Maher v Maher & Anor

This judgment has been handed down in private because of the consequences of the COVID-19 pandemic. However the judgment is publicly available.

In the judgment, page references to the trial bundle appear with the relevant bundle name or number separated by a stroke from the page number.

The Claimant and Defendants are brothers (Footnote: ¹ ) . Together with their sisters, Siobhan Maher and Mary Mills, they are the children of the late William Maher and his widow, Monica Maher (Footnote: ² ) .

During his lifetime, William built up a successful group of companies whose business lay in the demolition of buildings and land remediation, with associated excavation, haulage, waste disposal and waste recovery. The central company in the group was W

In June 1997, William executed a settlement trust. The entirety of the shares in WMS were transferred to the trust. Since then, the trust has acquired a residential property at 36 Albert Road, Hale (“the house”), which is occupied by Siobhan. The shares in WMS and the house are the trust’s only assets.

The original trustees of the settlement trust were William and Monica. On William’s death, Monica became the sole trustee for a while, but subsequently appointed her three sons, Vincent, Brendan and Gerard in her place.

The dispute between the Claimant on the one hand and the Defendants on the other that has formed the subject matter of this litigation commenced as an argument about whether the trust should sell the shares in WMS. It has developed into a more general dispute about which of the three of them (if any) should be allowed to continue to act as trustees and whether further independent trustees should be appointed.

There is a great deal of material before the court. Some of it is of limited, if any, relevance to the issues before the court. Much of the material about the day to day operation of WMS and indeed other companies in the group does not assist the court on

Further, issues are raised as to the conduct of the parties in terms of the pension fund. In short, the Claimant applied to release his lump sum entitlement from the pension trust in September 2014, but this has still not occurred because of disputes relating to the valuation of pension trust assets. The Claimant suggests that this is a result of WMS, through Defendants as its directors, failing to honour its obligations to the pension trust. Whilst clear cut evidence of the maladministration of a pension trust by trustees might be highly relevant to their fitness to act as trustees of the settlement trust, the evidence here is not at all clear cut. I agree with the submission of Mr Weisselberg QC on behalf of the Defendants that the pension complaints are matters for the pension ombudsman that I cannot properly investigate in this litigation.

I therefore limit this summary of the evidence to the broad history of WMS and the trust, before summarising the core issues and analysing the factual issues that are important to deciding the issues before the court.

WMS was established by William and was incorporated on 25 July 1974. Vincent, Brendan and Gerrard all worked in the company and over time became directors and acquired a shareholding. At varying times, other members of the Maher family had been employed (and in some cases continue to be employed) by WMS, including: Matthew (son of Brendan) - he has been a director of WMS since December 2016; Callum (son of Gerard) - similarly a director of WMS since December 2016; Siobhan (one of the sisters); Dominic (son of Brendan); Joseph (son of Brendan); Joshua (one of William’s grandchildren (Footnote: ³ ) ); Laura (daughter of Vincent); Paul (son (Footnote: ⁴ ) of Vincent); Mary Mills (the other sister); and (probably (Footnote: ⁵ ) ) Loretta Mills (Mary’s daughter).

Over time, the business developed in different directions such that:

The structure of the companies as at June 2014 is shown in the table at 2B/1587. This identifies which were owned by WMS and which were owned by other family members.

On 24 June 1997, a meeting took place at which William, Monica, Vincent and Brendan were present from the Maher family, as well as (probably) Barbara Chadwick and Brian Cripps (Footnote: ⁶ ) . A proposal to create a discretionary trust was discussed and agreed upon. It was intended that William (Footnote: ⁷ ) , Brendan and Gerard should transfer their shares in WMS to the trust. The trust was established by deed of settlement executed by William on 30 June 1997. The entirety of the shares in WMS were duly transferred to the trust.

The deed of settlement identifies William’s five children identified at paragraph 1 above. Of particular relevance within the deed are the following clauses:

Further, paragraph 12 of the Second Schedule provides, “The trustees shall not be bound to inquire into or be involved in the management of any company in which the Trust Fund is invested unless they have knowledge of circumstances which call for inquiry.”

William died on 3 April 2006. His widow, Monica, continued as sole trustee until 10 February 2011 when she retired from the role and was replaced by Vincent, Brendan and Gerard.

From around 2011, it seems that there was a gradual parting of the ways between Vincent on the one hand and Brendan and Gerard on the other. Brendan and Gerard continued in the active management of WMS, whereas Vincent was less involved in the management of the company, albeit that he continued to attend board and other meetings until 2014.

It is common ground between the Claimant and the Defendants that, by 2014, Vincent was suggesting that the trust sell the shares in WMS. The detail of the discussions and the extent to which agreement was reached on the way forward is a matter of dispute between the parties as identified below, but it is Vincent’s pleaded case that the agreement was reached on or shortly before 29 January 2014 and that the agreement was confirmed on 10 July 2014.

In February 2014, Vincent contacted Hornblower, a business brokerage company, to investigate the sale of WMS. The exact circumstances of his doing so are in dispute, Gerard and Brendan stating that they were unaware of this until October 2014 or at least July 2014.

On 10 July 2014, a board meeting of WMS took place. This was the last board meeting that Vincent attended. It was one of several meetings and conversations that Vincent covertly recorded.

On 3 September 2014, Vincent resigned from his employment with the company.

On 22 September 2014, Vincent met with Brian Cripps and Chris Booth. This was another of the meetings that Vincent recorded and of which a transcript is therefore available. Amongst other thing they talked about Vincent’s resignation from the company and the operation of the trust. Whilst considering potential ways out of the impasse that was developing, Vincent said, “So at the end of the day, I don’t have to put up with them two, let them two run it whatever way they see fit, and I don’t want to be arguing with ‘em and I don’t want to argue with ‘em full stop. I just want what I think is right and proper and hopefully if they can get round the table, maybe so, but if it goes the other way, then I’m just gonna block ‘em forever more, you know. And that, like you say, it just ends up in a stalemate and it just gets bitter.”

On 17 November 2014, Ms Chadwick emailed Mr Booth stating, “Brendan and Gerard have asked me to email to confirm that after having a meeting, they have made the decision that the company is not for sale. Under these circumstances, please do not pass any details whatsoever on to third parties.” (2B/1930).

