Deir v Athel & Ors

The present proceedings are replete with accusations and counter-accusations of bad faith, dishonesty, the failure to disclose documentation, the falsification of documents and many other matters of a similar nature.

I give that short history to illustrate the nature of the tangled factual web it is necessary for me to try to unravel in order to reach a just conclusion in this case. It is clear when reading Cranston J’s judgment that he was faced with similar difficulties. Assessing credibility is not easy in such a situation. I propose to return to the relationship between the findings made by Cranston J and my approach to the evaluation in this case shortly (see paragraphs 11-17) given the prominence sought to be given by Mr David Lewis, for Sheikh Fahad, to some of those findings.

An odd feature of the case is that, despite the vigour with which it has been contested and the nature of some of the allegations (Mr Lewis suggesting in his Closing Submissions that Mr Deir is “avaricious, deceitful, and self-interested”), Mr Deir and Sheikh Fahad still seem to have a sneaking regard for each other. Indeed the Sheikh (who is undoubtedly an extremely wealthy and successful Saudi Arabian businessman) went so far as to say in the witness box that he would still give Mr Deir a bonus if planning permission for the development and expansion of Lydd Airport was obtained ultimately, the objective that Mr Deir was under instructions to achieve when he came to work in the UK in 2004 (see paragraph 24 et seq).

That claim is denied and a number of counterclaims are made against Mr Deir and/or his company, Jet Connections Limited (‘Jet Connections’), in the names of some of the UK companies in which Sheikh Fahad has a direct or indirect interest. The substance of the allegations is that he misused a company credit card, incurred excessive expenditure (including unauthorised use of first-class air travel), obtained an unjustified benefit from a company car, converted another company car to his own use, used a small company aircraft (the ‘Piper aircraft’) for his own unauthorised purposes and then converted it to his own use, kept a company laptop computer when he resigned, instructed the deletion of information and computer files from a company computer system on his departure and operated Jet Connections in order to obtain a secret profit at the expense of the company of which he was Managing Director. All these matters are variously alleged to constitute breaches of his fiduciary duty and his duties of fidelity, good faith, trust and confidence and those provided for in sections 172, 174 and 175 ofthe Companies Act 2006.

Whilst Mr Deir accepts that some credit needs to be given against his own claim for a few relatively minor matters, the breaches of duty are denied and his essential contention is that everything he did was expressly or impliedly authorised by Sheikh Fahad or by those acting under his direction.

It will be noted that none of the allegations against Mr Deir relate to his competence as, or his essential performance in the role of, Managing Director of London Ashford Airport Ltd (‘LAA’), his primary responsibility in the UK, or indeed in any other role assigned to him by the Sheikh.

The passage in Cranston J’s judgment to which he drew particular attention related to the payment by Lasham Airport of the sum of USD$40,000 to Mr Deir which was said by the Sheikh to have been a “kick back” paid to Mr Deir without approval - in other words, a “secret profit”. Mr Deir’s case was that the payment was a repayment of an overpayment for the purchase of alcohol on behalf of Sheikh Fahad. Cranston J’s conclusion was expressed in these terms at paragraph 66 of his judgment:

“I have no hesitation whatsoever in rejecting Mr Deir’s evidence. The evidence points overwhelmingly to this payment by Lasham being a secret profit made to Mr Deir without the approval of Sheikh Fahad. Elizabeth Rosa’s evidence supports Sheikh Fahad’s case, not Mr Deir’s, since she said that for purchases of items like alcohol receipts would be obtained. No documentation has been produced to support Mr Deir’s case. In his oral evidence Mr Deir alluded for the first time to a note book, which he had now lost, which contained details of moneys owed to him by Sheikh Fahad for such purchases. That evidence had all the hallmarks of being manufactured during Mr Deir’s cross-examination. The Lasham invoice is for services and support provided and is not typical of how Lasham documented credits on overpayments. Crucially, Mr Deir failed to explain the very similar invoices issued him by Lasham for Sheikh Al-Hamrani’s aircraft.”

In an earlier part of his judgment (at paragraph 59) Cranston J had said that for reasons given in relation to the “secret profit” allegation “there is a cloud hanging over Mr Deir’s credibility in relation to his account of his dealings with Sheikh Fahad.” In that part of the judgment he had rejected Mr Deir’s claim that there was an agreement that he should receive a commission on the sale of the Boeing 727 aircraft referred to in the extract from Cranston J’s judgment in paragraph 18 below. There was evidence that the Sheikh had agreed to pay a commission to an agent on the sale of the aircraft, but not on the basis that it was Mr Deir personally who facilitated the sale.

Cranston J also rejected Mr Deir’s evidence that a statement of account dated 30 July 2008 on Jet Connections’ letterhead, setting out what Mr Deir said was the agreed commission in relation to the Boeing 727 aircraft and addressed to the directors of Kama in the Caymans (with a copy to Sheikh Fahad), was sent.

Whilst, naturally, I respect the findings of Cranston J on the evidence and argument deployed before him, and recognise that as between the parties the unappealed findings in that litigation are binding upon them, I do not see that I should be unduly influenced by those findings. I have to say that in any litigation where feelings run high (as they seem to have done in this case) any tribunal will look with some circumspection at what any witness says on a crucial issue where the contemporaneous documentary material is unsupportive and/or where there is no other reliable evidence to support what the witness says. Inherent probabilities also have a role to play in that context.

It is, of course, a commonplace in all forms of litigation that a tribunal may accept what a witness says about some aspects of his or her evidence, but not others. I do not know the full history behind the decision to litigate part of the dispute between the parties in this case in one set of proceedings and litigate another part of the dispute in separate proceedings. The entire disputation might have been better dealt with by one tribunal in one trial when all credibility issues could be evaluated at the same time. However, it has not been dealt with in that way and, as it seems to me, I must simply evaluate the evidence in this case as best I can on the basis of the impression it has made on me. I do not think it is right for me to start with some preconceived notion about the reliability or credibility of a particular witness. I do not think that any principle of law is involved in this save to say that essential fairness does require that all parties to a trial start on a level playing field.

In circumstances to which I will turn in more detail shortly, at the request and with the full approval and encouragement of Sheikh Fahad, Mr Deir ceased his employment with SAMCO at the end of 2003 with a view to taking up other responsibilities on behalf of the Sheikh in the UK, principally, though not exclusively, to become Managing Director of London Ashford Airport Ltd.

There was a meeting held in Saudi Arabia on 20 December 2003 (attended by the Sheikh, Mr Deir and Mr Al Nouti) at which, amongst other things, a “Final Benefits Settlement” was concluded dealing with outstanding bonus payments for 2000 and 2001 and amounts attributable to the 7% commission on commercial charter flights for 2002 and 2003, together with other matters arising from the end of his contract with SAMCO. It was signed by Mr Deir and the Sheikh. Although other disputes have arisen from what occurred at that meeting (and indeed in relation to other discussions at or about this time), the Final Benefits Settlement is one matter that does not appear to have given rise to any dispute. By virtue of it Mr Deir was due a little over SAR 1.2 million which was indeed paid to him.

