email address was monitored by EDF. I have no evidence from BES on this point.[322]I find that Mr Milledge was seeking to use the GENCO 25 tender to his own advantage. On 4 September 2017, he sent an email to Mr Walberg with proposals for his remuneration on alternative bases, depending on whether NHLS’s tender was successful or not. The clear implication was that he would be rewarded for his part in getting the tender over the line. He even built into his proposal an HR role for his wife.[323]However, Mr Milledge is only a witness in these proceedings. He is not a party to them. BES’s allegations are made against Mr Walberg and Mr Mohammed. My focus must be on the role played by them.[324]A key issue is whether they were collaborating with Mr Milledge in acting outside of his proper role or whether they considered that they were acting legitimately.[325]At first blush, it may seem unlikely that EDF would have endorsed NHLS’s involvement in the assessment of its competitors’ tenders. After all, their tender documentation clearly stipulated that the process was a confidential one and that those outside the evaluation team should not have access to the tenderers’ submissions. Moreover, EDF is no doubt a procedure-driven and sophisticated business. It monitors emails sent by its staff, evidencing concern about confidentiality in such a safety-critical field. Furthermore, there is no documentary evidence of NHLS having been invited to help to assess its competitors’ tender submissions, and no invoices were raised by NHLS in relation to that work.[326]Taken alone, the documentation and emails, therefore, appear to support BES’s case.[327]However, I must base my findings on all the evidence which I have read and heard.[328]I accept from the documentation that NHLS was the interim service provider to EDF which involved it producing detailed monthly reports for senior staff at EDF. I have seen examples of these reports.[329]It is also evident that EDF required NHLS’s input on safety critical issues. This is consistent with the acquisition documentation which made clear that NHLS was a niche business which was “best in breed” and with its swift appointment to work at Hinckley on the basis of a short interview and some limited email correspondence, largely relating to price.[330]Instinctively, I doubt that that role would ordinarily involve checking its own competitors’ tender submissions.[331]However, BES has called no witness evidence from EDF on the point. For example, it could have called Mr Speight to clarify the position and to comment, in particular, on the assertion by Mr Milledge and Mr Mohammed that the tender process was relaxed and that Mr Mohammed was openly consulted on other tenderers’ submissions.[332]If it had done so, then I could have considered that evidence alongside that of Mr Mohammed, Mr Walberg and Mr Milledge who have told me that the relevant staff at EDF endorsed NHLS’s input into the evaluation process and that they worked alongside them when they were doing so. On that point the accounts of those three witnesses were consistent and, of course, were not contradicted by BES’s witnesses, who were able to offer no direct evidence on the point.[333]Moreover, it must be considered in the context of a pressured working environment at EDF where Mr Mohammed was working on a regular basis. It is unsurprising that there might have been some fluidity in the arrangement and that Mr Mohammed would not raise separate invoices or letters of engagement for every task undertaken by NHLS. Mr Mohammed had an EDF email account which, if it had been searched, might have revealed relevant emails.[334]Whilst I have expressed reservations about the Notus Parties’ witnesses’ evidence, I do not find that they have conspired to mislead me on this point.[335]In those circumstances, on the evidence before me, I do not find on the balance of probabilities that NHLS’s involvement in the tender process was undertaken without the knowledge of senior EDF staff. I may well have reached a different conclusion if I had received contradictory evidence from EDF employees, but I have not done so.[336]Therefore, although this has been a finely balanced exercise, I am not satisfied to the requisite standard that Mr Mohammed/NHLS assisted in the GENCO tender process because they were intending to achieve an advantage in the tender process. I accept that NHLS considered it to be part of their role as interim service providers to EDF.

The “offers” made to Mr Milledge by Mr Walberg

[337]The email from Mr Walberg to Mr Milledge dated 6 January 2017 is not stated to be an offer, but rather a “proposal” which was being discussed by Mr Walberg and his colleagues. Given my findings above, it can only be considered to be one of several (oral and written) communications between Mr Walberg and Mr Milledge in the context of their seeking to establish whether a firm agreement could be reached on their working relationship. In the circumstances, I do not find that it was an offer made to Mr Milledge.[338]However, in his email of 3 October 2017, Mr Walberg appears to have been offering terms to Mr Milledge based on the GENCO tender bearing fruit for NHLS. If that was the case, given that Mr Milledge was representing that he was in a position to influence the tender process, I accept that, on the balance of probabilities, the offer was being made as an inducement for the improper performance of Mr Milledge’s duties at EDF. Findings of Fact: Mr Daniels The flight, the Point to Point event and the Mont Blanc pen refill

Findings of Fact: Mr Daniels

[339]I am satisfied that NHLS’s payment of the cost of Mr Daniels’ flight to the conference in Amsterdam was legitimate (even though he did not ultimately take that flight). This now appears to be accepted by BES.[340]I also accept that NHLS’s sponsorship of the Point to Point event was routine, did not benefit Mr Daniels personally and had the potential to benefit NHLS by raising its profile. That sponsorship predated the purchase of the Quad Bike and the payments to Mr Daniels’ companies. It was a routine corporate sponsorship.[341]Lastly, the Mont Blanc pen refill was of limited value and, in my view, is of no consequence. I accept Mr Daniels’ evidence that he was asked by Mr Nisbet if he wanted a pen refill and that he cannot recall receiving one.

The Quad Bike

[342]I am not able to accept on the balance of probabilities that Mr Daniels reimbursed the cost of the Quad Bike to Mr Mohammed. I have reached this conclusion for the following reasons.[343]Firstly, I was not satisfied with the evidence of the Notus Parties’ witnesses on this point.[344]As I have already noted, I found Mr Daniels to be an unsatisfactory witness whose evidence I am treating with caution.[345]His evidence on this issue was internally inconsistent.[346]He appeared to acknowledge in his trial witness statement that he had acquired the Quad Bike through NHLS in order to avoid paying VAT on the purchase. He acknowledged in the witness box that that would have been “wrong…[because] if you’re paying VAT it should be for that business”. He then went on to say that “VAT was paid and I paid the value and the VAT”. That assertion was, of course, at odds with his witness statement.[347]Mr Daniels went on to tell me that he was well able to afford to pay for the Quad Bike himself, but he did not explain why he did not do so.[348]In the witness box, Mr Daniels also told me that he did not know whether Mr Mohammed was going to buy the Quad Bike personally or through NHLS, which was inconsistent with his trial statement.[349]Mr Mohammed’s evidence was little more persuasive. In his live evidence, he told me that he “probably didn’t think about [the precise amount of the cash [reimbursement] payment made by Mr Daniels] until today”. I am not able to accept that evidence. This issue has been the subject of lengthy litigation and, it would appear, a criminal investigation. I think it unlikely that Mr Mohammed did not turn his mind to the issue until he was in the witness box.[350]I am also unable to accept that Mr Mohammed had asked his accountants to confirm whether any VAT had been paid on the purchase of the Quad Bike, but that they had not confirmed the position. This is longstanding litigation and that issue has proved to be contentious. In my view, it is very unlikely that the accountants would not have responded to Mr Mohammed’s query. If they had not done so, I am confident that Mr Mohammed would have pressed them to do so.[351]Secondly, the Notus Parties’ position on this issue has been far from clear and consistent. In their Reply and Defence to Counterclaim, it was pleaded that “assistance was given to Mr Daniels as an act of friendship” and that the cost of the Quad Bike was repaid by Mr Daniels.[352]However, in their reply to BES’s Part 18 request, the Notus Parties stated:- “payment was not made to Notus Heavy Lift. Mr Mohammed paid 50% to Mr Walberg as an act of friendship to Mr Daniels. Mr Mohammed and Mr Daniels reached separate arrangements as to the remaining 50%.”[353]Later, in his trial witness statement, Mr Mohammed indicated that NHLS had bought the Quad Bike for Mr Daniels “because he didn’t want to pay VAT” but that he “paid everything back to me by some cash, some art and a Rolex watch” after Mr Mohammed had reimbursed Mr Walberg for half of the company’s outlay. This was the first indication that any reimbursement was made other than by the payment of money.[354]Thirdly, in my judgment, it is inherently unlikely that Mr Daniels and Mr Mohammed would have agreed the arrangement for which they now contend.[355]Mr Daniels told me in his witness statement that he “could have bought the quad bike through his own money”. If that was the case, even if he acquired it through NHLS in order to avoid any VAT liability, it seems to me unlikely that he would not have repaid it promptly to Mr Mohammed in cash.[356]There was apparently a written record of the transfer of the Rolex watch and yet not of the cash payment or the artwork.[357]Moreover, I am aware of no good reason why the payment of £950/£1,000 was in cash, rather than by electronic transfer or why there was a delay between the purchase of the Quad Bike and the transfer of the Rolex watch and the artwork to Mr Mohammed.[358]Furthermore, there appears to have been no agreed calculation of the value of the reimbursement, which is perhaps surprising given that Mr Daniels and Mr Mohammed are businessmen.[359]Mr Daniels was unable to tell me precisely how much the Rolex watch or the artwork were worth and, in fact, suggested that, taken together with the cash repayment, he had paid Mr Mohammed more than the amount which NHLS had paid for the Quad Bike.[360]Fourthly, it strikes me to be very unlikely that there would not have been a single email, WhatsApp message or text message relating to the Quad Bike. On any view, this was a substantial payment made by NHLS and yet there are no electronic communications evidencing the arrangement, the terms on which it was made, that fact that NHLS had paid for the Quad Bike, the fact that Mr Daniels had received it, Mr Daniels’ gratitude to Mr Mohammed for arranging its delivery or the basis on which the repayment would be made.[361]Lastly, in my judgment, the electronic communications which are in evidence undermine the Notus Parties’ case on this issue. The WhatsApp message from Mr Walberg to Mr Mohammed on 31 May 2019 is particularly difficult to explain away. Similarly, on 4 August 2019, in his email to Mr Nisbet, Mr Walberg referred to “the purchase of an £11K quad bike [giving] us a bit of breathing space.” Later in the email chain comes Mr Walberg’s observation that Mr Daniels was “not exactly squeaky clean”. These unguarded messages suggest that the Quad Bike was a gift and it is difficult to interpret them in any other way.[362]I should also note that the document apparently evidencing the transfer of the Rolex watch to Mr Mohammed was only disclosed during the course of the trial. In my view, there is no good reason why it could not have been disclosed earlier. I, therefore, have reservations about that document.[363]For all of these reasons, I reject the Notus Parties’ position in relation to the Quad Bike and I find it likely that it was a gift to Mr Daniels.[364]Given that Mr Daniels was in a position of influence at EDF, and in the absence of any other credible explanation, I am satisfied that the Quad Bike was given to him as an inducement for the improper performance of his duties at EDF.

