Bezant v Rausing & Ors [2007] EWHC 1118 (QB)

[2007] EWHC 1118 (QB)

Case No HQ06X01611

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 14 th May 2007

Before

THE HONOURABLE MR JUSTICE GRAY

Between

RICHARD JOHN BEZANTClaimant

HANS ANDERS RAUSING (AND 16 OTHERS)Defendants

The Claimant appeared in Person assisted by Dr Bezant for in person

Mr Simon Devonshire (instructed by Taylor Wessing) for 1st to 8 th, 10 th&11 th and 14 th& 16 th Defendants

Ms Leigh-Ann Mulcahy (instructed by Barlow Lyde & Gilbert) for 9 th, 12 th, 13 th and 15 th Defendants

Ms Marianne Butler (instructed by Cameron McKenna) for 17 th Defendant (Mr Cork)

Mr Adam Wolanski (instructed by Taylor Wessing) for 1 st Defendant

Hearing Hearing dates: 17 th– 23 rd April 2007

Judgment

The issues for decision

[1]For several years past the Claimant in these three actions, Mr Richard Bezant, together with his wife, Dr Bezant, has through the courts sought to obtain from their former employer the compensation to which the Bezants have convinced themselves they are entitled following the termination of their employment in September 2000.

[2]The applications which are now before me are made by Dr Hans Rausing and the 16 other Defendants joined in one of the three actions to strike out Mr Bezant’s claims or in the alternative for summary judgment against him. Dr Rausing was at the material times the effective controller through his family trust of the company which formerly employed Mr Bezant, namely Wadhurst Park Limited (“WPL”).

[3]The broad questions which I have to decide are, firstly, whether Mr Bezant’s statements of case in the three actions disclose reasonable grounds for bringing the claims and, secondly, whether Mr Bezant has a real prospect of succeeding on those claims or any of them. In the event that I conclude that the actions should be struck out or that summary judgment should be entered in favour of the Defendants, the further question arises whether an Extended Civil Restraint Order (“ECRO”) should be made against Mr Bezant.

The three actions

[4]Mr Bezant’s first action (claim no HQ06X01124), which was commenced on 19th April 2006, is for damages and/or equitable compensation for breach of a contract which Mr Bezant claims was made between himself and Dr Rausing. I will refer to this action as “the contract action.” Mr Bezant’s case is that Dr Rausing, acting in bad faith, breached an agreement whereby he undertook to participate in a process of discussion which was not to be terminated by any (sic) of the parties until a resolution of all the matters in dispute between them had been achieved to the satisfaction of all the parties. Mr Bezant has applied in the Contract action to advance an alternative claim in deceit. Although permission to make this amendment has not been granted, it has sensibly been agreed that I should nevertheless deal with it in this judgment.

[5]The second action brought by Mr Bezant (HQ06X01311), commenced on 8th May 2006, is for damages for libels contained in, firstly, an email sent by a solicitor acting on behalf of Dr Rausing to a Mr Andrew Hill, an accountant acting for Mr Bezant and, secondly, in a letter dated 27th March 2006 sent by the same solicitor to Mr Bezant. The letter is said to have been opened and read by Mr Bezant’s daughter. I will refer to this action as “the Libel action”.

[6]The third action (claim no HQ06X01611) is for equitable compensation and for damages, including special, aggravated and exemplary damages, to which Mr Bezant claims to be entitled by reason of various breaches of common law or statutory duties allegedly owed by the 17 Defendants who have been joined in the action.

[7]It will assist if I briefly identify the Defendants in this third action, which I will call “the Misfeasance action”, and briefly describe their roles. The first four Defendants are respectively Dr Rausing, his wife, his son and his eldest daughter. The fifth Defendant, Mr Charles (Anthony) Hyde was a Director of WPL from 1989 to 14th August 2002. He was also a director of a Portuguese company, Sociedade Agricola Do Vale da Lama D’Atela Ida (“Vale da Lama”). The sixth Defendant, Mr David Fox, was another director of WPL from 1985 until 14th August 2002. The seventh Defendant, Mrs Philippa Blake-Roberts, was a legal executive employed by the firm of solicitors Taylor Wessing (“TW”), formerly Taylor Joynson Garrett acting for Dr Rausing and members of his family. The eighth Defendant, Mr Paul Callaghan, was a solicitor (and is now a partner) employed by TW. The ninth Defendant, Mr Richard Douglas, was at the material times a director of a company incorporated in the Cayman Islands, Zirundium Limited (“Zirundium”), the parent company of WPL. He was at the material times the Senior Partner of Rawlinson & Hunter, a firm of accountants based in the Cayman Islands. The tenth Defendant, Mr Robert Zullig, was also a director of Zirundium, as was the eleventh Defendant, Mr Lennart Ohlsson. The twelfth Defendant, Mr Alan Milgate, was at the material times the Company Secretary of Zirundium. The thirteenth Defendant, Mr David Grainger, was from 1979 to 2004 a partner in Rawlinson & Hunter. He was also a director of WPL from 30th July to 14th August 2002. The fourteenth Defendant is the younger daughter of Dr Rausing. The fifteenth Defendant, Mr Phillip Prettejohn, was at the material times the senior partner in Rawlinson and Hunter. He provided taxation and trust investment advice to Dr Rausing and his family. The sixteenth Defendant, Mr Neville Beckhurst, was a partner in another firm of accountants, Honey Barrett, who were the auditors of WPL throughout the relevant period. Finally the seventeenth Defendant, Mr Stephen Cork, is an accountant and partner in the firm Smith &Williamson. He was the liquidator of WPL from 6th August 2002 until 23rd August 2005.

[8]Defendants 1 to 8, 10 and 11, 14 and 16 in the Misfeasance action have collectively been referred to as “the Taylor Wessing Defendants”. They were represented at the hearing before me by Mr Simon Devonshire. Defendants 9, 12, 13 and 15 instructed Barlow, Lyde & Gilbert to represent them and they have been referred to as “the Barlows Defendants”. Ms Leigh-Ann Mulcahy appeared for these Defendants. Finally the 17th Defendant, Mr Cork, was separately represented and Ms Marianne Butler appeared on his behalf.

The background facts

[9]Before turning to the issues which arise for decision on these applications, it is necessary for me to set out, as economically and neutrally as possible, the essential background facts.

[10]Dr Rausing is a wealthy Swedish industrialist. He was at the material times interested, through family trusts, in two farming enterprises, situated at Tenterden in Kent and in Portugal respectively. The former was at the material times owned by Zirundium and managed by WPL. The latter was at the material times owned and managed by Vale da Lama. Mr Bezant commenced employment with Zirundium in April 1979 as manager of the Tenterden farm. In the early 1980s his employment was transferred to WPL, of which company he was appointed Managing Director in 1985 and which provided Mr Bezant and his wife with accommodation at Heronden New House. Mr Bezant was appointed a director of Vale da Lama in September 1990 and thereafter acted as a consultant to that company.

[11]In the year ended 31st March 2000 WPL recorded a loss of ordinary activities of £207,000; losses brought forward totalled £139,000. In June 2000 Zirundium decided to sell the Tenterden farm. In July Dr Rausing informed Mr Bezant by telephone of the proposed sale. Given that he had been employed at the farm for over 20 years, Mr Bezant was naturally shocked at the decision to sell it. Zirundium instructed TW to act for it in connection with the sale and related matters.

[12]On 17th July 2000 TW made the first of a number of suggestions to Mr Bezant that he should seek his own legal advice in relation to the consequences for him if the farm were to be sold. TW offered to fund the cost of obtaining such advice. That suggestion was rejected by Mr Bezant.

[13]On 21st July 2000 Mr Bezant wrote a letter to Mr Oldfield of Alta Advisers Limited, a firm retained by Dr Rausing, which included the following words: “My 23 years of unstinting loyalty, discretion and dedication were destroyed in a 60 second telephone call. No warning. If this turns in to a “Bloody War” then so be it. I will not be the instigator. Events will decide. I have been taught how to campaign by the master – no holds barred just destroy. I have learnt my lessons well”.

[14]On 27th July 2000 Mr Bezant made an employment agreement between himself and Vale da Lama, back-dated to 30th June 2000, under which he was entitled to a salary of £50,000 per annum with effect from 1st January 2000. The Portuguese courts subsequently held that this contract is invalid and ineffective. Mr Bezant appealed that decision but his appeal was dismissed on 10th October 2006. A further appeal by Mr Bezant is pending.

[15]On 3rd August 2000 Mr Bezant wrote to Dr Rausing referring to unpleasant rumours circulating about him and suggesting that his reputation was at risk.

[16]A meeting was arranged for 23rd August 2000 at which Mr Callaghan of TW was to meet the farm workers. He stayed the previous night with the Bezants. A discussion took place that evening. There is a dispute about what was said at the meeting. Mr Callaghan made contemporaneous notes and the following day prepared an attendance note. According to the latter, Mr Bezant, having commented that the Rausing family were worth billions, said that he had huge files full of information regarding the family; that he knew everything about them and that, if his legal rights were not enough to secure him his future, he would have to turn to other means. Mr Bezant denies having said any such thing. His case is that Mr Callaghan’s attendance note falsely attributes words to him which he did not say in order to advance the interests of his client, Dr Rausing. However, Mr Bezant later in November accepted that the relevant paragraph of the attendance note was “substantially accurate”. Mr Bezant subsequently on 31st January 2001 lodged a complaint with the Office for the Supervision Solicitors (“OSS”) accusing him of professional misconduct by falsely recording words which Mr Bezant had not spoken. The OSS declined to take any action on the complaint.

[17]A meeting took place between Dr Rausing, his wife and the Bezants on 7th September 2000. Dr Rausing referred to Mr Bezant’s letter of 21st July 2000 (see paragraph 13 above) and the statements made by Mr Bezant to Mr Callaghan (see paragraph 16 above). Dr Rausing told Mr Bezant that he had lost confidence in him and that he was suspended.

[18]The next day Mr Hyde in his capacity as Director of WPL wrote to the Bezants terminating the employment of each of them with WPL and terminating Mr Bezant’s employment with Vale da Lama. On that day letters were sent to the Bezants offering without prejudice £450,000 to Mr Bezant and £50,000 to his wife if they agreed to waive all their claims, resign all positions and give confidentiality undertakings. Dr Rausing told Mr Bezant on 10th September 2000 that the reason for terminating his employment was his misconduct. He urged Mr Bezant to seek legal advice about WPL’s offer.

[19]The Bezants’ response to the offer on 21st September 2000 was to reject it and make a counter-proposal that they should be paid £800,000 net of tax and be permitted to remain at Heronden New House for 2 years. That counter-proposal was rejected by WPL.