It was contemplated that Mr Deir would, notwithstanding his new posting in the UK, continue managing and operating the Sheikh’s two planes, the Boeing 727 and the Legacy. An agreement concerning that was drawn up at that meeting. One of the major issues in the trial before Cranston J was the meaning of that agreement and that litigation has, of course, concluded that matter. As a result Mr Deir obtained judgment in his favour for just under US $266,000 but, as a result of certain adverse findings on other matters (see paragraphs 12 and 16 above), he and Jet Connections were held liable to Kama Aviation Company Ltd in the overall sum of just over US $134,000. The net balance following Cranston J’s judgment was in Mr Deir’s favour.

Having set that scene, I must turn to the more detailed background to the issues directly before me for resolution. They arise from the scenario referred to in paragraph 20 above.

That is the present position from the planning point of view, but the backdrop to the current litigation goes back to about 2001. Sheikh Fahad was told by Mr David Gardener, a financial adviser to the Sheikh, of the opportunity that Lydd Airport presented. By then Mr Deir had worked for the Sheikh for several years and was undoubtedly a trusted employee who had an aviation background. The Sheikh sent him to have a look at the airport to see if he considered that it had development potential. At that time the airport was owned by London Ashford Airport Ltd (‘LAA’), a company incorporated in January of that year and controlled by Mr Jonathan Gordon and Mr Robin Gordon. Mr Deir went to the airport during the summer of 2001, took the view that it had potential, but considered that it would need significant investment. His recollection was that he gave £25-30 million as the investment figure required to realise the full potential of the airport.

Mr Winskell, who had worked for the Sheikh on a number of other UK and European projects over the years, became a director of LAA and, together with the Gordon Brothers, helped to manage the company at this time. Mr Deir’s evidence is that he was asked to visit the airport again during 2002 which he did. The Sheikh said that his business relationship with Mr Winskell deteriorated during 2002. It emerged during his oral evidence that a significant factor was that, as a lawyer, Mr Winskell was charging the Sheikh on an hourly basis for his time. However, for whatever reason, the Sheikh became disenchanted with Mr Winskell and as a result the Sheikh confirmed in his witness statement that he had earmarked Mr Deir for the role of overseeing his interests at the airport andfor “the wider position as the principal representative for the remainder of [his] business and personal interests in the UK.” In relation to the role at the airport Mr Deir had become a director of LAA on 31 December 2002 although there seems to be some doubt as to whether he was told about that at that time.

It is common ground that at the meeting on 20 December to which I referred in paragraph 21 above the (uncontroversial) Final Benefits Settlement was concluded. This was plainly designed to finalise outstanding amounts due to Mr Deir from his employment in Saudi Arabia. Equally, the (controversial) agreement concerning the future management of the Sheikh’s aircraft was also concluded this day. The fact that each of these agreements was concluded would not, of course, necessarily mean that an agreement in relation to Mr Deir’s remuneration package in his new role or roles within the UK would also have been agreed. However, it would have been very surprising indeed if the issue was not raised at or about the same time.

The Sheikh recalls only one meeting with Mr Deir (at which Mr Al Nouti was also present). He said this about it in his witness statement:

“I … accept that Mr Deir was in Riyadh on or around 21st December 2003, because I met with him and Adel al Nouti … the previous day. I discussed with him a new opportunity for him to become the managing director of London Ashford Airport Ltd … and Lydd Golf Club as well as the wider position as the principal representative for the remainder of my business and personal interests in the UK. I wanted Mr Deir to replace Michael [Winskell]. The terms of his employment were discussed in outline. There was no discussion about salary or directorship fees. I also discussed with him the future direction of the airport. He was excited about the role, which was effectively a promotion for him within the FAL Group. The meeting confirmed my view that he was the right man for the role. The majority of his work was to be based around the Airport and he had a good background in this environment.” (My emphasis)

Mr Deir’s pleaded case in this respect was as follows:

At a meeting on 21st December 2003 at the first Defendant’s office in Riyadh, Saudi Arabia, the Claimant entered into an oral agreement with the first Defendant in the following terms:

(a)

The first Defendant would act as a company director for a variety of companies as agreed between the Claimant and the first Defendant from time to time;

(b)

In consideration for the same, the parties agreed that the pertinent companies and/or the first Defendant would pay to the Claimant the sum of £20,000 per year for each company for which he acted as Director.

Mr Deir says that there was no time available to the Sheikh to discuss the full remuneration package that would go with his new role at Lydd Airport and, accordingly, nothing further was discussed before his departure for the UK on 26 December. As a result of this, when he commenced employment at the airport in a formal sense on 1 January 2004, no contract of employment had been finalised.

Mr Deir said in his evidence that one of the reasons for waiting until 26 December before departing for the UK was because he was waiting for the payment of the sums due to him under the Final Benefits Settlement. He wanted the sums paid rather than waiting until after he left Saudi Arabia. His account, which does seem to be borne out by other evidence in the case, is that it is common in Saudi Arabia for payments to be delayed well beyond what would normally be thought to be reasonable in the UK. This, according to Mr Deir, applied to the Sheikh but, as he said, “no one wanted to annoy him by pressing for payment too hard.” This, of course, gives a clue as to the dynamics of the relationship between Mr Deir and the Sheikh. Doubtless at that time (at the end of 2003), Mr Deir knew how to gauge what to say or not to say to the Sheikh with regard to payments of money and/or to employment contract issues. Equally, there can, in my judgment, be no doubt that he was a trusted employee at that time and the Sheikh, no matter how one-sided any such conversation or discussion might be, would want that relationship of trust to continue. Ensuring that Mr Deir was content financially would have been a central part of that. An important issue for consideration in that context is the extent to which it can properly be said that the Sheikh did make a contractually binding commitment to payment of director’s fees. I will return to my conclusion about that when I have reviewed the evidence in full.

It is, however, right to say that there is no contemporaneous record, acknowledged by or on behalf the Sheikh, that the commitment to the payment of director’s fees was made. The Sheikh’s essential case is that had he made such a commitment, it would have been recorded in writing. Mr Deir’s case is as set out in the extract from his witness statement recorded in paragraph 35 above. It is clear that the Sheikh’s whole approach to business, which is entirely understandable, is if he makes a commitment he will abide by it. Whilst he would normally expect commitments to be made in written form, he did confirm clearly in his evidence that, from his point of view, an oral commitment is just as binding upon him as one reduced to writing. Mr Al Nouti confirmed that also.

It is, of course, the alleged commitment to the payment of director’s fees that lies at the heart of the claim advanced by Mr Deir in these proceedings. However, since issues arise about his contractual entitlement as managing director of LAA to various expenses claimed and other matters, I should review the evidence that relates to that contractual situation also.

As I have indicated, Mr Deir came to the UK without a concluded contract of employment in relation to his role at Lydd Airport. As a result he wrote to the Sheikh by means of a fax communication dated 20 January 2004 setting out his “proposed contract details for your review and approval.” These included an annual, but renewable, contract of employment with a monthly salary of £8500, travel allowances “as per company policy”, a performance bonus based on 7% of the company’s net annual profit, a housing allowance of three times the monthly salary, a transportation allowance of twice the monthly salary (or the provision of a company car) and family coverage medical care. It suggested that the position was “Managing Director, for – London Ashford Airport, Lydd Air, and Lydd Golf Club”.