The alleged commission and “tidying up” payments

[365]I find that the payments made to Mr Daniels and to his companies were, in reality, unwarranted commission payments based on headcount. This finding applies both to the payments made before the sale of NHLS and to the alleged “tidying up” payments made after the sale. I have reached this conclusion for the following reasons.[366]Firstly, the Notus Parties’ pleaded case does not set out the position which they now advance.[367]In the Reply and Defence to Counterclaim, they contend that the payments of £43,856 made to Mr Daniels between March 2020 and October 2021 were for Temporary Works. They did not assert (as they now do) that some of those payments related to investments in, or loans to, Mr Daniels’ company.[368]At paragraph 57 of their Reply and Defence to Counterclaim, in response to the allegation concerning tidying up payments, the Notus Parties assert that those payments related to the sale by Mr Daniels to Mr Mohammed and Mr Walberg of shares in Mr Daniels’ company, AD Plant Limited. In my view, it is clear that that response relates specifically to the tidying up payments allegation.[369]Moreover, there is no reference in the Notus Parties’ pleaded case to the App.[370]Regardless of whether the Notus Parties should be entitled to rely on unpleaded assertions, I cannot ignore their pleaded case. It has inevitably undermined the credibility of their position.[371]Moreover, in relation to the alleged tidying up payments, I note that the Notus Parties’ pleaded case does not refer to the Loan Agreement, the Heads of Agreement or the Declaration of Trust on which they now rely. Those documents first came to light during the disclosure process.[372]Secondly, I was not persuaded by the evidence given by Mr Mohammed, Mr Walberg or Mr Daniels that the payments made to Mr Daniels were legitimate.[373]It is of note that Mr Mohammed devotes just 3 lines of his trial witness statement to this topic in which he refers to the Temporary Works, but not to the alleged loan or investment.[374]In his trial statement, Mr Walberg addresses the issue in short order. He makes no substantial reference to Mr Daniels’ invoices. He talks about an investment in Mr Daniels’ company, rather than a loan. He refers to “formal documents”, rather than identifying the Loan Agreement, the Heads of Agreement and the Deed of Trust.[375]Mr Daniels’ statement provides no detail about his new business venture and very limited information about the work which he says that he undertook for NHLS.[376]I have already commented on my impression of the Notus Parties witnesses’ evidence generally but, in my judgment, they were unable to explain away the documentation which they were presented with on this issue.[377]Crucially, I found that they had no credible explanation for the content of the spreadsheets relating to the payments to Mr Daniels. Furthermore, they appeared to have no appreciation of the purpose of the Loan Agreement, Heads of Agreement and Declaration of Trust.[378]Mr Walberg accepted that invoice 2201 from Ashley Daniels Limited was not for Temporary Works, even though that was stated to be the case on the face of the invoice. He told me that the invoice did, in fact, relate to an investment in that company made by him and Mr Mohammed. He acknowledged that it had been “the wrong thing to do” and “a disguise”. The invoice even charged VAT on the sum claimed. In relation to another invoice, Mr Walberg acknowledged that it was not for Temporary Works but that it “served a different purpose”.[379]Mr Mohammed appeared to acknowledge that he had misled Notus’s accountants about the alleged investments in Mr Daniels’ company. There was no need for him to do so, if the payments were legitimate.[380]Thirdly, in my judgment, the key documents wholly undermine the Notus Parties’ position on these issues.[381]The spreadsheets dealt a substantial blow to the Notus Parties’ case on this issue. They were very difficult to explain away. They referred to “Current Headcount”, “Monthly Commission”, “Additional Headcount”, “AD to invoice for professional TW services” and “current headcount agreement”. One of the spreadsheets referred to payments to Mr Daniels which were consistent with the sums claimed in his invoices.[382]In my judgment, there is no credible explanation for those references other than that they referred to headcount.[383]The Notus Parties suggest that these were internal documents unrelated to headcount which were being used to establish how much NHLS could afford to invest in engaging a Business Development professional. That explanation is very difficult to accept and, in my view, is inherently very improbable.[384]That is so especially in the context of the unguarded contemporaneous email correspondence which has been brought to my attention.[385]Chief amongst that correspondence is the email from Mr Mohammed to Mr Walberg dated 10 March 2020 in which he set out proposed terms for Mr Daniels’ consultancy, or rather what he might be expected to do for NHLS in return for the payments. If that consultancy related solely to Temporary Works, there would have been no need to refer to anything other than Temporary Works as Mr Daniels’ side of the bargain, to Mr Daniels’ £600,000 budget or to Mr Mohammed’s understanding that EnerMech would have to be given some of the roles at Hinckley, but that they could be limited. That same email indicated that invoicing would be to Mr Daniels’ personal account because the limited company was “split between 3 directors”. The following week came the email from Mr Walberg to Mr Mohammed questioning whether invoicing through Temptag was “the right thing to do” because “this will mean 2 other people, other than Ashley, will know something”.[386]A headcount spreadsheet was sent by email to Mr Daniels. There was no need for it to be shared with him if it was produced to enable NHLS to establish the affordability of its marketing budget. The covering email to Mr Daniels read, “it can be tweaked as and when new headcount is assigned”.[387]Mr Daniels’ invoices are inconsistent with the case which the Notus Parties now advance. They were raised for Temporary Works, when, on their case, they also related to loans and/or investments made by NHLS in Mr Daniels’ company. Moreover, the starting date for the work referred to in the first invoice predated the email sent by Mr Mohammed to Mr Walberg setting out the proposed arrangement. One of the invoices also referred to “repairs and maintenance” which, on any view, were not undertaken. Mr Walberg described this invoice as “a disguise”.[388]Turning to the alleged tidying up payments, on 17 November 2021, Mr Mohammed informed Mr Walberg by email that he had spoken to Mr Daniels who was “ok with us committing to a max of two years for our existing agreement with him” and that “our current agreement still stands per person [my emphasis]”[389]On 18 May 2022, just 9 days before the sale of NHLS, Mr Mohammed emailed Mr Walberg to tell him that “[Mr Daniels] has asked for a couple of invoices to be paid up if possible.” Mr Walberg’s reply was “honestly don’t know if these are in line with the headcount without the calcs”. He also asked, “are we paying for February twice?” These emails, in my view, are entirely inconsistent with the investment/loan arrangement for which the Notus Parties now contend. In Mr Milledge’s email to Mr Walberg on 25 May 2022, he refers to Mr Walberg having “agreed to pay extra in [Mr Daniels’] fees [my emphasis]”.[390]Then, after the sale of NHLS, when he was asked by his accountant about the purpose of the post-sale payments to Mr Daniels, Mr Walberg emailed Mr Mohammed to say that he had not replied to the query. Mr Mohammed then responded saying that he had agreed with the accountant that “it was consultancy services related to the sale”. Those emails do not sit at all well with the case now advanced by Mr Mohammed and Mr Walberg.[391]It is perhaps also worth noting that the aggregate of the post-sale payments appears to equate to the previous monthly payments multiplied by 24.[392]Fourthly, whilst the Notus Parties have produced some documentary evidence of Temporary Works delivered by Mr Daniels to NHLS, those documents are very limited. Moreover, I have not seen any written proposal or costings from Mr Daniels to NHLS and, in my view, it is inherently unlikely that Mr Daniels would have raised substantial invoices for the same or similar amounts every month, when there is no evidence that his services were provided on a regular and consistent basis.[393]It may have been that Mr Daniels undertook some work for NHLS, but I am not satisfied that the value of that work was reflected in the invoices submitted to NHLS.[394]Fifthly, I have been referred to no emails or other instant communications passing between Mr Mohammed and Mr Walberg referring to the Temporary Works or indeed to the alleged loan/investment.[395]Lastly, the observations I have made concerning the Loan Agreement, the Heads of Terms and the Trust Deed, of course, have a substantial bearing on this issue.[396]For all of those reasons, I reject the Notus Parties’ case that the monies paid to Mr Daniels and to his company were legitimate business expenses, loans or investments. I also find, on the balance of probabilities, that the invoices were produced to conceal the true nature of the payments to Mr Daniels. I think it likely that those payments were made gratuitously and not in return for services undertaken by Mr Daniels.[397]Again, given that Mr Daniels was in a position of influence at EDF, and in the absence of any other credible explanation, I am satisfied that these payments were made as an inducement for the improper performance of his duties at EDF.