On 9 March 2015, Vincent, by his solicitors, sent a letter of claim to Brendan and Gerard. The letter raised a number of complaints about how Brendan and Gerard were running WMS and threatened action to enforce the alleged agreement to sell WMS, to remove Brendan and Gerard as trustees, to seek orders for the proper regulation of the affairs of the company and trust, and/or for compensation for breaches of duty by Brendan and Gerard.

On 11 May 2016, a board meeting took place at which Brendan, Gerard and Roy Taylor, who had been brought in to deal with Vincent’s concerns about governance (Footnote: ⁸ ) , were present. It was noted that the outstanding sums due on the directors’ loan account were £828,918.87 in respect of Gerard, £1,926,454.17 in respect of Vincent. There was no outstanding sum due in respect of Brendan. The board resolved that it was in the best interests of the company to seek to recovery of the outstanding sums as soon as possible and requested that directors with outstanding sums on their account should provide a statement of assets and liabilities, together with proposals for repayment and/or security.

On 7 July 2016, WMS wrote to Vincent requiring that he pay £125,000 towards his directors’ loan account within 28 days and make proposals for the repayment of the balance.

On 24 August 2016 at a board meeting, WMS resolved to accept Gerard’s offer to repay his director’s loan account at the rate of £50,000 per month.

On 6 September 2016, solicitors for the company sent a letter to Vincent requiring repayment of the full amount outstanding on the director’s loan account, £1,926,454.17 within 14 days.

On 19 September 2016, Vincent, issued this claim. On the same day he sent a solicitors’ letter to Gerard and Brendan, accepting that he owed about £1.63 million on the director’s loan account and proposing that his brothers agree to stand down as trustees and agree to the appointment of independent trustees, in which event Vincent too would agree to stand down as a trustee.

On 11 November 2016, WMS issued a claim against Vincent in respect of the sum of £1,926,454.17 said to be outstanding on his director’s loan account. In his defence in those proceedings, Vincent contended that the claim should be struck out (the decision to commence proceedings having been taken by majority, rather than, as Vincent contended was necessary, unanimously) or alternately stayed pending determination of this claim. Various other defences were raised, including the assertion that the amount claimed was inconsistent with previous statements as to the amount due and owing. In July 2017, HHJ Moulder (as she then was) ordered the provision of a Scott Schedule in which Vincent set out his case on each of the items contended by WMS to be properly chargeable to his account. In that document, which appears at 4A/6238, a small number of the items were accepted without qualification. Some were accepted “subject to verification”. A significant number were either rejected altogether or subject to the statement that, “The Defendant is unable to comment given the lack of detail provided.”

By letter dated 3 March 2017, WMS stated that it was treating Vincent as removed from office as a director due to non-attendance at meetings. The result is that his only involvement in the company since then has been indirectly as one of the trustees of the settlement trust.

On 1 June 2017, a general meeting of WMS took place. This was one of the meetings that Vincent recorded. By that time, the true nature of the beneficial interest in the trust was understood (see transcript of the meeting at 2F/5114). Brendan and Gerard jointly proposed the payment of a dividend of £250,000 which would of course have accrued to the benefit of the trust. Vincent said that he would think about the proposal but did not subsequently approve the payment of such a dividend.

The trial of the claim by WMS on the directors’ loan account was listed to commence on 13 November 2017. However, on 6 November 2017, Vincent accepted a Part 36 offer made by the company in the total sum of £1,896,454.17 (Footnote: ⁹ ) .

On 5 June 2018, District Judge Matharu gave direction in these proceedings including for the filing and service of statements of case.

On 7 September 2018, Roy Taylor emailed Vincent about the impending general meeting of the company expressing concern that, at the previous year’s meeting, Vincent had been provided with far more information than he was entitled to as one trustee of the shareholder in the company and that Gerard and Brendan did not intend to provide the material that he was requesting in advance of the 2018 meeting. On 11 September 2018, Vincent replied, stating that there was disagreement about what he was entitled to and suggesting that an independent law firm be instructed to advise on what he was entitled to. Mr Taylor replied, declining to take up the offer.

On 14 September 2018, a general meeting of WMS took place. Again, Gerard and Brendan proposed the payment of a dividend of £250,000. Again, Vincent declined to agree such a payment. He is minuted as having stated, “he could not make such discussions with the financial information he had requested.”

This matter came on for trial before me on 13 January 2020.

The parties have defined the core issues in the case as follows:

The Claimant’s case on issue 1 is as follows:

On issue 2, he says:

On issue 3, the Claimant does not identify any need for consequential directions or any further relief.

The Defendants’ case on issue 1 is that, since the Claimant does not now seek any relief is required in this respect, the court does not formally need to consider the issue. However, they contend that the manner in which the Claimant has pursued the issue is relevant to consideration of issue 2.

On issue 2, the Defendants’ position is as follows:

There is no dispute on the applicable law, which can so far as relevant be summarised as follows:

The Claimant relies upon his own statements dated 16 August 2016, 20 December 2016 (largely dealing with procedural issues), 23 February 2018 and 26 February 2019. The first three of these statements preceded the Particulars of Claim.

The Defendants rely on the following witness statements:

All these witnesses, save Monica, gave oral evidence over 6 days of the trial.

The parties jointly instructed a handwriting expert, Ms Ellen Radley of the Radley Forensics Document Laboratory. Her report is dated 11 January 2019. It was admitted in writing.

In order to assess the parties’ cases on the core issues, it is appropriate to consider in particular the following aspects of the evidence:

The Claimant covertly recorded several discussions and meetings between himself and the Defendants and/or other people who were acting on behalf of the company, as follows:

It has been said that covert recordings of discussions generally say more about the person recording the conversation than they do about those who are covertly recorded (see Peter Jackson J, as he then was, in M v F [2016] EWFC 29). Of course the value of a recording will depend on its contents and its circumstances, but in the context of this (and most other) cases, the following points are obvious.