That letter related, of course, to the contract of employment relating to Lydd Airport. It did not purport to deal with any director’s fees concerning other companies. Mr Deir explains the lack of reference to the alleged agreement concerning directors fees in this way in his witness statement:

“This letter makes no reference to my entitlement to directors’ fees because that was not part of my employment contract with LAA but was a personal matter between myself and the Sheikh.”

Mr Deir asked Mr Al Nouti to make a counter-proposal. He expressed some concern that the suggestion was to discuss the matter again in about two month’s time. At all events, they did agree to defer consideration of the issue for the time being.

It is not entirely clear whether there was a direct telephone conversation between Mr Deir and the Sheikh thereafter, but on 27 February Mr Deir wrote the Sheikh in the following terms:

“Further to our phone conversation in regards to my employment proposal, I would like to explain and clarify my position.

Firstly, I would like to assure you of my full and unconditional loyalty and support to you, and your projects.

I would like to apologise for my proposal as it was never intended to upset you in any way, and definitely it was never my intention to come across as if I wanted to take advantage of this situation. As a matter of fact I have assumed my full duties and responsibilities as a Managing Director and your representative based on a verbal agreement prior to any financial considerations.

At the same time I had no intention what so ever to work for any other companies either in the UK or anywhere else, otherwise I would have brought it to your attention at that stage.

I do appreciate and cherish your continuous support to me over the past years, and for that I have and will always endeavour to do my best in whatever I am assigned to do.

Therefore I am more than happy to accept whatever you may offer, as I strongly believe in your fairness and consideration.

Furthermore I do believe in this project and its future potentials. I am willing to accept this challenge and very confident that I could turn it to be very successful with your full support and directions.”

Mr Deir was unhappy with this proposal. From his perspective, it represented considerably less than he was earning in Saudi Arabia and, of course, he was subject to UK tax whereas there were no taxes in Saudi Arabia. According to his witness statement, he telephoned the Sheikh shortly after this to this effect:

“The next day I telephoned the Sheikh to explain that being in the UK, I would have to pay income tax on all my income, and the salary on the offer letter would not be enough to cover my cost of living and would be less than I was receiving when I worked for Samco. The Sheikh reminded me about our agreement in relation to my entitlement to director’s fees in due course but he also promised to look into the difference between his offer and my request for salary. I accepted his assurances and I did not raise either of these issues with him anymore.”

As I have recorded above (see paragraph 27), at least by sometime during 2003 the Sheikh had decided that he wanted to replace Mr Winskell. However, part of the history from which the Sheikh wished to escape in that context was an agreement between them concerning a share in the profits by Mr Winskell in any venture undertaken by the Sheikh in which Mr Winskell was to take part in a profit-sharing way, including the Lydd Airport venture. The agreement was in a memorandum dated 8 February 2001 signed by the Sheikh and Mr Winskell in the following terms:

“This memorandum is to record the agreement reached between Fahad Al-Athel (“FAL”) and Michael Winskell (“MW”) relating to new projects in which FAL chooses to involve MW on a profit-sharing basis.

Where FAL selects such projects it is agreed between FAL and MW that in consideration of MW agreeing to make a reduction of 25% in all charges levied by him in respect of such project on the fee basis that existing between FAL and MW at the date hereof (£150 per hour) FAL agrees to pay to MW 5% of the net profits derived from such project calculated after the return to FAL of all monies invested by him into such project.

The first project to which this agreement is to apply is FAL’s proposed participation in the development of Lydd Airport in Kent.”

What can be said with confidence about the meeting or meetings on 9 December 2004 is that Mr Winskell agreed to relinquish any right that he had under this agreement because it is clear that there is a handwritten endorsement to that memorandum signed by Mr Winskell at the foot of the copy that appears in the trial bundle which reads as follows:

“In consideration of the payment to me of one pound (the receipt of which I acknowledge) I surrender any rights or claims to which I have under this Agreement.”

At all events, those present at the meeting(s) were the Sheikh, Mr Deir, Mr Gardener, Mr Winskell, Mr John Lowings and Heather Lobb-Tosh (Ms Heather Lobb). Mr Lowings was then a partner (now a consultant) with the firm of solicitors, Hallett & Co, based in Ashford in Kent that acts for the Sheikh in this litigation.

Ms Lobb was then a recently-joined member of the executive office of LAA (having since March 2004 been a customer service officer at the airport) who was employed to assist Mr Deir’s personal assistant at that time, Samantha Rice. Ms Lobb attended the meeting(s) as a minute-taker. (In March 2005, when Ms Rice left, she was promoted to be Mr Deir’s personal assistant on a full-time basis. She has remained his personal assistant since that time, even after his departure from LAA in September 2008.)

Ms Lobb’s notes concerning the meeting(s) were quite extensive and, if accurate, suggest that there was a fairly wide-ranging discussion about the Sheikh’s interests in the UK. It appears that this was something of a “winding up” meeting so far as Mr Winskell’s involvement with the Sheikh’s interests were concerned. Mr Lowings’ note of the meeting was very short, but it does include the expression “[discussing] other matters with which we were not directly concerned”, a note which does support the general proposition that the discussions were more wide-ranging than his own note indicated.

Ms Lobb’s evidence, which I have no reason to doubt on this issue, is that she remembered the meetings clearly as it was the first external meeting she had attended in her new capacity and the first time she had met Sheikh Fahad. She described it as “a big experience for me”.

At all events, FAL Aviation UK Limited was incorporated on 1 December 2004, Mr Lowings being responsible for the formalities in relation to that. According to Mr Deir, during the discussion on 9 December 2004, and after the matters concerning Mr Winskell had been completed and he and Mr Gardener had left the meeting, Mr Lowings raised the question of who were to be appointed directors of the new company. Mr Deir’s evidence, as contained in his witness statement, was as follows:

“Mr Lowings asked who the directors of this company were to be and the level of their remuneration. The Sheikh then confirmed what had already been agreed, namely that I was to receive £20,000 per year for each company in which I was appointed a director by the Sheikh. It was understood that this was entirely separate from any remuneration to which I was entitled through LAA.

…

It was agreed that the directors of FAL Aviation (UK) Ltd would be Mr Al Nouti and I. Mr Lowings produced appropriate forms then and there which were then completed later ….”

Ms Lobb has produced a copy of her handwritten notes from which, in due course, a typed minute was prepared. She says that when Mr Deir left LAA she assisted him in taking copies of documents that might be of assistance to him, one such document being these handwritten notes. She says that the original version of the minutes and the original version of the manuscript notes were left in the FAL Group file at the airport. Indeed the assertion that it was left at the airport was made on several occasions in the inter-solicitor correspondence during 2009 and in the run-up to the trial. The Defendants have not apparently found the original and, accordingly, it has not been possible to see how the handwriting was applied to the paper. Although Mr Lewis has suggested that Mr Deir had not previously been forthcoming about precisely where the original of this document would have been left, and indeed went so far in his Closing Submissions (although not in his cross-examination of her) as to suggest that Ms Lobb “concocted” her evidence about this, it seems to me abundantly plain (certainly having regard to the evidence of Mr Lowings) that there was an original version created at the time of the meeting. Given the evidence of Mr Lowings it is very likely that the original was indeed in exactly the same form as the copy available in these proceedings. Furthermore, I cannot see what motive there could have been for not leaving behind the original: its existence would surely assist in the presentation of the claim for director’s fees in the event of it being disputed. At the time of Mr Deir’s departure, there is little doubt that litigation was on the horizon.