Preliminary Conclusions

[398]Mr Zaman KC suggests that I should make findings on 7 issues:-a. Was the provision of the Audi A5 to Mr Milledge an inducement for improper performance?b. Was the payment of 2.5% commission to Mr Milledge an inducement for improper performance?c. Was the invoicing of Mr Milledge under a false name (Oakley Farrell) done to disguise the true purpose of the payments?d. Was NHLS’s involvement in providing criticism of rival tenders for the GENCO 25 tender part of the improper performance of duties by Mr Milledge?e. Was the Quad Bike of £10,388 given to Mr Daniels as an “act of friendship “or as an inducement for improper performance?f. Were the payments to Mr Daniels inducements for his improper performance and “commission” calculated by reference to headcount or were they for Temporary Works, investments and loans?g. Was there an agreement for Mr Daniels to be paid 24 months of commission by way of tidying up payments?[399]Given my conclusions set out above, I make findings e, f and g on the bases sought by BES, but I do not make the findings a,b,c and d which they seek.[400]I, therefore, find that the allegations relating to Mr Daniels have been established.[401]The only adverse finding that I have made in relation to Mr Milledge relates to Mr Walberg’s email dated 3 October 2017.[402]By Clause 8.1 of the SPA, the Notus Parties warranted that each of the commercial warranties, including those at Clauses14.1 and14.2 of Schedule 3, were true.[403]BES’s case is advanced on the basis of Case 1, as set out in Section 1 of the Bribery Act 2010.[404]In my judgment, the findings which I have made relate to conduct which does or could contravene the Bribery Legislation and, in particular, section 1 of the Bribery Act 2010 (as outlined above).[405]Mr Chaisty KC complains (although his complaint is not pleaded) that the wording “does or could contravene Bribery Legislation” contained in Clause 14.1 introduces uncertainty, in that the word “could” is ambiguous. I do not accept that argument. The meaning of the word is, in my judgment, plain and unambiguous and it is clear what it would mean to a reasonable person having all the relevant background knowledge available to the parties at the point when the contract was entered into (Nigeria v JP Morgan Chase Bank NA [2019] EWHC 347 (Comm)). I agree with Mr Zaman KC that the word is used to express possibility.[406]It was originally argued by Mr Chaisty KC that Clause 14.1 was void for uncertainty, but, perhaps understandably, that point has not been pursued.[407]The Notus Parties assert that Mr Mohammed and Mr Walberg had no knowledge of the Bribery Legislation. For the clause to apply, they did not need to be able to recite the legislative provision. In any event, for the reasons outlined below, I accept that they were aware of the legislation.[408]In the circumstances, I accept that the Notus parties are in breach of Clause 14.1.[409]I also accept that breaches of Clause 14.2 have been established. On the basis of my conclusions, it must have been apparent to the warrantors that there were “circumstances which might reasonably be expected to lead to …a complaint, action, investigation, enforcement proceedings or prosecution [under Bribery Legislation]”. The threshold is not a high one and, in my judgment, it has been achieved here.[410]Insofar as it is of any consequence, I am also satisfied that there was “Wilful Non-Disclosure” of the bribery.[411]NHLS had its own Bribery and Corruption Policy. Mr Mohammed and Mr Walberg may not have drafted it themselves, but they were the sole directors of the company. That policy was verified by Mr Mohammed and approved by Mr Walberg. Mr Walberg accepted in his live evidence that he had read the policy.[412]Moreover, on 14 May 2019, NHLS completed a Bribery Act compliance form for Skanska UK Plc in which they gave themselves very impressive scores for anti-bribery compliance and in which they confirmed that there were “regular management checks of compliance”.[413]To underscore this point further, in response to Due Diligence further enquiries, the Notus Parties asserted “Whilst NHLS has not formally delivered any training to staff in relation to this, staff are aware of the existence of the anti-bribery policy and are aware to read the policy. The anti-bribery policy and the corporate responsibility document are contained within the IMS system.”[414]Lastly, as recorded above, EDF’s Gifts & Hospitality Policy was shared by Mr Nisbet with Mr Mohammed and Mr Walberg, leading to jovial replies from them.[415]For all of these reasons, I have no hesitation in accepting on the balance of probabilities that Mr Mohammed and Mr Walberg were fully aware of the Bribery Legislation. Given my findings, it also stands to reason that they were aware of their breaches and that they wilfully and deliberately chose to omit them from their Disclosure Letter.

(i) The Law

[416]The purpose of warranties is outlined in Sinclair on Warranties and Indemnities on Share and Asset Sales (12th ed) to which Mr Zaman KC and Mr Perrin have referred me:- “ In effect, warranties allocate risk as between the vendors and the purchaser in relation to the target company whose assets or shares are being purchased. To the extent that warranties are given, the vendors accept the potential liability if the warranties are breached; insofar as warranties are not given, are restricted in their scope or are disclosed against, the purchaser takes the risk. The negotiation of the warranties is often referred to as the “battle of the risks” for this reason.[417]McGregor on Damages (2nd Ed) at 30-008, to which Mr Zaman KC and Mr Perrin have also referred me, makes the following observations:- “… if the shares are in some way not up to the promised standard this is in the nature of a breach of warranty of quality and the normal measure is of value as warranted less value in fact. That normal measure reveals the objective difference in value between what a reasonable person would have paid for the shares as warranted and what the shares are actually worth and it disregards any particular preferences of the buyer other than as evidence of what reasonable people would think and be prepared to pay based on the warranty. Indeed, this usual measure has been described as a rule of thumb. This rule of thumb has been confirmed and applied in numerous cases where it has been held that events subsequent to the bridge were not to be taken into account. Examples are Ageas (UK) Ltd v Kwik-Fit (GB) Ltd, 36 Hut Group Ltd v Nobahar-Cookson and Bir Holdings Ltd v Mehta…”[418]In MDW Holdings Limited v Norvill [2022] EWCA Civ 833, Newey LJ reviewed the applicable legal principles and summarised them in the following way:- (i). Where damages fall to be assessed in respect of an anticipatory breach of contract which was accepted, it is appropriate to consider what would have happened if the breach had not occurred and, in that context, events subsequent to the breach may be relevant; (ii). That principle has, however, no application where a party to a contract has, by failing to supply goods or services, committed an actual, rather than anticipatory, breach of contract; (iii). Further, where a claimant has been induced by deceit to buy something, the defendant cannot reduce its liability by showing that a contingency which served to reduce the value of the item at the date of assessment did not eventuate; (iv). There is a strong case for saying that, in general at least, the position should be similar in relation to warranties given on a share sale. Supposing the position to be that the true value of some shares is decompressed by a contingency, someone buying them at a higher figure will have paid more than they were worth even if the contingency never happens. Events subsequent to the purchase cannot affect the value at the time of the transaction… (v). If, none the less, there can be cases in which account can be taken of what happened subsequently as regards a contingency which existed on the date of assessment when determining what, if any, damages are payable for breach of a warranty on a share sale, they must be rare. They would doubtless involve situations in which the buyer might otherwise be said to have gained a “windfall”, but the mere fact that the value of the relevant shares has increased since the date of assessment cannot demonstrate such a “windfall”: it is inherent in the selection of the date of assessment that subsequent changes in value can fall to be disregarded. Still less could it be appropriate to categorise a post-assessment rise in value as a “windfall” if it were attributable to steps that the purchaser had itself taken since the transaction. Further, as Popplewell LJ said in Ageas, it would be “important to keep firmly in mind any contractual allocation of risk made by the parties”; and (vi). There is no similar bar on using events subsequent to the date of assessment to cast light on events which had happened by that date.”[419]In Equitix Biomass 2 Ltd v Fox [2021] EWHC 2531 Mr

Justice Kerr said:

