National Westminster Bank Plc v Bonas

This action concerns a Solicitor who, acting for one client, acted against a former one. In 1989 Mr Jeffrey Bonas, who appears by Mr Selwyn Bloch Q.C. and Mr Stuart Ritchie, was ordered to pay a substantial sum to his first wife upon their divorce. Brice Droogleever, Solicitors, who appear by Mr Gadd, acted for him in the ancillary proceedings. Mr Bonas borrowed from National Westminster Bank plc a good part of the sum that he was required to pay. A friend, Mr Colin Edwards, who had been a client of Brice Droogleever, guaranteed the borrowing to a limit of £350,000 and charged his flat to the Bank in support.

Despite a number of arrangements sought to have been made over some years, Mr Bonas failed to repay the Bank. A substantial sum, which later became more than £350,000, became owing. Mr Edwards and the flat were at risk; Brice Droogleever advised Mr Edwards. Mr Bonas complained, by reason of Brice Droogleever’s having acted for him in his ancillary proceedings, that that was improper but Brice Droogleever continued to act for Mr Edwards. Eventually, after some dealings which, crucially, Mr Bonas claims were agreed and contractual, Mr Edwards, advised by Brice Droogleever, separately agreed to pay the Bank £230,000; that exonerated him from further liability but left Mr Bonas still exposed to the Bank. In June 1996 the Bank started proceedings against Mr Bonas for some £578,000. In 2001 Mr Bonas raised a Part 20 claim in those proceedings against Brice Droogleever. Although Mr Bonas has settled with the Bank the Part 20 claim did not settle and it alone comes before me.

Mr Bonas claims that Brice Droogleever acted in breach of confidence owed to him, Mr Bonas, and he says that they were negligent and that they deliberately interfered with or procured breaches of contractual arrangements which, he alleges, he had arrived at with Mr Edwards and the Bank. That interference, says Mr Bonas, being by way of breach of confidence, was interference by unlawful means. Mr Bonas, he says, thereby lost the benefit of contracts which would have capped his liability to the Bank and would have left him liable only to Mr Edwards. I am not told of any proceedings by Mr Edwards against Mr Bonas.

I have heard oral evidence, mainly by way of cross-examination, from Mr Bonas and Mr Edwards for the claimant and from Mr Brice, Mr Knight and Mr Crossman for Brice Droogleever. I should say something in general terms about these witnesses.

As the judgment unfolds it will be found that on a number of issues I have preferred the evidence of persons other than Mr Bonas. He was, for a short span, a man of exceptional wealth and, perhaps to protect that position, cloaked his affairs with “offshore” Isle of Man trusts and Isle of Man and Swiss bank accounts. Anyone who goes to such lengths to achieve opacity but then later finds himself in debt can hardly complain when others conclude that it might be that he has more resources than he is claiming to have. That possibility for a number of years coloured the response to him of the Bank, of Brice Droogleever and even of his friend Mr Edwards. In particular, so far as credibility is concerned, as will be found below, I hold that he did offer a company to Mr Edwards as recompense for Mr Edwards finding himself having to pay the Bank under the guarantee and being liable also to lose his flat on that account. Any such offer, of course, suggested that the company in question was at his disposition and thus was inconsistent with his claim that by then he had no undisclosed resources. Before me Mr Bonas was thus forced to deny that any such offer had been made. However, as I shall explain below, I preferred the evidence of his own witness, Mr Edwards, and of Mr Brice on the issue; the offer of the company was made. I cannot regard Mr Bonas as a reliable or candid witness.

Mr Edwards was put into an uncomfortable position. He has been in severe financial difficulties himself as a name at Lloyds and now finds himself trapped between, on the one hand, an old friend, Mr Bonas, who, after a period during which that friend had not been trusted, has at least now been restored to a position devoid of hostility or mistrust, and, on the other, Brice Droogleever, and in particular Mr Brice of that firm, whom he had come to know well after having had the firm act for him for many years. Now restored to better relations with Mr Bonas, he tended, if anything, to understate the mistrust, distaste or even anger that earlier affected his attitude to him. I hold Mr Edwards, though, to have been a witness who in general wished to tell the truth as he saw it to have been. On one important issue I do not accept his version of events but that I hold more to have been a matter of a failure of chronology or memory rather a lapse into deliberate untruth.

Mr Brice, as I shall explain, acted for Mr Edwards when he should not have done so and acted in breach of confidence. He should have realised long since that that was so but my impression was that it was only during the hearing itself that he truly came to acknowledge his shortcomings. When faced with the obvious he ultimately accepted it and he may properly be criticised for the tardiness in his doing so but I do not find him to have been untruthful in his evidence to me. Nor, although this was hinted at by Mr Bloch Q.C. for Mr Bonas, do I find that he either destroyed, concealed or altered attendance notes. Attendance notes made by him in the course of the events I shall need to look at are far less frequent than one could reasonably expect but I regard that as a matter of poor practice in a small firm in which there was no-one to correct or supervise him rather than as indicative of what would have been very serious professional malpractice.

Mr Knight and Mr Crossman both acted for the Bank during the relevant events but neither is still employed by the Bank. To that extent they were a little more remote from bias or interest than were the other witnesses and although, inevitably, their memories were chiefly as was provoked by the Bank’s contemporary notes rather than being truly fresh, the Bank’s notes were relatively copious and I have no reason to have any doubts about the credibility of either of these two.

With that general background I turn to the facts.

In 1986 Mr Bonas and his first wife, Elspeth, divorced. The financial provision he was to make for her was not agreed and the issue went to proceedings. Mr Bonas became dissatisfied with the solicitors who had been acting for him and in late 1988 or early 1989 he became the client of Brice Droogleever. That was some 5 months before the hearing of the ancillary proceedings at which the financial provision to be required of him was to be decided. Although he was the client of a firm rather than of one individual, I have had no evidence of any material dealings by the firm other than by way of Mr James Brice and I shall, for simplicity, refer to “Mr Brice” throughout though thereby meaning to cover both him and the firm.

I have not seen the papers in the ancillary proceedings nor the judgment but I have received some evidence about what was said by one party or another and what the judgment said. My impression is that the proceedings were very hard fought; the hearing itself took some 9 days or so. Mr Bonas says that for the purposes of the proceedings, in which Counsel was instructed on his behalf, he provided Mr Brice with information concerning his entire financial position from 1967 to 1989. That included, he said, details of his directorships at and remuneration from Wrightson Wood International Ltd. (“Wrightson Wood”) and McCulloch & Wallace Limited.

The parties to the ancillary proceedings were very far apart. Elspeth had given evidence that Mr Bonas had been chairman of the London & Liverpool Trust and had, she said, once owned shares in it worth £28m, although it was accepted, I think, that by the time of the proceedings all or most of that value had been lost upon that Trust going into receivership. Mr Bonas’ affairs involved alleged connections with Isle of Man trusts or companies and with Swiss and Isle of Man bank accounts. Elspeth’s case, presumably, was that a person who had once been of such high net worth, however briefly, and whose affairs were cloaked by offshore trusts and secretive accounts would have retained far more than Mr Bonas was admitting to, his case being that, so far from having any net worth, he had net liabilities in total of some £73,000. I accept Mr Brice’s evidence that Johnson J., who heard the ancillary proceedings in camera and gave his judgment also in camera, said that on the evidence he had received he could not form any truly accurate opinion as to Mr Bonas’ assets and I accept also Mr Bonas’ evidence that in the Learned Judge’s estimation he, Mr Bonas, was worth about £2,500,000. Although Elspeth’s evidence and that given by her side was apparently largely circumstantial, she made a compelling case as to the existence of undisclosed offshore or other undisclosed assets and was successful to the extent that the Learned Judge ordered provision totalling £1.2m in Elspeth’s favour. The Judge was satisfied, said Mr Brice, that that still left Mr Bonas with “enough”.

The Judge’s view, of course, was totally inconsistent with Mr Bonas’ view of his net worth being minus £73,000 and I accept the evidence that the judgment included disparaging remarks about Mr Bonas’ reliability as a witness.

Exactly how Mr Bonas had said his net liability position was arrived at is not available to me but it is Mr Brice’s evidence that despite his receiving some information from Mr Bonas in the course of acting for him in the ancillary proceedings and despite his having heard the evidence given in camera from Elspeth’s side, he nonetheless was in such a position that if, for example in order to enforce a judgment, he had, after the award in Elspeth’s favour, then been asked to pinpoint even a single asset that was in Mr Bonas’ ownership, he would have been unable to do so. He had, he said, no information as to any tangible asset of Mr Bonas. I accept the substance of this evidence from Mr Brice.

Of the £1.2m awarded in Elspeth’s favour, part was provided by way of the contents of the matrimonial home and part by way of a payment, required to be effected by the 31^st August 1989, of a sum of money. Mr Bonas’ witness statement said that the sum required to be paid was £564,000 of which £249,000, it reads, was provided from an account at Swiss Bank Corporation (“SBC”). These figures were later corrected by Mr Bonas in his oral evidence. It seems that £235,425.50 (or perhaps the equivalent of that in Swiss Francs) was received from Switzerland and that £315,000 (in fact, as later became clear, its equivalent in Swiss Francs) was borrowed from the National Westminster Bank (“the Bank”). An aggregate of £550,425 was paid into the name of Mr Bonas’ (by then) second, wife, Lady Mary Gaye Bonas, at Hoares and then paid to Elspeth (or her solicitors). No satisfactory explanation is given of why the account of Lady Mary was used but it could have created an impression or have conduced to one that it was she who was paying or contributing to the payment. Mr Bonas says that the SBC account was the trust account of a family trust. He said that they (the Trustees presumably) were under instructions, presumably his, to sell everything. He also extended the mortgage on his flat in Verbier. Not all of this was likely to have been known to Mr Brice at the time; he, for example, had understood that the borrowing from the Bank was in sterling

Mr Bonas’ witness statement continued -

“As a consequence of the transfer of the SBC funds I was left with no significant beneficial interest in any assets other than my interest in Wrightson Wood International Limited, and my flat in Verbier, which was then subject to a mortgage of 500,000 Swiss Francs.”

Mr Bonas does not indicate what he had in mind by reference to the word “significant” and that passage suggests that he had no material interest in McCulloch and Wallace.

Mr Bonas’ borrowings from the Bank were required by the Bank to be fully secured. As part of that requirement, Mr Bonas turned to a friend of his, Mr Colin Edwards. They had known each other for several years and had done some business deals together. Mr Bonas had helped Mr Edwards in a relatively small way at some juncture and the favour was now returned but enlarged. Mr Edwards offered to guarantee Mr Bonas’ borrowing to the tune of £350,000. In late July 1989 Mr Edwards told the Bank that he would offer his flat at 27 The Little Boltons, London, SW10 (“No. 27”) to secure that guarantee of up to £350,000.

Mr Edwards was a long established client of Mr Brice and Mr Brice was given instructions by the Bank to act for it in advising Mr Edwards on the guarantee and charge and in seeing to the registration of an appropriate charge on No. 27. Mr Brice did not act for Mr Bonas in relation to the borrowing, guarantee and charge. Mr Edwards duly guaranteed Mr Bonas’ borrowing to the maximum extent of £350,000 and duly secured that obligation on No. 27 in August and September of 1989. Mr Bonas had agreed to pay Mr Brice’s legal fees and they were paid, by a cheque drawn on Lady Mary’s account. When Mr Brice had advised Mr Edwards on the potential liability under the charge and guarantee, Mr Edwards’ body language and gestures suggested to Mr Brice that Mr Edwards was quite relaxed about the risk. Mr Brice told me and I accept that he did wonder himself whether there was some “behind the scenes” agreement between Mr Bonas and Mr Edwards whereby in return for giving the guarantee and security within this jurisdiction Mr Bonas was to provide Mr Edwards with some hitherto undisclosed assets or security elsewhere. Body language apart, that something such was contemplatable is seen from the Bank’s notes of the 14^th August 1989 in which the Bank writes of its not pressing for a charge on Mr Bonas’ “holding of the shares in MacCulloch and Wallace Limited” as they were to be held, so understood the Bank, by Mr Edwards in consideration of his providing the guarantee to the Bank. It is Mr Bonas’ case that he has not and has never had a holding of or any beneficial interest in shares in McCulloch & Wallace but rather that he is merely an employee and director of that company. Nor, as I understand his evidence, had Mr Bonas any shares or beneficial interest in shares in Wrightson Wood but rather that he had some right to acquire the same on very favourable terms. No documentary evidence of such rights, to 20% of the issued share capital, was shown to me.

Mr Bonas was dissatisfied, he says, with the manner in which Mr Brice had acted for him in the ancillary proceedings. He considered, with another firm of solicitors, whether to appeal the Learned Judge’s judgment but did not do so. But neither did he pay Mr Brice’s fees and on the 13^th December 1989 Mr Brice commenced proceedings in Queen’s Bench (“the Fee Proceedings”) for 3 unpaid Bills of Costs, chiefly relating to the ancillary proceedings. In his defence and counterclaim of the 4^th February 1990 Mr Bonas indicated that whether he had any beneficial interest in offshore companies had been an essential issue in the ancillary proceedings and gave particulars of 8 offshore companies the beneficial interest in which had most specifically been in issue. Mr Brice’s reply and defence to counterclaim alleged that if Mr Bonas had suffered any loss it had been his own fault. He had, said the pleadings, persistently lied during his evidence in the ancillary proceedings and had, in identified respects, been dishonest also prior to the trial, including by way of his not making proper disclosure of his assets, which included beneficial interests in offshore companies which he controlled. Although the reply and defence to counterclaim was not, under the then practice, required to be endorsed with a statement of truth and although the pleading, signed by Counsel, was likely to have depended in large part on Counsel’s reading of the judgment of Johnson J. I accept that in asserting that Mr Bonas had lied as to interests in offshore companies and had not made proper disclosure of his assets it represented what Mr Brice felt at the time had been the case.

The Fee Proceedings were settled by Mr Brice’s acceptance of £15,977 payable (and, I apprehend, paid) by Mr Bonas by instalments. That represented a compromise at roughly ¾ of the amount of the claim and recoverable costs (taking the latter to be some ²/₃ of the costs actually incurred). Mr Brice in his witness statement says:-

“Nevertheless at that stage I was mindful of the fact that I had no information concerning Mr Bonas’ means and assets nor did I know of any assets against which I could enforce any judgment. I subsequently agreed to settle the claim for the sum of £15,977 inclusive of interest and costs which was payable by three instalments the last being due at the beginning of the following June. Had I had knowledge of any actual assets belonging to Mr Bonas I would almost certainly have taken a much more robust line in the settlement discussions as I did not consider Mr Bonas had any possible defence to my firm’s claims for costs.”

I do not accept that Mr Brice had no information concerning Mr Bonas’ means or assets but I do accept that he still could not pinpoint any assets against which he could have enforced any judgment.