At all events, the minute was not circulated to anyone else at the time and the first time it was sent to anyone was when it was sent to Mr Al Nouti on 18 February 2008 (see paragraph 88 below). Against that background and given the recriminations that have abounded in more recent times, one could see how the allegation could easily be made that the minute was, to borrow a suggestion previously referred to, fictitious. However, if that was to be so, the “fiction” had crystallised by no later than 19 January 2005 and Ms Lobb would have been complicit in creating it. I say this because the typed version of the minute in which specific reference to this aspect of the meeting appears was completed no later than 19 January 2005. That is demonstrated conclusively by the electronic record of the “properties” for this particular electronic document contained in the relevant folder on Ms Lobb’s personal computer. That folder contains two electronic documents, one entitled ‘Meeting with Sheikh Fahad in London’ (the date on which it was modified being 20 December 2004) and the other was entitled ‘Meeting with Sheikh Fahad LAA’ and was modified on 19 January 2005. Ms Lobb undoubtedly treated the overall meeting as being divided into two, the first part involving Mr Winskell and Mr Gardener, but the second part not involving them. Her notes suggest that the first part of the meeting was between 09.30 and 12.05 and the second part of the meeting was between 12.15 and 13.00

Her evidence, which on this issue I have no reason to doubt, was that she probably typed up the minutes of both parts of this meeting on or about 20 December. She would then have submitted them to Mr Deir for approval, giving him both her typed version and her handwritten notes. The first typed version of these minutes contained the following under the heading FAL Aviation UK Ltd:

“ZD explains to SF that the company has already been established but we need to appoint a director and a secretary.

ZD recommends that it shouldn’t be SF or Badar, he thinks the company should be owned by Lydd Holdings Ltd, in the British Virgin Islands.

JL said he needs instructions regarding who he would like to be appointed.

ZD appointed as Director and Secretary and Adel Al-Athel appointed as Director.

JL said that this can now be done and handed over to ZD.”

Ms Lobb said the following in her witness statement:

“I can say with certainty that the manuscript version of the minutes taken by me at the meeting were not altered by me subsequently. The amendments that I made to the minutes had their origin in the manuscript notes and reflect what was said at the meeting — I had merely omitted certain matters when typing up the first version of the minutes, not an uncommon occurrence.”

When cross-examining Mr Deir, Mr Lewis did indeed suggest to him that either he or Ms Lobb on his instructions added those words or that expression after 9 December. He made the same suggestion to Ms Lobb when she was cross-examined. Both adamantly denied the suggestion. Ms Lobb said that what was on the copy handwritten note was what she wrote at the time.

At that stage, all that Mr Lewis had by way of effective instructions on the issue (apart from the generalised suspicion that his team will have had) was what the Sheikh and Mr Lowings said about the meeting. The Sheikh said this in his witness statement:

“I am now aware that Mr Deir asserts that at a meeting which occurred on 9th December 2004 at 24 Basil Mansions, in London (a property that I own), that I confirmed that I would pay Mr Deir the sum of £20,000.00 per year for each company for which he acted as a director.

To the best of my recollection, the issue of directorship fees or the wider question of Mr Deir’s remuneration was not discussed at this meeting.

The purpose of the meeting was to discuss various matters arising out of my decision to increase the number of shares that I owned in the airport , that is to say to purchase more shares from South East Airports Ltd. There was also discussion of the on going management and development of the Airport.

…

I have seen a copy of the Minutes …

These Minutes were not circulated after the meeting. I did not see a copy of the Minutes until Mr Deir presented them to me at the meeting I had with him on the 19th August 2008. I am now aware that Mr Deir had sent these Minutes to Adel previously. I have also seen handwritten notes … which are alleged to be an accurate record of the meeting. The handwritten notes make reference to “SF £20pypc” which I am told is alleged to be a reference to me agreeing to pay Mr Deir £20,000 per annum per company when he was appointed a director. As I say, I do not believe that I agreed to this, therefore, the minutes must be inaccurate.”

In his witness statement, having confirmed that he recalled Ms Lobb taking notes, Mr Lowings said this:

“I cannot recall ever being provided with a typed copy of the Minutes … until the e-mail dated 22nd August 2008.

The Minutes that [Mr Deir] relies upon are lengthy and cover a number of different subjects. I am, of course, aware that the crucial issue, so far as these proceedings, is the question of directorship fees. So far as I can recall, there may have been some discussion between [Mr Deir] and Sheikh Fahad about remuneration. This could have been about directorship fees but I am not sure. I do not recall what figure was discussed, nor can I recall whether [Mr Deir] and Sheikh Fahad reached a concluded agreement.

…

The Minutes that [Mr Deir] relies upon … state that I initiated discussion about who were going to be the directors of FAL Aviation. I am not sure that I would have not asked Sheikh Fahad directly about this. I had already asked [Mr Deir] for the relevant information in my letter of 2nd December 2004. Further, I am quite sure that I would not have asked Sheikh Fahad about remuneration for the directors. This was not information that I required to complete the forms to Companies House. Remuneration was irrelevant to me.

As I have already said I have no recollection about the specific figure being discussed, but I cannot rule out the possibility that there was some discussion about remuneration. However, I do not believe that the Minutes that [Mr Deir] relies upon are accurate for the reasons I state above.”

When Mr Lowings came to give evidence there was quite a significant move from what he had said in his witness statement. He said that he had been thinking about the case carefully and in a focused fashion over the days before he gave his evidence (and had listened to some of the evidence in the case as it unfolded). He said that he did now remember Mr Deir raising the question of remuneration with the Sheikh. He recalled a figure of £20,000 per company being mentioned and being put to the Sheikh as a suggestion with which Mr Deir was, he said, trying to get him to agree. He said that “certainly” there was no concluded agreement (something he said in his witness statement that he could “not recall”), but that he did remember the proposal, as he described it, being put. He repeated that “certainly” there was no deal done. He gave his evidence during Wednesday, 13 October, and had apparently realised his current recollection of the meeting during the Monday night. However, the first the court and Mr Hill-Smith for Mr Deir, knew about this was when he gave some evidence in chief and when he elaborated on his account in cross-examination.

Leaving aside, for the moment, the precise way in which the conversation took place, this was the first occasion when any witness called on behalf of the Sheikh had acknowledged that there was express reference at this meeting to a figure of £20,000 and that the figure was raised as being one applicable “per company”. This is, of course, precisely what Ms Lobb’s note says and precisely what Mr Deir has been saying for a good while was the agreement – not, I should add, simply a proposal to this effect.