[20]On 30th October 2000 Vale da Lama commenced proceedings against Mr Bezant in Portugal claiming that his employment agreement (see paragraph 14 above) was invalid and made by him without authority and in conflict of interest. Mr Bezant had shortly before commenced proceedings of his own against Vale da Lama claiming that his dismissal was invalid and that he should be reinstated as an employee.

[21]On 14th November 2000 the Bezants commenced proceedings in England claiming damages for unfair dismissal and (in Dr Bezant’s case) for sexual discrimination. In those proceedings the Bezants later on 9th March 2001 submitted a schedule of losses which included numerous benefits in kind to which they claimed that they were contractually entitled. WPL subsequently amended its defence to allege that the Bezants were not entitled to pursue their claim for unfair and wrongful dismissal because on their own pleaded cases they had knowingly participated in a fraud on the Revenue (“the illegality issue”). The accountants, Honey Barrett, notified the Inland Revenue by letter dated 15th May 2001 of the tax issues raised in the Tribunal proceedings.

[22]In the meanwhile Mr Bezant had made a wide-ranging request pursuant to the Data Protection Act for information he claimed was held by Dr Rausing in various capacities. Further requests followed in October 2001.

[23]A hearing of the illegality issue (see paragraph 21 above) took place in the Employment Tribunal on 1st August 2001. Judgment was reserved. Before judgment was delivered, Mr Bezant approached Dr Rausing indicating that he and his wife would accept £750,000 tax free plus Heronden New House and the adjoining paddock rent free. On 19th September 2001 the Employment Tribunal determined the illegality issue in favour of WPL. In its ruling the Tribunal stated that “there is clear evidence that Mr Bezant knew that he was not declaring for tax most of the items which he subsequently claimed in schedule of losses to be… benefits in kind… we are entirely satisfied that… he was deliberately shutting his eyes to whether what he was doing was illegal or not, and have no doubt he was participating in the illegality”. Mr Bezant sought permission to appeal this ruling. His notice of appeal contained threats that he would adduce fresh evidence including “wide-ranging Inland Revenue investigations into the operation of this and other companies associated with Rausing”. Mr Bezant also accused TW of perverting the course of justice and the Tribunal of bias. The Employment Tribunal having refused to review its decision, Mr Bezant appealed to the Employment Appeal Tribunal, which on 1st April 2003 dismissed his appeal.

[24]In November 2001 TW proposed settlement terms which included payment to the Bezants by WPL and Vale da Lama totalling £1.7 million and occupation of Herondon New House and adjoining paddock in perpetuity for themselves, their dependants and descendants. These proposals were rejected.

[25]On 6th December 2001 WPL commenced High Court proceedings against Mr Bezant for: i) misappropriation by causing it to discharge personal liabilities of Mr Bezant, ii) breach of duty by causing unjustified and unjustifiable salary increases to be paid to Dr Bezant and iii) breach of duty by failing to supply the company with the information required to make full and accurate annual returns to the Revenue. Mr Bezant counter-claimed in those proceedings for a salary increase which he claimed had been awarded to him in 1995 but not received by him.

[26]In May 2002 attempts were made by a third party to negotiate a settlement. Those attempts were rebuffed by Mr Bezant who indicated that he would only settle for £1 million.

[27]On 30th July 2002 the Directors of WPL resolved to place the company in Creditor’s Voluntary Liquidation. That resolution was implemented on 6th August 2002, when Mr Cork (Defendant 17) was appointed as liquidator. Mr Bezant thereafter served a proof of debt in the liquidation, claiming that the company owed him £655,000. Dr Bezant served a proof of debt alleging that she was owed £159,000.

[28]In August 2002 Mr Cork decided to discontinue the High Court proceedings which had been commenced against the Bezants. The reason for doing so, according to Mr Cork, was to avoid costs and to protect the interests of creditors. For the same reasons Mr Cork informed the Employment Tribunal that WPL would concede liability to Dr Bezant upon her claim for sexual discrimination. He offered to admit her claim in full for dividend purposes. Judgment was accordingly entered for Dr Bezant in the sum of £159,000 on 23rd September 2002. On 28th November 2002 Mr Bezant obtained judgment in default of defence against WPL on his counter-claim. However, that judgment was subsequently set aside and the counter-claim was struck out.

[29]In December 2002 the Bezants made a complaint about Mr Cork to the Insolvency Practitioners’ Association. The complaint was rejected in October 2003.

[30]On 26th October 2003 Mr Cork in his capacity as liquidator of WPL wrote a six page letter to the Bezants informing them of the conclusions resulting from his investigations into their allegations of fraudulent trading, wrongful trading, transactions at an undervalue, preferences and other possible statutory offences. In his letter Mr Cork informed the Bezants that his conclusions that there was no basis for their allegations had been unequivocally confirmed by counsel.

[31]On 30th October 2003 Mr Bezant instituted further proceedings in the Employment Tribunal, this time naming Dr Rausing/Zirundium as his employer. The claim was dismissed and Mr Bezant’s application for permission to appeal was refused.

[32]On 23rd February 2005 Portuguese lawyers acting on behalf of Vale da Lama lodged a “denuncia” against Mr Bezant alleging that he had acted in breach of the Portuguese Criminal Code by backdating his employment contract and by using Vale da Lama monies in an attempt to acquire property in Portugal for himself. Mr Bezant was informed of the “denuncia” on 17th May 2005 at which time he was also constituted a defendant in Portuguese criminal proceedings.

[33]On 20th June 2005 the Portuguese civil court entered judgment in favour of Vale da Lama on its claims against Mr Bezant. The court found that Mr Bezant was not an employee of the company; that his employment agreement was made without authority and that he should repay to Vale da Lama the sums he caused to be paid to himself under the agreement.

[34]On Dr Bezant’s initiative settlement negotiations resumed yet again July 2005. Mr Bezant informed Dr Rausing that he wanted a reasonable, fair pension. Dr Rausing replied by letter dated 12th September 2005:

“I, too, would like to see an end to this whole business. [TW] are in contact with Mr Hill [lawyer instructed by the Bezants]. This will continue. Write to [TW]. They act only on my instructions. Do not write to me again”

. Notwithstanding Dr Rausing’s instruction to Dr Bezant not to write to him again, Mr Bezant did write to him on several occasions in the Autumn of 2005.

[35]On 1st August 2005 Dr Bezant issued an application against Mr Cork under Section 212 of the Insolvency Act 1986 alleging against him misfeasance in the conduct of the liquidation. She also applied, unsuccessfully, to Blackburne J for an order deferring Mr Cork’s release from the liquidation. Thereafter she warned him of further claims. The liquidation closed and Mr Cork was released from office on 23rd August 2005. The Bezants had previously applied pursuant to Sections 112 and 155 of the 1986 Act for an order requiring Mr Cork to disclose to them WPL’s books and records. That application was dismissed by Registrar Jacques on 30th September 2005. The Bezants appealed against that order; subject to one minor exception the judgment of the Registrar was upheld.

[36]Mr Andrew Hill, the Bezants’ then accountant, enquired of TW by letter dated 21st March 2006 “whether there remains open dialogue on this matter or if it is the intention of your client to no longer pursue an end to [Mr Bezant’s] claims through ourselves”. TW replied in these terms on 21st March 2006: “Thank you for your email and for your assistance in bringing [Dr Bezant’s] case to a conclusion. As to Richard Bezant, our client is content to await the outcome of the civil and criminal proceedings in Portugal. We are not aware of any proceedings in the United Kingdom”.

[37]That response led Mr Bezant to complain to Dr Rausing that TW’s reply was libellous and should be retracted. Having taken advice from WPL’s Portuguese lawyers, Mrs Blake-Roberts of TW replied on behalf of Dr Rausing on 27th March 2006 saying “the fact of criminal proceedings was made known to you when you were detained, in public, by a police officer on 17th May at the [Portuguese] Tribunal”.

[38]There followed in April, May and June 2006 the service of claim forms and later particulars of claim in the three actions, that is, the Contract action, the Misfeasance action and the Libel action.

[39]The only other matters which I should mention before concluding this summary of the background facts are, firstly, that on the 24th July 2006 Deputy Judge Ivory QC struck out the application made by Dr Bezant under Section 212 of the 1986 Act against Mr Cork as former liquidator of WPL on the grounds that it disclosed no reasonable grounds for bringing the application. In the course of his judgment the Deputy Judge observed that, if Dr Bezant wished to advance a case based on a failure on the part of Mr Cork to exercise reasonable care to investigate properly the affairs of WPL (an issue which was not before him) it would be liable to be struck out for failing to disclose reasonable grounds for bringing the application or as an abuse of the process.

[40]On 5th April 2007 Chadwick LJ refused the application of Dr Bezant to appeal the judgment of Deputy Judge Ivory QC as being “totally without merit”.

Approach to the Defendants’ applications

[41]I propose in due course to deal separately with the sustainability of the various claims advanced by the Bezants in the three actions. Thereafter I will address the contention of the defendants in those actions that the claims should be struck out on the additional, or alternative, ground that they constitute an abuse of the process.

[42]First, however, I should set out the principles relating to summary disposal applications of the kind being made by the Defendants here. I can do so briefly because there was no dispute about the principles and accordingly little was said about them in the course of the hearing.

[43]CPR 3.4(1)(a) provides that the court may strike out a statement of case if it appears to the court that the statement of case discloses no reasonable grounds for bringing the claim. The note in the White Book at 3.4.2 identifies as being suitable for striking out on that ground claims which raise an unwinnable case where continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides. A claim may also be struck out if it discloses no valid claim as a matter of law. On the other hand, a statement of case is not suitable for striking out if it raises a serious live issue of fact which can only be properly determined by hearing oral evidence. English courts have taken the view that

Article 6(1) of the ECHR

does not prevent the striking out of claims in appropriate cases since Article 6(1) applies only to “genuine and serious” disputes about civil rights and obligations.

[44]CPR 24.2(a)(i) provides that the court may give summary judgment against a claimant on the whole of a claim or on a particular issue if it considers that the claimant has no real prospect of succeeding on the claim or issue. A real prospect of success is one that is more than fanciful or merely arguable. On an application for summary judgment the Court cannot resolve disputed questions of fact, although if it is clear beyond question that the respondent to the application will not be able to establish the facts on which he relies (which may be because there is some inherent improbability in what is being asserted or some extraneous evidence which contradicts it), the court may enter summary judgment: see Celador Productions Limited –v- Boone

[2004] EWHC 2362 (Ch)

per Morritt VC at paragraphs 6 and 7. Celador was approved by the Court of Appeal in Doncaster Pharmaceuticals –v The Bolton Pharmaceutical Co

[2006] EWCA Civ 661

at paragraph 4.