The underlying facts here are, at several points, less than well-proved but it would seem that in May 1989 Chase Personnel Holdings Limited, a subsidiary of Wrightson Wood, paid £32,500 to the Isle of Man bank account of Trafalgar Management Limited. The sum was intended to be repaid in full and with interest. Trafalgar was managed by a Mr Qualtrough, whom Mr Bonas had known for some time. Mr Bonas had authorised Chase’s transfer of the sum to Trafalgar. It was paid, so said Mr Bonas, to rectify an administrative mix-up on Trafalgar’s client account. But it was found that Trafalgar was already the subject of a petition in the Isle of Man and to an injunction. On the 26^th May 1989 Chase petitioned the Court in the Isle of Man on the footing that the £32,500 had been a temporary loan made in ignorance of the Isle of Man proceedings and of the injunction against Trafalgar and asking for the return of the sum with interest. Also on the 26^th May 1989 Mr Bonas swore an affidavit in the Isle of Man proceedings describing the £32,500 as a temporary injection. The sum was not returned and Trafalgar went into administration or liquidation. The liquidator or administrator resisted repayment of £32,500. However, on the 9^th March 1990 Wrightson Wood by Mr Bonas offered to sell the deposit to Mr Edwards; Mr Bonas wrote to Mr Edwards as follows:-

“This deposit was lodged in May 1989 in the client account of Trafalgar Management Ltd. As such it is protected by Isle of Man law which I am advised is similar to the UK law in protecting client deposits. This deposit is refundable as and when the Administrator of Trafalgar Management has wound up its affairs which he is in the process of doing. We cannot say when the deposit will be refunded but it should be fairly soon. We have not been advised of any reasons why it should not be refunded and indeed have been advised by solicitors Morris Maddrell that it will be refunded. Nevertheless, if for any reason it is not refunded and in the event of your purchasing this deposit, Wrightson Wood International undertakes to indemnify you against any loss.

We are prepared to sell you the deposit for £32,500 provided we receive a cheque for £32,500 by 31 March 1990. The deposit has interest attached to it at Barclays Bank Deposit Rates going back to May 1989 and the accrued interest together with any further interest which is continuing to accrue will be your property together with the principal.”

It is difficult to see how the same advance to Trafalgar could at one and the same time be a “temporary injection” or “temporary loan” and a payment into client account, nor is it easy to visualise how a new payment into client account could help to rectify an “administrative mix up”.

Mr Edwards paid the £32,500 on the basis of that letter He was not told of the Isle of Man proceedings or of any orders made therein. He later became concerned about the money and consulted Mr Brice. Mr Edwards had also become concerned because Mr Bonas had told him that he, Mr Bonas, did not have any money and that the Bank therefore might foreclose on the charge on No. 27. Mr Brice’s contemporary attendance note says:-

“I advised him [Mr Edwards] that from my previous knowledge of Bonas I did not believe his claim that he was without money and informed him [Edwards] that in my opinion he [Bonas] had substantial funds offshore. I stated that I would revert to him when I had investigated the present position of Trafalgar and his deposit and that I will consider the best way of approaching Bonas.”

Mr Brice made contact with Mr Paul Morris of Morris Maddrell, the Isle of Man solicitors who had been identified in Mr Bonas’ letter of the 9^th March 1990 Mr Morris was acting on behalf of Wrightson Wood in trying to recover monies owed to Wrightson Wood by Trafalgar. On the 22^nd March 1991 Mr Brice wrote to Mr Edwards saying, inter alia, :-

“Mr Morris denied that he had advised Jeffrey [Mr Bonas] that the deposit would be refunded by Trafalgar Management, indeed he expressed doubts that the liquidator would be able to repay Trafalgar creditors in full at the end of the day. I have written to him requesting the name and address of the liquidator and as soon as I have it I will write to him for a full report. It is within my own knowledge that Jeffrey knew that there were problems at Trafalgar Management in May 1989 when the Chief Executive of Trafalgar was reported in the Financial Times to have been arrested for misappropriation of funds. Although I am not yet in possession of all the facts I am certain that when he wrote to you on the 9^th March 1990 Jeffrey knew perfectly well that there were problems at Trafalgar; it is certainly possible to say that his letter was less than straightforward and it is possible that it may even have been fraudulent.”

Mr Brice got in touch with the solicitors to the Liquidator of Trafalgar who told him of criminal charges having been made against Mr Qualtrough and said that unsecured creditors of Trafalgar could not expect to receive back much of their money. Mr Brice on the 3^rd May 1991 re-iterated, in a letter to Mr Edwards, that Mr Bonas had known in May 1989 of the problems at Trafalgar and that Mr Bonas had thus misled Mr Edwards. Mr Brice wrote that Mr Bonas must have known, when writing the letter of the 9^th March 1990, that it was at best uncertain whether Wrightson Wood would receive the return of the deposit and he concluded his letter as follows:-

“Taking into account the above and the indemnity from Wrightson Wood he has given you, you have a cause of action against both Wrightson Wood and Jeffrey for the repayment of your money. I am mindful of the fact that what Jeffrey has done might even be a criminal matter as it appears he may have obtained a pecuniary advantage by deception. I look forward to receiving your instructions when you have considered the above.”

The chief defence or explanation, as I have understood it, which is offered on Mr Bonas’ behalf as to the Trafalgar episode is that Mr Edwards was in any event indemnified by Wrightson Wood. That indemnity, it is said, could properly have been and was thought at the time to have been a good indemnity. The indemnity did not prove to be a good one but it is in my judgment impossible, legally or morally, to justify the Trafalgar transaction and the representation in Mr Bonas’ original letter by saying that, after all, an indemnity against loss was offered.

Given Mr Bonas’ silence in his dealings with Mr Edwards as to the Isle of Man proceedings and orders, given that the £32,500 was described a temporary loan, given the difficulty in seeing how a deposit, if put on client account, could ameliorate Trafalgar’s position and given the fact that, as it seems, Mr Morris of Morris Maddrell had never advised that the sum would be refunded, it is impossible to criticise Mr Brice’s conclusion that Mr Bonas’ original letter had been less than straightforward and might possibly even have been fraudulent. Mr Brice’s investigation of the Trafalgar affair had not been his own unprompted doing; Mr Edwards had given Mr Brice the telephone number of Mr Morris of Morris Maddrell in order that Mr Brice should be able to make inquiries. It became clear to Mr Edwards that he was not going to get back the £32,500, at any rate from Trafalgar, and he was angry at the position that emerged. If the case truly was that Mr Morris had denied that he had given the advice ascribed to him in Mr Bonas’ letter of the 9^th March 1990 (as Mr Brice wrote in his letter of the 22^nd March 1991, upon the truth of which, in that respect, he was not cross-examined) then, said Mr Edwards to me, he had been grievously misled by Mr Bonas. The Trafalgar episode changed Mr Edwards’ view of Mr Bonas, moving him towards the view that Mr Bonas was not a man to trust. Mr Edwards remained of that view until a date in the mid-1990s, as I shall come on to.

Mr Brice, at the same time as making his inquiries into the Trafalgar position, asked the Bank to advise him how much was currently charged on No. 27. He was put in contact with Mr Moretta of the Bank who told him that Mr Bonas’ borrowings, those secured by Mr Edwards, had been by way of an Isle of Man account and were in Swiss Francs and that at the then current rate of exchange the indebtedness was of some £343,648. I accept Mr Brice’s evidence that it came as a surprise to him that the borrowing had been in Swiss Francs. He wondered why that had been so; it would, in his experience, have been an unusual thing to do if the object of the borrowing had been merely to pay the sterling debt to Elspeth.

Mr Edwards’ own financial position was by now in severe difficulties as he had been substantially committed as a name at Lloyds. Unknown, as it would seem, to the Bank, who thought that Mr Edwards lived there, No. 27 had been let and Mr Edwards was, by reason of his difficulties at Lloyds, now heavily dependent on the rental income. He asked Mr Bonas to procure the release of No. 27 from the charge to the Bank but Mr Bonas told him that he was without resources and was thus unable to help. Attempts were being made at the time to sell Wrightson Wood but little interest was being shown by prospective purchasers.

At the time Mr Edwards did not believe Mr Bonas’ assertions that he had no money. He was unconvinced of that; he felt Mr Bonas’ lifestyle had remained as it had earlier been and from March 1991 onwards he recognised that there was a risk of his being obliged to sell No. 27. His intentions at the time were firstly to try to persuade Mr Bonas to pay off the Bank (presumably, mainly out of the as yet undisclosed assets which Mr Edwards felt that Mr Bonas had or might have or perhaps from Bonas family money) and, failing that, as best he could to minimise whatever sum he was to be called upon to pay the Bank under his guarantee. He wanted, nonetheless, to be seen to remain on friendly terms with Mr Bonas lest recovery of whatever he might be called on, to pay the Bank should ultimately depend on some further dealings with him.

I do not hold that Mr Brice either deliberately set about creating or inflaming Mr Edwards’ anger at the emerging position nor that he inquired into the Trafalgar affair or into Mr Bonas’ borrowings at this time in order, or hoping, to furnish Mr Edwards with grounds to mistrust Mr Bonas. Mr Edwards was at this time in frequent contact with Mr Bonas and with Mr Brice. He asked Mr Brice, as his solicitor, solicitor to a guarantor and chargor whose property was at some risk, to look into matters. Mr Edwards’ instructions to Mr Brice were that he wished to remain on friendly terms with Mr Bonas but that he nonetheless wished to put some pressure upon Mr Bonas to encourage him to make arrangements so as to prevent the Bank having recourse to No. 27. I do not doubt but that Mr Brice, by reason of his familiarity with Mr Bonas and his affairs gained during the ancillary proceedings, had a view that Mr Bonas might, during those proceedings, have had and might then still, in 1991, have had offshore or other undisclosed assets, that he did not trust him and that, as his letter of 22^nd March 1991 shows, that he had special knowledge of Mr Bonas’ awareness of problems at Trafalgar. But I hold that whilst that such matters were in his mind as he began to enquire into the Trafalgar episode and into the state of the account between Mr Bonas and the Bank, they did not materially affect his actings or, indeed, Mr Edwards’ attitude to Mr Bonas. Having made inquiries which, by way of implementation of Mr Edwards’ instructions, any disinterested solicitor would have made, Mr Brice then gave advice to Mr Edwards as to the Trafalgar episode which, although informed by a lack of trust in Mr Bonas and in stronger terms than many solicitors would have used and given with a conviction which some solicitors would have lacked, was, for all that, of a kind which any disinterested solicitor would have been likely to have given.

The Bank, which had been so far tolerant of Mr Bonas’ failure duly to service his borrowings and had been content to rest on the security of No. 27, began in late May 1991 to consider transferring the accounts to their insolvency and debt recovery department. Mr Bonas telephoned Mr Brice suggesting that they should meet and a meeting was arranged for the 13^th June. Before the meeting Mr Brice wrote to Mr Bonas saying:-

“I should make the point that in connection with this matter I am acting for Colin [Mr Edwards] in order to protect his interests but I am not in any way acting as a go-between in respect of any dispute which may arise between you.”

On the 9^th May 1991 receivers were appointed over Wrightson Wood. It became apparent to Mr Edwards that there was no real prospect of recovering the £32,500 he had paid for the Trafalgar deposit without his having to launch legal proceedings. That he was unwilling to do. No further steps were taken in relation to the Trafalgar episode.

Mr Bonas’ guarantee of some Wrightson Wood borrowings from Hill Samuel was called in and ultimately there was a judgment against Mr Bonas in favour of Hill Samuel. In the course of informing Hill Samuel as to Mr Bonas’ financial position, a draft Statement of Affairs was drawn up for Mr Bonas which, as at the 18^th June 1991, indicated, says Mr Bonas, that he was insolvent to the extent of approximately £1.5m. In negotiations with Hill Samuel and Mr Bonas agreed to pay any annual income he had above £40,000 to them, over the next 5 years. His income, from 1991 on, as I have understood his case, has been only his income as a director and employee of McCulloch & Wallace.

Mr Brice’s evidence is that at the meeting on 13^th June Mr Bonas, after indicating that he was heavily insolvent and that his accountant was preparing a Statement of Affairs that would show that to be the case, then offered to transfer McCulloch & Wallace, worth, he said, some £250,000, to Mr Edwards. He said that the company was owned by an offshore trust, a Swiss one, but that he could arrange for its transfer to Mr Edwards if Mr Edwards agreed to sell No. 27 and thereby paid off Mr Bonas’ debt to the Bank. Mr Bonas disputes this version head on in his evidence to me. He said he did not own McCulloch & Wallace shares nor was he a beneficiary of the trust which did. He added that one cannot hand over that which one does not own. However, as if to cover the possibility that he might be found to have offered McCulloch & Wallace to Mr Edwards, he added that if he had re-capitalised McCulloch & Wallace he could have offered that interest in it to Mr Edwards and that that had been going through his mind. He did not explain whence the means necessary for his recapitalisation of McCulloch & Wallace would have come.

I accept Mr Brice’s evidence that an offer of a transfer of McCulloch & Wallace to Mr Edwards was made to Mr Brice on 13^th June. I do not accept Mr Bonas’ version, which was that no such offer was ever made. Mr Brice’s oral evidence and his contemporary note of the meeting suggest that the offer was made and Mr Edwards (who was not at the meeting on the 13^th June), whilst unable to say when or where it was that Mr Bonas had made the offer to him, nonetheless was clear that Mr Bonas had offered him McCulloch & Wallace. He declined the offer. He told me “didn’t want a school uniform manufacturer”. Mr Bloch Q.C. sought to undo the effect of his own client’s witness, Mr Edwards’ evidence on the point by saying that McCulloch & Wallace was not in fact a school uniform manufacturer but I can attach little weight to that as there was no doubt in Mr Edwards’ mind (or any in Mr Brice’s) that it was McCulloch & Wallace that was offered.

The importance of the offer was, of course, that it strongly suggested to Mr Brice when he heard it on the 13^th June and can only have suggested to Mr Edwards whenever precisely Mr Bonas made the offer to him that Mr Bonas had assets available to him (and assets offshore at that), whatever the ostensible position might have been as to their ownership. The offer thus was likely to have fuelled deep suspicions as to Mr Bonas’ having offshore or other undisclosed assets and thus conduced also to a view that if sufficient pressure were to be put on Mr Bonas he might come up with assets and thereby lift the burden that was otherwise on Mr Edwards and on No 27, the continuing receipt of the letting income of which was still important to Mr Edwards.

After the meeting Mr Brice wrote to Mr Edwards in terms hostile to any reliance upon Mr Bonas, terms which at points plainly derived from information gained or an impression formed when he had been Mr Bonas’ solicitor. He said:-

“I suggested to Jeffrey that if he was asking you to accept his claim that he is at present insolvent and does not have any assets outside the country, that it would helpful if he would supply me with full details of the Swiss bank account which had been used to make interest payments in Swiss Francs. This request produced an immediate change of attitude on his behalf, his face assuming a look which I have often seen before when he has been faced with an awkward question. He curtly dismissed my suggestion by stating that the bank account was no longer in existence.”

Later in the letter Mr Brice said that on the basis of past experience Mr Edwards could not trust Mr Bonas adding:-

“I personally do not a believe a single word that Jeffrey says on account of my dealings with him throughout his divorce, my own dealings with him over the question of our costs and the manner in which he has conducted the two conversations and meetings I have had with him concerning your own affairs. My belief that he has money abroad is only a strong supposition but it is based on the fact that most of the facts we know about Jeffrey can only be explained by the fact that he has money abroad.”