If there were lingering doubts about the authenticity of Ms Lobb’s handwritten note (in the sense of when the expression referred to in paragraph 74 above was placed upon it), this evidence from a respectable source would help to resolve those doubts. Having heard the evidence given, there is no doubt in my mind that it swung the pendulum back in Mr Deir’s favour in relation to his credibility on this issue. However, before reaching a final view on the whole question, there are two other areas of the evidence I need to review: first, the response by or on behalf of the Sheikh to the claims advanced by Mr Deir on the basis of the alleged agreement; second, Mr Deir’s own handwritten note to which I referred in paragraph 37 above.

The response to the claim has never been an unequivocal denial that any agreement of the nature suggested by Mr Deir was ever made. The Sheikh has usually said that he “does not recall” making any such an agreement and Mr Al Nouti, on the Sheikh’s behalf, has effectively said that it is highly unlikely that any agreement of this nature would have been made. Drawing on his own experience he said this in his witness statement:

“I am a statutory director of a number of Companies in which Sheikh Fahad has a controlling interest. These Companies are incorporated in various jurisdictions throughout Europe and the Middle East. I play an active role in some of these Companies. However I have never received a payment from Sheikh Fahad for holding the office of Director. There are no directors, who at the same time are employees within the FAL Group, that receive such a payment, and I would know because I am entrusted by Sheikh Fahad with management of the Group’s financial affairs.”

The backdrop to the advancement of the claims for director’s fees is what, on Mr Deir’s case, was the deteriorating relationship between him and the Sheikh starting in about the middle of 2007. It is not in dispute between them that the Sheikh was asking him to make some personnel redundant as part of a cost-saving exercise, presumably in response to the considerable delays in achieving the development of the airport which the Sheikh thought would have been much more speedy than it was. Mr Deir was resistant to these suggestions and as a result, he says, relations soured, including relations with Mr Al Nouti, the Sheikh’s financial controller. I will be dealing with aspects of this in connection with the various counterclaims made, but merely note the position for present purposes. I think, however, that this is a convenient point at which to note the terms of the resignation letter that Mr Deir sent to the Sheikh on 2 August 2007. In due course, the resignation did not take place during 2007, but the phraseology is worth noting:

“Please consider this letter as my one month resignation notice, from the following positions within the group.

•

London Ashford Airport (Managing Director and a Director of the company)

Lydd Golf Club (Managing Director and Director)

Fal Aviation (Managing Director and Director)

Basil Properties (Director)

Swailand (Director)

Barton House 41 (Director)

Lydd Air show (Director)

Prince Sultan House

The reason being that I [cannot] agree with your decision to dismiss more employees at the airport and to cancel the air show for this year.

I believe your decisions at this stage are very hasty and will not serve your developments, and investments, and I would not like to be part of it. We have made commitment to our employees, to the local authorities and the local people.

I appreciate that the funds are tight and you do not wish to carry on with the development, but it must be said that a decision like this will even cost you a lot more in depreciation cost than the monthly losses we are incurring. It would be much better to put the airport on the market has (a going concern) and you will get a much better return than just to reduce its capability. Just remember that our investment has been in the employees not only in the tangible [asset].

Kindly arrange to appoint a representative in order to process the handover of all my responsibility and obligations. In the meantime I will on all my duties and responsibilities until such time.

I thank you for your support and the opportunities you have given me over the years.”

It does, perhaps, need to be understood that following the resignation letter to which I referred above, discussions took place about the potential sale of the airport. Shortly prior to the letter of 26 November 2007 referred to in the preceding paragraph, Mr Deir wrote to the Sheikh on 2 November 2007 in the following terms:

“As we are progressing with the sale of Lydd airport, and finalising the other UK projects, I believe this is a good time to discuss my future role with the group and the remuneration package (severance pay) for my services and the sale of Lydd airport.

The new owners would expect that all present directors to resign and new directors from their side to be installed.

As you are fully aware that I have developed Lydd airport to its present status and placed it as a marketable airport in the UK markets and beyond, plus creating the supporting companies i.e. Fal Aviation and Phoenix Aero Engineering to enhance its status.

Over the last four years it has been a struggle for me, whereby I was fighting with all the stakeholders, the local and regional authority for the expansion plans on one side and on the other side trying to keep you on board and in support of the operations and the expansions plans.

My determination to keep the project going by defying your decision to make more employees redundant and reduce the size of the operation, to the extent that I had to go to the most extreme situation and you as my resignation as final persuasion tool to keep you in support so we do not destroy what we have managed to achieve, and you do not lose out on your investment, I am glad to say that it has paid off, and now you are satisfied with the result.

Now the purchase of the airport and the support companies are well underway, I would like to propose the following is my remuneration package,

•

finding buyers in negotiating the sale £450,000 being

1.5% of the purchase price

•

shortfall of salary payments £200,000 for four years

severance pay £62,500 being £10,416 per month

I am bound to say that it seems very odd that a request for payment for £355,000 should simply be ignored in the way that it was and I find it impossible to accept that Mr Al Nouti did not discuss this with the Sheikh at this time. The Sheikh undoubtedly made all the important decisions within the FAL Group and here is one of his most loyal and long-standing employees saying that he entitled to a very substantial sum of money on the back of a personal commitment by the Sheikh. The Sheikh became involved personally when Mr Deir was asking for a proper remuneration package in the early part of 2004 (see paragraphs 44-46 above). All that was required was a telephone call from the Sheikh to Mr Deir telling him firmly that he well knew that he (the Sheikh) had made no such commitment and that he (Mr Deir) was dreaming something up. However, nothing of the sort happened.

At all events, in response to the fax of 27 May, on 28 May Mr Deir attached the minutes of the meeting of 9 December 2004 to a further e-mail. There was no response to this e-mail from Mr Al Nouti. He (Mr Al Nouti) says that he had noted that the Minutes were not signed by the Sheikh. Nonetheless, upon receipt of these minutes he says that he believes he then mentioned to the Sheikh the claim that Mr Deir was making, but the Sheikh said that he “had no recollection of reaching any such agreement with Mr Deir.” I am unable to accept that this was the first time Mr Al Nouti mentioned this issue to the Sheikh.

Nonetheless, by this time a number of issues had been joined between Mr Deir and Mr Al Nouti to some of which I will have to refer later. However, in an e-mail of 1 July 2008, which covered a number of matters, in relation to the issue of directorship fees Mr Deir said this:

“This matter has been brought to your attention over three months ago and you have asked me for a support document which I have supplied you with, I need a full settlement as per the agreement. Should you wish to choose otherwise I need your response in writing and your reasons.”

In the meantime there had been exchanges of e-mails between Mr Deir and Mr Al Nouti about various matters, but on 1 August 2008 Mr Deir sent an e-mail to Mr Al Nouti which contained the following paragraph:

“In the meantime I will instruct our accounts department to calculate my final settlement with LAA to include my directorship fees with other companies which will be sent to you for review and the Sheikh’s approval.”

I will return now to the issue that I said I would leave until later, namely, Mr Deir’s own handwritten note of the meeting he claims to have had with the Sheikh on or about 21 December 2003.