[45]I remind myself that I should, in dealing with applications of the present kind, bear in mind the possibility that claims may be capable of being saved by amendment. That is particularly so where, as here, Mr Bezant has appeared in person (albeit ably assisted by his wife whom I allowed to present her husband’s case on his behalf).

[46]I should record the fact that a Defence (and a Reply) have been served in the Libel action but not in the other two actions. Mr Bezant applied at the outset of this hearing for an order directing the defendants in the Contract and Misfeasance actions to serve defences before the determination of the present applications. I refused the application because it appears to me to be implicit in CPR 12.3(3)(a) and 24.6(a) that such applications may be made before service of the defence. That is what generally happens. Otherwise disproportionate and unnecessary expense may be occasioned to the defendant.

Contract action

[47]I deal first with the Contract action because it was the first of the three actions to be lodged. As originally formulated, the claim was for damages for breach of contract simpliciter. Mr Bezant applied for permission to amend to advance an alternative claim in deceit with which it is agreed I should now deal, notwithstanding that no permission has been granted.

[48]The agreement which is alleged to have been breached is described in somewhat differing terms in the Claim Form, in the Particulars Claim and in Dr Bezant’s witness statement. However, I shall treat as being the relevant formulation the version to be found in the Particulars of Claim, where an agreement is pleaded:

“… the terms of which were to undertake and participate in a process of discussion, which would not be terminated by any of the parties until a resolution of all the matters in dispute between them had been achieved to the satisfaction of all parties”

. This agreement is alleged to have been made by the parties in exchanges of correspondence between June and September 2005.

[49]The contentions advanced by Mr Simon Devonshire on behalf of Dr Rausing (who is the sole Defendant in the Contract action) are these: i) that an agreement in the terms alleged by Mr Bezant would be legally unenforceable; ii) that it is impossible to carve out an agreement in the terms alleged by Mr Bezant from the correspondence he relies upon; and iii) that the claim amounts to an impermissible attempt to deploy in evidence discussions properly cloaked by without prejudice privilege. I will take these contentions in reverse order.

[50]I would not strike out the claiming contract on the third ground relied on by Mr Devonshire; nor would I grant summary judgment to Dr Rausing on that ground. I say that because if (as is contended by Mr Bezant) the without prejudice discussions did culminate in a binding contract, the cloak of privilege would fall away. Once agreement is reached in the course of without prejudice discussions or correspondence, there is no objection to a party to the agreement either suing on it or relying on it by way of defence.

[51]I move on therefore to Dr Rausing’s second objection, namely that the correspondence does not, even arguably, disclose an agreement in the terms alleged by Mr Bezant. The correspondence relied on is set out in paragraph 3 of the Particulars of Claim, starting with Mr Bezant’s letter to Dr Rausing dated 21st June 2005 and culminating in a letter dated 27th April 2006 by which notice of Dr Rausing’s intention to defend the action was given to Mr Bezant. Mr Bezant relies principally on Dr Rausing’s letter of 12th September 2005 which I have quoted at paragraph 34 above. It is pleaded at paragraph 3.17 of the Particulars of Claim that the Bezants were delighted to receive that letter, which is pleaded as amounting to “a clear and unambiguous confirmation that Hans Rausing has accepted and agreed the settlement discussion process and is 100% committed to its continuing uninterruptedly until a resolution of all the disputes between the parties has been achieved”.

[52]I find it quite impossible to spell out from that letter, whether it be read in isolation or in the context of the preceding and succeeding correspondence, an agreement in the terms for which Mr Bezant contends. I think that on any sensible reading of that letter Dr Rausing would be taken to mean no more than that he hoped and expected that settlement discussions would proceed. He cannot in my judgment be taken to have been entering into a contractual commitment for the settlement discussion process to continue without interruption until a resolution of all the disputes between the parties had been achieved.

[53]One way of testing whether there was indeed an agreement of the kind contended for by Mr Bezant is to consider whether the parties acted in a manner consistent with a mutual understanding that there was in existence a contract to continue the discussion process until settlement of all the disputes had been arrived at. There are several documents which suggest clearly that such was not the understanding of the parties. For example in his letter of 26th September 2005 Mr Hill, Mr Bezant’s legal adviser, wrote:

“…it is my clients’ genuine desire to bring all matters to a close… equally in the absence of any settlement agreement, they have no alternative but to pursue any avenues open to them in terms of legal cases…”

. It is impossible to reconcile those words with the existence of the agreement contended for by Mr Bezant. Another example is Mr Hill’s letter to TW dated 21st March 2006, quoted at paragraph 36 above, which posed the question whether there remained an open dialogue in regard to Mr Bezant’s claim or if it was Dr Rausing’s intention to no longer pursue an end to Mr Bezant’s claims through his legal adviser. A letter would not have been written in these terms if indeed there had been a binding contractual commitment on the part of Dr Rausing to keep the dialogue open until all disputes had been resolved. A similar comment could be made about TW’s reply to that letter dated 21st March 2006 (also quoted at paragraph 36 above).

[54]For the above reasons I see no real prospect of Mr Bezant’s claim in contract succeeding; nor do I think that the particulars of claim disclose reasonable grounds for bringing the claim in contract.

[55]The linchpin of Dr Rausing’s contention that an agreement in the terms alleged by Mr Bezant would be legally unenforceable is to be found in the decision of the House of Lords in Walford –v- Miles

[1992] 2 AC 128

. In that case the first defendant had orally agreed to deal only with the first plaintiff in connection with the sale of a company and a property to the defendants and to terminate any negotiations then current between the defendants and any other competing purchaser. It was pleaded that there was an implied term of the agreement that, so long as they continued to desire to sell the property and shares, the first defendant on behalf of himself and the second defendant should continue to negotiate in good faith with the plaintiff. In his speech, with which the other members of the House of Lords agreed, Lord Ackner said at 138C and F to H:

“The reason why an agreement to negotiate, like an agreement to agree, is unenforceable, is simply because it lacks the necessary certainty…[the appellant] of course, accepts that the agreement upon which he relies does not contain a duty to complete the negotiations. But that still leaves the vital question – how is a vendor ever to know that he is entitled to withdraw from further negotiations? How is the court to police such an internal “quotation”? A duty to negotiate in good faith is as unworkable in practice as it is inherently inconsistent with the position of a negotiating party. It is here that the uncertainty lies. In my judgment, once negotiations are in existence either party is entitled to withdraw from those negotiations, at any time and for any reason. There can be thus no obligation to continue to negotiate until there is an internal “proper reason” to withdraw. Accordingly a bare agreement to negotiate has no legal content”

. As Mr Devonshire pointed out it is trite law that an agreement to negotiate is unenforceable: see for example Courtney & Fairburn Limited –v- Tolani Brothers (Hotels) Limited

[1975] 1WLR 297

at 301.

[56]Dr Bezant contended on behalf of her husband that the agreement sued upon is legally enforceable. She relied on three witness statements of her own and a further witness statement from her husband’s former accountant, Mr Andrew Hill. In the course of her oral argument she cited a large number of authorities, to which I do not feel it necessary to make reference since Dr Bezant did not take me to the detail of any of them. The fallback position which Dr Bezant adopted on behalf of her husband is that Dr Rausing is estopped from denying that he undertook to continue negotiations until a settlement was arrived at by what he himself or his legal advisers wrote.

[57]I agree with Dr Bezant that an undertaking to use reasonable endeavours is enforceable. That is apparent from, amongst a number of other authorities Little –v – Courage

[1994] 70 P&CR 471

, in which case Millett LJ said:

“An undertaking to use one’s best endeavours to obtain a planning permission or an export licence is sufficiently certain and is capable of being enforced…”

. In cases such as those postulated by Millett LJ in that passage there is certainty because the object or goal which the party has agreed to use his best endeavours to achieve is clear and certain and the nature of the obligation undertaken is sufficiently clear. However, the position is entirely different where the agreement sued on is to use best endeavours to arrive at an agreement or to conclude a settlement. As Millett LJ observed in the passage from his judgment which immediately follows the passage cited above:

“An undertaking to use one’s best endeavours to agree, however, is no different from an undertaking to agree, or to try to agree, or to negotiate with a view to reaching agreement; all are equally uncertain and incapable of giving rise to an enforceable legal obligation”

. As Mr Devonshire pointed out, these observations were approved and followed by the Court of Appeal in London & Regional Investments Limited –v- TBI Plc

[2002] EWCA Civ 355

at paragraph 39.

[58]Dr Bezant relied in addition on an unreported decision of Mr Justin Fenwick QC, sitting as Deputy Judge, in Beta Investments SA –v- Transmedia Europe Inc [2003]. In a version of his judgment which the Deputy Judge has approved, he held to be enforceable an agreement whereby, in the context of an ongoing dispute, the parties entered into heads of agreement, expressed to be “subject to more complete documentation”, whereby they agreed to use their best endeavours to reach terms for a settlement of all outstanding disputes between them. The document also set out various arrangements for the transfer of shares in a company and for the replacement of its Directors. Those provisions were implemented but settlement negotiations collapsed. The Deputy Judge concluded that the parties had indeed intended the agreement to have contractual effect. The defendants’ objective was to ensure that the business of one of the companies could continue without interruption. In exchange the Claimant agreed that over a finite period it would negotiate bona fide with the Defendant to resolve the dispute. The Judge did not, however, consider that there was a binding obligation to enter into some specific form or indeed any form of actual agreement. He noted that the obligation to negotiate was for a 90 day standstill period.

[59]I do not consider that Beta Investments assists Mr Bezant: the period during which it was held that the parties were under a duty to negotiate in that case was a limited one and the Judge expressly declined to hold that there was any agreement to conclude a settlement. In both those material respects Beta Investments is distinguishable from the present case.

[60]Besides Walford is a decision of the House of Lords by which I am of course bound. The words of Lord Ackner in Walford cited above appear to me to be directly in point in the present case. How would Dr Rausing ever know that he was entitled to withdraw from further negotiations? How would the court police an “agreement” of the kind contended for by Mr Bezant? How would a duty to negotiate in good faith be workable in practice? I see no answer to these questions in the circumstances of the present case. I reject the contention of Mr Bezant that an agreement in the terms claimed would be enforceable. Accordingly on this further ground I would strike out the claim in contract and enter summary judgment in favour of Dr Rausing in respect of it.