Amongst the factors relied upon in support of that conclusion was that although Mr Bonas had claimed he was penniless he had managed to produce the unborrowed part of the provision that had to be paid to Elspeth and had never explained how that had been done. Mr Brice continued:-

“I understand that your reluctance to take proceedings against him to date is influenced by the belief that you may do better to try to settle this with him but my view remains that you cannot trust him at all and I think that it is only recovery proceedings with the consequent threat of bankruptcy proceedings which will produce the desire[d] ... result.”

At the meeting on the 13^th June Mr Bonas vigorously complained to Mr Brice that the solicitor was now acting against his former client and that it was quite wrong for him to do so. Mr Brice, however, made it plain enough that he was going to continue to act for Mr.Edwards. I shall later deal with the propriety or otherwise of that. Mr Bonas, whilst accepting in evidence to me that he did not tell Mr Brice it the meeting that what was then being told to the solicitor was to be kept confidential and was not to be repeated to Mr Edwards, nevertheless said in evidence that what he then told Mr Brice was not to be told to Mr Edwards without Mr Bonas’ consent. I do not accept that; Mr Brice had made it quite plain in his letter before the meeting that he was acting for Mr Edwards and would be doing so at the meeting. I am able to find nothing said at, or to be implied in relation to, the meeting which would have denied to Mr Brice his ability to pass on to Mr Edwards what he was then told or what he was told by Mr Bonas at the two further meetings he had with Mr Bonas in 1991. To the extent that Mr Bonas relies on Mr Brice’s or Mr Edwards’ use of such material as being in breach of confidence owed to Mr Bonas, the claims thus fail.

Mr Bonas a little later asked for confirmation that Mr Brice would not act against him and said that if the solicitor failed to give that confirmation “My solicitors will be instructed accordingly”. There is nothing to suggest that any such instructions were given for some time.

In the meantime the Bank had made formal demand on Mr Bonas for immediate payment of £1588.35 in sterling and 880,587.42 Swiss Francs. The Bank added, after reference to accruing interest,:-

“And in the event of our not receiving such payment we shall proceed to exercise our rights under any security which we may hold.”

On the 25^th June 1991 Mr Bonas supplied to Mr Brice a copy of an unsigned Statement of Affairs purporting to show assets of some £157,500 but a net deficiency of £1,501,000. It was Mr Bonas’ case at the time that “I have no income to even pay the interest”.

Mr Edwards was due to meet Mr Brice on the 1^st July and Mr Bonas was invited to join that meeting. This was against a background in which Mr Bonas had by now repeatedly indicated that it was not right for Mr Brice to continue to act for Mr Edwards in any way inimical to Mr Bonas’ interests. Mr Brice had considered the then current edition of the Guide to the Professional Conduct of Solicitors but felt that he had no relevant knowledge that had any bearing on the matters then in play. Mr Brice also telephoned the Ethics and Guidance Department of the Law Society but it is difficult to put any real weight on that fact given that I am not told the terms in which the department had the problem posed to them nor do I have evidence from them of their answer. Remarkably Mr Brice made no attendance note of what he said to them or they to him.

At the meeting between Mr Bonas, Mr Brice and Mr Edwards on the 1^st July 1991 the figures in the Statement of Affairs and the reasons for them began to be discussed but, when Mr Bonas again indicated that he objected to Mr Brice acting, Mr Brice asked him on what was the objection based. Mr Brice’s contemporary note recorded Mr Bonas saying that the main reason why he, Mr Bonas, objected was that the solicitor was useless. Mr Brice’s witness statement says that Mr Bonas had described him as “absolutely f.. . .ing useless”. Mr Bonas, who accepted he had been angry with Mr Brice, indeed furious, said that he could not remember exactly what was said and disputed that he had said that Mr Brice’s uselessness had been the stated main reason for his insisting that Mr Brice should not act for Mr Edwards. Mr Brice’s letter to Mr Bonas of the 2^nd July described the event, including reference to his own utter uselessness having been given as the main reason for the objection to his continuing to act. Mr Edwards’ evidence, too, was that at a very unpleasant meeting he had found himself in the middle of a violent disagreement in which in “relatively strong language” Mr Bonas’ general thrust had been that Mr Brice was useless and that that was the reason why Mr Bonas did not want Mr Brice to continue to act for Mr Edwards. I prefer the Edwards and Brice versions. Whilst I would accept that Mr Bonas could not be expected to remember the exact words used I am unable to accept that he did not remember that he had described Mr Brice as useless and had done so in very strong language. I accept also the Brice and Edwards evidence that was, in effect, that someone listening to what was said at the meeting would have taken Mr Bonas to have been describing Mr Brice’s utter uselessness as the main reason for him wishing that Mr Brice should not continue to act.

Mr Bonas’ strong language, hardly surprisingly, soon brought the meeting to an end but before the strong language had been used Mr Bonas had made it clear that he was insolvent, that he could not make any proposals to the Bank to settle his indebtedness, that he would let Mr Brice have details of the Swiss bank account from which, ultimately, the provision for Elspeth had been made and that he had once again raised the possibility of transferring McCulloch & Wallace to Mr Edwards. Mr Edwards in his oral evidence said that it could have been that it was at that meeting that Mr Bonas had offered him McCulloch & Wallace. Mr Brice ascribed Mr Edwards’ remark that he was not interested in a business of selling school uniforms to that meeting. I hold that the offer of McCulloch & Wallace to Mr Edwards was mentioned by Mr Bonas to Mr Edwards, if on no other occasion, then at the meeting of the three on the 1^st July.

Before the meeting had broken up on the 1^st July Mr Bonas indicated that he would write to SBC asking them to send the closing statement of his account 565054EK direct to Mr Brice. I do not regard Mr Brice’s enquiry into and request for information as to the Swiss Bank account to have been triggered or affected in some way that would have not occurred had Mr Edwards been using a Solicitor without Mr Brice’s knowledge of the ancillary proceedings. Any guarantor’s and chargor’s Solicitor, faced with a situation in which the primary debtor was in difficulty and was pleading poverty in answer to the principal creditor, would want to see what assets the primary debtor had, how the guaranteed debt had arisen and what dealings there had been on the guaranteed account. I do not hold there to have been any breach of confidence or other abuse of his position by Mr Brice in his so acting. Mr Brice received some SBC bank statements direct from SBC in mid-July. He wrote to Mr Edwards with doubts about the completeness of the information that they gave, which included doubts which could only have been based upon his knowledge of the way in which provision had been made for Elspeth.

By now, July 1991, consideration by the Bank of Mr Bonas’ accounts and position was in the hands of the Bank’s Insolvency and Debt Recovery Department. On the 29^th July the Bank made formal demand upon Mr Edwards asking him to make proposals for the discharge of his liability under his guarantee of the liabilities of Mr Bonas.

Mr Edwards passed the correspondence to Mr Brice who, on the 1^st August 1991, wrote to Mr Edwards saying :-

“I realise that this whole episode, coming at the time it does, is placing a tremendous strain on you. I will do all I can to help you out of it and I have repeatedly said to you I remain of the view that in all probability Jeffrey does have funds outside this country. I cannot be certain of this although the one thing that is certain is that much of the information which he has given us to date which is capable of independent verification has turned out not to be true. I cannot at this stage pretend to you that there is going to be any easy way out of this but I am hopeful that in the long term I will be able to achieve something for you as against Jeffrey.”

Part of Mr Brice’s doubts derived from what he took to be the Bank’s likely position; he assumed that the Bank would not have lent without having been satisfied as to Mr Bonas’ ability to service the loan and also that if the Bank, after making the formal demands, was seen not actively to begin pursuit of Mr Bonas, that would indicate that the Bank felt that Mr Bonas had assets of which Mr Brice and Mr Edwards had no knowledge.

There was correspondence between Mr Brice and Mr Bonas as to what bank statements Mr Brice had asked for and what he had required thereby to be illustrated. By this stage no SBC statements covering the period when payment was made to Elspeth had yet been disclosed to Mr Brice. Mr Bonas asked SBC to supply him, Mr Bonas, with some 1989 statements on account 5605EK. He attended at Mr Brice’s offices on the 2^nd September 1991 when he showed to Mr Brice photocopy bank statements of that account covering the period July and August 1989. I accept Mr Brice’s evidence, which was not contradicted by Mr Bonas, that Mr Bonas declined to allow Mr Brice to retain or photocopy the statements which he was then shown On the 3^rd September Mr Brice reported to Mr Edwards what he had been able to derive from the bank statements. He said:-

“The information which [Mr Bonas] gave to us does not take us any further in that the papers he produced did not convince that he had no other assets outside the jurisdiction. It appeared quite clear from the copy statements that the Swiss bank account was merely used as a channel for funds coming from elsewhere. Where they came from was not possible to ascertain”

Whilst one has to have in mind the difficulty of proving a negative - that Mr Bonas had no offshore assets at all - Mr Brice’s comment on the accounts he had seen was not unfair, especially bearing in mind that he was not allowed to retain a copy of them. The statements show the realisation of some bonds or equities but in whose name they had stood was, of course, not disclosed. The statements did show a transfer out of 5650EK of 445,028 Swiss Francs on the 25^th August 1989, a transfer which in oral evidence Mr Bonas said was to the client account of Mr Brice’s firm. However, if the Swiss Franc-to-£l rate at the time was the rate of 2.5 Swiss Francs to the £1, as Mr Bloch told me was the case, it is not possible precisely to reconcile that transfer with the CHAPS receipt by Mr Brice’s firm of £235,425.50 on August 31^st. Nor did the statements show the closure of 56505EK as that account was, so far as one can tell from the statements, still open as at the 31^st December 1989, with a balance in the account holders’ favour of either 16,714.60 Swiss Francs or 180 Swiss Francs, the statements puzzlingly seeming to indicate both balances. Even given the difficulties to be encountered by Mr Bonas in proving a negative such as that he had no offshore assets, one can understand the comment to Mr Edwards on the 3^rd September which I have cited.

By now Mr Edwards regarded his position, with some justice, as one of desperation. He told Mr Brice that he was one of the most exposed “names” at Lloyds having no “stop loss” policies and having been involved in, amongst other syndicates, the Feltrim Syndicate. He told Mr Brice that he would be “effectively wiped out” and that he had to place No. 27 on the market. He thought that £325,000 would be a realistic price for it to fetch in a weak market. He was going to require some toleration of delay by the Bank if the best price was to be fetched and he asked Mr Brice to approach the Bank in order that the Bank should take a sympathetic view of his position and his proposal. Mr Brice sought to do that, pointing out to the Bank on the 16^th September that Mr Edwards was unemployed and aged 60. The Bank replied on the 23^rd September 1991; they were willing to be tolerant for a time as long as they could be assured that No. 27 was on the market at a realistic price.

By late 1991 Mr Brice was engaged on two fronts. On one front, he was inviting the Bank to recognise that, with No. 27 already on the market but not attracting offers and with Mr Edwards severely, exposed as a member of Lloyds, a sensible course would be for the Bank to settle with Mr Edwards on terms that No. 27 and Mr Edwards personally were released and that the Bank would be paid a sum coming to Mr Edwards by way of assistance from his family. The unspoken message was that his family would not assist Mr Edwards if No. 27 were not to be released. In the meantime, Hill Samuel’s solicitors were considering presenting a Bankruptcy Petition against Mr Bonas and Mr Brice, on the other front, suggested to them that they and he (as solicitor to Mr Edwards) should agree that Hill Samuel should without delay present such a petition and exchange information as to (inter alia) any offers of settlement which Mr Bonas might then make. In the course of Mr Brice’s dealing with Hill Samuel’s solicitors he acknowledged that he might owe solicitor-and-client confidence to Mr Bonas.

Mr Bloch Q.C. relied on Mr Brice’s dealing with Hill Samuels’ solicitors as evidence of a hostile animus in Mr Brice against Mr Bonas, one going back to an adverse view of Mr Bonas formed during the ancillary proceedings and reinforced by the Fee Proceedings and the Trafalgar episode. Mr Brice’s evidence, though, was that he got into contact with Hill Samuel’s solicitors not of his own motion but upon Mr Edwards’ instructions. Mr Edwards had found that Hill Samuel were intending to take steps against Mr Bonas. The hope of Mr Edwards and Mr Brice was that a real threat of bankruptcy might open up the doors to as yet undisclosed offshore or other assets of Mr Bonas. It is notable that the letter of the 6^th December 1991, which records Mr Brice’s dealing with Hill Samuel’s solicitors, does not contemplate Mr Edwards either presenting a petition or even supporting a petition. It was Mr Brice’s evidence, which I accept, that neither Mr Edwards nor he wished Mr Bonas to be made a bankrupt, if for no other reason than that his bankruptcy would be likely to turn the Bank towards recovery by way of a sale of No. 27 (a possibility the Bank itself underlined in its letter of 19^th August 1992). I hold that the object of the cooperation with Hill Samuel’s solicitors was to find what offers or what information would emerge from Mr Bonas were he to be threatened with bankruptcy. It would be interesting, said Mr Brice, to see how Mr Bonas reacted to Hill Samuel’s moves. Hill Samuel did present a petition. It was not, it seems, supported by Mr Edwards. It was opposed by Mr Bonas and adjourned. Mr Brice advised Mr Edwards of this on the 1^st July 1992 when he wrote:-

“You are aware of my views concerning the likelihood of Jeffrey having money offshore. It is quite possible that he may have suffered some investment disasters and I am clearly not in a position to venture any opinion as to the size of any offshore funds or their actual whereabouts but everything within my knowledge points to the fact that there is still money there. My own opinion is that the consideration of any “goodwill” which Jeffrey may have towards you is not worth anything in deciding whether or not you should now take proceedings against him. You yourself have already commented how he has continued to go on golfing trips while you remain in this country in a parlous state and you are faced with the fact that he has defrauded you in the first place. My own opinion is that you should now make a move against him and if you wish to discuss this please let me know.”

Mr Edwards did not launch any proceedings for an indemnity from Mr Bonas nor support the petition for his bankruptcy. He let matters rest in the hands of the Bank and told Mr Brice of that course. If, as Mr Bloch would have it, the letter of 1^st July 1992 was “a strong steer” to Mr Edwards rather than merely advice, it was not acted on by Mr Edwards.

In the meantime, Mr Bonas was negotiating with the Bank, offering them £120,000 by instalments (depending on his earnings) and mentioning to the Bank that when his mother died (she was then 75 years old and in good health) he should receive a substantial inheritance sufficient to clear his debt to the Bank, which the Bank then froze for a further 6 months at £400,000. Mr Bonas, whose mother, happily, is still alive, said to me in his oral evidence that he did not recall telling the Bank of the possibility of such an inheritance but I have no doubt but that he did.

In late October 1992 Mr Brice learned that Hill Samuel had agreed terms with Mr Bonas and that the petition for Mr Bonas’ bankruptcy was withdrawn. He did not know the terms on which this outcome had been agreed but was told that no capital payment was made or to be made by Mr Bonas. Mr Brice wrote to Mr Edwards saying that Hill Samuel’s solicitor:-

“……did say that although initially Jeffrey had shown himself to be indifferent to the prospect of bankruptcy, the forthcoming hearing had resulted in him showing a great willingness to settle the proceedings. This does now leave you in a position of either having to persuade Jeffrey to come to some settlement with you or for you to pursue bankruptcy proceedings against him yourself. If he has reached a settlement with Hill Samuel it leaves me wondering whether he can do the same with National Westminster Bank. I realise the claim for £32,000 [meaning the Trafalgar sum]causes you greater irritation but the release of your flat is obviously far more important to you. I strongly advise you not to tell either Jeffrey or [Mr Bonas’ brother-in-law] that we are receiving this information from Hill Samuel.”

