Beddow v Cayzer, Court of Appeal - Queen's Bench Division, March 20, 2006, [2006] EWHC 557 (QB)
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Beddow v Cayzer, Court of Appeal - Queen's Bench Division, March 20, 2006, [2006] EWHC 557 (QB)
Case No: HQ 0007193Neutral Citation Number: [2006] EWHC 557 (QB)IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 20th March 2006Before :MR JUSTICE TUGENDHAT- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Mr Nigel Jones QC & Mr Colm Nugent (instructed by A R Legal) for the ClaimantMr Stuart Adair (instructed by SJ Berwin) for the DefendantHearing dates: 13-17, 20th and 22nd February 2006- - - - - - - - - - - - - - - - - - - - -JudgmentMr Justice Tugendhat : 1. It is a truism that in the City of London agreements are made by word of mouth. In 1997 Mr Beddow (``the Claimant''), a former stock broker, and Mr Brunnock, a former fund manager, made an agreement by word of mouth to join together as partners in a venture. The project was to raise money to acquire veterinary practices through of a company which they would form or acquire, and which would, in due course, be floated on the Stock Exchange. In this action the Claimant claims that he and Mr Brunnock together made a further agreement by word of mouth in February 1998 (or if not in February, then in July). This agreement was with Mr Rupert Galliers-Pratt and his brother Mr Nigel Cayzer (``the Defendant''). The Claimant alleges that Mr Galliers-Pratt and the Defendant agreed to participate in their joint venture. 2. There is no doubt that work was done by all four to bring this plan to fruition. The Claimant's and Mr Brunnock's and Mr Galliers-Pratt's activities were mainly in the period up to the beginning of August 1998. The Defendant's activities overlapped, but were mainly from the end of July 1998 onwards. Eventually in March 1999 a financial backer was found (Nash Sells & Partners Ltd (``NSP'')), albeit much later than originally anticipated, and not the sort of investor originally anticipated (NSP are venture capitalists). On 17th May 1999 a company was formed in the name of CVS (UK) Ltd (``CVSUK''). The Claimant and Mr Brunnock were each offered the opportunity to subscribe for shares representing 1½% of the ordinary share capital of that company. They each considered that this was a breach by the Defendant of the agreement they allege was made. Mr Brunnock reluctantly accepted, and took up the shares. Mr Galliers-Pratt was also offered an opportunity to acquire shares, but declined to do so. The Claimant rejected the proposal and sues the Defendant in this action. 3. The Defendant's case, in summary, is that there was no agreement in February or July 1998, or none to which he was a party, and that the relationship between himself and the Claimant was one in which they each participated in the venture independently and at their own risk, and without any obligation or commitment to the other parties. The Defendant always recognised that the Claimant and Mr Brunnock had introduced to his brother (and to himself) a very good idea, and that each of the two of them had a moral claim to acquire shares in CVSUK when it was formed. It was never his intention to cut them out. His case is that their claim was no more than moral, and that he did all that was required of him by arranging for them each to have the opportunity to subscribe for 1½% of the shares. He himself had the opportunity to subscribe for 10%. Those shares were in fact subscribed for by a Panamanian corporation, Perth Business Corporation, represented by lawyers practising in Liechtenstein. The Defendant denies having any beneficial interest in those shares, and says he does not know who the beneficiaries are. He also says that he could not have done better than he did for the Claimant, because NSP would not have agreed to provide the finance in circumstances where the Claimant and Mr Brunnock had the shareholding they claim to be entitled to. 4. Other individuals were also able to subscribe for shares in May 1999, and the Claimant claims that the Defendant could, and by law should, have arranged for him to have a proportion of the available shares equal to that of the Defendant. But even if that could not have been achieved, the Claimant's case is that it makes little difference. The result would be that he held and holds such shares (or such interest in, or entitlement to, shares as he did hold) on trust for the Claimant to the extent necessary to give effect to the Claimant's rights under the agreement he alleges.5. The Claim Form was issued in December 2000. There was a stay for mediation ordered on 8th November 2001. The mediation did not succeed. After nearly four years the stay was lifted on 27th July 2005. So the matter has come on for trial eight years after is alleged that the oral agreement was made in February 1998. The trial bundles amounted to twelve lever arch files, and the number of pages referred to amounted to one thousand or more. But most of these documents, and much of the oral evidence, relate to w...See the full content of this document
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