The alternative claim in deceit

[61]As I have already indicated, draft Amended Particulars of Claim have been served by Mr Bezant in the Contract action in which he adds a claim in deceit against Dr Rausing. This alternative claim is pleaded in paragraphs 4.9 to 4.20 of the new statement of case. The false representation on which Mr Bezant relies as the foundation for his claim in deceit is alleged to have been made by Dr Rausing in his letter dated 12th September 2005 which I have quoted in paragraph 34 above. The submission on behalf of Mr Bezant is that Dr Rausing falsely represented to him (and to Dr Bezant) that it was his intention to reach a settlement with both of them. According to Mr Bezant that was not his true intention so that his representation was false. It is submitted further that Dr Rausing knew his representation to be false or, at the very least, was reckless whether it was true or false: see Derry –v- Peek

[1889] 14 AC 337

at 374. In support of his contention that a statement by a person as to his future intent can amount to a false statement if the maker of the statement does not truly intend it, Mr Bezant relies on the well known dictum of Bowen LJ in Edgington –v- Fitzmaurice

[1885] 29 Ch 459

: “There must be a misstatement of an existing fact…but the state of a man’s mind is as much a fact as the state of his digestion”.

[62]Mr Bezant further relies in support of his claim in deceit on the words and conduct of Mrs Blake-Roberts and Mr Toby Graham of TW, which are said to have given rise to a reasonable expectation on the part of the Bezants that Dr Rausing had an honest belief in the representation made in the letter of 12th September 2005. A typical example of the words relied on is the statement of Mrs Blake-Roberts in an email sent on 5th September 2005 to Mr Hill on behalf of the Bezants in which she referred to Dr Rausing’s “genuine wish to bring this matter to an end”.

[63]It is alleged that Mr Bezant (and his wife) were induced by the words and actions of Dr Rausing and his representatives into believing that Dr Rausing honestly intended that a resolution of all the disputes between them was to be achieved to the satisfaction of all the parties. It is Mr Bezant’s case that, as a result of Dr Rausing’s failure to keep his word, he had to incur continuing legal fees and litigation costs in relation to the ongoing cases in Portugal and England.

[64]I readily accept that a false representation of present intention can found an action in deceit: see Clerk & Lindsell on Torts (2006) 19th Ed para 18-09. However, the case for saying that Dr Rausing did not honestly intend the negotiations should continue at the time when he wrote his letter of 12th September 2005 must be properly particularised and mere assertion is not enough. One looks in vain for any material in the draft amended particulars of claim which lends support to the proposition that Dr Rausing had no honest intention of continuing to negotiate on 12th September 2005.

[65]Moreover the conduct and communications of Dr Rausing’s representatives both before and after 12th September 2005 strongly suggest that he did intend to negotiate a settlement if that proved to be possible. TW’s letter of 21st March 2006, referred to at paragraph 36 above, marked the cessation of negotiations at least for the time being. It seems clear that, as it appeared to Dr Rausing, an impasse had been reached. He was in my judgement perfectly entitled to withdraw from the negotiations at that point. The fact that he did so sheds no light on his true intention when he wrote his letter six months earlier. I reject the contention that Dr Rausing deceived Mr Bezant as being wholly without foundation.

[66]In my view there is a further insuperable difficulty confronting the claim in deceit. I see no real prospect of Mr Bezant establishing at trial that the words of Dr Rausing’s letter of 12 September 2005 amounted to a representation that it was his intention that the negotiation process “would continue until the differences between [the parties] had finally been brought to an end once and for all”: see para 4.10 of the proposed Amended Particulars of Claim. The words in Dr Rausing’s letter “this will continue” cannot sensibly be taken to mean that negotiations would continue indefinitely.

[67]For the above reasons I am satisfied that the Amended Particulars of Claim disclose no reasonable grounds for bringing the claim in deceit and that there is no real reasonable prospect of that claim succeeding at trial.

The Libel action

[68]As I have said Mr Bezant complains of two alleged libels. The first alleged libel was contained in an email sent by Mrs Blake-Roberts of TW to Mr Hill, who was at the time Mr Bezant’s solicitor, on 27th March 2006. The words complained of at paragraph 3.4 of the Amended Particulars of Claim are that settlement discussions will “await the outcome of the civil and criminal proceedings in Portugal”. Mr Bezant’s case is that there were at the material time no criminal proceedings taking place against him in Portugal or anywhere else. The sole publishee of that alleged libel was Mr Hill. Mr Bezant sought an apology from Dr Rausing but none was forthcoming.

[69]The second alleged libel was contained in a letter written by Mrs Blake-Roberts to Mr Bezant on 27th March 2006. The alleged libel in that letter is the statement that Mr Bezant was “detained in public, by a police officer on 17th May at the Abrantes Tribunal”. Mr Bezant cannot of course claim for the publication to himself. The publication which is said to found Mr Bezant’s entitlement to damages arises because, so it is alleged, the letter was opened and read by Mr Bezant’s daughter, who is said to have been profoundly shocked and distressed by its contents. She is also said to have shown the letter to other (unidentified) members of her family, who are described as having been equally shocked and distressed. As Mr Bezant explained to Dr Rausing in his letter of 29th March 2006, the statement that he had been detained by a police officer was untrue. Dr Rausing did not retract the allegation, as Mr Bezant had invited him to do.

[70]Mr Adam Wolanski, who represents Dr Rausing in the libel proceedings, concedes, rightly, that the publications complained of are at least arguably defamatory of Mr Bezant. He nonetheless contends that the claim in libel should be struck out, or in the alternative that summary judgment should be entered for the Defendant in respect of it, for three reasons. One of those reasons is that the libel action constitutes an abuse of the process. The same contention is advanced in the Contract action and in the Misfeasance action. I will address the issue whether the three actions or any of them constitute and abuse of the process in a later section of this judgment.

[71]Mr Wolanski fairly reminded me that in those circumstances the Libel action would in the ordinary course of events be decided by a jury. The correct approach to this issue is that set out by Eady J in Bataille –v- Newland

[2002] EWHC 1692 (QB)

at page 7, namely: i) the Judge should make all assumptions in favour of the Claimant as far as pleaded facts are concerned; ii) in so far as evidence has been introduced for the purposes of the application, the Judge should assume that those facts will be established, save in so far as it can be demonstrated on written evidence that any particular factual allegation is indisputably false; iii) that the Judge should then decide whether, on the facts assumed, a properly directed jury could draw the inference for which the claimant contends; iv) if the applicant’s case is so clear that it cannot be disputed, there would be nothing left for the jury to determine. If, however, there is room for legitimate argument, either on any of the primary facts or as to the feasibility of the inference being drawn, then a judge should not prevent the claimant having the issue or issues resolved by a jury; v) the judge should not conduct a mini trial or attempt to decide the factual dispute on first appearances when there is a possibility that cross-examination might undermine the case that the applicant is putting forward. Mr Wolanski also referred me to Spencer –v- Sillitoe [2003] EMLR 10 at paragraphs 23 and 31. I bear the guidance provided by those cases in mind.

[72]The Defendant in the Libel action is Dr Rausing. The author of the alleged libels is Mrs Blake-Roberts. In order to establish liability against Dr Rausing, it would be incumbent on Mr Bezant to prove that Dr Rausing caused or authorised Mrs Blake-Roberts to publish the defamatory words. In my judgment Mr Wolanski is right when he submits that there is no evidence whatever that Dr Rausing caused or authorised or even knew in advance of the allegedly defamatory words published by Ms Blake-Roberts. I acknowledge that Ms Blake-Roberts wrote the letters in her capacity as an employee of the firm of solicitors representing Dr Rausing and companies controlled by him but it does not in my view follow that he is on that account to be taken to have caused the defamatory words to be published. Common sense suggests otherwise. The burden of proving publication against Dr Rausing rests of course on Mr Bezant. All that Dr Bezant was able to point to in support of her husband’s contention that Dr Rausing did authorise the publication of the words complained of is the statement made by him in his letter to Mr Bezant dated 12 September 2005 that TW act on his instructions. But in my view that cannot be taken to mean that Dr Rausing instructs his solicitors what to say in their correspondence with Mr Bezant.

[73]In relation to the second alleged libel there is the further potential difficulty that the only publishee is Mr Bezant’s own daughter. On any view the damage flowing from such publication is minimal. Ms Janice Williams says that, in accordance with her usual practice, she marked the letter “Private and Confidential”. That being so, Mr Wolanski argues in reliance on Theaker –v- Richardson

[1962] 1 WLR 151

and Huth –v- Huth

[1915] 3 KB 32

that Mr Bezant would have to establish that it was a natural or probable consequence of the publication to Mr Bezant that his daughter would see fit to open and read the letter, marked, as it was, “Private and Confidential”. It is a striking fact that there is no witness statement from the daughter. Dr Rausing denies that he knew that Miss Bezant would open and read the letter. Mr Bezant’s case is that Dr Rausing was aware of the practice within the Bezant family of opening each other’s mail. That is insufficient to establish liability for the publication. In my judgment this claim is unsustainable.

[74]The second reason why I consider both claims in libel to be hopeless is that there is what I regard as an unanswerable defence of qualified privilege. The basis of the claim to privilege is set out in paragraph 5 of the Defence. In effect what is said in relation to both publications is that they took place in the context of an ongoing dispute between Dr Rausing and his companies on the one hand and the Bezants on the other hand and attempts to negotiate a settlement of that dispute. In those circumstances it is contended that Dr Rausing had a legitimate social and/or moral and/or legal duty to publish the words complained of and Mr Hill had a legitimate and corresponding interest in receiving the words contained in the email of 21st March 2006. As to the letter of 27th March 2006, Dr Rausing’s case is that, if the letter was opened by and accordingly published to Mr Bezant’s daughter or other members of his family, such publication was an incident of the transmission of the letter sent in the course of a dispute between the two parties in accordance with the reasonable and usual course of business and so was also published on an occasion of ancillary qualified privilege: see Gatley on Libel and Slander at paragraphs 14.73-75. In my view the claim to privilege is unassailable.

[75]Qualified privilege is defeasable on proof by the claimant that the defendant was malicious. As appears from the well-known case Horrocks –v- Lowe

[1975] AC 135

I have to consider the sustainability of the contention that Dr Rausing was guilty of malice either because he did not honestly believe to be true what Mrs Blake-Roberts stated in the email and letter complained of or because, in causing both communications to be sent, Dr Rausing was actuated by some dominant improper motive.

[76]In approaching those questions I bear in mind the cautious approach which has to be adopted to applications such as the present ones in a case which would ultimately be heard by a jury: see Bataille, cited earlier, and Sharma –v- Jay

[2003] EWHC 1230

QB at paragraph 53.