Mr Bloch was, I apprehend, critical of that last sentence but, as it seems to me, it was sensible advice to Mr Edwards not to disclose that if Mr Bonas gave information to Hill Samuel it might find its way back to Mr Edwards and to Mr Brice.

No information came from Hill Samuel’s solicitors and in early 1993 Mr Brice wrote to Mr Edwards considering an alternative approach which was that it should be suggested to the Bank that they should issue a Statutory Demand against Mr Bonas. It was not advice that Mr Edwards chose to take any further.

There was then a spell, until late 1994 or early 1995, during which, whilst the Bank had meetings with and heard proposals from Mr Bonas, for the time being it took no steps to enforce security against No. 27 nor even further to explore the possibility of proposals from Mr Edwards. Mr Bonas was from time to time making proposals and amending proposals to the Bank whereunder he would repay them out of his available income or upon some improving corporate prospects in a company of his but there was nothing implemented in either regard and just what income would be available to the Bank and just what his company’s corporate position truly was were matters left rather imprecise.

On the 13^th April 1995 Mr Edwards granted a tenancy in writing of No. 27 to the Chase Manhattan Bank N.A. for a term of 52 weeks from the 13^th April 1995 to the 12^th April 1996 at a rent of £520 a week. The tenant agreed, inter alia, to use the premises as a single private residence in the occupation of Mr and Mrs Hal Richardson and their immediate family or of such other officer or employee of the National Westminster Bank tenant whose identity should first be notified in writing to and be approved by the landlord. Chase Manhattan was given an option to extend the tenancy for a further 52 weeks, to the 12^th April 1997, by serving notice to that effect as prescribed in the tenancy agreement.

Mr Edwards’ evidence left me with a picture that even before this agreement of April 1995 he had been out of occupation at No. 27 and had been dependent upon the income of its letting before as well as after April 1995. Indeed, he mentioned the name of a tenant, not that either of Chase Manhattan nor of Mr and Mrs Richardson, who had been in possession. I thus take it to be the case that this Chase Manhattan tenancy agreement replaced some earlier tenancy but, whether or not that was right, thereafter a sale of No. 27 with vacant possession might be difficult to procure before the 12^th April 1996 or, if Chase Manhattan chose to extend its tenancy, before the 12^th April 1997. There is nothing in the papers before me to suggest that the Bank was told or knew of the tenancy. Litigation might have ensued to determine whether the Bank was bound by it.

On the 24^th May 1995 the Bank’s Corporate Insolvency Department by Mr N.M. Crossman, its Manager, began to take a more active attitude to Mr Bonas’ indebtedness; Mr Crossman wrote:-

“As discussed, control of these liabilities was transferred to this Department of the Bank for recovery of the sums due approximately 4 years ago and we have yet to see the commencement of any repayment. Whilst terms were agreed at a meeting approximately 12 months ago for you to make a minimum payment of £50,000, no progress has been made. We wish to emphasise that the following terms must be strictly adhered to as the Bank’s patience in this matter is becoming exhausted. In the event of default, then the Bank must reserve all its rights and remedies against you, the guarantor [Mr Edwards] and the security held. In such an event, the Bank will have no option but to take legal action against all parties.”

The Bank then set out the terms that it proposed to Mr Bonas, which included that it understood that bonuses were to become payable from a company of his but were to be channelled to Mr Bonas in a way that avoided an antecedent obligation to pay parts of his salary in settlement of his debt to Hill Samuel. £10,000 a quarter was contemplated as to be paid. The terms were more fully set out and the letter concluded that:-

“Subject to your compliance for the above terms, and your written acknowledgement thereof by signing and returning the enclosed copy of this letter as confirmation, then the Bank is prepared to continue to crystallise your private liabilities at our Isle of Man and Burton-on-Trent branches in the sum of £400,000. We look forward to hearing from you, as indicated, but in the meantime the Bank must reserve all its rights and remedies against you, [Mr Edwards] and under the security held.”

However, it soon became apparent that Mr Bonas did not agree the terms as the Bank had set them out and accordingly on the 30^th May the Bank wrote to Mr Brice indicating that if an agreement could not be reached with Mr Bonas then the Bank would be looking to Mr Edwards for repayment under his guarantee and that that “may include a voluntary/enforced sale of the security held”.

Mr Bonas asked the Bank for a fresh meeting to be arranged but the Bank by now, 3^rd July 1995, was taking a rather more forceful attitude; in his letter of that day Mr Crossman wrote:-

“Our terms are as laid out in our letter of the 24^th May and if you are not willing to confirm in writing within 14 days from the date of this letter your acceptance of these terms, the Bank will instruct its Solicitors to commence legal proceedings against you and also realise the security it holds from you to secure your liabilities. We see no reason to hold a further meeting with you as the Bank’s position has been made clear. Finally, all the Bank’s rights and remedies against you and under the security it holds are fully retained.”

Mr Bonas’ reaction was to speak to the Bank and explore with it the possibility of a revised full and final settlement between him and the Bank under which the guarantor’s premises, No. 27, would be sold. Whilst the Bank, by Mr Knight, gave no commitment to any particular reduced full and final settlement figure it was indicated to Mr Bonas that the matter would be considered and, privately, the Bank thought that it could be cost efficient to do some such deal. I shall need to return later to the sort of factors that the Bank had in mind and how it came eventually to decide as it did.

On the4th July 1995 Mr Bonas met Mr Edwards at Mr Edwards’ address. Although Mr Bonas must have known that Mr Edwards was acting by Mr Brice there is no suggestion that Mr Brice’ had been told of this meeting but Mr Edwards makes no complaint on that score. Mr Bonas made a note which, since it is asserted by him that it amounts to evidence of a binding oral contract (which is described by Mr Bloch as “the Sale Agreement”), I shall set out in full. It is in handwriting and reads as follows:-

“1.

Nat West insist on action. Total exposure to o/d inch interest equals 500k+

2.

AGREED.

a L Bolton’s flat to [be] sold in market or bought by Judy.

b JHB to inform Nat West and negotiate settlement figure if possible.

c CE to get best valuation i.e. lowest from Read.

d Depending on valuation JHB to aim for 250k. Try 12 months. 6 months minimum.

e Important stick to agreement with Nat West if agreed. V. patient so far.

3.

Meet Soonest to discuss repayment of eventual debt from JHB to CE.”

“Judy” is Mr Edwards’ sister. “L Bolton’s flat” is No. 27, The Little Boltons. Although Mr Bonas says it was written at the meeting I accept Mr Edwards’ evidence that he did not see the note being written at the meeting, nor was it provided to him (then or later) for his signature as being the record of something then agreed as part of an agreement intended to bind either him or Mr Bonas. Mr Bonas did not give a copy to Mr Edwards nor send one to Mr Brice. Mr Bonas and his witness, Mr Edwards, differ sharply at several points as to the meeting of the 4^th July 1995.

Mr Edwards says that Mr Bonas’ plan, namely that he, Mr Edwards, should set about an early sale of No. 27, either on the market or to his sister, and that a sum (to be agreed with the Bank) out of the proceeds should then be paid to the Bank in full and final settlement of both Mr Bonas’ indebtedness and Mr Edwards’ liability under the guarantee, was presented to him by Mr Bonas as a fait accompli. By that he meant, in context, that the Bank having decided to rely on No. 27, the plan was something which, as he understood from Mr Bonas, was something that had already been agreed with the Bank by Mr Bonas and that he, Mr Edwards, had accordingly not been required to agree it but that it was simply left for him to perform it if No. 27 was not to be sold by the Bank over his head by way of its charge. Mr Bonas denies that the matter was presented to Mr Edwards in any such way.

Mr Edwards, who is commended to me by Mr Bloch as being an honest witness, when writing to Mr Brice in early 1996 even then described Mr Bonas’ proposal of the 4^th July as having been presented to him as a fait accompli. I accept that, in the sense in which I have explained it. By the time Mr Edwards and Mr Bonas met, the Bank had already indicated to Mr Bonas that it would consider such a proposal. Mr Bonas, I hold, presented his plan to Mr Edwards on 4^th July as a matter that had already been fully agreed with the Bank subject only to further discussion, firstly, as to how much of the proceeds were to be paid over if the figure of £250,000 were not accepted and, secondly, as to the time which would be permitted to Mr Edwards to effect the voluntary sale. It was not, in other words, that on the 4^th July Mr Edwards, as a matter of contract, was agreeing to a proposal then made to him, one capable of being agreed or not agreed on his part, but rather that he was presented by Mr Bonas with proposals which Mr Bonas indicated (subject to the matters remaining to be agreed) had already been accepted by the Bank as the way of avoiding a forced sale of No. 27.

The evidence has not left me with a wholly indisputable view of whether the fait accompli with which Mr Edwards says he was presented on the 4^th July included that it was a figure of £250,000 that was to be specified to the Bank as the figure to be offered by way of full and final settlement, at all events unless the Estate Agent’s, Read Cunningham’s, valuation undermined that figure. However, I take Mr Edwards’ repeated assertions to the fait accompli as intended to include evidence to that effect. That was the figure agreed between the two on 4^th July as the figure which, depending on the valuation, was to be aimed for and is what, the day after the valuation, Mr Bonas offered to the Bank on the 11^th July. Mr Edwards’ witness statement of 28^th April 2003 describes Mr Bonas’ proposal at the meeting of 4^th July as including that £250,000 was already the sum to be proposed to be paid to the Bank. Hence, although Mr Bonas said in his evidence that what Mr Edwards was getting out of the alleged Sale Agreement of the 4^th July which he, Mr Bonas, was asserting was that:-

“He was getting my assistance in negotiating a settlement with the Bank”

I have not understood the fait accompli to include any obligation on Mr Bonas’ part “to negotiate”. It was intended he should put the figure of £250,000 to the Bank and he did so. There was no further negotiation and the Bank (as I shall come on to), without more accepted that figure on the 18^th July subject to the 6-month stipulation which Mr Bonas did not “negotiate” but simply accepted on the 19^th July. I cannot read the note of the 4^th July and the evidence I have received as to what was then agreed as creating some form of contractual obligation on Mr Bonas’ part to negotiate with the Bank; put the other way about, had Mr Bonas failed to mention the £250,000 to the Bank I cannot think Mr Edwards, supposing he thereby lost a bargain, would have been able to sue Mr Bonas for breach of Contract.

On the 10^th July 1995 Mr Bonas received a valuation of No. 27 from Read Cunningham at £275,000. I was not told if Mr Edwards had authorised the agent to give the valuation, which does not indicate that the flat had been let. The following day, 11^th July, Mr Bonas wrote to the Bank, enclosing or meaning to enclose a copy of that valuation and, after saying of himself and Mr Edwards that they were “both in our 50s and we have both been all but wiped out financially”, added that:-

“Making due allowance for a variation in the price received as against the valuation and for all costs associated with the sale we offer £250,000 in full and final settlement of all outstanding liabilities and that we are allowed 12 months in which to sell the property.”

On the 14^th July the Bank considered this proposal. Subject to some minor qualifications it felt it was worth taking further. On the 18^th July the Bank wrote to Mr Bonas saying that:-

“The Bank as an exceptional matter is prepared to accept the sum of £250,000 in full and final settlement of both your own and Mr Edwards’ liability and this is subject to the sum being received within 6 months from the date of this letter. We understand that the full and final settlement will be paid from the sale of Mr Edwards’ property [No. 27] over which the Bank holds a legal charge.”

The Bank wished to be assured that the flat was put on the market and was kept in the market and asked for Mr Bonas to confirm acceptance of the terms. The Bank added:-

“In the meantime all the Bank’s rights and remedies against you and under the security it holds are fully retained.”

On the 19^th July Mr Bonas in writing accepted the Bank’s terms. Mr Bloch argues that there then came into existence a binding contract which he called “the Compromise Agreement” and which bound Mr Bonas, Mr Edwards and the Bank. On 24^th July Mr Bonas sent Mr Edwards a copy of the letter of the 19^th July by which he had accepted the Bank’s terms.

There is no evidence that either Mr Bonas or the Bank sent to Mr Edwards or Mr Brice a copy of Mr Bonas’ letter to the Bank, proposing terms, of the 18^th July, nor that the Bank sent a copy of its letter of the 18^th July, which in effect amounted to a counter-offer, to Mr Edwards or Mr Brice. Thus Mr Edwards, on receiving a copy of Mr Bonas’ letter to the Bank of the 19^th July, would not necessarily have known precisely what it was that was being accepted. However, on the 27^th July Mr Bonas wrote to Mr Edwards saying that he was glad that the Bank had agreed to £250,000. He added:-

“I do think that it is very important to keep faith with the Bank and keep to the terms of their letter of the 18^th July.”

That suggests that Mr Edwards had by then either seen the letter of the 18^th July or had had it described to him by Mr Bonas.

A good deal later Mr Edwards wrote to Mr Brice (on 29^th January 1996). I take his reference “the letter from Natwest” to be to the letter from the Nat West of the 18^th July; he said that:-

“When I received the letter from Nat West confirming what Bonas had presented to me as “fait accompli”, I said to Bonas that I was going back to the Bank to try and get a better deal than the one proposed. He was very concerned and implored me not to contact them fearing, no doubt, that I might upset his “apple cart”. There was no question of an agreement as his solicitors are suggesting.”

That Mr Edwards had indicated (as he also said he had in his oral evidence) that he was going back to the Bank to try and get a better deal, a matter disputed by Mr Bonas, seems to me to be likely to have been the cause of Mr Bonas’ reference, in his letter of the 27^th July to the need to keep faith with the Bank and to keep to the terms of their letter of the 18^th July. At the time Mr Edwards was still of the view that Mr Bonas had undisclosed assets; as he put it, “I was still after him”. He believed Mr Bonas still enjoyed a life style suggestive of wealth and, as will be seen, Mr Edwards did go back to the Bank in order to seek a better deal.

Mr Edwards, as he told me, was by this time living off the rental income of No. 27. He knew that No. 27 could not be sold at the best possible price and thus with vacant possession unless the tenant agreed to leave. His sister, upon whom he was relying for financial assistance, advised him not to sell No. 27 in the then rather weak market but now told him that she would lend him money for him to come to terms with the Bank so that the flat could be released from the charge and only sold later. Whilst Mr Edwards recognised that the Bank could require the sale of No. 27, I do not believe that at the time he would have surrendered or did surrender further opposition to its sale without his being more sure, and without his first pressing the Bank for it to be more sure, that Mr Bonas had no assets that could be used-up ahead of recourse to No. 27. His evidence was, of No. 27 and of the so-called Sale Agreement and Compromise Agreement, that, if it chose to do so, the Bank could take No. 27 but that Mr Bonas could not insist upon its being taken.

It is Mr Bonas’ evidence that upon his agreeing, as he, Mr Bonas, did on the 19^th July, to the terms offered by the Bank on the 18^th July, Mr Edwards thereupon was “probably” bound, and he considered him bound, to ensure that No. 27 was sold and that £250,000 was to be paid to the Bank from its proceeds. He reiterated that Mr Edwards was obliged to him to contribute No. 27 to the Bank. I do not accept these assertions. I prefer his own evidence at another point in cross-examination when he described a situation far less concluded, less contractual, when he said:-

“We decided to get a valuation and suggested to the estate agent that it would be helpful if it was not high - to make available to the Bank. We decided to go to the Bank and to make a proposal; to ask the Bank to give us as much time as possible - suggest a year; 6 months minimum, and that was about it I think.”