A further feature of the covert recordings is that Vincent admitted that he had lied about the recording of meetings. For example, during the meeting on 1 June 2017, Vincent was asked if he was recording the meeting. He said that he was not (see 2F/5088) though in fact he was. Indeed, he said of this meeting in his third witness statement at paragraph 173 (Core/173), that he had (in advance of the meeting) suggested that a note be taken by a third party and/or the meeting be recorded and that his brothers were not prepared to agree to this. He goes on in that statement to dispute the minute of the meeting and to say at paragraph 16(ii), “It is disappointing that there is any dispute at all as to what was said – if a third party had taken the notes, for example, no such dispute would have existed at all.” Yet Vincent does not mention that he had in fact covertly recorded the meeting himself. Had he referred to that recording in this witness statement, there would have been little if any ground to dispute what had been said in the meeting. Whilst this statement may be “the truth”, in that it was disappointing that there was a dispute about what had been said that could have been avoided if a third party had taken notes, it could not be said to be “the whole truth”, where any dispute could equally have been avoided by Vincent disclosing the fact that he had recorded the meeting. His witness statement is clearly intended to bolster his assertion in the meeting itself that he was not recording it.

When Vincent was cross examined about paragraph 16(ii) of the third witness statement, he said that he did not trust his brothers and that the company secretary who was present, Mr Taylor, was acting on behalf of WMS and/or his brothers. He recorded the meeting to see how truthful or dishonest his brothers might be in the meeting. He did not mention the recording in his third witness statement because he wanted to see

I find Vincent’s approach to this issue to be troubling. He has showed a willingness to lie to his brothers and Mr Taylor about whether the meeting was being recorded, but further to maintain that lie in a witness statement to the court to further his ends. This causes me concern about his honesty and reliability as a witness.

A further concern raised on behalf of the Defendants was that, whilst Vincent had produced recordings of some meetings, there were others, for example the meeting on 3 September 2014 when he announced that he was ceasing working for the WMS, in respect of which had had not produced recordings. If he had felt the need to record some meetings, it is very surprising that he did not record all of them. He was understandably asked whether he had destroyed any recordings of meeting to which his answer was

“Not that I know of, no.” One might have expected Vincent to know the answer to this question, and his equivocation suggests that he might not be telling the truth. It is of course possible that there was a good reason for not recording the meeting, such as his suggestion that he may not have had his mobile phone to hand in order to record the meeting. There is insufficiently clear material for me to hold that Vincent was lying (or indeed was mistaken) when he said that other meetings were not recorded.

As to what the covert recordings in fact show, I have listened to several of the recordings as requested by the parties in order to consider the context of what was said and Vincent’s repeated assertion that he was being bullied.

It is certainly the case that, during the various recordings to which I have listened, each of the brothers shows himself able to expressly himself forcefully. Some of the language used is offensive and at times each of them is confrontational. Further, comments are made which, in the context of two brothers outvoting a third might be said to be derogatory. An example is the assertion by Brendan during the second recorded meeting on 3 February 2014 that Vincent suffered “older brother syndrome.”

But if bullying is meant to mean the use of intimidating behaviour to get one’s own way, I see no pattern of this in the manner asserted by Vincent. The recordings show that Brendan and Gerard largely agreed on the way forward, but they disagreed with Vincent. This is most obvious on the issue of sale of the WMS shares. It was put to Vincent in cross examination that he was not being bullied but rather was frustrated at

It is correct that Vincent’s allegation of bullying is not new. He complained of being “overruled and bullied” by his brothers in the first recorded meeting, that with Mr Booth on 29 January 2014. From the context of that comment, the impression I gain is not that Vincent was trying to get the complaint of bullying on record but rather that he genuinely believed that his brothers were combining against him. To that extent, I do not consider his evidence on this issue to be tainted by dishonesty.

Further, I accept Vincent’s evidence that, prior to the period of increasing distance between the brothers from 2011, decisions within the company had tended to be taken unanimously. I see no evidence from which to conclude that there was any obligation on the brothers, as directors of the company, to reach unanimous decisions but it is perfectly understandable that, as a relatively small family business employing various members of the Maher family, there should be a desire for unanimity where possible. Given the increasing dispute between the brothers about the sale of WMS in 2014, it was perhaps inevitable that the custom of making unanimous decision (including, as tends to be the case with such decision-making processes, the need sometimes for the majority to back down in the face of strong minority objection) should be replaced by the desire (at least in the majority) for majority decision making. I can well see that this would cause resentment in the mind of the other director, where he was repeatedly in the minority. But on the evidence before me, Vincent’s perception that he was being bullied arose from his being in the minority and outvoted by the others in circumstances where previously they may have deferred to his views. Objectively viewed, this does not amount to what could properly be called bullying behaviour

A feature of this case is that, notwithstanding the terms of the settlement trust, the Claimant and the Defendants have until recently all believed that the three of them were the equal beneficiaries in the trust. Somewhat frustratingly this issue was not dealt with by any of the three of them in their witness statements, though it must have been obvious to someone with the most minimal understanding of the case that it was a highly relevant issue. In any event, they each accepted in cross examination that they had believed it to be the case until recently that the three of them were the equal beneficiaries of the trust. Further, there are numerous points in the covert recordings

Given the clear terms of the trust deed, this is striking. One might have thought that they would have considered it unlikely that their father would have created a trust to benefit them and not their sisters. Further, even if they had believed themselves to be the equal beneficiaries of the trust when they were not trustees, one would have expected that even a minimal level of enquiry on becoming trustees would have led them at least to read the trust deed, if not to take advice on it. Each of the brothers said in the witness box that he had not had advice on the true meaning and effect of the settlement.

It is of note to see what the brothers thought their father’s intention was in establishing the beneficial interest in these shares:

There was some dispute between the brothers as to whether William’s concern arose from instability in Vincent’s previous marriage or in Gerard’s current one. It is unnecessary to decide this matter since either (or indeed both) would be capable of explaining why William had concerns about keeping the share in the family. It is notable in passing though how vehement each of the brother’s evidence was on this issue, despite it being peripheral to the issues before the court. This shows the severity of their fallout.