[77]Mr Bezant’s case on malice is pleaded at paragraph 28 of the Reply. He alleges, firstly, that Dr Rausing authorised Mrs Blake-Roberts to publish the words in the knowledge that no criminal proceedings had been commenced against Mr Bezant. He secondly alleges that the defendant was actuated by express malice arising from his long-standing desire to injure Mr Bezant by denigrating, discrediting and generally undermining his integrity. The latter contention is said to be supported by evidence referred to in paragraph 2.1 to 2.26 of the Particulars of Claim. It is further alleged that Dr Rausing knew that it was false that Mr Bezant had been detained in public by a police officer. It is to be noted that Mr Bezant does not put his case on the basis that Dr Rausing is vicariously liable for malice on the part of Mrs Blake-Roberts.

[78]The question which I have to decide is whether there is any evidence to support what Mr Wolanski describes as bare assertions by Mr Bezant in his statement of case. I start with the evidence served on behalf of the defendant. Mrs Blake-Roberts says in her witness statement that Dr Rausing had no involvement in the decision to send either the 21st March e-mail or the 27th March letter; nor did he authorise their wording. Mrs Blake-Roberts based what she said in those communications on her understanding of the position in Portugal derived from the Portuguese lawyers acting for Dr Rausing. Mr de Macedo, Senior Associate with the Portuguese lawyers attained by Vale da Lama, confirms that evidence.

[79]There is no credible evidence upon the basis of which the accounts given by Ms Blake-Roberts and by Mr de Macedo could be challenged. I recognise of course that Mr Bezant vehemently denies that criminal proceedings were ever commenced against him in Portugal and also denies that he was at any stage “detained” by Portuguese police. Be that as it may, what matters is Dr Rausing’s state of mind. As to that, there is unchallenged evidence from Mrs Blake-Roberts that Dr Rausing played no part in the composition of the publications complained of. If (which he denies) he had authorised or even been told of the contents of those two publications, Dr Rausing had no reason to doubt the truth and accuracy of the contents. I can find no basis for the proposition that Dr Rausing was engaging in malicious fabrication or that he was actuated by any improper motive. For this additional reason I am satisfied that Dr Bezant’s claims in libel should be struck out, or in the alternative that summary judgment should be entered for Dr Rausing, in respect of the claims in libel.

[80]As I have indicated, Mr Wolanski submits that the Libel action should be struck out on the further ground that it constitutes an abuse of the process. I will return to this contention in due course.

The Misfeasance action – a preliminary jurisdictional point

[81]I come next to the Misfeasance action. Before going to the constituent elements of that claim, I should deal with a jurisdictional point. I can deal with it briefly because I did not understand Dr Bezant to resist on behalf of her husband the submission made in relation to jurisdiction.

[82]Four of the Defendants are resident outside the jurisdiction of the English courts. They are defendants 9 to 12, that is Mr Douglas, Mr Zullig, Mr Ohlsson and Mr Milgate respectively. Subject to one qualification, all four of them, as I understand it, have elected to submit to the jurisdiction of the English courts in relation to the issues affecting them which arise in the Misfeasance action. They hope to be able to dispose of Mr Bezant’s claims against them once and for all. The four of them dispute jurisdiction in relation to that part of the Misfeasance action which relates to allegations against them regarding the removal of Mr Bezant as director of Vale da Lama. They seek a declaration by the court that it does not have jurisdiction or in the alternative that it will not exercise its jurisdiction in relation to that part of Mr Bezant’s case.

[83]The grounds for this contention can be shortly stated: Vale da Lama is a corporation registered in Portugal; any dispute arising from Mr Bezant’s removal as director is governed by Portuguese law; any damage to Mr Bezant is likely to have been sustained outside the UK; the courts of Portugal have exclusive jurisdiction over proceedings involving a company whose seat is in Portugal: see Article 22(2) Council Regulation (EC) No. 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and finally Commercial Matters; and the fact that Mr Bezant has already brought proceedings in Portugal in respect of his removal as Director of Vale da Lama which action, albeit stayed for the present, is extant.

[84]It is quite plain that the allegations relating to the removal of Mr Bezant as Director of the Portuguese company are not justiciable in the English courts. I therefore accede to the application that I should make a declaration to that effect. The claims against the four defendants, in so far as they relate to Mr Bezant’s removal as a Director of the Portuguese company, are dismissed.

[85]The seventeen defendants in the Misfeasance action found their attack on the claims advanced in this action upon several bases. Firstly, it is submitted that the individual claims advanced in the Misfeasance action for negligent misstatement; for breaches of various provisions of the Insolvency Act 1986 and of the Companies Act 1985; for breach of duty of care owed to Mr Bezant and for deceit are all for one reason or another unsustainable.

[86]But there is in addition a more broadly based attack on the Misfeasance action as a whole. It is contended on behalf of all seventeen defendants that the action represents an impermissible attempt to create an unfair dismissal remedy at common law; that the whole action is an improper collateral attack on previous decisions of competent tribunals and that the action as a whole is vexatious and an abuse of the process of the court. Because these latter contentions apply not only to the claims in the Misfeasance action but also to the claims in the Contract and Libel actions, it is convenient if I deal with them separately after I have considered the defendants arguments that the claims in the Misfeasance action are individually unsustainable.

Claims for breach of the duty of care owed to Mr Bezant

[87]Before turning to the individual breaches alleged, I will endeavour to set out what I take to be established limitations on the circumstances in which the court will impose on a person a duty of care to avoid causing economic loss to a third party.

[88]In Customs & Excise Commissioners –v- Barclays Bank Plc

[2006] 3 WLR 1

, Lord Bingham summarised at paragraphs 5 to 8 some of the principles which can be derived from earlier cases, namely: i) liability may be imposed where one party can accurately be said to have assumed a responsibility for what is said and done to another – the paradigm situation being a relationship having all the indicia of a contract, save for consideration; ii) the assumption of responsibility test is to be applied objectively; iii) liability may be imposed under the “three-fold test” (whether the loss to the claimant was reasonably foreseeable from what the defendant did or failed to do; whether their relationship was one of sufficient proximity; and whether it was just, fair and reasonable to impose a duty of care), but the three-fold test itself provides no answer as to whether to impose liability in a novel situation; iv) the law develops incrementally in novel factual situations and “the closer the facts of the case in issue to those in which a duty of care has been held to exist, the readier a court will be…to find that there has been an assumption of responsibility or that…the conditions of the three-fold test are satisfied”.

[89]Mr Devonshire in his skeleton argument on behalf of the TW defendants referred me to a number of additional authorities which bear on the issues arising in the present case. He submits on the basis of passages in the speeches in Spring –v- Guardian Assurance Plc

[1995] 2AC 296

at 322E-F, 325B-G and 336F-337D, that there is no general duty on a person in tort to exercise care in the statements he makes about a claimant (beyond the duty not to defame him), absent any voluntary assumption of responsibility by the maker of the statement to the person to whom it refers and absent Hedley Byrne proximity between the maker of the statement and the claimant.

[90]In reliance on Williams –v- National Life Limited

[1998] 1WLR 831

at 847G, Mr Devonshire argues that directors or employees of a company which has a contractual relationship with the claimant will not as individuals be liable for losses suffered by the claimant consequent upon breaches of the company’s tortious or contractual duties, absent an assumption of personal liability and the necessary reliance. Furthermore he submits that a director does not generally speaking owe a duty of care to the creditors of his company and so cannot be liable as a joint tortfeasor with the company, if he does no more than carry out his constitutional role in the governance of the company by voting at board meetings: see Palmer on Company Law at Chapter 8; Kuwait Asia Bank E.C. –v- National Nutural Life Nominees Limited

[1991] AC 187

at 217F-219E and MCA –v- Charity Records Limited (No 5) [2003] 1 ACLC 93.

[91]Mr Devonshire submits that, when a solicitor is performing his duties to his client, he will generally owe no duty to third parties: White –v- Jones

[1995] 2AC 207

at 256B-F. I interpolate that it was held in that case that a solicitor instructed to draw a will may owe duties of care to his client’s intended beneficiaries but that I take to be an exception to the usual rule. An auditor does not generally owe a duty of care in tort to a company’s creditors: Al Saudi Banque-v- Clarke Pixley

[1990] Ch 313

and Caparo

[1990] 2AC 605

F, 623 and 640.

[92]I accept that the authorities to which I have referred do establish the propositions for which Mr Devonshire contends. I did not understand Dr Bezant to argue the contrary. I bear those authorities in mind when considering the viability of the individual claims advanced on behalf of Mr Bezant that Dr Rausing and other individual defendants breached the duty of care said to be owed to him.

[93]The breaches of duty asserted by Mr Bezant are to be found in section III of the Particular of Claim. That section contains no less than 91 subparagraphs.

[94]In paragraph III.7 it is alleged that Dr and Mrs Rausing breached their duty of care to Mr Bezant “when they failed to exercise reasonable skill and care in statements they made in regard to Mr Bezant’s fitness to continue in his positions as a Director of [WPL] and Vale da Lama and as general administrator of the house and gardens as Wadhurst Park after 7th September 2000”.

[95]Neither Dr nor Mrs Rausing was at any time the employer of Mr Bezant. It is asserted that the duty of care owed to him arises out of a special relationship but the nature of that relationship is wholly unspecified. It is further asserted that they assumed a responsibility for Mr Bezant’s economic welfare, but that is a duty extending way beyond any duty which Mr Bezant’s employers could be said to have owed him.

[96]Even if the assertions to which I have alluded could be made good by evidence, it does not appear to me that there is any real prospect of the breach of duty alleged in paragraph III.7 being established at trial. The statements said to constitute breaches of duty are not identified. The pleading does not disclose the identities of those to whom the statements were made. There is no averment that reliance was placed by Mr Bezant on the statements which the Rausings are alleged to have made. It is moreover far from clear whether any and, if so, what part of the damage particularised in section XII of the Particulars of Claim can be said to flow from breaches of the duty alleged. In all these circumstances the allegation of breach of duty on the part of the Rausings has in my view no real prospect of being established at trial and there are no reasonable grounds for bringing that claim.

[97]Next come allegations of breach of duty on the part of Mrs Blake-Roberts, who, it will be remembered was at the time a legal executive with TW whose clients included the Rausing family, WPL and Zirundium. Various breaches of duty are alleged against her. She is said to have been in breach on each of the following occasions: when she stated to Mr Richardson at some time prior to 12th July 2000 that Mr Bezant had dishonest and/or dishonourable intentions towards the Rausing family (paragraph III.14); when on 16th August 2000 she stated that Mr Bezant would retain his positions (paragraph III.15); when she stated that the purpose of the meeting with Mr Callaghan on 22 August 2000 was to finalise the details of Mr Bezant’s and his wife’s contracts (paragraph III.16); when at about the end of August 2000 she sent to Dr and Mrs Rausing a copy of Mr Bezant’s letter to Mr Oldfield of 21st July 2000 (referred to at paragraph 13 above) accompanying it with her advice that Mr Bezant should be removed from his positions (paragraph III.17); when on 2nd September 2000 she ignored Mr Bezant’s faxed letter to her of the same date, which asserted that Mr Callaghan’s attendance note of the discussion on 22nd August 2000 (see paragraph 16 above) contained serious misrepresentations and finally when, without informing Mr Bezant, she sent a copy of the note to Dr and Mrs Rausing accompanying it with her advice that Mr Bezant should be removed from his positions (paragraph III.18). Mrs Blake-Roberts is also named in paragraphs III.19 and 20 but those paragraphs allege breach on her part of her duty of care to WPL and Zirundium and not to Mr Bezant.