It is notable that such evidence - “we decided to go to the Bank “- does not suggest that it was Mr Bonas alone who was necessarily to negotiate with the Bank or that it was recognised at the time by Mr Bonas or by Mr Edwards that his doing so was to be the quid pro quo for Mr Edwards binding himself in some contractual way as Mr Bonas now suggests. It is, moreover, intrinsically improbable, at a time when Mr Edwards still believed that Mr Bonas might have offshore assets and was mistrustful of him and at a time when a borrowing from his sister rather than a sale to her was not ruled out, that Mr Edwards would have obliged himself to sell No. 27 and to do so even if, under Item 3 of the note of the 4^th July 1995, there were either no discussions as to how Mr Bonas would repay him or none that were satisfactory.

Having heard both Mr Bonas and Mr Edwards on the issues I do not accept that any binding contract intended to have legal force and being of the nature of either the Sale Agreement or the Compromise Agreement was made by Mr Edwards.

Mr Bonas’ argument, meeting a possible doubt that Mr Bonas had had no authority from Mr Edwards to make the so-called Compromise Agreement, asserts that Mr Edwards ratified the Compromise Agreement. However, I do not take any actions of Mr Edwards to have been done by way of unequivocal ratification. Although he concurred in No. 27 for a time being put on the market by Read Cunningham he very shortly afterwards took it off the market. Indeed, so far from his simply accepting the Bank’s terms he went back to the Bank to tell them of what he took to be Mr Bonas’ lifestyle (not one, he believed, of someone impoverished) in order to prompt the Bank further to pursue Mr Bonas and further to inquire into his means before turning to No. 27. He proposed to Mr Brice that he should offer the Bank a different deal; that, having borrowed from his sister, he would give the bank less than £250,000, perhaps £200,000, but would give it sooner than the 6 months deadline expiring on the 18^th January 1996 which the Bank had stipulated

It is plain that in putting the No. 27 on the market albeit only briefly, and in sending or arranging for the sending of agent’s particulars to the Bank Mr Edwards was acting as he would have done had there been a Sale Agreement and Compromise Agreement of the kind pleaded but to act consistently with a contract is not, of itself, to ratify it. Mr Edwards never understood there to have been any contract with Mr Bonas or the Bank. He understood, of course, that the Bank had the advantage of a guarantee and charge from him but there is no evidence that he ever acknowledged or recognised that he was obliged to Mr Bonas or to the Bank either to sell No. 27 or otherwise to raise £250.000 by the 18^th November 1996. He knew that were he not to do so certain risks might attach but that is far from saying that he was under a contractual liability to the Bank or to Mr Bonas to do so. Nor is there any evidence of any action of his that can be regarded as an acceptance by him that Mr Bonas was contractually obliged to the Bank to procure Mr Edwards to sell No. 27 or raise and pay £250,000 bythe 18^th January 1996.

Mr Bonas’ argument also draws attention to the fact that no protest emerges from Mr Edwards that matters had not been agreed as Mr Bonas has said they were. But, in the light of my view that Mr Edwards never understood himself to have made any binding agreement, his absence of protest is explicable; he did not understand that he had made any binding agreement and neither the Bank nor Mr Bonas advised him that he had. I do not find any acts or omissions of Mr Edwards as having been done by way of adoption of any such a contractual and binding Sale or Compromise Agreement as is pleaded.

For his part Mr Brice took up with the Bank the question of what efforts it had made to recover Mr Bonas’ indebtedness from Mr Bonas himself. On the 5^th September 1995 Mr Brice advised Mr Edwards by letter as follows:-

“I think it is quite clear from the recent communications that [Mr Bonas] has every intention of letting your property to be taken in settlement of his debt to the Bank. I do not think there is now anything to be gained by being soft with Bonas any further. The fact of the matter is you are dealing with a man who has already stolen a substantial sum of money from you and I am sure that in the long run he has no intention of honouring even the derisory proposals he has put forward for paying you back the debt over a period of time. It is, however, a decision I have to leave to you. I will confirm to you as soon as I receive any further response from the Bank.”

The reference “a stolen sum of money” was presumably a reference to the £32,500 and the Trafalgar episode.

Mr Brice undoubtedly was using a very strong language and Mr Bonas argues that any independent solicitor, one uncontaminated by knowledge gained whilst acting in the ancillary proceedings, would not have adopted so entrenched a view of Mr Bonas. I accept that Mr Brice’s phrasing indicates a real distrust of Mr Bonas but I have already indicated that in my view an independent solicitor could very well have felt that the Trafalgar episode suggested fraud on Mr Bonas’ part and that he was not a man to be trusted. The offer of McCulloch & Wallace suggested assets were available to Mr Bonas despite his protestations. In this context even a solicitor wholly uncontaminated with knowledge gained from a solicitor and client relationship with Mr Bonas and wishing his new client to keep his eyes open in dealings with Mr Bonas could have expressed himself much as Mr Brice did in the letter I have cited.

During September 1995 Mr Edwards and Mr Bonas spoke together a number of times and Mr Edwards became resigned to the fact that money for the Bank to meet Mr Bonas’ liability was going to have to come from him but he still wished Mr Brice to pursue the possibility of his paying less than £250,000 but paying it before the deadline. On the 15^th September 1995 Mr Brice telephoned the Bank and spoke to Mr Knight. Whilst Mr Knight’s note of the conversation has some references that suggest he may have misunderstood or misheard Mr Brice in minor respects, I accept Mr Knight’s note as to the substance of what was then said and that such substance shows Mr Brice quite blatantly asserting that he had acted for Mr Bonas during Mr Bonas’ divorce and using and perhaps misusing information which he had then gleaned. Mr Brice made a reference, for example, to Elspeth having asserted that her husband was worth about £28m with a substantial portion of that being held in Swiss bank accounts. The Bank’s note also indicates that Mr Brice said that when Elspeth had threatened bankruptcy proceedings some £3m had been produced from a Swiss bank account to satisfy the divorce settlement. Mr Brice was not merely painting a picture of Mr Bonas that depended on his earlier solicitor-and-client relationship with Mr Bonas but was deliberately or recklessly painting a false picture. Mr Knight’s note concluded:-

“We are agreeable to a meeting with Mr Brice who wishes to provide us with as much evidence as possible concerning Mr Bonas’ background and financial standing with a view to the Bank perhaps commencing bankruptcy proceedings. However firstly Mr Brice needs to check with the Law Society as to his legal position concerning client confidentiality as a lot of information he does hold came into his hands whilst he was representing Mr Bonas.”

Although Mr Brice was no doubt seeking to do his best for his client, Mr Edwards, his conduct at this juncture and at several corresponding points below was, in my view, little short of disreputable. Although he perfectly well knew that he had no information that could pinpoint any undisclosed asset of Mr Bonas he was insinuating to the Bank that, by way of his earlier acting for Mr Bonas, he had a “lot of information” that would be material to the Bank recovering from Mr Bonas rather than from Mr Edwards and that that information could perhaps be made available to the Bank, especially, one might think, if Mr Bonas was made bankrupt.

At the same time Mr Edwards and Mr Brice discussed the possibility of getting the Bank to use a Private Investigator to check on Mr Bonas’ worth. It was Mr Brice’s response to Mr Edwards’ question as to how to proceed further. Mr Brice told Mr Edwards that he was able to suggest a name of an agent of whom his firm had some experience. It was part of a strategy agreed between them at the time to try and get the Bank to go after Mr Bonas rather than its looking to No. 27. As part of that Mr Brice wrote to the Bank on the 3^rd October saying:-

“Whereas we cannot express any opinion as to the resources Mr Bonas does have at his disposal, the information and papers we have been given suggest that Mr Bonas does have resources which he has not disclosed and we believe that if robust action was taken by yourselves it might well result in Mr Bonas reaching a settlement of his indebtedness with yourselves.”

A little later Mr Brice added:-

“Our client has instructed us to place any information we are holding at your disposal.”

Again, Mr. Brice, in my view, was at fault in two respects; firstly, in writing to someone to whom he had made clear that he had earlier acted for Mr Bonas in the ancillary proceedings, he was suggesting that he had useful and available information for use against his erstwhile client, the unstated premise being that the information included information going back to the ancillary proceedings, and, secondly, he truly had no papers or information which either identified a single asset of Mr Bonas against which recourse was possible or which suggested a real rather than supposed existence of undisclosed assets. That the Bank understood that Mr Brice’s hinted-at information went back to the ancillary proceedings was clear from its note of its response to Mr Brice on the 10^th October when they told him:-

“We want some “ammunition” to pursue Bonas with. He [Brice] will get to us when he finds out what info he can release to us.”

That last reference plainly refers back to Mr Brice’s earlier mention that he would need to check with the Law Society as to client confidentiality before indicating what it was that he could tell the Bank.

On the 23^rd November 1995 Mr Brice wrote to the Bank quite explicitly referring to matter which he could have known only by reason of his having acted in the ancillary proceedings; he referred to Mr Bonas having made a transfer to Mr Brice’s firm from a bank account in Switzerland. His letter continued:-

“We have also explained to you that we have previously acted for Mr Bonas in connection with his divorce proceedings and we have had to give consideration as to the information we are able to place at your disposal at this stage. Having reviewed our file we are confident that the information we are now prepared to forward you in support of what we stated above is information that was given to us by Mr Bonas in our capacity as solicitors for Mr Edwards at a time when we were negotiating with Mr Bonas on his behalf.”

Whilst I do not doubt that some information which Mr Brice and Mr Edwards then had, such as that Mr Bonas had been seen at Ascot, at Annabel’s and in Verbier, could have been and probably was acquired independently of Mr Brice having been Mr Bonas’ solicitor, other information in the letter, as to the Swiss bank account, as to understanding that Mr Bonas owned a flat in Verbier and the suggestion that he or a vehicle of his owned McCulloch & Wallace all was information that was unlikely to have come to the attention of anyone who had not acted, as Mr Brice had done, for Mr Bonas.

The Bank plainly did not regard anything which to this date Mr Brice or Mr Edwards had been able to supply as being “ammunition” sufficient to turn them away from recovery from Mr Edwards or his property. On the 14^th December the Bank reminded Mr Brice that if useful information was held by him it would be prudent to deploy it before the 18^th January deadline.

At this point a new development occurred. The Bank learned that Mr Bonas was proposing an Individual Voluntary Arrangement (“IVA”). In late December 1995 Messrs Buchler Phillips, Chartered Accounts, circularised creditors. The estimated State of Affairs showed an estimated deficiency of £1,713,000 and Mr Bonas proposed paying £35,000 over 3½ years. After costs, that, in the Nominee’s view, represented a dividend over time of 1.7p in the £. A meeting was convened for the 8^th January 1996. Mr Edwards told Mr Brice of the IVA proposal; he was still mistrustful of Mr Bonas, an attitude unlikely to have been softened when he found, as he reported to Mr Brice, that Mr Bonas owed money to another solicitor and had failed to meet the instalment payments which had been agreed with that other.

On the 2^nd January 1996 Mr Knight of the Bank made a note representing the Bank’s consideration of Mr Bonas’ IVA proposal in order to guide the Bank’s response to it. By then Mr Bonas owed some £458,000 to the Bank. Mr Knight sets out a number of considerations including that Mr Bonas had in August 1989 told the Bank that he was the 100% owner of McCulloch & Wallace, that he was then married to a daughter (Lady Mary) of Earl Howe, described as a very wealthy Buckinghamshire landowner, and that Mr Bonas had spoken of a possible inheritance from his mother. The last factor written, in the Note, which Mr Bloch most emphasised, read as follows:-

“Mr Brice, solicitor for Mr Bonas during divorce settlement and solicitor for Mr Edwards for the last 10 years has information pertaining to Bonas’ financial affairs and believes Bonas has hidden money and still leads an affluent lifestyle. Mr Brice is to provide us with papers so we can decide whether or not to commence bankruptcy proceedings when terms expire 18^th January 1996.”

I shall later consider the extent, if any, to which this last factor materially influenced the Bank’s later actions. The Bank decided to vote against the IVA proposal.

By the 6^th January 1996 Mr Bonas had arranged with his sister that £250,000 was available to him for payment to the Bank should it prove necessary. But he was unsure whether the Bank’s offer to accept £250,000 in full and final settlement had lapsed and wished to be advised as to whether there was an alternative to his paying up and as to what the Bank would be likely to do if he failed to pay that sum by the 18^th January deadline.

In the meantime Mr Bonas was understandably getting apprehensive as the deadline neared and on the 8^th January he wrote to Mr Brice saying that he was in a quandary. He said:-

“You may or may not know that the valuation of [No. 27] which the Nat West received was very substantially below its true value. The Nat West then gave a substantial discount for a clean settlement by January the 18^th. Thus anyone buying the property for £250,000 would make a profit probably in the order of £150,000. Whilst I do not personally have funds it would be fairly easy to interest a number of dealers in the situation and it would obviously be in both [Mr Edwards’] and my interest to do this if [Mr Edwards] or his family are not going to settle Nat West by the due date.”

He spoke of his having to insist that No. 27 was sold for its full value were the Bank not to be paid off by the 18^th January. By the 10^th January Mr Bonas had found two people who were seriously interested in buying No. 27 (presumably at £250,000) without even having seen it. On the 10^th January Mr Brice refuted that Mr Edwards was under any obligation to Mr Bonas to put No. 27 on the market or even to keep him informed as to his intentions but he said that if Mr Bonas did have the names of persons seriously interested in buying the property their details could be passed on by him to Mr Edwards should Mr Edwards be interested.

On the 11^th January Mr Bonas wrote to Mr Brice saying:-

“Although it is indeed up to your client as to whether he places his property on the market this week, the same will not be true after next week when as I have to assume because of your attitude the property will be repossessed by Nat West.”

Mr Bonas proposed finding someone to take over the Bank’s mortgage. It is difficult to see how Mr Bonas’ acceptance that it was up to Mr Edwards as to whether he placed No. 27 on the market squares with his evidence before me that Mr Edwards was bound to him to sell it. To implement the possibility of a transfer of the mortgage Mr Bonas wrote to the Bank on the 11^th January identifying an individual who would be prepared to take over the mortgage, whilst recognising that that did not, represent the Bank’s normal policy. On the same day the Bank telephoned Mr Bonas and told him that it would not agree to transfer the mortgage, at all events without Mr Edwards’ agreement, and on the same day also Mr Brice telephoned the Bank and, in a passage of which Mr Bonas complains, continued:-

“He says he has info re assets of [Mr Bonas] that he will forward to us re his marriage settlement and assets in Switzerland. He advises that should a trustee be appointed he will be able to release more information which at present cannot be revealed due to privilege.”

Whilst Mr Brice challenges this note as not being wholly accurate - there was no “Marriage Settlement” and no reference to it I accept the truth of the substance of the note which was that Mr Brice was offering, on the face of things, information about the ancillary proceedings and assets in Switzerland as to which such information as he had chiefly, if not wholly, derived from his engagement in the ancillary proceedings and which, in any event, as I have mentioned earlier, was such as not to enable him to pinpoint a single asset of Mr Bonas’ to which the Bank might have recourse. That, as I mentioned earlier, is little short of disreputable. Nor, in my judgment, can it have been any better for him to seek to procure the Bank to pursue Mr Bonas into bankruptcy on the basis that were he to be bankrupt the solicitor-and-client information which Mr Brice held could then become available to the Bank.