“[394] I agree that the prima facie measure of damages is the diminution in the value of the shares attributable to the falsity of the warranties of quality breached. [345] The question is what a hypothetical open market purchaser with no special interest or characteristic affecting the amount it would be willing to pay, knowing that (to the extent I have found) the warranties were false. [424] Some of these scenarios in the cases may not be easy to reconcile with others. The example from Popplewell J in Ageas of a horse, warranted to be healthy, but with a latent disease and the potential to become lame, which then does not become lame, may be difficult to reconcile with the example given by Equitix of an essential component, falsely warranted to be present and thought to be easily obtainable, but subsequently becoming unexpectedly unobtainable. [425] In the latter example, the breach of warranty is trivial with minimal impact on objective value, but a low downside risk eventuates with major consequences for the buyer. In the former example, the breach is grave with a major impact on objective value, but a high downside risk does not eventuate, to the good fortune of the buyer. Popplewell J at [36] in Ageas said that “to award the buyer half the price of the horse would overspend the compensatory principle and provide the buyer with a windfall.” [426] Another view might be that the buyer was duped into paying double the value of the horse obtained a windfall of half the price paid. Bir Holdings Ltd v Mehta might be thought to involve a windfall for the buyer, though HHJ David Cooke thought not. The seller failed to disclose non-registration with a scheme rendering the business ineligible for certain custom; but in the event no harm was done as there was no discernible effect on the business. The judge decided that the latter point did not assist the seller.”
[420]In the latter case, Bir Holdings v Mehta [2014] EWHC 3903 (Ch), HHJ David Cooke made the following observations: “77. The first is that this is not in my judgment a case of a valuation being made on the basis of an assumption as to future contingencies. The breach in this case was of a warranty as to present fact, and the consequences in terms of the value of the company depended on the assessment that parties in the market might have made of the uncertainties and risk to the business resulting from the undisclosed fact that the opportunity to be included on the CHC framework had been lost. It is of no assistance to say that this might or might not have resulted in future loss of income; in that wide sense almost all factors affecting the value of a business could be said to involve the outcome of future events.[78]Second, even if I am wrong on the above point, assessment of loss on the basis of information available at the date of sale does not result in any windfall to the defendants that offends against the compensatory principle. By suppressing the information that the tender opportunity had been lost, Mrs Bir deprived Mr Mehta of the chance of negotiating on the basis of the true state of affairs. Assessing his loss on the basis of the information available to the theoretical market at the time of sale puts him, as nearly as possible, in the position he would have been if Mrs Bir had disclosed what she knew at the time. … 80 Fourth, the way in which the contract was negotiated and the price that was struck involves an allocation of risk as between buyer and seller in which the buyer, having paid a price based on evaluation of the business prospects in the light of information known at the date of sale assumes the risk that the outturn may be worse than expected, and stands to benefit if it is better, either because factors that were uncertain or the effects of which were uncertain at the date of sale resolve themselves in his favour, or because he so manages the business that adverse effects are avoided or overcome. After the sale, no further CHC residents were placed at Quinton House until Mr Mehta negotiated rates for out of framework placements in 2012. The claimants point to figures which they say show that, notwithstanding this, the income of the home has not been affected. I am by no means persuaded that the figures do show this, for the reasons given above, but even if the claimants were right, this could only be because the defendants had so managed the business that the risks arising from the position at the date of sale had been overcome. The benefit of that outcome is inherent in the bargain struck.[81]Accordingly, I reject the argument based on the application of hindsight. The normal rule is to be applied and the value of the company assessed on the basis of information available at the date of the contract.” 421. Mr Chaisty KC refers me to Ageas (UK) Ltd v Kwik Fit [2014] Bus LR 1338, where Popplewell J observed:- “Damages for breach of contract are intended to put the innocent party in the same financial position as if the contract had been performed. This is the compensatory principle which has been enunciated and applied times without number and is not in doubt…” Damages for breach of contract will normally be assessed by reference to the position at the date of breach. But a later date may be used for the assessment if in all the circumstances of the case to do so would more accurately reflect the overriding compensatory principle.”[422]Popplewell J then went on to refer again to his analogy of a horse with a latent defect and said:- “With the benefit of hindsight, it is known that the horse was as capable of winning the same number of races over its racing career as a horse without the latent disease. To award the buyer half the price of the horse would offend the compensatory principle and provide the buyer with a windfall.”[423]Mr Zaman KC and Mr Perrin also refer me to the broad axe principle set out by Lord Reed in One Step (Support) Limited v Morris-Garner [2019] 1 AC 649; [2018] UKSC at [37]:- “The quantification of economic loss is often relatively straightforward. There are, however, cases in which its precise measurement is inherently impossible. As Toulson LJ observed in Parabola Investments Ltd v Browallia Cal Ltd [2011] QB 477, para 22:
“Some claims for consequential loss are capable of being established with precision (for example, expenses incurred prior to the date of trial). Other forms of consequential loss are not capable of similarly precise calculation because they involve the attempted measurement of things which would or might have happened (or might not have happened) but for the defendant’s wrongful conduct, as distinct from things which have happened. In such a situation the law does not require a claimant to perform the impossible, nor does it apply the balance of probability test to the measurement of the loss.”
An example relevant to the present case is the situation where a breach of contract affects the operation of the business. The court will have to select the method of measuring the loss which is the most apt in the circumstances to secure that the claimant is compensated for the loss which it has sustained. It may, for example, estimate the effect of the breach on the value of the business, or the effect on its profits, or the resultant management costs, or the loss of goodwill: see Chitty on Contracts, 32nd ed (2015), vol I, paras 26-172 to 26-174. The assessment of damages in such circumstances often involves what Lord Shaw described in the Watson, Laidlaw case 1914 SC (HL) 18, 29-30 as “the exercise of a sound imagination and the practice of the broad axe.”[424]Lastly, turning to the issue of mitigation, I am referred to the observations of Kerr J in Equitix:- “in a normal share valuation case such as this, where the measure of damages is the ordinary one, breaches of warranties of quality, steps taken or not taken by the buyer and others to mitigate its loss after the purchase are simply irrelevant and of concern only to the buyer, not the seller. The loss has already crystallised at the point of purchase.”[425]Subject to the discussion below on the application of the applicable legal principles, I hope that it is fair to say that the following principles are uncontroversial:- (a). Any breach of the warranties established by BES would be breaches of warranties of quality; (b). Any such breaches occurred at the date of the SPA; (c). The measure of damages is the difference as at that date between the value of the shares in BHLS on the basis that the warranties were true (Warranty True) and their value on the basis that the warranties were false (Warranty False). In this case, the Warranty True value of the shares in BHLS is agreed, namely the Purchase Price, but the Warranty False value is controversial. (d). The assessment of the Warranty False value is undertaken on the basis of what a hypothetical open market purchaser with no special interest or characteristic affecting the amount they would be willing to pay would pay, knowing that the warranties were false; (e). Mitigation does not apply. (ii). The expert evidence[426]BES relies on the expert evidence of Henry Pocock of FRP Advisory Trading Ltd (Mr Pocock), whose report is dated 20 September 2024. The Notus Parties rely on the report of Paul Bennett of Longworth Forensic Accounting Limited (Mr Bennett), whose report is dated 30 August 2024.[427]The experts later produced a written joint statement dated 8 November 2024.[428]Mr Pocock’s Warranties False valuation is based on an assumption that the Rullion contract would have been terminated with no deployment of NHLS staff to other contracts.[429]Mr Bennett accepted that that was one possible basis of assessment (Scenario 1) and suggested two further possible approaches, namely that the Rullion contract would have continued, would not have been terminated and would have had no impact on the purchase price (Scenario 2) or that, whilst the Rullion contract would have been terminated, the redeployment of NHLS’s employees should be taken into account (Scenario 3).[430]In the experts’ joint statement, Mr Pocock says, “I have assumed that a buyer, being made aware of the matters giving rise to the alleged breaches of warranty, would have excluded amounts earned from the Rullion contract from its assessment of profitability of NHLS on the basis that the contract would be terminated and/or the circumstances under which it was obtained meant that it should be excluded from maintainable earnings.” This was the basis for his contending for Scenario 1.[431]The view of Mr Bennett was that Scenarios 1,2 and 3 were all credible and that:- -. the Rullion contract continuing -. the Rullion contract being reduced in scope; and -. the Rullion contract being terminated -. deploying employees to existing contracts; and -. obtaining new contracts -. the seriousness of the allegations -. the performance of NHLS on the Rullion contract, both operationally and financially -. the operational importance of the Rullion contract to the [Hinckley] project -. the availability of alternative providers to Rullion -. existing contracts where NHLS were using sub-contractors -. the likelihood of increased work on existing contracts -. the likelihood of new contracts from existing customers -. the likelihood of new contracts from new customers -. pipeline projects -. NHLS’s customer base -. NHLS’s track record of winning work -. NHLS’s reputation in the market However, it seems to me a matter for the Court to determine the impact that knowledge of the alleged breaches would have had on the transaction, including the impact on any re-assessment of the maintainable earnings of NHLS, rather than one for the Experts”[432]On cross-examination, Mr Bennett was questioned at some length on these issues. His evidence remained that various factors would be taken into account by a prospective buyer. One key factor would be how Rullion/EDF would respond when they became aware of the bribery. Other factors included the buyer’s strategic rationale for acquiring the company, reputational risks, how NHLS had been performing the contract over the years, whether it was being paid a non-market rate as a result of the bribery and how the safety record had changed as a result of its performance. He stood by his suggestion that Scenario 2 was realistic and he told me that he had based his assertion that Scenario 3 is a reasonable proposition on instructions and information which he had received from NHLS.[433]The experts have been able to agree the following points:- Valuation Methodology -. the market approach is the most suitable methodology to adopt in assessing the enterprise value of NHLS and that adjustments will need to be made in respect of cash, debt, working capital and cash profit to derive the market value of the company; -. the market approach was adopted by BES in its valuation, and subsequent acquisition, of NHLS; and -. a multiple of 6, which was the multiple used by BES in its valuation, and subsequent acquisition, should be applied in assessing the value of NHLS with the warranties being true and untrue; Valuation on the basis of Warranties False -. the market value of NHLS with the warranties being true is £5,688,241.70, being the Purchase Price; Valuation on the basis of Warranties False (Scenario 1) -. the maintainable earnings of NHLS should be based on the maintainable earnings for FY21 because that was the actual approach adopted in the pricing of the transaction; -. a multiplier of 6 should be applied in assessing the value of NHLS with the warranties being untrue; -. NHLS’s revenue from the Rullion work was £1,627,000, excluding expenses recharged by NHLS to Rullion; -. the cost of sales to Rullion should be based on the direct wages of NHLS staff who were working on the contract, together with other direct costs referable to the Rullion contract. (iii). BES’s position[434]Mr Zaman KC and Mr Perrin contend that the authorities do not allow the Court to assess the Warranty False value of the NHLS shares on the basis that there would have been no transaction or that there has been no loss suffered by BES. The purpose of warranties is to allocate risk between contracting parties. The relevant warranties in this case cater for the risk that work was secured by NHLS by bribery. It cannot be that those warranties were valueless.[435]The ultimate question is what a hypothetical purchaser would have paid for NHLS on 27 May 2022 in the knowledge that the warranties given by the Notus Parties were false.[436]There can be no inquiry into the stance which the parties themselves would have taken on any renegotiation.[437]Any events postdating the date of assessment (such as the retention of Rullion/EDF as clients of NHLS) are inadmissible and irrelevant.[438]Mr Zaman KC and Mr Perrin say that I am entitled to, and should, apply the broad axe principle in assessing damages and that I have sufficient evidence on which to do so.[439]They draw my attention to the following factors to assist me in assessing the price that a hypothetical willing purchaser would have agreed to pay:- -. 59.2% of NHLS’s revenue came from one customer, Rullion; -. the alleged bribery was very serious; -. in the case of Mr Milledge, it had been going on since 2017; -. Mr Milledge has received an Audi car and £38,659.30 commission referable to headcount; -. He had also been heavily involved in the GENCO 525 contract; -. Mr Daniels had received the Quad Bike and £43,856 directly related to headcount; -. He was also to receive a tidying up payment of £97,968 based on headcount commission.[440]The hypothetical willing purchaser would also have taken into account any potential reputational damage to NHLS and the possibility that the company would be prosecuted by the regulatory authorities.[441]BES’s position is that Mr Pocock has rightly assumed that a hypothetical buyer would only purchase the business on the basis that the tainted arrangement with Rullion formed no part of the deal.[442]There was a sequential exchange of the expert evidence, with Mr Bennett responding to Mr Pocock’s report. As noted above, Mr Bennett proposed two alternative scenarios.[443]Scenario 2 is wholly unrealistic on the basis that a willing buyer would inevitably take into account the alleged bribery. Scenario 3 is not supported by cogent evidence and, in any event, the reasonable hypothetical purchaser would not have taken it into account.[444]In any event, a prudent buyer would also factor in the risk that NHLS might lose further business if other clients found out about the bribery issues and the reputational damage associated with the bribery.[445]Furthermore, even Mr Bennett acknowledges in his report that Scenario 3 is a “simplistic assumption” that costs savings and profits would equate to 50% of maintainable earnings achieved by NHLS on the Rullion contract.[446]For all of those reasons, Scenario 1 is the only realistic basis on which I should proceed to assess BES’s loss.[447]BES’s fallback position is that I should base my assessment of its loss on Scenario 1, but that I could adjust the assessed figure by a percentage if I consider that the full Rullion EBITDA should not be discounted. (iv). The Notus Parties’ position[448]Mr Chaisty KC’s starting point is that BES has simply not proved its case. It has produced insufficient evidence on which I might be able to base an assessment of its loss. The Equitix judgment reflects that, in that case, there were detailed issues considered by the parties’ experts to enable the Court to arrive at a reasoned decision. That is not so here.[449]In any case, there is no evidence of any loss having actually been suffered by BES. NHLS retained the Rullion work and remains on site to this day. It continues to be a thriving business.[450]Mr Chaisty KC does not accept that he is seeking to apply hindsight improperly. As at the date of completion, the breaches had not reduced the value of NHLS’s shares.[451]Moreover, there was allocation of risk to both parties. There was the possibility of a post-acquisition price adjustment in the form of the Additional Consideration.[452]Any award of damages to BES would offend against the compensatory principle and would represent a windfall. It would be ignoring reality to disregard what happened after the sale of the business and the authorities (principally Ageas) justify taking into account what actually happened after the date of the notional acquisition.[453]Mr Pocock has simply instructed himself (or been instructed) that his analysis should be based on the loss of the Rullion contract.[454]There is, therefore, no justification for an assessment based on Scenario 1.[455]There is also no fair basis on which to reject Scenario 2. Mr Bennett gave a persuasive justification of his decision to advance that scenario.[456]In any event, I should prefer the evidence of Mr Bennett over that of Mr Pocock. Mr Pocock’s views in relation to the adjustments issues (see below) were unreasonable and it is evident from the experts’ joint statement that he made substantial concessions when he met Mr Bennett. Moreover, Mr Pocock provided no justification for the basis of Scenario 1, whereas Mr Bennett made the point that the factual foundation of the claim was a matter for the Court. Mr Bennett was more realistic in the approach which he adopted to the exercise generally, namely that Scenario 1 was not, to borrow a phrase from Mr Zaman KC, “the only game in town”.