[98]These allegations against Mrs Blake-Roberts are premised upon the contention that she had assumed a personal responsibility for Mr Bezant’s economic welfare and interests. That is why she is joined as an individual defendant. That assumption of responsibility is said in paragraph III.9 to arise from her position as a legal executive who provided advice to companies of which Mr Bezant was a director and to members of the Rausing family. Mr Bezant’s case, as pleaded in paragraph III.10, is that Mrs Blake-Roberts “therefore” owed Mr Bezant a duty to avoid making statements which she knew or ought reasonably to know or could reasonably foresee would cause him harm and detriment.

[99]As it appears to me the allegations of breach of duty on the part of Mrs Blake-Roberts are misconceived in a number of respects. Her position as a legal executive with TW cannot in my judgment have entailed an assumption by Mrs Blake-Roberts of a personal responsibility for Mr Bezants’ economic welfare and interests. I observe that, as in the case of the claim against Dr Rausing, such a responsibility far exceeds any responsibility towards Mr Bezant that his employer, WPL, could be said to have had. I do not overlook the fact, urged on me by Dr Bezant, that, as appears from the transcript of the meeting which took place on 16th August 2000, Mrs Blake-Roberts expressed the opinion that it would be more beneficial for Mr Bezant to enter into a new contract than for his employment to be transferred to the purchaser of the farm at Wadhurst. However, that appears to me to be far too slender a basis upon which to conclude that she assumed personal responsibility, especially when one bears in mind that at that meeting as well as on several other occasions Mr Bezant was urged to obtain his own independent legal advice (see for example page 34 of the transcript and paragraph 12 above). Besides it is clear that Mr Bezant did not rely on what Mrs Blake-Roberts told him.

[100]Mr Bezant alleges that Mr Callaghan (defendant 8) owed a duty of care to him because (so it is pleaded in paragraph III.22) he had assumed a personal responsibility for Mr Bezant’s economic welfare and interests arising from his position as a Solicitor advising WPL, Zirundium and Vale da Lama. Breaches of that duty are said to have taken place on occasions identified in paragraph III.28, 29 and 30 of the Particulars of Claim.

[101]In my judgment the Particulars of Claim do not disclose any arguable case that Mr Callaghan is liable in damages for breach of duty. He was an employed solicitor acting for the companies to which I have referred in the preceding paragraph, all of which were at the material times at loggerheads with Mr Bezant. I cannot accept that this is one of the exceptional cases (such as White) where a solicitor, who is performing his duty to his client, owes a duty to a third party. Furthermore the evidence reveals that Mr Callaghan told Mr Bezant that he could not advise him and there is no evidence that he did so. Mr Bezant describes Mr Callaghan’s attitude as having been non-committal. I see no basis for the suggestions that Mr Callaghan assumed the responsibility alleged or that he and Mr Bezant were in a special relationship with one another. There is no plea of reliance.

[102]I can take shortly the claims against the next three defendants who are accused by Mr Bezant of breach of their duty of care to him, namely Mr Hyde (defendant 5), Mr Prettejohn (defendant 15) and Mr Beckhurst (defendant 16). The case against these three defendants is to be found a paragraphs III.33 to 45 of the Particulars of Claim. The claim against Messrs Hyde and Beckhurst relates to their involvement in the Tribunal proceedings and/or their roles in the preparation of reports to the Revenue. In the circumstances of the present case I am satisfied that there is no prospect of Mr Bezant being able to establish that any of these three defendants as individuals owed him a duty of care: see the cases cited at paragraph 90 above. There is no pleaded allegation of a duty of care owed by Mr Prettejohn to Bezant. His reports to the Inland Revenue were prepared at the request of WPL and it was to that company that Mr Prettejohn owed a duty of care. They were not prepared for his own use. Mr Bezant cannot have relied on them since the reports were never communicated to him. As to Mr Hyde, the complaints relate to his evidence to the Employment Tribunal which accepted that he was a witness of truth. Mr Beckhurst’s evidence was accepted by the same Tribunal. Witnesses enjoy immunity from suit for what they say in Court and in proofs of evidence: see Darker –v- CC of West Midlands Police

[2001] 1 AC 435

[103]The duty of care alleged in paragraph III.46 is said to have been owed by the defendants identified in that paragraph to the creditors of WPL. Similarly the duty of care alleged in paragraph III.50 is said to have been owed by the defendants who were directors of Zirundium and who are mentioned in that paragraph to WPL and to its directors and auditors. In point of fact Mr Milgate was not a director of Zirundium. It is plain and obvious that Mr Bezant cannot recover damages for breaches of a duty owed to other entities than himself. Moreover there is authority that auditors do not generally owe a duty of care in tort to a company’s creditors: see paragraph 91 above. No exceptional circumstances are or could be pleaded which would, even arguably, give rise to any personal liability. Messrs Douglas, Zullig, Ohlsson and Milgate cannot be said to have owed a duty to WPL in their personal capacities. Such duty as they could be said to have owed would have been owed to WPL. There is in any case no evidence that any of these defendants represented that the monies advanced to Zirundium were gifts. They were treated as loans in the accounts of both WPL and Zirundium.

[104]The final allegation of breach of duty of care is levelled by Mr Bezant against Mr Cork. The duty is pleaded in paragraph III.53 to arise from a special relationship created respectively by Mr Cork’s position as liquidator of WPL and Mr Bezant’s position as a creditor of that company. I do not accept that a liquidator, any more than an auditor, will in ordinary circumstances owe a duty of care to a creditor: see Oldham and others –v- Kyriss

[2004] 1 BCLC 305

; McMahon –v- McGrath

[2005] EWHC 2125

, Ch, 118-120. There are no exceptional circumstances justifying the composition of a duty in the circumstances of this case. Besides the statements relied on were made to the Secretary of State for Trade and Industry rather than to Mr Bezant. Furthermore, if Mr Bezant was aggrieved about the manner in which Mr Cork carried out his duties, his proper course was to apply to the court for relief in accordance with Section 168(5) of the Insolvency Act. As Ms Marianne Butler pointed out on behalf of Mr Cork, he clearly went to considerable lengths to investigate the concerns which had been expressed to him by the Bezants: see Mr Cork’s witness statement at paragraphs 22 to 29 and his letter to the Bezants dated 26th October 2003 referred to in paragraph 30 above. It is in any case difficult to see how a claim against Mr Cork by Mr Bezant in his capacity as a creditor can be sustained given that his proof of debt in the liquidation was admitted in full.

[105]For all of these reasons I have concluded that the claim in negligence against Mr Cork is unsustainable. I share the view expressed by Registrar Jaques in paragraph 18 of his judgment dated 30th September 2005: “I can see no useful purpose in laboriously going through [the Bezants’] many complaints in this judgment, the substance of which can be seen from a perusal of the documentation before me. With respect to them all, all the Bezants have, at the end of the day, are suspicions and concerns of wrongdoing and what they are trying to do is embark on an extensive fishing expedition in the hope that they will find evidence to support those suspicions and concerns, which is something the courts have said time and again is not permissible”.

[106]Mr Bezant’s claim that Mr Cork breached his duty of care is enlarged and elaborated upon in draft amended Particulars. Leave has not been obtained to make the amendments but (as in the case of the Contract action) I will deal with the allegations contained therein. I can do so quite briefly. The primary allegation appears to be that Mr Cork breached his duty of care to WPL. It is alleged that Mr Cork failed to investigate “matters of crucial importance”, whereby substantial loss was caused to WPL, its creditors and Mr Bezant in particular. In her witness statement dated 2nd August 2006 Dr Bezant accepts that her husband’s claims are virtually identical to those advanced in the application made by her to Deputy Judge Ivory QC pursuant to section 212 of the Insolvency Act. At paragraph 42 of his judgment the Deputy Judge pointed out that Dr Bezant had taken upon herself the task of substantiating not only the primary allegations of misconduct against the directors of WPL and others but also the secondary allegations of breach of duty or misfeasance against Mr Cork for failing to pursue the primary wrongdoers or take steps to recover company assets from them. That appears to me to be plainly right. The Deputy Judge went on to consider the allegation that Mr Cork failed to investigate with due diligence, saying this at paragraphs 49 and 50 of his judgment: “…in what respects is it said that [Mr Cork] failed to investigate properly? What exactly is it that he could and should have done by way of investigation that he failed to do, and exactly how would it have made a difference? The Particulars of Claim do not say. It is not good enough simply to say that he should have investigated properly and had he done so monies would have been recovered. In my judgment, even if Dr Bezant did seek to advance a case based on a more limited duty to take reasonable care to investigate matters properly, there is no proper case of breach particularised, let alone substantiated and it is liable to be struck out for failing to disclose reasonable grounds for bringing the application…”.

[107]I agree. I cannot accept that any duty of care was owed by Mr Cork to Mr Bezant. The claim that he breached his duty of care remains unparticularised. The claim sought to be introduced by amendment is also unsustainable.

Claims for damages for deceit

[108]Mr Bezant’s claims in deceit in the Misfeasance action are pleaded at paragraphs III.57 to 91. The defendants to whom damages for deceit are sought are the same defendants against whom Mr Bezant alleged breach of their duty of care. I dealt with Mr Bezant’s claim for damages for breach of the duty of care at paragraphs 97 and following above. In large part the observations I there made apply equally to the claims in deceit. In those circumstances I can confine myself to a relatively small number of additional comments about the individual claims.

[109]The claim against the Rausings at paragraph III.57 is wholly unparticularised. It is also inconsistent with Mr Bezant’s case that at the meeting on 16th August 2000 TW on behalf of Dr Rausing manoeuvred Mr Bezant into remaining in the employ of WPL. Moreover I cannot accept that representations of the kind alleged sound in damages. In effect what Mr Bezant is saying is that he was lulled into a false sense of security about his future; but the result would have been the same had the representations alleged not been made. No doubt that is the reason why no particulars of the loss and damage alleged are pleaded. The false statements pleaded in paragraph III.61 are presumably representations which were made to third parties (who are unidentified). Absent a claim of reliance, Mr Bezant cannot recover damages for deceit in respect of them. This is not framed as a claim in defamation.