A statement from Mr Cripps, the accountant at McKellen’s who advised William, appears at 2A/1247. He describes his knowledge of the settlement in broad terms and adds that “Mr (sc. William) Maher told me on at least one occasion that his intention in setting up the Settlement was to protect the Shares in the event of one or more of his sons getting divorced and this his intention as settlor was that, notwithstanding that the shares would continue to be held in trust, the beneficial and eventual legal owners of the shares would be his three sons in equal shares.”

Mr Cripps was not called to give evidence and therefore it was not possible to explore the reliability of this statement. On its face, it shows that, at the very least, he, as the accountant advising William, believed the brothers to be beneficiaries in equal share and, at its highest, that William himself believed this. It is simply not possible to explore how this belief on the part of either of them could have come into existence.

I conclude from this evidence that, however surprising it may be that this misunderstanding came about, each of the brothers did indeed believe that he was entitled to one third of the beneficial interest of the trust in the shares of WMS.

There is some dispute as to timing of when they came to realise that they were wrong. The Defendants argue that the Claimant must have been aware that he was not entitled to a one third share in the company by February/March 2014 or May 2014 (when he appears to have had discussions with a lawyer about how the trust worked) and in any event in September 2014 (having discussed the terms of the trust in a recorded meeting with Mr Cripps on 22 September 2014), that is to say far earlier than Vincent’s own evidence that he first discovered that he was not entitled to a one third share in the trust in late 2015 or 2016. The Defendants point out that Vincent continued to assert an entitlement to one third of the value of the company in October 2014, and that this shows him acting in a manner inconsistent with his duty to further the interest of the beneficiaries.

However, I am not convinced that it can be said that Vincent asserted an entitlement to one third of the value of the company in the clear knowledge that he was not entitled to this. The transcript of the discussion with Mr Cripps on 22 September 2014 shows that Vincent was not being clearly told what his settlement was. Notwithstanding the discretionary nature of the trust, the history of the parties’ understanding of the effect of the trust would make it understandable that the brothers might continue to be unsure about their entitlements. Whilst it seems somewhat strange that Vincent should repeatedly criticise his brothers for treating the company as theirs to control regardless

Vincent’s account of how and why the relationship broke down is unclear. He identifies a breakdown of trust at paragraph 36 of his witness statement of 26 February 2019 and, in the following paragraph, attributes that breakdown to three factors all of which arose in or after 2014, namely:

On the other hand, Vincent said in evidence that, by February 2014, he had so little trust in them that he felt it necessary to record a series of meetings and conversations with his brothers and other involved with the operation of WMS (Footnote: ¹¹ ) . It seems unlikely that the factors of which he complains in paragraph 37 of that statement would have caused so serious a breakdown so quickly.

Indeed, in the meeting on 29 January 2014, Vincent had said to Mr Booth that the situation between his brothers and he was “getting untenable.” At that time, Vincent’s concern seems to have been largely about the amount of money that WMS was spending on the instruction of his brothers. That is entirely different than the three reasons given by Vincent in his witness statement for the breakdown of the relationship.

Brendan, in contrast, speaks of growing concern from 2011 on his and Gerard’s part that Vincent was focussing his work on Greens, which were beginning to work in competition with WMS. This seems more plausible in so far as it is consistent with a

It is no doubt the case that Brendan’s account of the breakdown in the relationship reflects his perception of events. It is probably influenced by the belief that he and

Vincent’s first recorded account of the decision to sell the company appears in the letter of claim dated 9 March 2015 (3A/5164). Paragraph 30.1 of the letter states, “In or around March 2014, a unanimous decision as taken by [Vincent] and [Brendan and Gerard] to sell the company and (its related businesses/group companies) with any such sale being subject to an acceptable price being offered.” This agreement is said to have been “confirmed” in a meeting which took place on 10 July 2014. Towards the conclusion of the letter of claim at paragraph 37.1, the agreement is said to have been reached in June 2014.

Vincent’s pleaded case at paragraph 8 of the Particulars of Claim is that “on or around 29 January 2014 the Claimant and the Defendants, as Trustees of the Trust and therefore as sole shareholder in the Company, took the unanimous decision to sell the

In his first witness statement, Vincent says the following of the decision/agreement to sell:

In cross examination, the Claimant was asked about this inconsistency of dates. He said that the meeting where the agreement was reached was in January 2014 but variously said that it had taken place “on or before 29 ^th ”, “before the 29 ^th ” and “could have been on 27 ^th or 28 ^th .” He stated that his brothers kept changing their minds.

His explanation for the date in the letter of claim was simply that it was wrong. He said that his brothers kept changing their minds, that “they change with the wind.” He went on to say, “If we got a price for it of excess of 30 million pound and sat down, then we would have to make another decision as trustees whether we sell the company.”

When Mr Weisselberg QC for the Defendants pushed Vincent about the agreement, the following exchange took:

“Q: You never agreed whether Brendan or Gerard would continue to work in the business after the sale?

A: We did not know what we were going to do with the sale of the business. We wanted to get it out there, put it out, advertise it through Hornblower’s and let us just see what goes with it. That is where we took it.”

These exchanges led me to comment that I was not sure whether it was Vincent’s case that an agreement had been reached. But shortly after this, Vincent seemed to change his position by reverting to the position that there was a fixed agreement at least at some point:

Vincent was asked about his evidence that the agreement to sell was confirmed in a meeting on 10 July 2014. In fact, it is clear from the transcript of a meeting on that day that his brothers were not agreeing to sale. Vincent’s response to this was to assert that “the transcript itself is only a certain portion of what went on that day.” He thought he recalled that there was a conversation agreeing to sell the company when the three brothers were “passing each other in the office”. The Defendants’ point out that this description of the circumstances is very different to the description of agreement being

“confirmed” in “a meeting which took place on 10 July 2014” (as referred to at paragraph 23 of Mr Maher’s first witness statement), which gives the impression of formality in the discussions rather than a conversation in a corridor.

In a meeting on 22 September 2014 with Brian Cripps and Chris Booth, Vincent had this to say about the sale of the business: “Well Brian, let me just go back probably six weeks. Eight weeks/two months ago. The two of them were adamant they were not selling. That is where it was. They were adamant they won’t sell.” Vincent’s explanation of this was that his brothers were repeatedly changing their minds. However, it is difficult to square this with his evidence that in July his brothers were agreeing to sell.