(v) Analysis and Decision

[457]Essentially, the question I must ask myself is what a hypothetical purchaser, with no special interest or characteristic affecting what it would be prepared to pay, would have paid for NHLS on the open market in the knowledge that the warranties given by the Notus Parties were false on the basis of my findings. I remind myself that those findings are that, in breach of the warranties given by the Notus Parties:- -. In relation to Mr Milledge, an offending offer was made to him, which ultimately came to nothing. -. Mr Daniels received (either himself or through his companies) £43,856 directly related to headcount, a further £97,968 at a later stage and the Quad Bike with a value of £10,388, as inducements for the improper performance of his duties at EDF.

Approach to the legal issues

[458]Mr Chaisty KC understandably emphasises the approach adopted in Ageas, but, as HHJ David Cooke noted in Bir Holdings, Popplewell J regarded it to be an exception to the general rule and one to be applied with caution, observing that it “can only be justified where it is necessary to give effect to the overriding compensatory principle” and that “the prima facie rule, from which departure must be justified, is that damages are to be assessed at the date of breach and that only events which have occurred at that date can be taken into account”. He went on to note that “party autonomy dictates that an award of damages should not confound the allocation of risk inherent in the parties’ bargain…If the benefit or detriment of the contingency eventuating is a risk which has been allocated to the buyer, it is not appropriate to deprive him of any benefit which in fact ensues; it is inherent in the bargain that the buyer should receive such benefit…”[459]HHJ David Cooke described Popplewell J’s decision as “the high water mark of the principle [advanced by the sellers in HHJ Cooke’s case]”.[460]In my view, the Ageas decision is not of particular assistance to the Notus Parties here, especially given the qualifications noted by Popplewell J.[461]I have very limited evidence about the fortunes of NHLS after it was acquired by NHLS. It seems to be uncontroversial that NHLS’s services were retained by EDF. Mr Vaughan gave evidence that the company’s revenue from Hinckley reduced in 2023. I do not know to what extent or the factors which led to that reduction in business. Neither Mr Vaughan nor Mr Rowe were able to give me a clear picture of NHLS’s post-acquisition finances.[462]It may well be the case that, to the extent that the EDF was retained, that was a result of key management decisions taken by BES and NHLS’s new management team. For example, in relation to a different client, Mr Vaughan’s evidence was that a decision was made in 2023 to take advantage of a new opportunity at BAE.[463]I, therefore, am not able to accept that there is any sound basis for taking into account post-acquisition events or indeed that, by disregarding them, I run the risk of offending the compensatory principle or of awarding BES a windfall.[464]Moreover, the allocation of risk between the parties was agreed and reflected in the SPA. The bribery warranties were given by the Notus Parties and they were not qualified in any way. Those risks were reflected in the Purchase Price and BES was entitled to rely on them. The warranties must have had some value. BES was deprived of the opportunity of negotiating a purchase price with NHLS based on the bribery warranties being untrue.[465]In any event, I agree with the approach adopted by BES in relation to these points. The applicable guidance is to be found in MDW Holdings (referred to above). It is a recent Court of Appeal decision which sets out the position very clearly. I shall apply the usual rule set out in that authority and I shall assess the value of NHLS on the strength of the information which would have been available at the date of the acquisition. That is the appropriate approach in this case, where there has been a breach of a warranty of fact.

The expert evidence

[466]I was particularly impressed by the Mr Bennett’s evidence. In his written and his live evidence, he set out a comprehensive and clear range of factors which he considered would influence a prospective purchaser. He also provided me with a range of potential scenarios for the assessment of the Warranties False figure.[467]Mr Pocock, on the other hand, appeared to be committed to the Scenario 1 approach and to have assumed that either the Rullion relationship would have come to an end when the breaches came to light or that, given that the work was tainted by the wrongdoing, it should be left out of account.[468]I agree entirely with Mr Bennett that the impact that the knowledge of the breaches would have had on the purchase price is for me to determine and that it is an exercise which requires consideration of a wide range of factors. I also accept his very helpful analysis, setting out the factors which might properly be taken into account in making that assessment. On the other hand, Mr Pocock has based his evidence on an assumption which, in my view, cannot fairly be arrived at without considering the type of factors highlighted by Mr Bennett.[469]For those reasons, whilst I am grateful to both experts for the help which they have given to me, I prefer Mr Bennett’s evidence which has been of more assistance to me on this issue in particular and I shall be guided by it.[470]I shall now consider, in turn, the various factors highlighted by Mr Bennett and any others which I consider to be relevant before analysing the Scenarios for which the parties’ respective experts contend.

The adequacy of the evidence

[471]I do not accept Mr Chaisty KC’s primary submission that I have inadequate evidence on which to assess any loss suffered by BES. I received extensive evidence and documentation before and over the course of the 9-day trial, enabling me to reach findings and conclusions on what I consider to be key issues and crucially on the factors which have been highlighted by Mr Bennett. In any event, it was not for BES’s witnesses to engage in speculation.