The way he put the matter in his witness statement was as follows:

“I had a further meeting with the Sheikh on or about 21 December 2003 in his office. On this occasion, only the Sheikh and I were present. The purpose of this meeting was to discuss my future role in the UK working for the Sheikh. We discussed the Sheikh’s interests in the UK generally. That evening after the meeting, I wrote out some notes as a reminder to myself of the points that we discussed. These notes do not have a precise date on them; they refer to “December 2003”. I am relying on memory when I say that the meeting took place on 21 December 2003 – it is possible it was a day or two days later. It was definitely after 20 December 2003 and before Christmas. Once I had prepared these notes, I put these notes with some other papers which I brought with me to the United Kingdom. These notes were on loose pieces of paper which unfortunately I have now lost. I made other notes of [meetings] from this time in notebooks and I have retained and given disclosure of these notes. Obviously I did not keep notes at which an official record was being kept.”

The giving of express instructions concerning the alleged meeting on 21 December 2003 would suggest that Mr Deir had some specific recollection of that meeting (unless, of course, it was something he dreamt up in the meantime). Equally, if he had a document evidencing such a meeting, it would be surprising if he did not remember its existence (albeit several years after the event) and/or was not asked by his legal advisers at the time whether he had any documentary support for his recollection. Given that it was, on any view, purely a personal document in the form of the aide-memoire, I could understand why it might not have been referred to expressly in the pleadings whilst the minutes of the meeting of 9 December 2004, albeit not circulated at the time, were at least by the stage of the proceedings in wider circulation. However, it appears that the document said to evidence the meeting on or about 21 December 2003 was not discovered until some 6-8 weeks after the Defence to Counterclaim in this action was filed. The Defence to Counterclaim was served on or about 27 March 2009.

Mr Deir’s evidence was that the document was only discovered whilst he was looking through documentation relevant or potentially relevant to the litigation ultimately heard by Cranston J in March 2010. It is to be presumed, therefore, that his case is that he had forgotten about it until it was thus found.

If it was discovered in about the middle of 2009, it is a legitimate comment that it would be expected to have been disclosed in the original List of Documents dated 14 December 2009 or at least referred to by either Mr Deir’s first set of solicitors or his present firm of solicitors before the document eventually emerged. As I understand it, its existence was first disclosed in a Supplemental List of Documents sent on 23 June 2010 and a copy of the document was provided to the Defendants’ solicitors on 12 July 2010.

When the Defendants’ solicitors raised questions about all this, they were told that the original document had been discovered, as I have indicated, some 6-8 weeks after the Defence to Counterclaim was served and that the original was first given to Mr Tony Lawson, the solicitor then acting for Mr Deir, who took a copy and gave the original back to Mr Deir. Mr Deir then provided the original to his present solicitors who themselves took a copy, but either they have or Mr Deir has since then mislaid the original.

I am bound to say that all this is very unsatisfactory and it is quite obvious why the Defendants have made so much of the issue. I do, however, understand that Mr Lawson died suddenly during 2009 and that, of course, may have had a bearing on the preparations for this case (and indeed the other litigation). It would not, however, explain the loss of an important original document at sometime between June 2010 and a few weeks later.

Mr Lewis has made a fair point that the story about when the document was first discovered and handed to Mr Lawson is nothing more than assertion and there is no statement from someone within that firm indicating what is recorded by a perusal of the file. That might, of course, have been difficult in Mr Lawson’s absence and, equally, might have raised issues of legal professional privilege. It is also said that there has been no unequivocal statement or assertion by his present solicitors that someone within that firm saw the original of the document, took a copy and handed back the original to Mr Deir. However, numbered paragraph 2 in the letter from his current solicitors to Messrs Hallett and Co dated 26 August 2010 can probably be taken to be such a statement or assertion.

The real question is whether the suspicions that arise from the way this document has emerged and how the original has “gone missing” undermines significantly Mr Deir’s case on this overall issue. If this case had stood solely on this document, I think I would have been minded to say that it was too suspicious to be given credence. However, it seems to me (as I have already hinted) that it gains some credibility as a document from what seems to me to be a fairly persuasive case derived from all the evidence surrounding the meeting of 9 December 2004 (particularly in the light of what Mr Lowings has now said about it), the failure on the part of the Sheikh unequivocally to deny that he made such a commitment and, allied to that, the failure to refute the claim adequately (or indeed at all) after it had been put forward on a number of occasions by Mr Deir.

If that gives the document some intrinsic credibility, then the question might be asked whether its contents either strengthen or undermine Mr Deir’s case. Is there anything in the document that either helps to show that it was composed at or about the time Mr Deir says that it was composed or is there anything in it that suggests otherwise?

The short point, it seems to me, is that if one left out the line in the document that deals with the alleged £20,000 per annum director’s fees, everything else does fit in quite well with events that were happening in December 2003. The Sheikh wanted Mr Deir to come to the UK and effectively take over Mr Winskell’s responsibilities. The Sheikh needed to extricate himself from the agreement that gave Mr Winskell a percentage in the profits of Lydd Airport. (Incidentally, Mr Deir noted in his handwritten document that the percentage was 10% which was not, of course, what the agreement was: see paragraph 55). That was something that would have to be handled with sensitivity and, as events turned out, it was not achieved finally until December 2004. The Sheikh’s interests in Champneys and Barton House 41 were matters that were also to be followed up and dealt with. Again, it appears that these issues were eventually finalised in December 2004, Mr Deir having been referred to in an internal FAL Group memorandum dated 20 October 2004 from the Sheikh, who was President and Chairman of the Board, as “[General] Manager of Lydd Airport [and Representative of the President] for UK Projects”. Overall, the document relied upon by Mr Deir has the hallmarks of a document produced at or about the time he says it was produced, though I am not sure that I can accept that it was produced, as he says, on the evening of or the day after the meeting to which it related. If that had been so, I would have expected to see the precise date of the meeting recorded on the document, or the precise date of the note itself to have been recorded on the note. Furthermore, the use of the expression “come back the second day” rather suggests to me that this document was created somewhat later. However, it generally has a “prospective” flavour about it and I consider that it was probably created soon after the meeting to which it relates.

Having said that, I cannot wholly exclude the possibility that the document was created much later (even as recently as 2010). Indeed I cannot wholly exclude the possibility that it was created in order to be able to suggest that the Sheikh made the commitment suggested before Mr Deir left Saudi Arabia rather than, as might have been suggested, at the meeting on 9 December 2004. By then, of course, Mr Deir would have been working in the UK for nearly 12 months on a salary that he did not regard as adequate with no immediate prospect of planning permission on Lydd Airport being achieved (and thus no prospect of a generous bonus). There might have been an incentive on Mr Deir’s part at that point to try to persuade the Sheikh to pay him more by virtue of the directorships to which he was to be appointed. Had the Sheikh had a clear recollection to that effect about the discussions on 9 December, but that he had rejected the overture from Mr Deir, I might have been disposed to accept it as inherently likely. However, as I have emphasised before, the Sheikh’s attitude throughout has been that he “cannot recall” making any commitment about director’s fees and he has very little recollection, he says, of the meeting on 9 December. Although Mr Lowings has ventured the view that no agreement was concluded at that meeting, given his focus on the meeting about which he spoke when giving his evidence, I think he would have been able to recall more precisely the Sheikh’s response if this had been the way in which Mr Deir had approached him. Without such a precise recollection I am unable to place any significant weight on this impression even though I acknowledge that the “impression” of an experienced solicitor might, in some circumstances, be of assistance. However, as I have indicated (paragraphs 78 and 80), he was unable to recall whether a concluded agreement was reached at the time he first thought about the matter when his first witness statement was put together. However, having observed the way in which Mr Lowings’ evidence was given, I sensed that, having recognised that he did recollect reference to the figure of £20,000 in the way I have described, he felt he had to maintain strongly that there was no agreement about it which was not how he expressed himself in his witness statement. I regret to say that I cannot regard his evidence in that respect as persuasive.