Vincent’s attention was drawn to an email of 28 September 2014 that he had sent to Mark Sykes and Chris Booth saying, “As for the brothers trying to sell the business,

Vincent was asked about a meeting with Mr Booth on 7 October 2014 (2F/5023), in which he is recorded as saying, “I don’t want to go down the legal route, but if I have got to do it, I will do, and I know it’s in the trust and all the rest, but I don’t think they know their, how can I put it? They do -, they don’t understand the trust, they know a certain amount of it but they don’t understand it all, and I think if Brian and yourself were to tell them, ‘Look, it’s going to end up in court, it’ll probably end up in the papers, blah blah de blah.’ It could end up as though it’s like egg on everybody’s faces.” Vincent did not accept that this was inconsistent with a belief that he and his brothers had a concluded agreement. He maintained that a unanimous decision had previously been taken.

Vincent was asked about a letter from his solicitor to Brendan dated 13 November 2014

However, in fairness to Vincent, it should be noted that, on 19 November 2014, he emailed Mr Sykes at Hornblower stating, “The brothers are now saying they don’t want to sell…” This is consistent with a belief on his part that Brendan and Gerard previously having been agreeable to a sale.

At the conclusion of re-examination, in response to questioning from me, Vincent said as follows:

“The agreement was to sell the company initially. That is where we – you know – made the decision to sell the company or find a prospective buyer. And that is – you know – when someone is telling you ‘we will sell it’. ‘See what we can get for it.’ ‘Are you up for that?’ “Yes, I am.’ ‘Are you?’ ‘Yes, I am up for that.’ And that is how it happened.

Q. So would there need to be a further decision – a decision as trustees as to whether to sell the company if an offer were made?

A. Yes, there would be. Yes.”

Brendan’s evidence as to the alleged agreement was that, in early 2014, he was aware that Vincent was saying “that we weren’t getting on and he wanted out,” meaning that he wanted the brothers to sell WMS. Brendan said that his response was in essence that he did not want to sell, but that he said something like, “Just go and do what you want to do, Vincent. Look, I’m sick of it, I’ve had enough of the aggravation of it.” His recollection was that Gerard was “even keeled” on the issue and was “the peace maker.”

Brendan said that he understood Vincent’s intention was to get a valuation. He was asked about his question to Vincent in the meeting of 10 July 2014, “What have you done with the firm then? Have you put that up for sale?” Brendan did not accept that this showed that he already knew that Vincent was taking steps to market the company.

“I wanted just to know what he was up to and what he was doing. He was just carrying on as he pleased. There was no coming back towards him asking for our opinions, it was just, ‘I am going to sell it and I am going to do as I want’.”

Brendan was asked about an email from Mr Sykes (of Hornblower) to Mr Booth dated 25 September 2014 (2B/1775). Based on a conversation with Vincent, Mr Sykes asserted that “there clearly has been some positive developments at his end in terms of the brothers full agreement to try and sell the business…” Brendan said that he was never “open to persuasion” on whether the business should be sold. He was simply indulging Vincent who was “on a mission.”

Gerard’s evidence was that he had understood, following the meeting on 10 July 2014, that Vincent was trying to sell WMS but that he did not agree with this course of action.

The Defendants’ pleaded defence at paragraph 9.4 was that they first became aware on or about 1 October 2014 that the Claimant had engaged Hornblower with a view to selling the company. It was put to Brendan that Hornblower was in fact mentioned in the meeting on 10 July 2014. From the transcript, that is incontrovertible, although the company name is only mentioned once and if this was the only time that the company name was mentioned, it is not surprising that, at the time of signing the defence (before disclosure of the transcripts), Brendan said that he did not recall this.

Brendan did not accept that the email of 17 November 2014, which referred to Gerard and he having had a meeting at which they “made the decision that the company is not for sale”, supposed that previously the company had been for sale.

In his witness statement, Mr Booth referred at paragraphs 47 and 48 to events on 10 November 2014, when Brendan had spoken angrily to him about disclosing information to Hornblower. In cross examination, Mr Booth was asked why in his witness statement he had not explained why the information had been disclosed, this being that he understood that the information had been disclosed with the consent of all 3 directors, as set out in the email of 10 November 2014 at 2B/1872. It was suggested that Mr

My conclusions on the issue of the agreement to sell are set out under the heading “Discussion - Issue 1” below.

The current views of the Claimant and Defendants as to the sale of the company.

In advance of the trial, Vincent’s position was that the company should be sold. For example, it is stated in his Skeleton Argument that, because the Claimant and the Defendants had unanimously agreed to sell, the company should be sold unless they unanimously agree not to sell. It is striking that, at no point in any of his witness statements or in the skeleton argument, does the Claimant assert that it is in the best interests of the beneficiaries that the company be sold. Therefore perhaps I should have been less surprised than I in fact was when he said in evidence that he did not (at least at the time of giving evidence) believe that it was in the best interests of the beneficiaries to sell the company.

Brendan’s opinion as to the ownership of the company was expressed in the following exchange:

“Q. Is it your view and Ged’s view that the company should not be sold? A. Yes.

Q. Never?

A. You can never say never, but my view is that I am going to finish working and leave it to the next generation. I will walk away from it, hopefully.”

When asked why it was in the best interests of the trust for his and Gerard’s sons to carry on running the company in the future, he said, “Well the company is doing well, as in the best interests of the trust. So hopefully, they can carry that on.”

On this issue, Gerard said in cross examination,

“Q. Are you opposed to a sale of the company?

I have always been opposed to the sale of the company. Q. Would you ever consider a sale of the company?

A. No, because my father never wanted to sell the company. He always wanted to keep it in the family.”

Gerard also said in evidence, “It is a valuable company. It is making good profits. It has got good assets. Why would you want to sell it?”

Since 2014, Vincent has declined to agree the payment of bonus to the Defendants as the directors who continue to work in the company. His attitude to the payment of directors was explored in the following exchange during cross examination:

“Q. Assuming that the finances of the company are appropriate, Mr Maher, are you able to say what amount you think Gerard and Brendan should be paid?

