Approved Judgment - clients.squareeye.com

THE HONOURABLE MR JUSTICE EADY
Approved Judgment
Butler-Creagh v Hersham
Mainstream, was valued at £40m. He later explained, in the course of crossexamination,
that this could only be justified on the basis of what he called
“potential”. He at least accepted that it was “slightly exaggerated”. He also claimed,
without supporting evidence, that his home was valued at £4.5m, whereas there was
actually a net equity value of about £1m. Furthermore, he stated that he had £2m in
cash at the bank. That, of course, has a well understood meaning. It would have been
nearer the truth to say that he and Mainstream had overdraft facilities of more than
£700,000 in June 2008. Mr Butler-Creagh personally seems to have had an overdraft
of £65,561. The position worsened over the next six months (a period of dramatic
downturn in the property market and the economy more generally).
12. Against this background, Cherrilow in closing submissions characterised Mr Butler-
Creagh‟s conduct as an “abnegation” of the informal tender process carried out on the
Marian Fathers‟ instructions:
“It was a cynical attempt to take advantage of the Catholic
charity and its difficult circumstances by someone who was
looking to try and implicate himself in the transaction, falsely
achieve a position of some „influence‟ and then, having done
so, achieve some financial advantage for himself.”
The bid he made was not genuine, in the sense that it was his intention, as he accepted
in his witness statement, to negotiate the price downwards once he had succeeded in
the tender process.
13. Having put in the highest bid for the property, Mr Butler-Creagh set about negotiating
with the Marian Fathers to obtain an exclusivity agreement, ultimately dated 1 August
2008, in the hope that this could be exploited if a prospective purchaser emerged who
had the necessary funds available. It is clear from the evidence that the Marian
Fathers and their advisers went along with this proposal only with reluctance and
subject to strict time limits. Accordingly, the agreement imposed on Mr Butler-
Creagh an obligation to proceed with the conveyancing process “as soon as is
reasonably practical” and, if he should decide not to proceed, then to inform the
Marian Fathers immediately (whereupon the agreement would lapse). He also
acknowledged “a mutual duty of good faith”.
14. Meanwhile, quite cynically, he instructed his solicitor, Mr Will Osmond, to “sit tight”
on the sale transaction while he found a suitable candidate. That is confirmed in an
email of 18 August 2008 and again on 7 October, when he gave instructions to
Osmonds to stop work until they heard from him. (Mr Osmond was also
characterised as a “crony”. He too had been lent sums of money by Mr Butler-
Creagh. As in the case of Ms Rafiq, the terms of such arrangements are obscure, as
they appear to have been undocumented. That is a remarkable state of affairs, having
regard to Rule 3.01(2)(b) of the Solicitors‟ Code of Conduct and paragraphs 39 and
40 of the relevant guidance.)
15. The exclusivity deal was, however, limited in point of time, originally expiring on 19
September 2008. It was later extended to 10 October, again with reluctance. Mr
Conway, who was seeking to protect the best interests of the Marian Fathers in
accordance with the Charities Act, had come to the conclusion that the
disadvantageous market conditions justified that course. He confirmed in his witness