However, the interpretation (probably prompted by Mr Deir) of Ms Lobb’s note (which I accept she completed in its entirety at the time of the meeting) was that the Sheikh said that “we have already agreed to pay ZD £20,000 per year per company” (my emphasis), not that it had just been agreed at that meeting. That lends credence to the proposition that there had been an earlier commitment to the payment of director’s fees which, of course, is what Mr Deir’s handwritten document evidences. Mr Deir certainly appears to have been of that view no later than 19 January 2005 (see paragraph 68 above).

Doing the best I can, therefore, on material that is not easy to evaluate, I think it is more likely than not that the Sheikh did make a personal commitment to Mr Deir that he would be paid at the rate of £20,000 per annum in respect of companies to which he was appointed after he went to the UK. (I will say a little more about what this meant shortly.) I consider that he did this as an incentive to Mr Deir to go to the UK where he would be paid less for working at Lydd Airport than he had been paid whilst working in Saudi Arabia. Whilst the issue was inevitably not discussed in the evidence, I suspect that the Sheikh knew that a greater salary than that offered could not be justified at that time and that ultimately, if planning permission was achieved, Mr Deir would become entitled to a very large discretionary bonus. However, some incentive to him (given his family commitments) was going to be necessary to induce him to go to the UK and undertake the important roles that the Sheikh had in mind for him. Given that Mr Al Nouti, as he himself has emphasised, and others within the FAL Group, did not get directors’ fees for their involvement in other companies probably explains why Mr Al Nouti was not brought “into the loop” about this proposal - and why, until he was forced to make the claim, Mr Deir did not mention it to him. I suspect that the Sheikh hoped that the question of director’s fees would not emerge because the planning permission would be achieved quickly and the large bonus paid. However, when the planning permission did not emerge and the relationship with Mr Deir became difficult, the request for payment of the director’s fees became something of an embarrassment. That is why, in my judgment, no concession has been made that any director’s fees are due, whilst an outright denial of the claim has never been put forward by the Sheikh personally. His attitude, consistent with his general attitude to business, is that if it is shown that he made any commitment to this effect, he would pay.

The general considerations to which I have just referred also explain, in my view, why Mr Deir did not seek to pursue the claim until it became plain that he was not going to remain with LAA during a period when planning permission might be obtained. He too might have been prepared to let this commitment die a death if that had occurred and a substantial bonus was paid, and the commitment represented something of an insurance policy if things did not work out in that way. Whilst, of course, English law is accepted by the parties as the law that governs the commitments made in this case, the context is that of a deal between two men who at the time were negotiating in Saudi Arabia with the approach to business of those experienced in the ways of that part of the world. I do not sense, certainly in the context with which this case is concerned, a culture of constantly “badgering” for payment even though a binding commitment to pay has been made and recognised.

I do not, with respect, think that pleading points are going to be helpful. I have to determine (a) whether what the Sheikh said was intended to have contractual force and (b) as a matter of law, what the common intention of the Sheikh and Mr Deir was, judged objectively. It is not, of course, for the court to re-write the bargain or interpret the words used in a way that the court simply considers reasonable. However, if a contractual intention is to be discerned objectively and the commercial purpose of the contractual intention can also be discerned by reference to all the relevant and admissible materials, then the court will endeavour to give effect to it rather than to render the agreement ineffectual.

I do not consider that the claim in respect of LAA is sustainable for the reasons I have given (see paragraph 120).

The position concerning the companies associated with the Lydd Golf Club is, to my mind, less clear. Mr Deir’s own evidence is that the acquisition of the golf course and club facilities was an integral part of the planned expansion of the airport. It appears that he was appointed company secretary of each company on 22 December 2003 (which itself demonstrates that the discussions over his move to the UK must have been well advanced by then), but was not appointed a director until 4 October 2005. On the one hand, one could see this overall role with these two companies as simply part of what might be termed the “LAA picture” in the sense that it was, in real terms, merely part of the overall venture and Mr Deir’s role at the airport as managing director was intended to embrace it. It has not been explained to me what changed, in a qualitative sense, after Mr Deir was appointed a director. However, his unchallenged evidence is that he was actively involved in the management of these companies and, since his appointment as a director for each company post-dated the meeting at which the commitment to the payment of director’s fees was confirmed, I consider, on balance, that he is entitled to claim for those fees until his role of active management came to an end. So far as Lydd Airshow Limited is concerned, the evidence demonstrates that Mr Deir became a director on 8 November 2005. Two airshows took place during the period of Mr Deir’s involvement at the airport, namely, on 9 and 10 September 2006 and on 1 and 2 September 2007. The second took place despite the Sheikh’s earlier directive to Mr Deir that it should be cancelled. Indeed it was that directive that contributed to the rupture of relations between the Sheikh and Mr Deir. Although the second show took place, no further shows did take place thereafter and the inference to be drawn from the way matters proceeded after September 2007 is that no truly active management of Lydd Airshow Limited was required other than a short period of “run off” after that show. I am prepared to infer that it had effectively ceased trading, albeit that it had not been dissolved formally, soon after that second show. For convenience for calculation purposes, I would conclude that “active management” as I have further defined it in the Postscript to this judgment ceased by 9 November 2007 which means that this aspect of the claim must be restricted to two years.

The claim is, therefore, allowed on that basis and the necessary re-calculations must take place. Notwithstanding what I regard as some opportunistic submissions made by Mr Lewis (which I must assume were forced upon him by his instructions) following receipt of the draft judgment, those “re-calculations” involve calculating the sums due, not by reference to a completed year as a director, but by reference to a pro rata day-to-day basis. I will mention this again in the Postscript to this judgment at paragraphs 279-284 below.

I have not addressed directly the issue of whether these claims should be directed to the individual companies in respect of which the fees are due or whether the claim should be directed to the Sheikh himself. I have obtained the impression, rightly or wrongly, that that is not the sort of point the Sheikh himself would find attractive: if he is found to have made a commitment (which I have) it will be one he will wish to see discharged. In the broadest sense (and without addressing the issue on the basis, for example, of a collateral contract or the personal liability that can arise in this broad area under certain provisions of the Companies Act) this has to be seen as a personal contractual commitment by the Sheikh and indeed it was seen as such by Mr Deir. Leaving aside all legal niceties, there is no doubt that nothing of significance would be done (or left undone) without the sanction of the Sheikh. He would undoubtedly have had the effective power to sanction the formation of the company and to appoint someone as a director. I can well understand why Mr Deir’s advisers have felt it a sensible precaution to take proceedings against the individual companies, but the reality is that this is the Sheikh’s personal responsibility.