A. It is what they are proposing. That is what I wanted to see, what they were proposing, instead of being shouted at and being told “what we are telling you, what we want.”

Q. Well, Mr Maher, you know what they were proposing. They were proposing for 2016 £170,000 plus the £500 a week that they had already been paid. So roughly £200,000. Would you say that is a reasonable amount of money for directors in the position of Gerard and Brendan to be paid?

A. I still needed the paperwork to cancel that out, to say that. Yes. Not a problem. It would have been OK.

Q. Are you able to express any view as to what amount of money you consider they should be paid?

A. I think a reasonable amount of money.

Q. And I am suggesting to you £200,000. Would you say that is a reasonable amount of money to be paid?

A. It is a little bit excessive.

Q. How much do you think they should be paid?

A. 80. 70/80 thousand pounds.

Q. How much were you paid when you were a director of the company?

A. Well, we would have to go back through the records there on that.

Q. Substantially in excess of £80,000 a year.

A. But the three of us were at it that time.

Q. So now there are two of them, surely they should be paid more, Mr Maher?

A. Well, why did they not produce the stuff? There is not a problem. I can pay, but I have also got the beneficiaries to consider as well.

Q. Mr Maher, what I suggest to you is that you were adamant that you would not approve any money above the £500 a week because you wanted to put pressure on Ged and Brendan so that they would make you a proposal.

A. That is not right.”

As Brendan points out at paragraph 209 of his witness statement, the average remuneration from salary and bonuses for directors for the last 10 years prior to 2015 when Vincent being a director, was £170,000 net. In the period from 2014, Brendan and Gerard have been paid about £500 per week each. Brendan suggests that that means that he and Gerard are each owed about £900,000.

Brendan was asked about the basis of recommending directors’ bonuses of £170,000 in the accounts meeting of 10 March 2016. The minute records Brendan and Gerard saying that they had reviewed the bonuses over the last 10 years and that this figure was the average of directors’ bonuses paid in that period. It was suggested that this was inconsistent with Brendan’s evidence that the bonuses were based on what the company could afford to pay. He replied, “I thought that, with the turnover being up so much and the profit being up so much, it would have been – the previous 10 years included a bad recession. I thought that it couldn’t be questioned whether an average of 10 years would be acceptable going forward.”

In his evidence, Mr Booth said the considered that the company could have paid dividends of £250,000 in 2017 and again in 2018, as had been recommended in the general meetings of those years.

The Defendants also note that Vincent was asked to approve dividends that they recommended of £250,000 in 2017 and again in 2018. He declined to so. When asked why this was, Vincent said that he would have been questioned by the beneficiaries if he had agreed the figure. He stated that he did not have the necessary material to justify the dividend. But of course the Defendants point out that the result of this was that no dividend at all was paid to the trust. Vincent said that his reason for not approving any dividend was that he wanted to know that the company could afford to pay that money. But even if one accepts that Vincent may not have had the material to judge whether the dividend was sufficient, it is difficult to see how Vincent can have thought that he was better placed than the remaining directors to judge the appropriate dividend or how it cannot have been in the best interests of the beneficiaries for no dividend at all to be approved.

It was common ground between the brothers that it had been the custom for them to draw down on their directors’ loan accounts and reduce that indebtedness to the company by the voting of directors’ bonuses. It was however in the company’s interest for loans to be repaid so that it could reclaim tax.

On 30 October 2013, a meeting had taken place following a review of the amounts due on directors’ loans between 2011 and 2013 and the respective balances were agreed.

At the time that Vincent retired from WMS there was a significant loan outstanding on his directors’ loan account. He agreed in cross examination that there was no good reason for him to continue to enjoy the loan thereafter, since he would not be receiving further bonuses to repay the account.

Vincent accepted that WMS required repayment of £125,000 together with a proposal relating to the repayment of the balance in its letter of 7 July 2016. He stated that he was not able to repay that money at the time. He said that he was trying to sell his house (though accepted that it had been on the market for 4½ years).

It was put to Vincent that the instant proceedings, which were issued on 19 September 2016, one day before the expiry of the period given by WMS to make proposals for repayment of the directors’ loan account, were timed in an attempt to avoid the repayment of the loan. Vincent denied that this was a tactic. Rather, he said that he was “being attacked”, was “under severe pressure” and was “being bullied.”

The company brought proceedings against Vincent for repayment of the loan account. Those proceedings were defended by Vincent, including defending a summary judgment application on the basis that there was no present liability to pay the sums claimed. As indicated above, Vincent prepared a Scott Schedule which either required WMS to prove, or positively disputed, large numbers of the items that were attributed to his loan account, only for the claim to be settled 7 days before trial by Vincent accepting a Part 36 offer that represented over 98% of the claim as put by WMS.

It was put to Brendan in cross examination that a letter had been sent to Vincent on 9 February 2015 seeking repayment of his director’s loan account (2B/2079) yet no similar letters were produced in respect of Brendan and Gerard. Brendan thought that he had repaid his loan account by then and that Gerard had made a proposal to repay what he could and was still working at WMS as a very important part of the business whereas Vincent was no longer working for the company. In so far as this demand was made without a board meeting, Brendan said that he was “not sure proper governance was being done at that time.” However he denied that the request of Vincent was a tactic to place Vincent under financial pressure. Later in his evidence (after a short

As to the board meeting on 11 May 2016 and the subsequent claim against Vincent for the balance due on his director’s loan account, Brendan said that he and Gerard were concerned that issues as to repayment of the account had been going on for 7 years and were still unresolved. In contrast to Vincent, Gerard admitted that he owed the money on his account, had made substantial repayments on the account, was doing the best to repay the loan and was a working director bringing in the contracts that made the company profitable. He denied that the claim on the loan account against Vincent was a sham.