[110]The comments which I have made about the claim in deceit against the Rausings apply mutatis mutandis to the claim in deceit against Mrs Blake-Roberts, which is particularised at paragraphs III.65 to 78. The same applies to the claim in deceit against Mr Callaghan, which is pleaded at paragraphs III.79 to 82. I note that Mr Bezant now claims that a false representation was made by Mr Callaghan in his attendance note of the meeting on 22nd August 2000. As I have pointed out at paragraph 16 above, Mr Bezant himself accepted in November 2000 that the relevant paragraph was “substantially accurate”.

[111]As to the claims in deceit against the other individuals named in paragraphs III.38 to 52, I see no need to add to what I have already said about the corresponding claims that these individuals acted in breach of duty: see paragraphs 102 and 103 above.

Claims of breach of statutory duties owed under the Companies Act 1985

[112]The breaches of the Companies Act 1985 alleged by Mr Bezant are to be found at section IV of the Particulars of Claim. Breaches of sections 303(2) and 379(1) of the 1985 Act are alleged against Mr Douglas, Mr Zullig, Mr Ohlsson and Mr Milgate (defendants 9, 10, 11, and 12). Those provisions are as follows: “303(2). Special notices required of a resolution to remove a Director under this section or to appoint somebody instead of a Director so removed at the meeting at which he is removed. 379(1). Whereby any provision of this Act special notice is required of a resolution, the resolution is not effective unless notice of the intention to move it has been given to the Company at least 28 days before the meeting at which it is moved”.

[113]It is clear from section 303(5) of the 1985 Act that the statutory provisions which I have cited do not apply to any other power which may exist, for example under the Articles of Association of a company, to remove a director; see also Gore-Browne on Companies at paragraph 13 [16]. It is clear that an alternative power to remove Mr Bezant as a director did exist under the Articles of WPL and that the procedure there laid down was correctly followed. Moreover I find it impossible to see how any loss can have been sustained by Mr Bezant by reason of any breaches of those sections of the 1985 Act, even if his removal as a director of WPL had been irregular. Dismissal as an employee (which was in the circumstances inevitable) would have rendered his role as director untenable. In any event Mr Bezant tendered his resignation from his directorship of WPL by letter dated 9th October 2000, thereby bringing his directorship to an end by his own actions.

[114]As regards Mr Bezant’s removal as a Director of Vale da Lama, as I have said in paragraphs 81 to 84 above, this Court has no jurisdiction in relation to this part of Mr Bezant’s claim. The evidence before me is that Mr Bezant was validly removed from his directorship in accordance with the Portuguese law. Indeed Mr Bezant has himself so conceded in the Portuguese proceedings.

[115]Breach of section 304(1) of the 1985 Act is alleged against defendants 1, 3, 4, 5 and 6. The subsection reads:

“304(1). On receipt of notice of an intended resolution to remove a Director under section 303, the company shall forthwith send a copy of the notice to the Director concerned; and he (whether or not a member of the company) is entitled to be heard on the resolution at the meeting”

. Even assuming (as I do) that no notice was sent to Mr Bezant, I cannot see that he suffered a loss as a result. His removal as a director was certain to have taken place irrespective of any representations he might have wished to make.

Claims for breaches statutory duty owed under the Insolvency Act, 1986

[116]Claims for breach of duty owed under the Insolvency Act 1986 are brought against all the defendants save defendants 2, 3 and 8. The sections which are alleged to have been breached are section 89 (statutory declaration of solvency), section 206 (fraud in anticipation of winding up); section 208 (misconduct in the course of winding up); section 209 (falsifying a company’s books with intent to defraud or deceive any person during winding up); section 210 (material omissions from statement of affairs during winding up or prior to the winding up but after the winding up resolution had been passed); section 211 (false representations to creditors or deception by any officer of the company during or prior to winding up); section 213 (fraudulent trading); section 214 (wrongful trading); section 238 (transactions at an undervalue) and section 239 (preferential treatment of creditors).

[117]It will overload an already lengthy judgment if I were to set out the terms of those sections, so I will not do so. Ms Mulcahy reminded me that allegations of this kind about WPL have already been thoroughly investigated by Mr Cork and found by him to be unsustainable. The evidence is that Mr Cork instructed counsel of suitable standing and experience to review his conclusions and that counsel did endorse them.

[118]The Bezants’ allegations about Mr Cork’s conduct of the liquidation have already been considered judicially by courts of competent jurisdiction. In its judgment of 6th September 2005 the Employment Tribunal held that “the decision to put the company into liquidation and the following liquidation process were lawful”. On 30th September 2005 Registrar Jaques made the observations which I have quoted at paragraph 105 above. On 24th July 2006 Deputy Judge Ivory QC, having struck out Dr Bezant’s application under section 212 of the 1986 Act against Mr Cork, made the remarks which I have quoted at paragraph 106. Chadwick LJ dismissed the application for permission to appeal as “totally devoid of merit”. I nevertheless accept that I should consider the claims under this head on their merits.

[119]There is, as it appears to me, a short and conclusive answer to the claims made by Mr Bezant under sections 89, 206, 208, 209, 210 and 211 of the 1986 Act. All of these sections create criminal offences; they do not ground an action for damages. Moreover, in regard to the claim under section 208, there is uncontroverted evidence from Mr Grainger that he played no part whatever in the winding up of WPL. The claim under section 209 cannot succeed against either Mr Douglas or Mr Milgate, because neither was a past or present officer of WPL or a contributory. In addition a proof of debt submitted by Zirundium in the liquidation is not “a book, paper or security or entry in a register, book of account or document” belonging to WPL within the meaning of section 208. So far as Mr Douglas was concerned, the sums advanced were loans and accounted for as such. There is also what appears to me a fatal objection to the claim under section 211, namely that there is no basis for Mr Bezant’s allegation that the representation sued on was false. According to the evidence, by the end of July 2000 Zirundium was no longer prepared to continue “propping up” WPL with financial support. I accept that the loans made to WPL by Zirundium were very substantial. But I am satisfied by the Note prepared in the course of the hearing headed “Purpose of the Zirundium Loans” that there existed valid reasons for Zirundium to make them.

[120]As to the claims under sections 213, 238 and 239 of the 1986 Act, those sections confer rights of action on the liquidator or administrator of a company. It follows that Mr Bezant has no right to bring a claim under any of those sections. The claim under section 213 that all the Barlows defendants were guilty of participating in fraudulent trading on the part of WPL from April 2001 to August 2002 is in any event unsubstantiated by any evidence. WPL was not actively trading after April 2001; it continued in existence solely because of the ongoing litigation involving the Bezants. The claim under section 213 is in any event wholly inconsistent with Mr Bezant’s claim under section 211 that the directors of WPL made false representations to creditors that the company was insolvent. I reject the contention of Mr Bezant that because it was foreseen under the loans advanced by Zirundium to WPL were unlikely to be recoverable, the advances are to be treated as “gifts”.

[121]The claim of wrongful trading contrary to section 214 of the Act appears to me to be misconceived. The directors of WPL had been consistently advised by Zirundium that it would continue to provide funds to meet its working capital requirements, thus enabling WPL to meet debts arising from its continuing operations. After the sale of the Tenterden farm, the evidence indicates that the directors of WPL felt that there was still a reasonable prospect of achieving a settlement with Mr Bezant which in turn would have allowed an orderly wind-down of WPL to be completed, funded by Zirundium. It was only after attempts to achieve settlement with Mr Bezant failed that the directors accepted advice to place WPL in liquidation.

[122]The claim under section 238 that WPL entered into transactions at an undervalue is another claim which Mr Bezant has no right to bring because he is not the liquidator or administrator of WPL. The same objection applies to the claim under section 239 of making preferential payments.

[123]For the reasons which I have given, there is in my view no substance whatever in any of the claims under the Insolvency Act of 1986. All of these must be struck out or in the alternative there must be summary judgment in favour of the respective defendants in relation to all of these claims.

Claims identified in the Claim Forms but not pursued in the Particulars of Claim

[124]There are a substantial number of claims which have been pleaded in Mr Bezant’s Claim Forms but which are not pursued in the Particulars of Claim. These claims have helpfully been identified in counsel’s skeleton arguments. All of them must be struck out and in the alternative summary judgment must be entered in favour of the defendants in respect of them. Dr Bezant did not seek to persuade me otherwise. I would be grateful if counsel would include particulars of these claims in the minute of order.

The application to strike out the claims as an abuse of the process

[125]Hitherto in this judgment I have been considering the very numerous individual claims advanced by Mr Bezant in the three actions in order to decide whether they are sustainable. I have concluded that none of them has any merit. All are to be struck out and summary judgment will be entered for the respective defendants. That of course brings all three actions to an end. However, counsel for all the defendants have contended that the actions should be struck out, irrespective of their merits (or lack of merits), on the separate and distinct ground that they constitute an abuse of the process of the court. CPR Rule 3.4 provides instances that this is an additional ground on which an action may be struck out.

[126]“Abuse of the process” is not defined. It is often been said that the categories of abuse of process are many and are not closed. In the course of the hearing a considerable number of authorities have been cited to me. It is clear from those authorities that abuse of the process comes in many guises. One form which abuse of the process can take, which is of particular importance in the circumstances of the present case, was first identified in Henderson –v- Henderson [1843] 3 HARE 100: “Where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case and will not (accept under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward, only because they have from negligence, inadvertence or accident omitted it as part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and announce a judgment, but to every point which properly belonged to the subject of the litigation, and which the parties exercising reasonable diligence, might have brought forward at the time”.

[127]The authoritative modern restatement of Henderson – type abuse is to be found in the speech of Lord Bingham in Johnson –v- Gore Wood & Co

[2002] 2 AC 1

at 31: “But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same manner. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party’s conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice”.

[128]An allied form of abuse of process, which is also relevant in the present case, arises where a party mounts a collateral attack on a final decision adverse to him which has previously been made by a court of competent jurisdiction. The principles relevant to this head of abuse were summarised by Sir Andrew Morritt VC in Secretary of State for Trade and Industry –v- Bairstow

[2004] Ch 1

at paragraph 38: “In my view these cases establish the following propositions. (a) a collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of the process of the court. …(c) if the earlier decision is that of a court exercising a civil jurisdiction then it is binding on the parties to that action and their privies in any later civil proceedings. (d) if the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if little (i) it would manifestly unfair to a party to the later proceedings that the same issues should be re-litigated or (ii) to permit such re-litigation would bring the administration of justice in to disrepute”.

