Approved Judgment - clients.squareeye.com

More documents

Recommendations

Info

THE HONOURABLE MR JUSTICE EADY Approved Judgment Mr Justice Eady : Introduction Butler-Creagh v Hersham 1. These cases were ordered to be heard together by Nicola Davies J on 14 April 2011, although the claim by Cherrilow Ltd against Mr Richard Butler-Creagh was begun almost a year after his claim against Ms Aida Hersham. Nevertheless, they have the factual background in common and there is considerable overlap in the issues to be resolved. 2. The claims arise out of the purchase of a large property on the river at Henley-on- Thames called Fawley Court, which is thought to have been designed by Sir Christopher Wren and is situated in gardens attributed to Capability Brown. The purchaser was Cherrilow Ltd (a company incorporated in Jersey, for the purpose of this transaction, on 3 December 2008). The contracts were exchanged on 10 December of that year and completion took place in April 2010. The vendors were the Marian Fathers, a religious group with charitable status which had owned the property since just after the Second World War. In accordance with obligations under the Charities Act, the trustees received outside professional advice throughout from Ms Alexa Beale, a solicitor, and from Mr Martin Conway, a property expert. He and his firm, Marriotts, had been appointed as independent surveyors pursuant to s.36(3). Both gave evidence at the trial. 3. Cherrilow Ltd was created as a special purpose vehicle for the acquisition of the property at the instigation of Ms Hersham a few weeks after she had first been shown round the property on 19 October 2008 by Mr Butler-Creagh, who claimed at that time to have the benefit of an exclusivity arrangement with the Marian Fathers whereby he would be recognised as the sole purchaser. He now claims a fee of £5m from Ms Hersham on the basis that he permitted her to “step into his shoes” and obtain the benefit of his contract with the Marian Fathers. That forms the subjectmatter of the first claim. Mr Butler-Creagh brought no proceedings against Cherrilow and acknowledges that no contractual relationship exists between him and that company. 4. Cherrilow began its action earlier this year claiming damages for deceit, or fraudulent misrepresentation, against Mr Butler-Creagh and seeks a declaration that it is not liable to him in the sum of £5m or any other sum. Mr Butler-Creagh denies any dishonesty on his part and challenges causation. He also contends that Cherrilow has suffered no loss. He counterclaims on the basis of quantum meruit or unjust enrichment, alleging that he is owed fees in respect of services rendered to Cherrilow. 5. The trial took place over a three week period beginning on 11 July 2011. It was rife with allegations and cross-allegations of dishonesty, each side accusing the other inter alia of forging documents. Ms Hersham and Cherrilow have gone so far as to characterise Mr Butler-Creagh as a “confidence trickster” and a “middle man” fraudster. The dispute has given rise to a considerable amount of documentation and some 25 witness statements were prepared, although in the event 17 witnesses of fact and three experts were called. The essential issues, however, were reasonably straightforward.
THE HONOURABLE MR JUSTICE EADY Approved Judgment The background to the claims Butler-Creagh v Hersham 6. In summarising the factual background, it is necessary to begin before Ms Hersham became aware of the property and made her first visit in October 2008. In June of that year Mr Butler-Creagh made a successful bid to purchase the property in the sum of £22.5m. In that context, he made representations to the Marian Fathers to the effect that he was willing and able to fund the purchase of Fawley Court himself and that some funding had been made available, in principle, by the Bank of Ireland (falsely described as “my bankers”). That was a lie. 7. He also presented them with what purported to be a reference from the same Bank, addressed “to whom it may concern”, stating that he was “good for” £25m. On any view, that was again simply untrue. Mr Butler-Creagh seemed to think that this was legitimate as it was only to give “comfort”. The reference itself is alleged to have been fraudulently created at Mr Butler-Creagh‟s instigation by a corrupt employee of the bank, which itself has given evidence to the effect that it has no record of the document and denies its authenticity. A senior bank employee provided written evidence, in particular, that no such letter would have been written on a general basis (“to whom it may concern”) or without the usual disclaimers based on Hedley Byrne v Heller [1964] AC 465. That evidence went unchallenged. 8. It is quite obvious that the supposed reference is not genuine and that the contents are false. The person who prepared it was a former bank employee called Ms Sayeda Rafiq. She had apparently sent it from a (disused) Bank of Ireland fax number to Mr Butler-Creagh‟s then solicitor, Mr Osmond, for onward transmission to the Marian Fathers (through Mr Conway). Until trial, it had been anticipated that she would be called by Mr Butler-Creagh. When he was asked in cross-examination about the “reference”, he sought to direct any “flak” in her direction, by suggesting that counsel‟s questions should be put to her instead. That was the height of cynicism. Shortly after he left the witness box, the decision was made not to rely on her or make any other challenge to the Bank‟s evidence. Ms Rafiq was described by counsel as one of Mr Butler-Creagh‟s “cronies”, to whom he had lent large sums of money (giving rise to an obvious conflict of interest). That fell foul, not surprisingly, of the Bank‟s code of conduct for its employees. The terms on which such monies were lent are unclear. Being wholly improper, there was no documentation recording the payments. 9. Mr Lewis QC canvassed the possibility that she might have misguidedly sought to do him a favour and supplied the reference without his connivance. I find that unpersuasive. It is highly unlikely that she would have used the phrase “good for £25m” without his prompting. At one stage, when interviewed by her employers, Ms Rafiq claimed that her signature on the document had been forged. I cannot decide whether that is so or not. All I need to say is that it was a fraudulent document put forward on Mr Butler-Creagh‟s behalf and with his knowledge. 10. Mr Conway to an extent appears to have taken up the bogus “reference”, since he spoke to Ms Rafiq on 11 July 2008. She lied to him, saying that the Bank was “in principle very happy to provide finance to enable them to undertake the purchase”. 11. Mr Butler-Creagh made a number of other misrepresentations at this time. He claimed in an email of 7 July 2008 that his money-lending business, known as
Page 1: Neutral Citation Number: [2011] EWH
Page 5 and 6: THE HONOURABLE MR JUSTICE EADY Appr

Approved Judgment - clients.squareeye.com

Create successful ePaper yourself

Delete template?

Save as template?