The Defendants case was that Vincent had forged Brendan’s signature on two WMS cheques dated 12 January 2006 and 28 April 2006 (core/410 and 411). On both, the payee is “cash.” The signatures on the cheques were considered by Ellen Radley in her report of 11 January 2019. She concluded that there was “strong” evidence that the signature on these cheques was not that of Brendan and “moderate” evidence that the signature was in fact written by Vincent. In this context, “strong” is said to equate to the proposition that “it is unlikely that an alternative explanation represents the truth of the matter” and “moderate” that it is “more likely than any converse possibility,

Brendan’s account of how he found out that Vincent had (allegedly) forged the cheques is somewhat puzzling. In his witness statement he speaks of the seriousness of Vincent’s conduct being that of someone who “effectively writing [himself] a cheque on behalf of WMS when [he has] no authority to do so at all.” He does not explain how the evidence of the (alleged) forgery came to light.

In the witness box, he said that the issue of the alleged forgery of cheques had come to light when “I went through the cheques because I had a memory of Vincent signing my name on cheques and when it came up about Vincent accusing me of signing the accounts, that is when I thought it was relevant…The way it worked was Vincent would go into Barbara where the chequebook was, write himself a cheque for however how much it was and ask Barbara to add it to his loan account. So he would tell me, ‘I’ve

The Defendants point to the fact that the evidence before the court shows Vincent to have been on the bank mandate for WMS from May 2007 to September 2014 (see 2F/4789). If Vincent were not in the mandate in 2006, this would explain why he wrote the cheques.

Vincent in contrast said that he “thought” he had been on the mandate earlier than May

Vincent accepted that, when he stopped working for WMS in September 2014, he took two cheques from the middle of the WMS chequebook. He said that he was angry when he took the cheques and it was his “initial thought” to use them take money out of WMS. However, he calmed down and did not do so. He accepted that it was inaccurate to say (as his solicitors had in a letter dated 11 August 2015) that he “never had any intention of cashing those cheques.” Rather, he took them intending to cash them but quickly changed his mind. Thus, Vincent’s admitted intention in respect of the cheques taken in September 2014 is consistent with his having signed cheques to cash when not on the mandate in 2006.

Ms Radley also reported on accounts for Green Remediation Ltd signed in Brendan’s name apparently in 2010 (Core/409). Again she found “strong” evidence that the signature was not that of Brendan. She found the evidence to be “inconclusive” as to whether, taken on its own, the accounts were signed by Vincent, but she found

“moderate” evidence to support the proposition that the accounts were signed by the same person as signed the cheques dated 12 January 2006 and 28 April 2006.

The final piece of the jigsaw on the issue of signatures is Brendan’s admission that he signed the 2010 accounts on Vincent’s behalf, using the latter’s name. Whilst Brendan said that Vincent had authorised him to sign the accounts in this way, Vincent denied this.

The significance of the 2010 accounts was that they contained a figure relating to restoration costs at Thelwall which Vincent has challenged and used as a criticism of

During his evidence, Mr Booth said that he recalled that Vincent was present at the account meeting in 2011 when the 2010 accounts were agreed. At no point had he objected to them. It is to be noted also that the same figure for restoration costs at Thelwall had appeared in the later accounts.

For reasons identified above under the headings “A - Covert recordings of meetings by

However, it has a bearing on the issue of his signature on the accounts of 2010. If Vincent was willing to forge signatures on cheques taken from the company, it seems to me equally likely that he would have tolerated his brother forging his signature on the company accounts - indeed that would seem to be less culpable conduct if Vincent was aware of and approved the accounts. Given the evidence of Mr Booth, it is in my judgment more likely than not that Vincent did indeed approve those accounts. It follows from this that his conduct in seeking to query the Thelwall restoration costs is unjustified, since he approved them at the time.

My finding on the issue as to the signature on cheques also justifies the decision by Brendan and Gerard to remove Vincent from the bank mandate on 12 September 2014. As Brendan puts it, “We were wary that Vincent might write himself cheques for large amounts, or cash the cheques for large amounts, which he would keep himself.” Given that Vincent no longer worked for the company from September 2014, had removed company cheques then with the intent of using them for his own benefit and had previously forged signatures on cheques to pay himself, it is difficult to criticise this decision.

Several attacks were made by the Defendants on Vincent’s conduct as a director/trustee apart from the matters referred to above relating to Vincent not agreeing the payment of dividends and/or bonuses to the directors.

Vincent criticised his brothers in particular in the following respects:

I should note that in written closing submissions, the Claimant raises a question as to whether I have erred in my approach to the issue of the use of company funds to fund the litigation, had there been evidence of that occurring. The Claimant contends that the use of company funds to fund the litigation would be a misuse of trust property and breach of trust, even if the Defendants persuaded the court that the reason they resorted to this method of funding was the failure of the trustees to agree proper remuneration for their services. Without hearing full argument on the issue, my initial view is to agree with that proposition. The situation that I was considering was one where directors who could not otherwise fund litigation, advanced money to themselves by way of directors’ loans for that purpose. In my judgment, that would not necessarily amount to the misuse of trust property or a breach of trust if the directors had a reasonable expectation that the monies that were advanced were in fact due to them for services rendered in any event.

The Claimant’s position is summarised thus in written closing submissions:

“The Claimant and the Defendants have all behaved wrongly when ignorant of the true position as regards the beneficial ownership under the trust…There is a marked change in the Claimant’s approach once lawyers are instructed on his part. He discovers what his obligations are, changes his approach and tries to instil independence and oversight into his dealings. The evidence shows that the Defendants have not however changed. They continue to want ‘control’, continue to pay remuneration to themselves and their sons without reference to the trust, continue to refuse to provide information/seek advice on information to be provided and establish new companies in the same as before, despite now knowing (or saying that they know) how to behave.

I have received evidence from only two other beneficiaries, Monica and Siobhan.

I have also noted the comment of Monica in her statement that, when William set up the trust, “it was not his intention that the family business would be sold.”

Siobhan’s was in the unenviable position of giving evidence in a dispute between her brothers. She said four things of significance:

I saw no reason to think that Siobhan was giving anything other than her genuine opinion as a beneficiary and a member of the family. I did not see any evidence that she had been misled by Brendan and Gerard though it is by no mean unusual that, when arguments happen within families, people take one side or the other in the dispute without full knowledge of the background.

The Claimant’s pleaded factual case on whether an agreement was reached on or around 29 January 2014 is unsustainable for numerous reasons.