The parties’ and the witnesses’ subjective views

[472]Mr Lomax and Mr Rowe have said that, had they known about the bribery, then BES would not have purchased NHLS. Mr Mohammed’s evidence was that he wished that he had never sold the company. Those are subjective views which are of little consequence in the context of my analysis and which I am not able to take into account. I must consider the prospective purchase from the perspective that there would be a willing buyer. I cannot undertake the exercise on the basis that there would be no transaction.[473]I now turn to the factors which I consider it likely that a prospective purchaser would have taken into account.

The nature and seriousness of the breaches

[474]There can be little doubt that the findings which I have made in relation to NHLS’s dealings with Mr Daniels are serious. This was an arrangement which carried on for approximately 2 years and which involved the unwarranted receipt by him of the Quad Bike and in the region of £140,000.[475]In my judgment, a hypothetical purchaser, armed with the knowledge of those findings, would inevitably have had concerns about them.[476]I am not diminishing the seriousness of the offer made to Mr Milledge on 3 October 2017 but any concerns of a hypothetical purchaser about it would have been dwarfed by the issues relating to Mr Daniels. The offer was made several years before the hypothetical acquisition, it did not come to fruition and, on the basis of my findings, there were no other inducements made to Mr Milledge. I do not think that it would have influenced a potential buyer. Even if I am wrong on my assessment of Mr Walberg’s email of 4 January 2017 to Mr Milledge, I do not think that it would have made a material difference to a potential purchaser, whose focus would have been on the more recent past and, in particular, on the events concerning Mr Daniels.[477]The main point is that these issues would have been overshadowed by the far more recent misconduct relating to Mr Daniels.[478]I accept Mr Zaman KC’s argument that it is likely that a purchaser might have been concerned about any potential regulatory or criminal liability ramifications of the findings which I have made. They would also inevitably have been concerned about reputational risks arising from the established wrongdoing.

Other key factors

[479]However, as I have already noted, in my view there are other factors which a prospective buyer would have taken into account.[480]Firstly, I find and accept that, from a financial perspective, NHLS was a successful business at the time of the sale.[481]BES had identified NHLS as an attractive proposition for acquisition. It was very profitable and had achieved financial success over a short period of time. BES’s due diligence report noted that NHLS had achieved a turnover of £2.8 million in the financial year to December 2021, with an EBITDA for that period of £0.9 million and a forecast EBITDA of £0.95 million for the year to April 2022.[482]I have also noted that BES’s original offer of £4 million for NHLS was rejected by Notus and that a further, far improved, proposal was then put forward and ultimately accepted.[483]Secondly, NHLS represented an attractive business proposition for a potential purchaser. It was a niche business which faced limited competition.[484]In his live evidence, Mr Lomax described BES’s due diligence report on NHLS as “very positive” and NHLS to have been an “attractive business”. He accepted that it had “few, if any, direct competitors”.[485]BES’s Investment Paper noted that NHLS was “referenced as highly specialist in heavy lifting, providing a high quality expert service that is difficult or not commercially interesting to replicate” and that NHLS’s narrow focus on lifting consultancy and assurance was a key differentiator.[486]BES’s due diligence report is also particularly instructive. It described NHLS as “best of breed in what they do” and “consistent, reliable and responsive”. It noted that NHLS had a small set of competitors “with varying levels of consulting capabilities” and that NHLS was “referenced as highly specialist in heavy lifting, providing a high quality expert service that is difficult or not commercially interesting to replicate internally”.[487]Thirdly, I find that the nature of NHLS’s business was that it relied on the expertise, experience and reputation of its engineers, who were to remain in place after its acquisition. According to BES’s investment paper, the experience and attitudes of NHLS’s engineers distinguished it from its competition. NHLS employed 21 people, the majority of whom were lifting specialists based at customers’ sites. None of those people (except Mr Mohammed) have been implicated in any wrongdoing on the basis of my findings.[488]The only people who have been so implicated are Mr Mohammed and Mr Walberg. On the sale of NHLS to BES, Mr Walberg was to leave the business and Mr Mohammed was to remain in place for a limited period (i.e. for the earn-out period).[489]BES’s Investment Paper also noted that NHLS’s shareholders had delegated customer relationships to second-tier management.[490]Therefore, going forward, the business was not going to be reliant on the input of Mr Mohammed and Mr Walberg, but rather on the skill and expertise of its technical engineers. That is equally likely to have been the case for any prospective purchaser. It is perhaps of note that Mr Nisbet (rather than Mr Mohammed and Mr Walberg) was identified in BES’s due diligence report as a key person in NHLS’s relationship with EDF.[491]In my view, the impending departure of Mr Mohammed and Mr Walberg would have limited the impact of the disclosure of the breaches from the perspective of a prospective purchaser.[492]Fourthly, I find and accept there was no contractual security in the Rullion/EDF work, that there was no guarantee that it would have been the mainstay of NHLS’s work in the future and that other work could quite easily have materialised to replace or supplement it.[493]It is evident from the documents which have been disclosed and from the witness evidence that Mr Mohammed and Mr Walberg saw a substantial benefit in securing the GENCO 25 contract, in large part because their work at EDF could have come to an end at any time on 2 weeks’ notice.[494]Moreover, in the due diligence report, it is noted that “[NHLS] has provided a list of historic opportunities which shows that, of those tendered for, 83.3% of the opportunities were secured.”[495]It is evident from the “key customers” table BES’s due diligence report (at page 10) that customers’ requirements would change every year and that the sources of NHLS’s income were fluid. For example, in the financial year ending December 2020, Rullion’s work only amounted to 39.4% of NHLS’s revenue. In that same year, sales to BAE Systems Marine Limited amounted to £51,000, which increased to £494,000 in the year ending December 2021 and was estimated to reach £913,000 in the first year after the acquisition. Mr Vaughan also described a substantial expansion of slinger work carried out for BAE in 2023.[496]Fifthly, BES’s pre-acquisition enquiries revealed that NHLS had an impressive reputation (“best in breed” etc) and that it had the potential to fit into the strategic plans of a range of purchasers. BES’s Investment Paper noted that NHLS would be able to assist it to expand its service offering and to cross-sell to the two organisations’ respective client bases. NHLS itself had a blue-chip client base, including Siemens and BAE Services.[497]Sixthly, there is every indication that NHLS had performed the contract well over the years. The company had been in place since early 2017 and it had been invited to tender for GENCO 25. Leaving aside the contribution of Mr Daniels, the feedback received by Armstrong from other customers was largely very positive, suggesting a good level of competence. There is unchallenged evidence from the Notus Parties’ witnesses that there were safety issues which needed to be addressed at Hinckley and that NHLS was seen to be the solution (at least in the short term) to those challenges. They were appointed by EDF in short order after their interview with Mr Campanero in March 2017.[498]Seventh, I accept that, if required, there would have been scope for NHLS’s employees to have been deployed elsewhere, where opportunities arose, either with existing or new customers. As noted above, NHLS had a strong reputation, highly regarded engineers and an impressive customer base. It would have made no commercial sense for NHLS’s skilled employees not to have been engaged in productive work.[499]Lastly, but crucially. there is no evidence that NHLS was being paid a non-market rate for the services which it was providing to EDF. A complaint was made about their charging rates but it is of no evidential value and there is no basis on which I could fairly find that it had any justification. It was made anonymously. It could quite easily have been made by someone who had a grudge against, or an interest in undermining, NHLS.[500]Moreover, it has not been proved that any advantage was conferred on NHLS as a result of the established breaches. For example, it has not been established that NHLS received more work or more favourable commercial conditions.