[129]Yet another form of abuse can arise in circumstances where it can be demonstrated that the benefit attainable by the claimant in the action is of such limited value that “the game is not worth the candle”. It was described by Phillips LJ (as he then was) in Jameel –v- Dow Jones and Company

[2005] 2 WLR 1614

at paragraph 54 as follows: “An abuse of process is of concern not merely to the parties but to the court. It is no longer the rule of the court simply to provide a level playing field and to referee whatever gain the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately proportionately used in accordance with the requirements of justice… [69] If the claimant succeeds in this action and is awarded a small amount of damages, it can perhaps be said he will have achieved a vindication for the damage done to his reputation in this country, but both the damage and the vindication will be minimal. The cost of the exercise will have been out of all proportion to what has been achieved. The game will not merely not have been worth the candle, it will not have been worth the wick”.

[130]Whilst the power to strike out an action undoubtedly exists, it is equally clear that it is a draconian power which should only be exercised in a clear case. This is a consideration which it is particularly important for me to bear in mind where, as here, the litigant whose case is sought to be struck out does not have the benefit of legal representation. I have tried to make every allowance for the fact that the Bezants have had to face the daunting task of struggling with issues of law and fact which are in certain respects complex. It is plain and to an extent understandable that the Bezants fervently wish to take their various claims to trial. As I have already said, they have convinced themselves that the defendants (and in particular Dr Rausing) are to blame and should be made answerable for the financial consequences for them flowing from their dismissal. That said, if the actions or any of them are properly to be described as abuses of the process, then it must follow that they be dismissed.

Grounds of application to strike out the actions as an abuse of process

[131]The basis on which Mr Devonshire, with the support of Ms Mulcahy and Ms Butler, invites me to strike out the claim as an abuse of process can be summarised in this way: he contends that the Misfeasance action constitutes an impermissible attempt to use the law of tort to create a non-statutory common law remedy for unfairness attending dismissal. He says that this is illegitimate for the reasons given by Lord Hoffman in Johnson –v- Unisys

[2001] ICR 480

. He argues further that Mr Bezant is seeking in the Misfeasance action to mount a collateral attack on final decisions adverse to him made by Courts of competent jurisdiction. Mr Devonshire submits that established by Henderson that it is an abuse of process for Mr Bezant to raise in the Misfeasance action causes of action or issues which could and should have been raised in earlier proceedings.

[132]Mr Devonshire contends that all three actions constitute an abuse of the process because the further litigation on which the Bezants have embarked can properly be described as “frivoulous and vexatious”. He says in addition that the litigation is aimed at achieving a collateral advantage beyond the proper scope of the action, namely to cause expense, harassment, commercial prejudice and the like to the defendants and particularly to the Rausing family. Mr Devonshire further contends that there is an irresistible inference that the three actions were launched after Mr Bezant had exhausted his legitimate avenues for complaint in the UK, in order to secure for himself and his wife by improper means a payment from Dr Rausing and the other defendants which far exceeds his legal rights and entitlements. He points out that Dr Rausing has in the past made attempts to settle the Bezant’s claims of sums far in excess of their strict legal entitlements but that Mr Bezant has held out for an even bigger pay day.

[133]Mr Wolanski adopts the submissions made by Mr Devonshire. He submits that this is a textbook case for striking out the Libel action on the ground that it is absurd to suppose that Mr Bezant has suffered any real damage as a result of the two publications complained of. Reliance is placed on Jameel.

[134]The response of Dr Bezant on behalf of her husband is that an action will only constitute an abuse of the process if it can be shown that the claimant has some ulterior purpose or collateral motive, so that the proceedings can be described as having been brought in bad faith. She argues the abuse must be shown to be plain and obvious. The mere fact that a party is seeking to relitigate issues previously decided is not enough to justify the action being struck out. Dr Bezant suggests that the Henderson rule should be disapplied in the special circumstances which arise in the present case. She says that it cannot be said that Mr Bezant is estopped from advancing any of the causes of action or raising any of the issues which have been pleaded.

Conclusion on the applications to strike out

[135]I am entirely satisfied that all three of Mr Bezant’s actions should be struck out on all the grounds relied on by the defendants.

[136]One of the main reasons for summarising the background facts at some length at the outset of this judgment was to demonstrate the multiplicity of proceedings which have been brought by the Bezants in connection with their dismissal by WPL and by Vale da Lama. In fact there have been more actions brought and complaints made by the Bezants than my summary of the facts would suggest. In the course of the hearing I was provided with a comprehensive list of proceedings and complaints initiated by the Bezants. All of their claims and complaints have been dismissed, save only for Dr Bezant’s claim for sex discrimination.

[137]In particular Mr Bezant’s claims that he was wrongly or unfairly dismissed by WPL and by Vale da Lama were determined against him both in England and in Portugal. It seems to me to be clear that in the Misfeasance action Mr Bezant is invoking the common law of tort and asserting breaches of duty in order to recover losses (including the right to live rent-free in Heronden New House) which he claims flowed from the fact and circumstances of his dismissal. This despite the fact that the Employment Tribunal has dismissed all his claims under the relevant employment legislation.

[138]This is illegitimate for the reasons given by Lord Hoffman in his speech in Johnson –v- Unisys Ltd at 500F-501B. He there held that, where Parliament has provided a statutory framework and remedy, it cannot be circumvented by resorting to the common law or by imposing a duty of care out with the statutory framework. In the present case Mr Bezant had a contractual right not to be dismissed in breach of his contract of employment and a statutory right not to be unfairly dismissed. Those claims having been dismissed it is an abuse on Mr Bezant’s part to invoke the common law (not to mention the Companies Act and the Insolvency Act) to recover by a different route the compensation to which he has been held not to be entitled by courts of competent jurisdiction both in England and in Portugal. Mr Bezant’s strategy is all the more objectionable because he has joined in the Misfeasance action individuals who could not have been liable to him as abettors of any unfair dismissal or as having procured a breach of either of his contracts of employment. In addition the present claims for damages vastly exceed the maxima to which Mr Bezant would have been entitled if successful in either his claim for wrongful dismissal or his claim for unfair dismissal.

[139]In my judgment the Misfeasance action is also objectionable and abusive on the overlapping ground that it constitutes an impermissible collateral attack on previous decisions of courts of competent jurisdiction, namely the Employment Tribunal, the Employment Appeal Tribunal and the High Court in England (which dismissed Mr Bezant’s contractual claims for salary arrears) and of the Employment Tribunal and Court of Appeal in Portugal (which decided that Mr Bezant is entitled to no compensation for his alleged loss of employment with Vale da Lama). Mr Bezant cannot legitimately avoid the consequences of the adverse findings made by these courts against him by the simple expedient of reformulating his claim in tort against individuals connected in one way or another with WPL or the Portuguese company.

[140]I am furthermore of the opinion that the Misfeasance action constitutes an abuse of process on the further ground that many (but I accept not all) of the defendants in that action are in privity with WPL, so that the causes of action against them could and should have been raised in the earlier proceedings: see Henderson and Johnson –v- Gorge Wood referred to above and also MCC Proceeds Inc –v- Lehman Brothers International (Europe)

[1998] All ER 675

and Morris –v- Wentworth-Stanley

[1999] QB 1004

at 1011E-F and 1017C-F.

[141]As regards the Contract action, I accept that it is not in itself a collateral attack on a previous judicial decision in the Henderson sense. However, I am satisfied that in the Contract Action Mr Bezant is seeking to obtain a collateral advantage for himself by harassing Dr Rausing and putting him to disproportionate trouble and expense. The collateral advantage which Mr Bezant is intent on recovering is in effect the compensation for his dismissal to which he has been held to be disentitled. In that sense this action also constitutes an abuse.

[142]In Wallis –v- Valentine [2003] EMLR 8 Sir Murray Stuart-Smith at paragraph 31 adopted words spoken by Simon Brown LJ in Broxton –v- McClennand [1995] EMLR 497-8, namely: “…accordingly the institution of proceedings with ulterior motive is not of itself sufficient to constitute an abuse: an action is only that if the court’s processes are being misused to achieve something properly available to the plaintiff in the course of properly conducted proceedings. The cases appear to suggest two distinct categories of such misuses of process:(i) The achievement of a collateral advantage beyond the proper scope of the action – a classic instance was Grainger –v- Hill where the proceedings of which complaint was made had been designed quite improperly to secure for the complainants a ships register to which they had no legitimate claim whatsoever. The difficulty in deciding where precisely falls the boundary of such impermissible collateral advantage is addressed in Bridge LJ’s judgment in Goldsmith –v- Sperrings Limited at 503D-H.

(ii) The conduct of the proceedings themselves not so as to vindicate a right but rather in a manner designed to cause the defendant problems of expense, harassment, commercial prejudice or the like beyond those ordinarily encountered in the course of properly conducted litigation…”.

[143]Those words seem to me to be in point in the present case. I have already expressed the conclusion that the Contract action is devoid of merit. I consider that it is a vehicle constructed by Mr Bezant as part of what he describes as his “crusade for justice” which is in reality designed to extract the maximum amount of money possible from Dr Rausing. In this connection I refer to (but do not recite) the information put before the court by Mr Graham of TW at paragraphs 15.1 to 17.11 of his witness statement dated 12th July 2006.

[144]What I have said in the preceding paragraph in relation to the Contract action applies with equal, if not greater, force to the Libel action. Moreover I think Mr Wolanski is justified in his contention that the claim should be struck out on what might be termed Jameel grounds. Publication of the alleged libels was confined to two individuals, one of whom was at the time Mr Bezant’s accountant and the other his daughter. I have referred at paragraphs 72-74 above to the formidable difficulties confronting Mr Bezant in relation to the issues of publication to Mr Bezant’s daughter and the charge of malice to meet the defence of privilege pleaded in relation to both publications. Even if Mr Bezant were able to surmount those hurdles, I find it impossible to see how a jury, properly directed, could conclude that Mr Bezant is entitled to more than minimal damages. Nor do I think that there can be any question of Mr Bezant being entitled in all the circumstances of the case to the vindication of his reputation. In my view the Libel action is one where the game is not worth the candle.

[145]My conclusion is therefore that all these actions have to be dismissed on the further ground that they constitute abuses of the process of the court in the respects which I have identified.

The application for an Extended Civil Restraint Order

[146]I will hear argument on the question whether an Extended Civil Restraint Order should be made against Mr Bezant immediately following the handing down of this judgment.

Cited in 5 later judgments

Monir v Wood 2018
Qantas Cabin Crew (UK) Ltd v Alsopp & Ors 2013
Qantas Cabin Crew (UK) Ltd v Alsopp & Ors 2013
Wallis & Anor v Meredith 2011
Noorani v Calver 2009