First, the Claimant has never been clearly able to identify when this meeting took place. He has, at various times, indicated the following date of the discussion:

Second, the circumstances of the meeting are unclear. The meeting is described in the Claimant’s first witness statement as having taken place in the company’s board room

Third, it is not even clear whether the Claimant is saying that an agreement was reached at the meeting. At one point in his evidence he stated, “The 3 of us were in agreement to see if we could sell the company for in excess of £30 million….if we got a price in excess of £30 million, we would have to sit down as trustees and decide whether we sold the company.”

Fourth, the meeting was not referred to in subsequent discussions.

The Claimant’s account that such an agreement was confirmed later, whether specifically at a meeting on 10 July 2014, or otherwise more generally, is equally difficult:

The Claimant makes the fair point that, following mention of the instruction of Hornblower to market the company in July 2014 and consideration as to what material was being provided to potential purchasers during the next 4 months, it is somewhat surprising that Gerard and Brendan did not seek to put a stop to Vincent’s marketing efforts until the letter of 17 November 2014. It may be that the explanation is that they were rather more willing to contemplate the sale of the company at this time than they now acknowledge. That would be consistent with there being a serious break down in the relationship between the brothers and a consequent benefit in a way being found for them to go their separate ways, though neither Brendan nor Gerard accepted that they considered it a viable way forward. It would equally be consistent with Brendan and Gerard thinking that a buyer would never be bought for WMS at the price that Vincent was seeking, but that it might mollify him to be allowed to investigate a sale.

But either way, the evidence is not consistent with their being a concluded agreement to sell WMS. On this material, I am driven to the conclusion that Vincent’s reference to their being an agreement is no more than wishful thinking. Whilst he would have liked them to agree to sell, no such agreement was ever reached. Vincent has taken the fact that his brothers did not emphatically say “no” as evidence of them agreeing to such a sale. In fact, the contents of the recorded discussions clearly show their reluctance to agree.

The position within this trust is one of serious impasse. The history and evidence as summarised as above show that this is a clear case of conflict between trustees that has seriously impaired the operation of the trust. The trustees have been unable either to agree remuneration for directors of the company (which in the long-term risks damaging the performance of the company through deterring directors from spending the proper time on company business) or the payment of dividends to the trust. Neither of these are situations that can be allowed to continue.

Further, I see no likelihood that this situation will improve. Despite my having pointed out more than once during the trial that the parties could if they wished to explore an amicable resolution by all three continuing as trustees, the suggestion was not taken up. I take this, together with the manner of their giving evidence, that there is no realistic possibility of the brothers working together.

It is obvious that there is potential benefit to having one or more trustees who understand the workings of the company, so long as they are capable of acting in the best interests of the beneficiaries.

I have considered whether the addition or substitution of a trustee by the appointment of another family member would be a solution. Siobhan is the only candidate who has been considered seriously. Her evidence was of considerable reluctance unless she was the trustee with the Defendants. However if the Defendants (with or without the Claimant) are to remain trustees, I see little benefit in adding her as a trustee. She would doubtless only find herself in the middle of a continuing dispute between her brothers.

Further, I do not consider that the addition of a professional trustee to the existing group of trustees would improve matters. The independent trustee would find themself in the middle of disputes. No doubt much time and therefore money would be taken up in dealing with disputes between the brothers.

That leads me to consider the removal of some or all the existing trustees, with the possibility of the appointment of a new professional trustee. In order to consider the removal of existing trustees, I need to look at their conduct and the extent to which it has contributed to the current impasse.

In respect of Vincent, the following issues stand out:

In Brendan’s case:

It is suggested that Brendan has shown himself unwilling to compromise, by for example agreeing to Vincent’s proposals to instruct an independent law firm in September 2018 to advise on what Vincent was entitled to see; and in failing to agree the proposal that all 3 brothers stand down as directors. In the former case, I have considerable sympathy with Brendan’s concern that more time was being spent on legal issues than on the core business of the company. He cannot be criticised for failing to agree to the proposal. In the latter case, whilst the failure to take up the offer may have been born to some extent out of stubbornness on Brendan’s part, I do not consider that he had behaved in a way that mandated his stepping down.

In this litigation, Brendan has tended to take a lead over Gerard in matters relating both to the administration of the company and the running of the trust. Everything said about Brendan (both positive and negative) applies with approximately equal force to Gerard. 153. From the above analysis, I draw the following conclusions:

In the light of my conclusion about the removal of trustees, the position will be that the two continuing trustees will be the brothers who have stated the view that the trust should not sell its shares in WMS. For the moment, Vincent agrees that that is the right course of action. However, there may come a time at which he or other beneficiaries wish the trustees to consider selling the shares. Given the strongly polarised position taken by the parties in this case, it is important to consider whether the Defendants will properly consider the issue as and when the question of the sale of the shares arise.

In principle they have a duty to consider any such proposal fairly and in the light of the interests of all beneficiaries. In practice, I fear that there will be continuing distrust between the brothers that may lead to further litigation over this issue. Whilst the appointment of an independent trustee is not necessary so long as the Defendants act in the interest of the beneficiaries generally, and I have no firm basis for thinking that they will not do this, further dispute may be avoided if all of the beneficiaries including Vincent can be confident that matters have been looked at dispassionately.

Further, I have expressed some concern about the governance of WMS. It is important that this trust is properly administered to allow all beneficiaries to have confidence in the decisions that are taken.

To this end, and notwithstanding the cost implication of the employment of a professional trustee, there is in my judgment good sense in the employment of a professional trustee. I have considered the firm of Smith and Williamson, nominated by the Defendants’ solicitors in their letter of 17 December 2019 at 3B/6145a. In principle, they appear to me to be a suitable firm, but I need to be satisfied that they have no connection with the Maher family, given the issues that have arisen in this case and the names of the contacts that appears at 3B/6145i. I will hear further submissions on this issue if necessary.

It was common ground between the parties that no further consequential directions were required. If any party considers they are necessary or desirable, I will hear further submissions. I would however point out that this will have costs consequences in litigation in which already a large amount of costs will no doubt have been incurred.

The parties have agreed the terms of an order giving effect to this judgment on the identity of the trustees. It leaves over certain issues, in particular relating to costs, to be determined at a further hearing.