Analysis

[501]I am confident that a prospective purchaser would have taken account of many or all of the factors which I have set out above, when arriving at a figure which it would be prepared to pay for the business. In my judgment, notwithstanding the wrongdoing, there were clear and substantial advantages to a potential purchaser in acquiring NHLS’s business.[502]I now turn to the scenarios advanced by the parties’ experts.[503]I must assume that a prospective purchaser would have brought the misconduct to the attention of Rullion/EDF (as indeed BES did).[504]I suspect that, in reality, a buyer might have approached Rullion/EDF to establish their position before going ahead with the purchase of NHLS but, for these purposes, I assume that it was proceeding on the basis that the ongoing working relationship with EDF would be uncertain after the disclosure of the breaches.[505]I am unable to accept Scenario 2 as a realistic basis for assessing what a hypothetical buyer would have been prepared to pay for NHLS, although I note that Mr Bennett was prepared to defend it in the witness box.[506]In my view, the findings which I have made inevitably would have raised the question of the strength of the Rullion/EDF arrangement, which accounted for approximately 60% of NHLS’s revenue. Given the seriousness of the breaches and their implications, I think it unlikely that they would not have had some impact on the amount a prospective purchaser would have been prepared to pay for the business. I accept that the warranties given by the Notus Parties had a value.[507]I also reject Scenario 3. I am not satisfied that I have a firm evidential foundation on which to conclude that the redeployment for which Mr Bennett contends would have happened. That said, as I have noted above, I do accept that the scope for redeployment is a factor which a prudent purchaser would take into account in deciding how much to pay for NHLS’s business.[508]Therefore, in my view, the only remaining basis presented to me by the experts on which it is open to me to make an assessment is Scenario 1.[509]It is open to me to arrive at an alternative basis for evaluating the approach which a would-be buyer would have adopted when valuing the business, such as simply seeking a percentage discount from the Warranties True figure. However, there is some logic in approaching the exercise from the angle of Scenario 1, because it focuses on the value of what was, at the time of the sale, the most valuable, and yet vulnerable ingredient, of NHLS’s income stream.[510]However, taking into account the various factors set out above, in my view the value of the business to a prospective buyer would have far exceeded a figure based on the exclusion of the Rullion work.[511]In my judgment, the most appropriate approach is to adopt Scenario 1 as the foundation for my assessment, but to adjust it to reflect the various factors to which I have referred in this section of my judgment. As noted above, that approach has been proposed by Mr Zaman KC in the alternative to his primary submission and I accept it.[512]I also agree with Mr Zaman KC that the only way to undertake this stage of the exercise is by adopting what he is termed the broad axe approach, as was applied in Equitix.[513]In my view, in particular, a willing buyer would have had regard to the following factors:- -. the absence of evidence of any tangible benefit to NHLS resulting from the established bribery; -. the successful financial performance of NHLS prior to its acquisition; -. its reliance on high quality engineers who would be retained after the sale; -. the unpredictable and flexible nature of its revenue stream and its success historically in securing new work; -. the niche nature of NHLS’s services and its reputation; -. the potential lack of security in the work from Rullion; -. opportunities for new work and NHLS’s impressive customer base and -. NHLS’s apparent success in undertaking the work at EDF.[514]I think that, given those factors, a buyer would have had considerable cause for optimism that NHLS’s work at EDF would continue and that, if it were to be reduced in scope, NHLS was in a strong position to secure work from new customers or from its existing customer base.[515]In my judgment, for the purposes of the Warranties False calculation, the most appropriate adjustment to make is to reduce by 25% the EBITDA figure generated by the Rullion work. In other words, the Warranties False figure is to reflect the retention of 75% of the Rullion EBITDA. I consider that outcome to fairly reflect the factors which I have set out above in some detail.[516]I should record, for completeness, that, even if I had reached a different conclusion in relation to the GENCO 25 tender and the commission payments to Mr Milledge, I would have arrived at a similar conclusion. In my judgment, the most concerning findings for a prospective purchaser would have been those relating to Mr Daniels for the reasons given above.

Scenario 1: the Disputed Issues – the Rullion EBITDA

[517]I am grateful to Mr Zaman KC and to Mr Perrin for producing a table to assist me to understand the contentious issues relating to the Rullion EBITDA in the context of Scenario 1.[518]It is now common ground that I should take the revenue figure for Rullion to be £1,653,000.[519]I must deduct from that figure the direct costs and the overhead costs associated with Rullion, to arrive at a figure for EBITDA relating to Rullion. The resulting figure is to be deducted from the agreed EBITDA of NHLS and then multiplied by 6 (the agreed multiplier) to arrive at the enterprise value of NHLS excluding Rullion. That figure should then be subject to equity adjustments.[520]The disputed issues have a substantial impact on the overall calculation. On the basis of the final table produced by Mr Zaman KC and Mr Perrin, Mr Pocock’s figure for the Warranties False equity value of NHLS based on Scenario 1 is £1,662,000, whereas Mr Bennett’s figure is £2,934,000, resulting in overall loss figures of £4,026,000 and £2,934,000 respectively. However, it seems that Mr Zaman KC has accepted Mr Bennett’s adjustment relating to the payments made to Mr Daniels which, by my calculations, brings Mr Pocock’s total loss figure down to £3,822,000.[521]That being so, I understand that the differences between the experts are accounted for as follows:- -. Direct costs – staff costs. Mr Pocock puts this figure at £830,000, whereas Mr Bennett’s figure is £876,000. Mr Bennett bases his figure on instructions which he has received from Mr Mohammed and Mr Walberg, whereas Mr Pocock’s figure is based on invoices submitted to Rullion. -. Direct costs – insurance – there is a modest difference between the experts (Mr Pocock suggests £7,000 per year, compared with Mr Bennett’s figure of £11,000). Mr Bennett has adopted a pro-rated approach. -. Overhead costs – Mr Pocock’s figure is £181,000, compared with Mr Bennett’s figure of £243,000. The differences are accounted for by Mr Pocock having worked from the financial due diligence report, whereas Mr Bennett has based his conclusions on the management accounts. -. Enterprise to equity adjustments – Rullion owed £61,000 to NHLS at the date of the sale of the business. Mr Zaman KC contends that this should be disregarded because Rullion could have argued that it was not recoverable in law owing to the established bribery. Mr Pocock’s evidence was that it would have been difficult to recover these sums. Mr Bennett does not accept that there is any evidence that the sums would not have been recovered. -. Enterprise to equity adjustments – cash profits – Mr Bennett seeks to add £165,000. Mr Pocock makes no allowance. Neither witness was taken to this issue. It has not been dealt with in any substantial way in closing submissions.[522]Perhaps understandably, the focus of Counsel’s submissions has been on the factual issues and other issues of principle outlined in this judgment. I have largely been left to my own devices in reaching conclusions on the disputed issues relating to the equity value of NHLS based on Scenario 1. Whilst I am content to endeavour to determine those outstanding issues at this stage, I may well benefit from receiving further submissions on them. To ensure fairness to the parties, I invite them to make additional submissions, if they wish to do so. If the parties agree, I am happy for those submissions to be made, and determined, in writing.