By now the deadline of the 18^th January was very close. The Bank interpreted its dealings with Mr Brice at the time as being that both Mr Edwards and Mr Brice wanted to see Mr Bonas made bankrupt as they believed Mr Bonas had substantial assets. I do not accept that Mr Edwards wanted Mr Bonas made bankrupt. He was still of the view that Mr Bonas had assets “stashed away” and that if he did have such, Mr Edwards wanted his share of them but he did not see Mr Bonas’ bankruptcy as in any way helping him. Mr Edwards was not willing to say that the Bank’s view of his and Mr Brice’s wishes emanated from Mr Brice but I accept that at the time Mr Brice was being less circumspect in conversation than he was in correspondence, that he was still of the view that a threat of bankruptcy might lead to disclosure of assets and hence that a fair understanding of what he was saying to the Bank would have led to the Bank to believe that both he and his client wanted to see Mr Bonas made bankrupt.

On the 17^th January the Bank advised Mr Bonas that it was not willing, without Mr Edwards’ written agreement, to entertain a transfer of the mortgage to the individual who had been identified as a prospective transferee.

On the 18^th January Mr Bonas, now acting by solicitors, again asked the Bank to transfer the mortgage for £250,000 but the Bank declined to do so. In the meantime Mr Bonas had told Mr Brice of the existence of individuals who had funds in place to buy No.27. The 18^th January came and went without £250,000 being paid to the Bank and without No. 27 being sold.

On the 19^th January Mr Bonas’ then solicitors, Joelson Wilson & Co. asserted that by failing to sell and by withdrawing his consent to a sale of No. 27 Mr Edwards had “prevented Mr Bonas from repaying the sum due to the Bank” and that Mr Edwards was thereby in breach of contract. On the 22^nd January Mr Brice refuted to Mr Bonas’ solicitors that Mr Edwards had made any agreement such as they had alleged with Mr Bonas.

It is Mr Bonas’ case that there was some covert agreement between Mr Brice or Mr Edwards and the Bank such that even if Mr Edwards had not paid the Bank the £250,000 by the 18^th January he should nonetheless be afforded more time - 3 months - to settle his liability (but not necessarily Mr Bonas’) at that figure. The 18^th January, in effect, was to be a deadline as to Mr Bonas but not as to Mr Edwards. Mr Edwards gave evidence on the point.

First I refer to the written evidence he gave. On the 1^st February 1999, when proceedings were only between the Bank and Mr Bonas, Mr Edwards made a brief affidavit that said:-

“Prior to the 18^th January 1996 my solicitor [Mr Brice] and I had discussions with Mr Crossman who was employed by the Bank. It was agreed that the Bank would extend the deadline by three months.”

A little later the affidavit says:-

“If, before the 18^th January 1996, the Bank had not agreed to an extension of time I would have sold the property at [No 27] and repaid the Bank before the deadline.”

The affidavit does not identify who it was said had agreed with the Bank as to the extension; was it Mr Edwards, was it Mr Brice or both? I do not accept that Mr Edwards plan at the time, shortly before 18^th Janaury, was to sell No. 27. In his oral evidence he indicated that if “push came to shove” he could and would pay the money to the Bank, having borrowed it from his sister, leaving No 27 to be sold at some more convenient time.

A little later, on the 12^th February 2001, when still the only proceedings were between the Bank and Mr Bonas, Mr Edwards made a 2^nd affidavit in which, confirming that he had £250,000 in cash available to pay the Bank on or before the 18^th January 1996, he added:

“I instructed my solicitor if necessary to complete the transaction by the 18^th January 1996 which was the deadline under the contract of the 18^th July. By “if necessary”I meant if no better terms could be negotiated prior to the 18^th January 1996.”

He added:-

“I want to make it quite clear that an extension of 3 months to the deadline was agreed prior to the 18^th January 1996. Obviously I would have been mad not to have either made an agreement to extend or hand over £250,000.”

In his witness statement of the 28^th April 2003, by which time, Mr Brice was a Part 20 defendant, Mr Edwards put the point a quite different way. He then said:-

Mr Edwards does not identify by whom he was assured and, of course, there is a world of difference between the £250,000 offer being extended beyond the deadline and an assurance that Mr Edwards would not be looked to for the full possible sum of £350,000.

In the run up to the 18^th January, if push came to shove, he could, he said, by way of assistance from his sister, have paid the £250,000 to the Bank and could do so without selling No. 27. He had at the time, he thought, two possibilities open to him; to pay the £250,000 or to hold out for a better deal. He said that he himself did not approach the Bank on the subject of an extension but he did accept that he had probably asked Mr Brice to ask the Bank for one. He was under the impression that Mr Brice had fixed an extension of time for him. However, he could not recall Mr Brice telling him that he had been granted a three months extension but he was nonetheless adamant that he would not have taken the risk of letting the 18^th January go by without paying the money had he not learned that in doing so he was not losing the possibility of settling his liability at £250,000. When told during his cross-examination that it would be Mr Brice’s evidence that he, Mr Brice, had not told him of any extension on or before the 18^th January, Mr Edwards said that if that was so then it must have been he, Mr Edwards, who had agreed the extension with the Bank as no-one else was involved.

Another piece of evidence I need to take into account is a note made by Mr Bonas in July 1999. In conversation with Mr Brice, Mr Bonas indicated to him (according to the note) that his view was that there must have been an “understanding” between Mr Edwards and the Bank to the effect that there would be an extension of time afforded to Mr Edwards if the 18^th January 1996 deadline were to be passed. Mr Brice answered, according to Mr Bonas’ note, “That is exactly what we were trying to do”. Mr Bonas in cross-examination claimed that he remembered the conversation extremely well. The note was put to him in cross-examination on the basis that Mr Brice would be denying that he had said any such thing. In fact, although Mr Brice’s witness statement said that he had had no instructions to seek an extension and that he denied that any had been agreed, the contents of the note were not put to him and hence were never denied. However, I do not feel able to attribute much weight to the note. That Mr Edwards and Mr Brice would have hoped that there would be an “understanding” or, better yet, an agreement for an extension was plain but, as I shall come on to next, there is no reliable evidence whatsoever that any practical steps were in fact taken by either Mr Edwards or Mr Brice with the Bank which could be described as an attempt to get an extension on or before the 18^th January.

As to that Mr Knight, formerly of the Bank, gave evidence. He, by his first witness statement, said that he did not agree prior to the 18^th January 1996 that Mr Edwards should have a further 3 months to make a settlement payment to the Bank. He did not believe, either, that anyone else on behalf of the Bank entered into such negotiations or such agreement. He was not cross-examined on that passage of his witness statement. Mr Crossman, also formerly of the Bank, in his first witness statement of the 7^th September 2001 said, commenting on Mr Edwards’ affidavit of the 1^st February 1999, that there had been no discussions with Mr Brice or Mr Edwards before the 18^th January 1996 as to the extension of the deadline. He had no recollection of ever speaking to Mr Brice and had only spoken to Mr Edwards once, on the 2^nd April 1996. Mr Crossman was not directly cross-examined on that passage of his first witness statement and his oral cross-examination included a firm rebuttal of there having been any understanding between Mr Brice and the Bank that Mr Edwards would not be at risk in letting the 18^th January pass without having paid the £250,000. He had said nothing to Mr Brice to enable the solicitors to tell Mr Edwards that he need not worry on that score. Mr Knight was at the time the Assistant Manager of the Bank’s Corporate Insolvency Section (the “CIS”) in London and Mr Crossman its Manager. Both were men of experience in the field and as persons who have left the Bank’s employ neither would have any present need to be protective of his employer. I prefer their evidence, which chimes with that of Mr Brice, to that of Mr Edwards, for all the conviction with which his was given.

I add that there is no writing from Mr Brice to Mr Edwards advising him that an extension had been or would be likely to be granted The case as to extension which Mr Bonas was putting was that Mr Brice deliberately wanted to subvert the compromise which involved payment of £250,000 by the 18^th January and that, as part of that, Mr Brice advised Mr Edwards not to pay the sum by that deadline. I reject both of those assertions. Mr Brice denied both and it would have been a very dangerous course for him, in the absence, as I hold to be the case, of any extension having been allowed by the Bank, to advise Mr Edwards not to pay by the deadline. “None of us”, he rightly said, “knew what the Bank would do after the 18^th January”. However, given that Mr Edwards felt that he probably had asked Mr Brice to ask the Bank for an extension, the subject plainly came up between him and Mr Brice and given that Mr Brice felt that, as the Bank had dithered for a long time, he would have advised Mr Edwards that the Bank might accept the £250,000 even a fortnight late, I hold that without Mr Brice or Mr Edwards having received any assurance from the Bank on the subject and without Mr Brice advising Mr Edwards not to pay by the deadline or even that it was safe not to do so, Mr Brice’s advice nonetheless did give Mr Edwards the impression that the 18^th January was not a crucial watershed. Mr Edwards has since enlarged that impression into a feeling that he was told (either by the Bank or by Mr Brice) that was safe to let the 18^th January pass.

It is to be remembered that at this time Mr Edwards was not at all well disposed to Mr Bonas; he had been annoyed at Mr Bonas’ attempts to procure persons who would purchase No. 27 at £250,000 and with the Bank being advised of their existence. As Mr Edwards felt confident that No. 27 was worth at least £80,000 more than £250,000 he described the proposals which Mr Bonas had procured as too stupid to contemplate. He felt that the proposals had been offensive; when he learned later that Mr Bonas’ solicitors were asserting that he was in breach of contract he felt, altogether, that his patience with Mr Bonas was exhausted.

On the 24^th January Joelson Wilson & Co. for Mr Bonas told Mr Brice that he should not accept instructions to act against Mr Bonas and invited confirmation that he would cease so to act. At the same time, and as part of Mr Brice being more circumspect in correspondence than he was in discussion, Mr Brice told the Bank that Mr Edwards was prepared to take steps to trace Mr Bonas’ assets although, added Mr Brice:-

“.... My client has no concrete evidence as to assets available to Mr Bonas, he does have certain leads which might lead us there. We are also instructed that Mr Bonas’ lifestyle is not consistent with someone who is without any money.”

He tried to represent that the Bank had indicated that if Mr Edwards assisted in tracing Mr Bonas’ assets the Bank would be prepared to come to some agreement whereby the charge over No. 27 would be released. Nothing such had ever been agreed; all that had been agreed was that if Mr Edwards or Mr Brice assisted in tracing assets of Mr Bonas their cooperation would be taken into account by the Bank when the Bank turned to considering what to do against No 27 or Mr Edwards.

On the 25^th January 1996 Mr Brice resisted Joelson Wilson’s claim that he could not act for Mr Edwards; he felt confident that he had, within Rule 15.02 of the Guide, no “relevant knowledge”. He made it plain that he was intending to continue to act for Mr Edwards. He asked Joelson Wilson to indicate the type of knowledge which Mr Bonas considered would be “relevant knowledge” in his, Mr Brice’s, possession. Mr Brice also denied that Mr Edwards had made any agreement with Mr Bonas of the kind which Joelson Wilson had alleged.

On the 22^nd January Mr Bonas’ IVA proposal failed to attract the required majority and the proposal was rejected and the arrangement failed.

On the 31^st January 1996 the Bank indicated to Mr Brice that the Bank intended to petition for Mr Bonas’ bankruptcy. They offered to withhold any action against Mr Edwards for an initial period of 6 months and to allow time for the trustee-in-bankruptcy to investigate matters. They reiterated that if Mr Edwards or Mr Brice provided useful information that would be taken into consideration should the Bank have to turn to Mr Edwards for repayment. As I mentioned earlier, I shall need to look to the reasons why the Bank acted as it did but at this juncture say only that I am quite unconvinced that any pressure from Mr Brice or Mr Edwards or even the dangling of possible information as to Mr Bonas’ assets held out to the Bank by Mr Brice or Mr Edwards had any material influence on the Bank’s decision, as it seemed to be at that stage, to petition for Mr Bonas’ bankruptcy. At that time Mr Bonas owed the Bank some £557,654.

At some date likely to have been after the 18^th January 1996 No. 27 was put back on the market and by early February an offer had been received for it. On the 6^th February Mr Brice wrote to the Bank asking it to confirm that it was prepared to release the charge over No. 27 if £250,000 was paid into an escrow account and if at the same time Mr Edwards agreed to make available to the Bank such information as had been given to Mr Brice by Mr Bonas concerning Mr Bonas’ affairs and had been given during the period when Mr Brice had been acting for Mr Edwards. By now, it would seem, Mr Brice was impliedly accepting that he had been wrong to dangle in front of the Bank the possibility of his having information that ran back to the time when Mr Brice had acted for Mr Bonas in the ancillary proceedings. On the 14^th February the Bank indicated that they would be agreeable to accepting £250,000 from Mr Edwards in full and final settlement subject to the sum being in their hands by the 13^th May 1996. The Bank did not care for the proposal that the sum should be paid into an escrow account, whilst not totally rejecting it The Bank’s letter concluded:-

“In the event that the Bank’s proposed petition for Mr Bonas’ bankruptcy is successful then any information you have on Mr Bonas should be forwarded direct to the subsequently appointed trustee. In the event that the trustee is able to put the information provided by you to good use and they prove fruitful then the Bank will consider some form of monetary concession.”

Both of the Bank’s offers after the 18^th January to Mr Edwards to extend time as mentioned in paragraphs 115 and 116 may have become confused in Mr Edwards’ mind with the existence of an agreement before the 18^th January, which leads me to suppose his error was, as I mentioned, one of memory or chronology rather than a matter going to his credibility.

On the 22^nd February 1996 the Bank which, as early as the 24^th January had told Mr Bonas’ solicitors that as the deadline of the 18^th January had passed there were to be no more concessions, now reminded those solicitors that the concessionary terms had lapsed and Mr Bonas was liable for the full amount which then totalled £560,464 with interest accruing at a daily rate of £122.18. The Bank’s letter concluded that its solicitors were instructed to commence bankruptcy proceedings against Mr Bonas.

On the 3^rd March 1996 Mr Edwards asked Mr Brice to approach the Bank in order to explore whether the Bank would release him and No. 27 on payment of less than £250,000 if he and Mr Brice cooperated (with my emphasis) “in their hunt [i.e. the Bank’s hunt] for Bonas’ hidden assets.” Mr Brice’s first response was to raise with the Bank somewhat ambitious claims that Mr Edwards’ guarantee was not enforceable but at the same time making a “without prejudice” proposal that Mr Edwards should pay £150,000 in full and final settlement and supply the Bank with such evidence as Mr Edwards had been given by Mr Bonas as to the latter’s offshore assets. It is difficult to see what information of any value to the Bank could have fallen within that description. On the 21^st March the Bank declined to accept the “without prejudice” offer and stuck to its offer at £250,000. Correspondence continued and on the 2^nd April 1996 the Bank, responding to Mr Brice, orally offered full and final settlement with Mr Edwards at £230,000 if the money was paid by the 4^th April. Significantly the Bank made no request that information as to Mr Bonas’ assets should be supplied as part of the deal. Mr Edwards accepted the Bank’s offer, the money was punctually paid and arrangements were made for the discharge of the security over No. 27.