(i) Procedural Background

[523]BES seeks to recover £449,296.91, being the total sum which it maintains that it has incurred in professional legal costs in connection with its investigation.[524]The claim originally featured in BES’s Defence and Counterclaim (at paragraph 16(2)) where it was pleaded “[BES] is entitled to recover the professional costs incurred to-date in investigating and dealing with the issue of bribery, being £355,127.07 [as at that date]. Further costs are likely to be incurred.”[525]In their Reply and Defence to Counterclaim, the Notus Parties disputed the claim and observed, “full particulars of the sum of £355,127.07 are awaited”.[526]In their Part 18 Request made in or around October 2023, the Notus Parties’ solicitors requested further details and particularisation of this head of the claim. In their Reply, BES responded:- “This is an unnecessary series of requests. These are matters that will be dealt with by disclosure, witness statements and expert evidence.” “Not entitled – this will be dealt with by disclosure and evidence.”[527]In support of the claim, BES has disclosed copies of invoices submitted to it by its solicitors, Pinsent Masons and later DLA Piper.[528]However, none of the invoices (except one) attach a narrative document, setting out how the sum charged has been calculated and the nature of the work undertaken.[529]The one exception is the bill for the period 4 September 2023 to 24 November 2023. Whilst the final charge was discounted, it was based on hourly rates of £795 (partner), £525 (associate) and £275 (trainee). It is evident from the narrative that much of the work undertaken was incurred engaging with (and travelling to meet) Avon and Somerset Police. There is one entry, “review of Garrick Nesbit employment law claim to be incorporated in A&S presentation”. There is another entry, “update on [partner’s] sick leave to Walter Rowe and Steven Hulme”.[530]BES’s disclosure statement contained the usual paragraphs about the withholding of privileged communications but I am told that it was not specifically communicated to the Notus Parties’ solicitors that the narrative statements relating to the invoices were not being disclosed on the grounds of privilege.[531]The witness evidence supporting the claim comes from Mr Rowe (at paragraph 33):- (ii). The parties’ respective positions[532]Mr Zaman KC says that the professional costs incurred by BES in investigating the allegations of bribery are properly recoverable as damages (rather than legal costs) and that they flow from the Notus Parties’ breaches.[533]He notes that the invoices are in the trial bundle and are, therefore, in evidence. They are supported by the Project Pimlico report, which has been disclosed in this litigation. He also notes that the costs have been verified by Mr Rowe.[534]As to the absence of the invoices’ narratives, Mr Zaman KC asserts that they were not disclosable because they relate to an ongoing criminal investigation in which NHLS is itself a potential target. In other words, they are subject to legal professional privilege.[535]He tells me that he expressed concern at the CCMC about what BES was able to disclose and he asserts that, for that reason, the Order for Disclosure (at paragraph 2.5) provided:- “Without prejudice to the parties’ usual rights regarding objecting to disclosure and inspection, the parties have the specific right to object to disclosure and inspection of documents on the basis that disclosure itself may be unlawful.”[536]In his closing submissions, Mr Zaman KC’s primary position was that the Court should not engage in a costs assessment exercise and that these are direct costs which are recoverable in full.[537]Otherwise, he submits that it is my duty to make an award of damages as I think appropriate.[538]He referred me again to the “broad axe” principle and to the Supreme Court ruling in One-Step(Support) Ltd v Morris-Garner and another [2018] UKSC 20 (please see above).[539]Mr Zaman KC also refers me to McGregor on Damages (22nd edn) at paragraph 11-02:- “where it is clear that some substantial loss has been incurred, the fact that an assessment is difficult because of the nature of the damage is no reason for awarding no damages or merely nominal damages. As Vaughan Williams LJ put it in Chaplin v Hicks, the leading case on the issue of certainty:
“The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages.”
Indeed, if absolute certainty were required as to the precise amount of loss that the claimant had suffered, no damages would be recovered at all in the great number of cases. This is particularly true since so much of damages claimed are in respect of prospective, and therefore necessarily contingent, loss. Of course, as Devin J said in Biggin v Permanite:
“Where precise evidence is obtainable, the court naturally expects to have it, [but] where it is not, the court must do the best it can.”
Generally, therefore, although it remains true to say that “difficulty of proof does not dispense with the necessity of proof”, the standard demanded can seldom be that of certainty. Even when it is said that the damage must be proved with reasonable certainty, the word “reasonable” is really the controlling one, and the standard of proof only demands evidence from which the existence of damage can be reasonably inferred and which provides adequate data for calculating its amount. The clearest statement of the position is that of Bowen LJ in Ratcliffe v Evans, where he said:
“in all actions accordingly on the case where the damage actually done is the gist of the action, the character of the acts themselves which produced the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist on less would be to relax old and intelligible principles. To insist on more would be the vainest pedantry.”
[540]Mr Chaisty KC resists this head of the claim. He does not accept that the sums contended for by BES can properly be claimed as damages. He suggests that, at best, they could have been said to form part of the legal costs incurred by BES, but that that option is no longer available to BES because they were not included in the costs budgeting exercise.[541]Furthermore, Mr Chaisty KC notes that no evidence, other than invoices without narratives, has been adduced in support of the claim. He complains that, in the circumstances, nothing is known of the work undertaken or the approach to charging. He says that his clients are entitled to particulars of this head of the claim. They asked for it in their Part 18 request and they were told that they would receive it.[542]In essence, his position is that BES has not proved its loss and that it is not open to me to try to arrive at a figure, doing my best on the basis of the material available to me.[543]He does not accept that NHLS is in danger of being prosecuted or that there is any appropriate basis for BES to withhold the bill narratives.[544]Mr Chaisty KC submits that the authorities to which Mr Zaman KC has referred me are not applicable here. In this case, precise evidence is, or should be, available and the assessment of damages is not difficult. (iii). Analysis and Decision[545]I accept, in principle, that this head of loss is properly pleaded as a claim for consequential loss and that it would not have been appropriate for it to have been advanced as part of the claim for legal costs arising out of the Counterclaim. This is a freestanding head of loss. The costs of the investigation have not arisen from the Counterclaim or the defence of the claim.[546]I also accept that the investigation costs arose from the breaches alleged by BES, although, of course, not all of those breaches have been established.[547]It is a fundamental principle of litigation that a claimant must prove their loss. In order to do so, they need to establish that they have, in fact, sustained recoverable damage. They must also satisfy the Court as to the amount of any loss which they have suffered.[548]I agree with Mr Zaman KC that there are cases where the assessment of loss is difficult because of the nature of the damage sustained. A good example would perhaps be where the loss claimed is prospective.[549]However, that is not the case here. The amount of the professional costs associated with the investigation and incurred by BES has crystallised. That loss is capable of precise calculation and indeed has been claimed in an exact sum. It is not contingent on some future event. It is not a case of the Court having to make as fair and accurate assessment as possible of the extent of that loss.[550]Mr Zaman KC focusses on the observation of Devlin J in Biggin v Permanite [1951] 1 KB 422 at 438:- “Where precise evidence is obtainable [my emphasis] the court naturally expects to have it, [but] where it is not, the court must do the best it can.”[551]In this case, precise evidence is obtainable. BES has disclosed the relevant invoices. It could also have disclosed the full narratives attached to those invoices, subject to its argument on legal professional privilege. If further evidence were required, it was open to BES to call relevant witnesses.[552]It seems that Mr Zaman KC’s point is that the narrative statements are not obtainable, because they are privileged and have properly been withheld.[553]I am not able to accept that argument as a basis for assessing this head of the claim on the strength of the invoices alone.[554]There is no direct evidence that that is the reason why the narrative statements have not been disclosed. For example, the point is not addressed in BES’s witness statements (or, as far as I am aware, in correspondence between the parties’ solicitors).[555]Moreover, there was no reference to privilege in BES’s response to the Notus Parties’ Part 18 request.[556]The argument did not feature in Mr Zaman KC’s/ Mr Perrin’s Skeleton Argument ahead of the trial, or indeed in their written closing submissions. It was first raised by Mr Zaman KC in his oral closing submissions, when I was raising questions about the absence of the bill narratives.[557]Whilst the issue of privilege was raised in BES’s disclosure statement, it only appeared in a rather generic provision. BES’s solicitors did not communicate separately to the Notus Parties’ solicitors that the narratives were being withheld on the grounds of privilege.[558]Lastly, BES has disclosed its Project Pimlico report. Whilst Mr Zaman KC is correct to say that it is a matter for BES to decide on which documents it waives privilege, I am surprised that it was able to disclose that comprehensive analysis and yet withheld the bill narratives.[559]Even if I accept that the bill narratives have been properly withheld, I would have expected to see witness evidence to substantiate the claim. All that I have been provided with is evidence from Mr Rowe, informing me that the costs have been incurred. That does not tell me, for example, whether the invoices raised related solely to the investigation, nor does it reveal who was involved in the investigation and the nature of the work which was undertaken.[560]Mr Chaisty KC makes a fair point when he says that this evidence could have come from one of the solicitors involved in the investigation.[561]Moreover, this is not a new point. The Notus Parties expected BES to provide evidence to substantiate this head of the claim. That was a reasonable expectation. It could have been that they wanted that information to help them to construct a Part 36 Offer, or simply to put them in a position to decide whether, and to what extent, to challenge the quantum of this head of the claim at trial.[562]In their Part 18 Request the Notus Parties, therefore, asked for further particulars of, and information about, this head of the claim. Not only was no further information provided at that stage, but BES indicated that it would be addressed in its disclosure, witness evidence and expert evidence. That did not happen.[563]In terms of disclosure, BES only provided the supporting invoices, and not the accompanying bill narratives, without which they proved nothing other than the amount of the bills.[564]It was presumably open to BES to disclose the fee estimates which they received from their solicitors relating to the costs of the investigation. Those estimates would not have been privileged and, to the extent that there was scope to argue otherwise, they could have been redacted. They would have given an indication of the level of costs which the solicitors anticipated BES would incur as the matter progressed.[565]In terms of witness evidence, Mr Rowe simply confirmed that the costs had been incurred and paid. His trial statement did not address the issues which were put to BES in the Notus Parties’ Part 18 Request, despite BES’s indication that it would address those matters in its witness evidence.[566]No expert evidence was served by BES on the quantum of the investigation costs claim, save that, in his report, Mr Pocock stated that a buyer would have considered that any investigation costs should be borne by the seller and would have sought an indemnity in the sale contract. The experts now appear to agree that any request for an indemnity may not have been accepted by the seller and this head of claim is pursued separately from the principal head of the Counterclaim.[567]In any event, without further evidence, I cannot be satisfied that the invoices which have been disclosed by BES solely covered the costs of the investigation.[568]For example, it may be that the invoices included work which was unrelated to Project Pimlico, such as, for example, work done in connection with Mr Nisbet and his Employment Tribunal claim. It may also be that the work undertaken included time spent by the solicitors advising BES generally on issues of compliance.[569]In the absence of evidence confirming the nature of the work encompassed by the invoices, I am not able to assess whether the time charged for was exclusively undertaken in connection with the investigation and the extent to which the costs were reasonably incurred. At the very least, the Notus Parties were entitled to ask BES about these issues, and indeed they did so in their Part 18 Request.[570]The supplementary trial bundle does contain one bill narrative (referred to above). I am not sure whether this has been disclosed inadvertently or whether BES has waived privilege in relation to it. That narrative does not reassure me that all the work claimed for is properly recoverable. For example, it largely relates to a presentation provided to the Police by two solicitors. It also refers to a review of the “latest Garrick Nisbet employment claim” albeit in connection with the presentation. These are the types of issues which the Notus Parties would inevitably have wished to explore further, if they had had an opportunity to do so.[571]BES has invited me to assess its loss in relation to the professional charges which it has incurred by allowing the claim in full or by doing the best I can with the assistance of a “broad axe”.[572]For the reasons I have set out above, I cannot fairly do so. This head of the claim has been capable of precise quantification. It has simply been a question of whether the supporting evidence is adequate and enables me to arrive at a reasoned conclusion.[573]In their closing written submissions, Mr Zaman KC and Mr Perrin contend that the investigation costs claimed by their clients are “proportionate and reasonable”. I could not fairly reach such a conclusion on the basis of invoices submitted and Mr Rowe’s evidence that they have been paid. For example, the invoices (with the exception of the one invoice to which the narrative is attached) do not reveal hourly rates, grades of fee earner and the time spent by each fee earner.[574]This is a very substantial claim. Even if I were minded to do my best to assess the loss on the basis of the evidence before me, I would not be able to do so in a fair and principled way. I have no basis on which to do so, and my assessment would, in large part, be the product of guesswork. That is not an appropriate way to determine such a substantial claim.[575]I ask rhetorically what supporting evidence would have been made available to me if this consequential loss claim had been advanced as a freestanding claim, with issues of liability having been conceded. It would have been a claim for approaching £500,000. It may well have been a High Court action. I cannot accept that the only evidence available to me would have been the invoices which have been disclosed (without bill narratives), along with a single paragraph in a witness statement from Mr Rowe, informing me that those costs had been incurred.[576]For all of those reasons, I have decided to dismiss the consequential loss claim for the costs of the investigation.

Disposal

[577]Judgment for Notus on the main claim (subject to the Counterclaim).[578]Judgment for BES on the Counterclaim/Part 20 Claim, to be calculated on the basis of Scenario 1, modified such that the Warranties False figure is to reflect the retention of 75% of the Rullion EBITDA, before the balance of the calculation is undertaken. The outstanding points will then be subject to further submissions, if necessary, as indicated.[579]BES’s consequential loss claim for the costs of the investigation is dismissed.