On the 16^th April Mr Brice advised Mr Bonas’ solicitors that Mr Edwards had settled with the Bank at £230,000 and asked for immediate repayment of that sum by Mr Bonas. Perhaps prompted by that, Mr Bonas’ elder brother, Ian, visited Mr Edwards. Mr Edwards’ view of Ian as a well-known businessman, coupled with what Ian told him of Mr Bonas’ and their family’s affairs, began to change Mr Edwards’ mind, unchanged until then, on the question of whether Mr Bonas had hidden assets. He began to think that if Mr Bonas did have any they would surely have been used by now to avoid the persistent difficulties in which Mr Bonas was finding himself. Others to whom Mr Edwards spoke also contributed to his changing his views in Mr Bonas’ favour.

On the 17^th June 1996 the Bank’s solicitors indicated they had been instructed to issue proceedings against Mr Bonas.

By the 2^nd July 1996 Mr Bonas’ solicitors had complained to the Solicitors Complaints Bureau that Mr Brice had acted against Mr Bonas while subject to a conflict of interest. The SCB asked Mr Brice for comments, Mr Brice answered that the allegations were baseless and inquired as to what form Mr Bonas’ complaint to the SCB had taken and what correspondence the SCB had seen.

In the meantime, on the 28^th June 1996 the Bank had issued a Writ against Mr Bonas endorsed with a Statement of Claim for £578,078.80 and interest. In answer to those proceedings Mr Bonas’ solicitors first claimed in correspondence that by settling with Mr Edwards, as it had, rather than with Mr Edwards and Mr Bonas, the Bank had interfered with a contractual agreement between Mr Edwards and Mr Bonas, that Mr Bonas had thereby suffered a loss and that the Bank’s proceedings would be defended on those lines. At the same time Mr Bonas’ solicitors made a without prejudice offer that Mr Bonas should pay £20,000 to the Bank within 60 days, thus bringing the Bank’s recovery up to the £250,000 which had earlier been its price for full and final settlement not only with Mr Edwards but also with Mr Bonas. The offer, made on the 15^th July, had been expressed to lapse if the Bank issued proceedings against Mr Bonas. In fact, although the Bank had not served its proceedings by the 15^th July it had already commenced them and, accordingly, on the 26^th July the Bank wrote to indicate that it assumed that the offer of £20,000 had been withdrawn. In response Mr Bonas’ solicitors revived the offer for a further 14 days. They told the Bank that the necessary £20,000 was held by a third party and was immediately available to pay to the Bank.

On the 14^th August 1996 the Bank’s solicitors declined the “without prejudice” offer and, in open correspondence, said:-

“The terms of the alleged agreement between your client and Mr Edwards were not “clear” to the Bank on the 18^th July 1995: as stated in our letter, all the Bank knew was what your client chose to tell the Bank and the Solicitors acting for Mr Edwards subsequently denied that there was any such agreement. On the evidence available us we do not consider there was any agreement or any binding contract.”

They added that, the deadline of the 18^th January 1996 having passed, that initial agreement had lapsed and the Bank had been perfectly entitled to negotiate a settlement with Mr Edwards without reference to Mr Bonas.

By the 11^th September 1996 Mr Edwards himself was writing to the Bank, perhaps in implementation of his changed views as to the existence of undisclosed assets but also because he feared that Mr Bonas’ bankruptcy would annihilate any chance of he, Mr Edwards, recovering from Mr Bonas, inviting the Bank to reconsider its pursuit of Mr Bonas.

On the 25^th September 1996 Mr Bonas served a Defence and Counterclaim in the proceedings taken against him by the Bank. There was, at this point, no claim against Mr Brice. On the 4^th November 1996 the Bank served its Reply and Defence to Counterclaim. The proceedings between the Bank and Mr Bonas dragged on. Mr Bonas’ solicitors’ sought documents from Mr Brice, still not yet a party. Very tardily, correspondence led to a consent order being made for their production. Mr Bloch was critical of the slowness and the nature of Mr Brice’s response to requests for documents, citing it as an indication of some persisting hostility on Mr Brice’s part towards Mr Bonas. It is plain from the rather aggressive correspondence that there was little love lost between Mr Brice and Mr Bonas; Mr Brice plainly thought poorly of Mr Bonas but I do not see that anything passing between the Solicitors or with Mr Brice at this stage has any real relevance to the matters I need to consider.

“On the 8^th June 2001, almost 5 years from the Bank’s, issue of proceedings against Mr Bonas, Mr Bonas amended his Defence and Counterclaim against the Bank to include a Part 20 claim against Mr Brice’s firm, which served a defence on the 23^rd August 2001. Mr Bonas replied to it in October 2001. The hearing of all claims was fixed for the 9^th June 2003. On the 2^nd May 2003 when, on the Bank’s computation, Mr Bonas then owed it over £568,000 even after crediting him with Mr Edwards’ £230,000, the Bank offered to settle for less than half of that aggregate and I was told that by way of mediation a settlement was arrived that was embodied into a Tomlin Order on the 26^th May 2003 whereby Mr Bonas became obliged to pay £100,000 to the Bank in full and final settlement. Of that, £40,000 was to be paid by the 3^rd June 2003 and £60,000 was stayed until the final outcome of these Part 20 proceedings. But the claim of Mr Bonas against Mr Brice was not settled and thus there was the hearing before me.

Mr Bloch Q.C. and Mr Ritchie assert four causes of action against Mr Brice. Firstly, they rely upon breach of confidence by Mr Brice in his capacity as erstwhile solicitor to Mr Bonas, a breach consisting of his giving the Bank or Mr Edwards information which had come to him during the course of the retainer. Secondly, it is said that Mr Brice was negligent in representing to the Bank that Mr Bonas continued to have substantial assets. Thirdly, Mr Bonas relies upon interference by Mr Brice with the proper performance of the alleged Sale and Compromise Agreements, including, a procuring of their breach by the Bank and by Mr Edwards. That was conduct designed, it is said, to confer a benefit on Mr Edwards and to cause an obvious detriment to Mr Bonas. The interference, broadly speaking, is said to consist of Mr Brice arranging an extension (but only as to Mr Edwards) of the agreement with the Bank which expired on the 18^th January 1996, further or alternatively by his advising Mr Edwards that he need not pay or was safe in not paying the required sum on or by the 18^th January. Fourth and last, Mr Bonas claims for unlawful interference with his interests by way of unlawful means, which included reckless representation by Mr Brice. That suffices as an outline; I shall deal with each in turn.

Mr Gadd, basing himself on Lillicrap -v- Nalder [1993] 1 WLR 94 C.A. argues that by reason of his entering a defence to the Fee Proceedings Mr Bonas thereby waived confidence and that Mr Brice thereafter became free to use against Mr Bonas material which otherwise would have been denied him under solicitor-and-client confidence and under the rules under which solicitors practice. I do not doubt that if the Fee Proceedings had been fought further Mr Brice would have been able to use otherwise confidential solicitor-and-client material in those proceedings. The reason would have been that without such an implied waiver justice would not have been capable of being done in that suit. But it would be quite disproportionate to achievement of that end to enlarge that limited form of implied waiver in such a way as to free Mr Brice to use the otherwise confidential material wherever he might choose, including in these proceedings. I reject Mr Gadd’s submission on this point and, to do Mr Brice justice, I add that he had never had this possibility in mind as the events unfolded.

Whilst some of the propositions I shall set out below are or may be subject to exceptions in particular circumstances or on particular evidence, the general position may be summarised for the purposes of this action as follows:-

As the hearing went on it became increasingly apparent to Mr Brice that he had, indeed, acted in breach of confidence. He accepted that he could not say that he had not received confidential information during his retainer by Mr Bonas. He accepted that disclosure of a negative asset position was confidential information just as much as would have been evidence of a positive one. He accepted that he had heard evidence during the ancillary proceedings from Mr Bonas’ accountant and evidence as to offshore companies, Swiss bank accounts and McCulloch & Wallace. He had heard Johnson J. making disparaging remarks in the course of his judgment about Mr Bonas and he had heard Elspeth making a compelling case as to Mr Bonas having offshore assets. He accepted that the language of his Reply and Defence to Counterclaim in the Fee Proceedings had been upon his instructions and represented his views. He knew that part of Elspeth’s settlement came from offshore. He accepted that he had conveyed confidential information as to Mr Bonas to Mr Edwards. He accepted that if the Bank’s note of his telephone call with Mr Knight on the 15^th September 1995 was correct (as, in substance, I have held that it was) then he was in a position of serious conflict and should not have acted for Mr Edwards against Mr Bonas. It increasingly dawned upon him that his earlier attitude, namely that as he could not pinpoint any specific asset of Mr Bonas’ of which he had gained information during the ancillary proceedings he was therefore devoid of relevant confidential information, was hopelessly simplistic. He plainly dangled before the Bank that he had information from acting for Mr Bonas which he would or might disclose to the Bank. He accepted, leaving aside hard fact, that impressions of Mr Bonas he had gained whilst he was acting for him could contaminate his reactions, later, when acting for Mr Edwards. He accepted, if the Bank’s note of his conversation with it on the 11^th January 1996 was correct (and I have already indicated that I accept the truth of the substance of the note) that that, too, represented a misuse of confidential information. It is not, in my view, necessary for me here further to collect and set out every breach of confidential information on Mr Brice’s part which I find to have occurred but it is quite plain that he should not have acted for Mr Edwards as he did and that he acted in breach of confidence at many stages over a period of years.

Mr Bloch sought to describe Mr Brice as “gunning for Mr Bonas” If, by that, he meant that Mr Brice had, above his implementing of instructions from Mr Edwards, some personal desire to harm Mr Bonas or to bring him down I would not accept the allegation; that he mistrusted Mr Bonas, that he felt that the Trafalgar episode was totally unacceptable, that he was quite untroubled should Mr Bonas be forced into bankruptcy, that he wished to protect Mr Edwards and to protect No. 27 is all plain. But it is to be remembered, too, that for a good part of the chronology Mr Edwards was himself deeply distrustful of Mr Bonas, at all events in relation to the possibility of his having undisclosed assets. I do not accept that Mr Brice had some dominant intention to harm Mr Bonas. The reason why, in my judgment, it is unnecessary for me to specify every breach of confidence I find on Mr Brice’s part is because of the difficulty, as Mr Gadd asserts there is, even accepting all the allegations of breach of confidence, in seeing that the breaches caused loss to Mr Bonas. That leaves me to the important question of causation.

In relation to the Bank’s position, it is Mr Bonas’ case, firstly, that (to use Mr Bloch’s phrase) there was a constant drip-feed from Mr Brice to the Bank either of confidential information or of insinuations that confidential information would be supplied to it, the information in either case being suggested to relate to the availability or likelihood of the availability to Mr Bonas of as yet undisclosed assets, and, secondly, that it materially contributed to the Bank’s actions. The Bank’s actions said to be so affected were, firstly, its not insisting upon Mr Edwards’ selling No. 27 or otherwise raising £250,000 and paying it to the Bank by the 18^th January 1996 in implementation of the alleged Compromise Agreement and, secondly, in the Bank’s extending time to Mr Edwards after 18^th January but not accepting the top-up of £20,000 offered by Mr Bonas and in its consequential pursuit of Mr Bonas with a view to his bankruptcy. The allegations require an examination of the factors operating on the Bank at the time and its response to those factors.

As for the Bank’s not insisting on performance of the alleged Compromise Agreement, I have already held that there was no Compromise Agreement of the kind alleged. Of course, the Bank had its respective positions as creditor of Mr Bonas, as chargee of No. 27 and under Mr Edwards’ guarantee but there was no contractual Compromise Agreement having some implied term that Mr Edwards was contractually obliged to both the Bank and to Mr Bonas or to either of them to sell No. 27 or otherwise to raise and pay £250,000 by the 18^th January 1996. The Bank had no reason to believe that there was such a Compromise Agreement and there is no evidence to suggest that it ever had believed that there had been such an agreement. I shall look further into causation but in my judgment Mr Brice’s representations as to the possible supply of information played no part whatsoever in the Bank’s failure to insist by way of contract upon a sale of No. 27 or payment of £250,000 by the 18^th January 1996. That the Bank did not so insist was because it had no ability to do so and no grounds to think it had some ability to do so.

Mr Knight’s written evidence was that payment of £250,000 by the 18^th January 1996 was the last chance given to Mr Bonas to settle his liabilities. “This was his third opportunity to settle and three chances, to my mind, were enough”. When the IVA proposal emerged it was considered by the Bank; the Bank took the view that Mr Bonas was using the Bank’s and Hill Samuel’s claims against him to thwart the Inland Revenue, listed as claiming £155,000. One of the factors the Bank considered was Mr Brice’s mention to it that Mr Bonas had hidden assets and that Mr Brice believed that he had and that he could provide the Bank with papers. In his witness statement Mr Knight said:-

“I did not regard the information we had received from Mr Brice up until that date as evidence of anything. It was just hearsay. All we had was an indication that information might be forthcoming in the future and I thought it might be useful to the trustee-in-bankruptcy in the event of a bankruptcy. That, however, was as far as it went. I did not regard it as material to the decision of whether or not the Defendant should be pursued for his indebtedness if the agreement lapsed. As I have said, that agreement was regarded as his last chance so in a sense the decision had already been made. Indeed we received no further information from Mr Brice. I felt that the position then was exactly that which I anticipated, when I first became involved in this account, would arise if the agreement was not fulfilled and that bankruptcy proceedings should be taken against the Defendant.”

Mr Knight was not involved in consideration of the £20,000 top-up offered by Mr Bonas.

In cross-examination Mr Knight accepted that whilst, until its agreement to accept £250,000, the Bank had not had in mind any expectation of pursuing Mr Bonas for recovery of hidden assets, there had been a persistent and insistent representation to the Bank that Mr Bonas had or probably had hidden assets and that the impact of the representations was that the Bank was expecting to receive information to enable it to track down such assets. He accepted, too, that Mr Brice, as Mr Bonas’ solicitor during the ancillary proceedings should have had such information, which made his representations significant. But he resisted that the Bank’s ultimate agreement to receive only £230,000 was affected by the possibility of information coming to the Bank from Mr Brice. That the Bank was offered information and papers as to hidden assets of Mr Bonas was, he said, “certainly helpful in the cause” and “the cherry on the cake” but there were other factors affecting the Bank. A relatively early receipt of a lesser sum than the full possible sale price of No. 27 was acceptable to the Bank as avoiding the costs, delays and uncertainties of a sale as chargee. As for the offer of information as to hidden assets enabling the Bank to pursue Mr Bonas into bankruptcy and being significant in that respect, Mr Knight said, after a long pause, “I think its something we were going to do anyway”.

Mr Bloch invites me to treat that long pause as having been an indication of doubt in Mr Knight’s mind and of his recognition that there might be conflict between his earlier written evidence and the drift of his oral evidence. I do not regard the pause in that way; in my judgment it represented Mr Knight being careful to reflect on the most accurate way of answering the question. There were other factors operating when an account came into the Recovery Department; the Department liked to see accounts paid within some 2-3 years at worst. This debt was already 5 years old. There had already been two plans for payment made by Mr Bonas that had not been fulfilled and not a single penny had been thus far received. Whilst the Bank did not seek to get blood from a stone, the factor that most influenced the Bank in continuing proceedings was that as a matter of general background Mr Bonas’ family had money.

In re-examination Mr Knight, asked what he had meant by his request to Mr Brice that Mr Brice should provide “ammunition” (paragraph 87 above), explained that what the Bank was looking for was some physical or tangible indication that Mr Bonas did have undisclosed assets but that such was never given to the Bank at all. Although Mr Brice (paragraph 112 above) had on the 24^th January 1996 said that Mr Edwards had “certain leads”, the Bank had not pursued the matter to find what they were.

Taken as a whole my assessment of Mr Knight’s evidence was that Mr Brice’s representations, even such as were untrue or recklessly made, had no effect on the Bank’s conduct. The Bank did not even trouble to find out whether, in practical terms, the representations amounted to anything helpful and there were numerous other factors already operating on the Bank to cause it to act as it did. The information which Mr Brice could offer would be useful to a trustee-in-bankruptcy if there was a bankruptcy and accordingly he did not say that the possibility of provision of such information had no influence; it had some influence but, against the background of Mr Brice not having actually produced anything concrete to the Bank, I do not, on Mr Knight’s evidence, take the prospective supply of possibly useful information by Mr Brice to have had any effect on what the Bank did. As, I believe, Mr Knight himself intended his evidence to be summarised and as I hold, continuing to pursue Mr Bonas was:-

“... something we were going to do anyway.”

The evidence of Mr Crossman, Mr Knight’s superior, was, if anything, less helpful to Mr Bonas. In his second witness statement he indicates that he shared Mr Knight’s concerns as to the true reasons for Mr Bonas’ IVA proposal. When the deadline of the 18^th January 1996 passed the task of recommending to the Bank what to do rested with him. He said:-

“The sort of factors I would have in mind in decisions such as this was the length of time which the loan had been outstanding, the behaviour of the customer in dealings with the Bank, the information on the file relating to the customer, the character of the customer as it appeared from meetings and the customer’s ability to pay.”

None of those factors was favourable to Mr Bonas and although, amongst the factors which Mr Knight had listed for the Bank’s consideration, was that Mr Brice had information, Mr Crossman knew that Mr Knight did not regard what he had been told by Mr Brice up until then as evidence of anything; it was all hearsay. Mr Crossman continued:-

“In the event, we got no further information from Mr Brice. Indeed his letter of the 24^th January 1996 indicated that he had nothing substantial to tell us. So I had to make my decision based on the available material and I concluded that we would proceed to enforce. At that point I had in mind a bankruptcy petition.”

Mr Crossman’s witness statement continued:-

“In making the decision to pursue the Defendant for the outstanding debt [Mr Brice’s] offer of information was one of many factors being considered. No information had been forthcoming which offered any hard evidence. All the other factors mentioned above and in Mr Knight’s file pointed to proceedings.”

As for his declining of the £20,000 top-up, his evidence was that once the agreed deadline of the 18^th January 1996 had passed the Bank’s earlier agreement lapsed and “we were in a different situation altogether”. The claim against Mr Bonas was for a sum in excess of £500,000; the offer was rejected “for the simple reason that against that background it was insufficient”. Mr Edwards’ £230,000 was held in a suspense account pending pursuit of Mr Bonas as principal debtor.

In cross-examination Mr Crossman accepted that he assumed that Mr Brice had some inside knowledge; he knew he had been engaged in the ancillary proceedings as Mr Brice’s solicitor and that confidential information could be released to a trustee-in-bankruptcy of Mr Bonas but he did not know if the information was of value. It was a very very old debt and the Bank was of the view that it should cut its losses and get something out of the security. The Bank was not so concerned as to the precise value of the security but if £250,000 could be received the Bank could close its file and there was thus a commercial decision that £250,000 was acceptable. Possession proceedings could be expensive and No. 27 (he understood) was on a short lease and the longer the matter went on the more the price could be affected. £250,000 reflected no prospect of recovering from Mr Bonas; there had been no proof of the existence of any assets from Mr Brice, just references His answers made it plain that a material factor in the Bank deciding to act as it did was that accepting £250,000 would enable the Bank to be released from the burden of the file in what Mr Crossman regarded as a recessionary period.

The Bank told Mr Brice that if useful information was provided which pointed towards as-yet undisclosed assets it would be taken into consideration in softening any blow against Mr Edwards. That may have consisted of a reduction in liability but there were other possibilities; Mr Edwards could, for example, have been permitted to occupy No. 27 for, say, another 2 years but no reduction of the £250,000 was discussed with Mr Brice (before any January deadline). After the 18^th January the Bank was not in a concessionary frame of mind in relation to Mr Bonas. After the deadline Mr Edwards offered £230,000. The Bank knew that No. 27 was being marketed at £350,000 but the Bank decided to agree to receive £230,000 from Mr Edwards. It was not the case that the Bank had some understanding with Mr Brice such that Mr Edwards was not at risk in letting the January deadline pass. There had been no agreement or implied agreement to such effect. Mr Crossman had said nothing to Mr Brice to enable him to tell Mr Edwards that Mr Edwards need not worry.

When Mr Bonas had proposed his IVA he had not first told the Bank of his intentions. Compared with going into bankruptcy IVAs were, thought Mr Crossman, an expensive process and Mr Bonas’ proposed use of one itself suggested the availability to Mr Bonas of assets. Mr Crossman felt that Mr Bonas’ ancillary proceedings and the provision he had had to make for his first wife would not have been such as to have stripped him of all his assets and hence, for that reason, too, it was likely that Mr Bonas had assets. As for his conduct, he had done 3 deals with the Bank, to no avail. His dealings with Hill Samuel had been irregular. A study of the file which the Bank had on him suggested to Mr Crossman that Mr Bonas did have assets and, in Mr Crossman’s view, the proposal for an IVA itself pointed to someone with assets to hide. The Bank’s experience of IVAs was one of some scepticism; there was no investigation of the debtor’s background. Mr Crossman, so to speak, was against IVAs. Whilst Mr Brice was claiming or inferring that there were assets and that he had useful information, he had never actually produced documents. Such approaches on behalf of guarantors were fairly common. Mr Crossman said he was certainly not following Mr Brice’s suggestion that there should a bankruptcy; the Bank was guided by the experience of its managers. Debtors do not always tell the truth. The Bank believed further sums could be obtained from Mr Bonas, perhaps from family money, and, in effect, the mediated compromise which Mr Bonas later agreed with the Bank proved that view to have been right.

So far as is relevant for immediate purposes, I hold, on Mr Crossman’s evidence, that he weighed up a number of factors in deciding how the Bank should proceed once the 18^th January had passed; all of the factors pointed to the Bank going forward to proceed against Mr Bonas and chief amongst them was a feeling that there would be (as it transpired there was) some recovery from him. I hold that Mr Brice’s representations or blandishments were, in Mr Crossman’s view, of a kind fairly commonly advanced on behalf of guarantors, were of hearsay, of claims and inference rather than of substance and made no contribution to the Bank’s decision in the sense that pursuit of Mr Bonas was, to revert to and adapt Mr Knight’s phrase, something that the Bank was going to do anyway. The Bank, I hold, would have done as it did even had Mr Brice made no representations.

As for Mr Brice influencing Mr Edwards’ actions in some way that a solicitor untainted by confidential information would not or could not have done, I do not find evidence to support any such conclusion. Until Ian Bonas, Mr Bonas’ brother, visited Mr Edwards in April 1996, Mr Edwards had not even begun to change his view on the subject of Mr Bonas having undisclosed assets. The offer of McCulloch & Wallace would have suggested he had some. Mr Edwards had been annoyed at the Trafalgar episode, which cost him some £32,500, and was vexed by Mr Bonas’ orchestration of offers to buy No. 27 for £250,000 shortly before the 18^th January 1996. He had had a “tiff’ with Mr Bonas on the subject. He was reliant on receipt of income from No. 27 and was determined to hold on to it for as long as possible. Mr Brice’s advice as I have held him to have given to Mr Edwards, that the 18^th January was not a critical watershed, was advice which, against Mr Edwards having given him no reason to believe that the alleged Sale Agreement and Compromise Agreement existed, was not only advice that any “untainted” solicitor could properly and might very well have given to Mr Edwards on the state of facts which Mr Edwards then gave but was later proved right. Mr Edwards needed no animus of Mr Brice, hostile to Mr Bonas, nor any advice or representations from Mr Brice contaminated from the Solicitor’s earlier actings for Mr Bonas to let the 18^th January pass without his either selling No. 27 or drawing down what his sister was prepared to lend him. The Bank did extend time to Mr Edwards after the deadline. Mr Bonas’ solicitors’ threats that he, Mr Edwards, was in breach of contract was, perhaps, as Mr Gadd argues, “the last straw” and certainly, by the deadline or a little after, Mr Edwards’ patience with Mr Bonas was exhausted. Mr Edwards, determined to keep No. 27 as long as he could, looked to his own interests, as he was entitled to do and chose, quite independent of any tainted representations or advice from Mr Brice, neither to sell No. 27 nor to pay the Bank by the deadline but to attempt, as he put it and as he successfully did, to cut a better deal for himself.

My view of the facts being as I have stated, I have no material on which to find that if Mr Brice had not behaved improperly or if, instead of having Mr Brice acting for Mr Edwards, Mr Edwards had throughout had a solicitor untainted by earlier-acquired confidential knowledge, the Bank’s actions and Mr Edwards’ would have been different in any material way. There is, as I hold, no causal link between the breaches of confidence alleged and Mr Edwards’ or the Bank’s behaviour and none between breach of confidence and any loss which Mr Bonas claims. That loss is said to be the difference between Mr Bonas’ position had the alleged Sale and Compromise Agreements been performed (nothing further owed to the Bank by Mr Bonas but, presumably, £250,000 owed to Mr Edwards) and the situation upon such alleged agreements not being performed (£100,000 due to the Bank under the mediated compromise and, presumably, £230,000 owed to Mr Edwards). The claim is argued as if for a loss of £100,000. However, I have not found the causal link necessary for Mr Bonas to succeed and I dismiss all Mr Bonas’ claims for breach of confidence on that account.

I accept Mr Gadd’s submission that claims in negligence here add nothing to those in breach of confidence. Outside such duties as Mr Brice owed to Mr Bonas on account of Mr Bonas having been Mr Brice’s client, Mr Brice at the relevant times owed no duty of care to Mr Bonas and hence, outside that area, could not be liable in negligence to him. Within such duties as Mr Brice owed to Mr Bonas on that account, Mr Brice was potentially liable only in the ways already explored and which I have held, for the reasons I have given, to fail as claims in breach of confidence. Such reasons apply equally if the claims are regarded as claims in negligence. I thus dismiss Mr Bonas’ claims in negligence.

I have already given reasons which, on the facts alone, lead me not to find either the pleaded Sale Agreement or Compromise Agreement to exist as agreements intended to bind, as to the Sale Agreement, Mr Edwards and Mr Bonas and, as to the Compromise Agreement, them and the Bank.

As for the Sale Agreement, Mr Edwards thought that negotiations such that the Bank might well accept £250,000 in full and final settlement of both his and Mr Bonas’ position had occurred by the time of the meeting at which the alleged Sale Agreement was said to have come into existence. The Bank’s notes do not show that £250,000 was agreed on or before 4^th July but it matters not if Mr Bonas had not in fact agreed that figure with the Bank; that was the position which Mr Edwards understood from Mr Bonas to be the case. On that basis, if Mr Bonas had proposed that he would negotiate with the Bank and that that alone was the consideration moving to Mr Edwards in return for his agreement, then Mr Bonas has the further difficulty that the consideration was illusory as past consideration.

But, even if one supposed that there had been a Sale Agreement of the kind asserted, what is said to consist Mr Brice’s unlawful interference with it? His client told him there was no such agreement and he was entitled to accept that. I cannot accept that a solicitor who, on the instructions he is given and who on the facts as they then seemed to him to be, sees no binding contract and has no good reason such that he ought to have seen the existence of one, can be liable for unlawful interference with a contract if he does no more than give honest advice to his client, albeit advice which is inconsistent with the client being bound by the contract. Moreover, so far as concerns the alleged Sale Agreement, Mr Brice, as I have held, never went beyond an indication to Mr Edwards that, as I have explained, the 18^th January 1996 deadline was not a crucial watershed, an indication that did not derive from “contaminated” information originating from his having been Mr Bonas’ Solicitors. I cannot see that it was unlawful of him so to say, nor do I find it unlawful of him to have so advised Mr Edwards as part of conduct the general purpose of which (as is asserted) was to persuade the Bank to recover from Mr Bonas and not from Mr Edwards and which thus was intended to benefit Mr Edwards but concomitantly to give rise to a detriment to Mr Bonas. Nor do I find any grounds for a finding that Mr Brice procured Mr Bonas to breach either of the alleged Agreements.

As for the Compromise Agreement, Mr Gadd submits, and I accept, that by reason of the long established rule in Foakes -v- Beer (1884) 9 App Cas 605 there was no consideration moving to the Bank - see Chitty on Contracts 28^th Edition at paragraphs 3-107 - 3-109. A promise to pay £250,000 to the Bank when far more was owed to it represented no consideration in the eyes of the law. There was no binding Compromise Agreement, nor did the Bank or Mr Edwards ever apprehend that there had been. Mr Edwards’ instructions to Mr Brice were consistent only with there having been no Compromise Agreement. In my judgment he had no reason to think there was one and, again, I have no reason to hold that Mr Brice ever advised Mr Edwards or indeed advised the Bank that the so-called Compromise Agreement could be broken with impunity or that it should be broken. Further yet, for reasons I have already given, I have been unable to find any causal link between Mr Brice’s behaviour and any loss to Mr Bonas. Mr Brice played no greater part in the extension, only as to Mr Edwards, of time after the 18^th January 1996 beyond, as I have held, indicating to Mr Edwards that the 18^th January was not a crucial watershed and then in passing on Mr Edwards’ offer of £230,000 to the Bank, as he was obliged to his client to do. I find no liability of Mr Brice under this heading and dismiss the claim accordingly.

The unlawful means alleged are said to be the breaches of confidence with which I have already dealt. However, for the reasons I have already given, I have not been able to find any causal link between Mr Brice’s breaches of confidence and the loss alleged to have been suffered by Mr Bonas nor, more widely, between any improper conduct by Mr Brice and some actionable loss to Mr Bonas. I thus do not find Mr Brice to be liable under this heading. Both Mr Gadd and Mr Bloch raise further arguments in connection with this difficult tort. Mr Gadd argues that as Mr Brice’s conduct was not “aimed” at harm to Mr Bonas, the tort does not apply and in any event that the tort only applies to “business” interests whereas Mr Bonas’ interests in this case were wholly private, the financing of an award made in ancillary matrimonial proceedings. On the other hand, Mr Bloch argues that where conduct intended to benefit A involves a manifest detriment to B it cannot be said not to be “aimed” at B and in any event, he says, that on a proper analysis Allen -v- Flood [1898] A. C. 1 an interest does not have to be a “business” interest in order to be within the area protected by the tort. As, for want of the causal link, there can be no liability under this heading I leave over such questions to other cases where they need to be decided.

I believe I have now dealt with all the principal claims raised by Mr Bonas. I dismiss his Part 20 claim.