A sense of reality is necessary in this context. Until the Sheikh and Mr Deir disagreed about the way the Sheikh wanted to deal with things in the middle of 2007 then, subject only to one finding made by Cranston J in the case before him (see paragraph 13), there is no basis for thinking that Mr Deir was doing anything other than advancing as actively and effectively as he could the Sheikh’s objectives for the airport. He (Mr Deir) knew that, if he succeeded, he would be rewarded handsomely. He did, of course, have to live and support his family in the meantime and there are a few areas where, on analysis, I think he pushed and indeed exceeded the limits of what he was entitled to do. But to suggest, as seems to be the suggestion, that virtually every step he took was for his own advantage and designed to take advantage of the Sheikh and the FAL Group seems to me to be far-fetched and missing the point by a considerable margin.

I will deal with the substance of this allegation shortly, but the point made by Mr Hill-Smith that seems to me to have some initial weight is that the work said to have been solicited was work of an aircraft-chartering nature, whereas the work of FAL Aviation UK Ltd related to aircraft handling at Lydd Airport: see paragraph 63 above. There is no evidence that this company was ever seen as a vehicle for aircraft-chartering work and, of course, it did not become operative until the end of July 2005. On that basis it is difficult to see what could have been lost by FAL Aviation UK Ltd even if the substance of the allegation was true.

At all events, as indicated previously, Jet Connections is a company that was incorporated in March 2004 by Mr Deir. In his witness statement he explains the background to the incorporation of this company in the following way:

“In March 2004, I arranged for a company to be set up called Jet Connections. This Company was set up with a view to promoting the chartering of the Sheikh’s private aircraft, a Boeing 727 and a Legacy Embraer. My relations with the Sheikh were good and I informed him of what I was doing, which was going to be in his interests. In accordance with this, I entered into discussions with well known aircraft brokers and operators, Hunt and Palmer (based in the UK) whereby Hunt and Palmer would acquire exclusive use of the Boeing 727 for a period of time. Hunt and Palmer would then make the aircraft available for its clients. I got as far as drafting a proposed Exclusive Aircraft Use Agreement in respect of the Sheikh’s Boeing 727 with proposed aircraft charterers, Hunt and Palmer. The draft agreement naturally enough named Jet Connections as operator. This agreement was never concluded but the Sheikh and Mr Al Nouti would have been fully informed about the negotiations and the proposal that Jet Connections should enter into the leasing agreement as operator ….”

According to Mr Deir, the reason that Jet Connections was incorporated was to facilitate the chartering of the private aircraft of the Sheikh including the Boeing 727. That, of course, was something he was proposing to undertake on the Sheikh’s behalf when in the UK as agreed in December 2003 (see paragraph 22 above). He referred in the extract from his witness statement set out above to the Exclusive Aircraft Use Agreement concerning that aircraft that was drafted. The agreement, which named Jet Connections Ltd as the “operator”, provided that Hunt and Palmer were to have exclusive use of the Boeing 727 for a minimum period of one year. Although undated, it is clear that it was drafted for use in 2004. That, of course, is a document that would be consistent with what had been planned and there could, so far as one can judge, be nothing sinister in Mr Deir setting up a corporate vehicle to facilitate this work: that is probably what the Sheikh would have expected.

Irrespective of anything that the Sheikh may have been told directly about Jet Connections, Mr Hill-Smith contends that the Sheikh would have been fully informed about this arrangement, particularly in the light of its one-year proposed duration and draws attention to the fact that this draft Agreement formed part of the disclosure provided by the Defendants. This shows, he submits, that Jet Connections was known about early on irrespective of anything said expressly about it to the Sheikh by Mr Deir.

Mr Deirsaid Jet Connections could not in fact be used for the purpose of operating the Sheikh’s aircraft after he discovered that it did not have an Air Operator’s Certificate permitting commercial operation of the aircraft in the UK. I do not think that there is any evidence about when that discovery was made, but equally, as I understand it, the substance of what Mr Deir says in this regard is not challenged.

There is no evidence that any significant work was actually carried out by or in the name of Jet Connections until certain events in 2005 to which I will turn shortly. The bank statements for Jet Connections reveal no activity during 2004 other than receipt of $11,368.29 from Sheikh Al Hamrani on 15 September which appears to relate, not to chartering Sheikh Al Hamrani’s plane, but to planning a private flight on his behalf from Farnborough to Paris on 21 September 2004.

However, there is evidence, in the form of a letter from Mr Deir to Sheikh Al Hamrani dated 22 April 2004, that Mr Deir had in mind using Jet Connections for purposes other than simply managing the chartering of Sheikh Fahad’s aircraft. In the letter Mr Deir referred to a recent lunch appointment with Sheikh Al Hamrani (who was, of course, at that time a customer of SAMCO) at which he had plainly spoken of having “established and registered [an] Aviation Company here in the UK”. He said that he was “in the process of finalising the office set up and [that he had] hired the required personnel.” He said that he anticipated “by the end of this month [being] ready and running.” There is no doubt that the subject of the conversation and the subject of the letter was the possibility of Jet Connections arranging and conducting the day-to-day management of Sheikh Al Hamrani’s Boeing 737 aircraft. At that time the aircraft was being managed by SAMCO. There is a further letter from Mr Deir to Sheikh Al Hamrani on 20 June 2004 concerning the costings of the annual inspection for the aircraft, but matters do not seem to have proceeded any further thereafter until the events to which I am about to turn. It is, however, fair to say that this exchange of communications between Mr Deir and Sheikh Al Hamrani does raise questions about what Mr Deir had in mind so far as Jet Connections was concerned and what its relationship with SAMCO would be.

Before turning to the material events in 2005, one background fact it is necessary to bear in mind is that from the beginning of 2004 Mr Ahmed Abubaker had replaced Mr Deir as General Manager of SAMCO. SAMCO continued to be a joint venture between the Sheikh and Sheikh Khaled El Seif. Both the Sheikh and Mr Al Nouti acknowledged in their evidence that Mr Abubaker had the responsibility of informing them of material matters concerning the business of SAMCO.

By March 2005 Sheikh Al Hamrani was in dispute with SAMCO about the payment of fees. Indeed it appears from one document disclosed that the dispute had been going on for some time, confirming what Mr Deir said about it when questioned. Mr Abubaker had apparently written to Sheikh Al Hamrani’s representative on 30 January 2005 in what Sheikh Al Hamrani regarded as “threatening” terms and, following a further letter from Mr Abubaker on 6 March 2005, a letter on behalf of Sheikh Al Hamrani was sent terminating his dealings with SAMCO. In a fax dated 15 March Mr Abubaker told Mr Al Nouti and a representative of Sheikh Khaled El Seif that Sheikh Al Hamrani had terminated the contract. Mr Abubaker did not say to them at that stage that Jet Connections was taking over the contract.

Within a short while of the termination of the contract, arrangements were being made for the transfer of the business concerning the aircraft to Jet Connections. There are e-mails from Mr Abubaker on 13 and 19 March speaking of the arrangements to be made. On 29 March Mr Abubaker e-mailed Mr Deir with a list of the agents throughout the world that had been notified by SAMCO of the changed arrangements. All these e-mails are from a SAMCO e-mail address. The e-mail of 29 March from Mr Abubaker was left behind at Lydd Airport when Mr Deir departed. At the beginning of May Mr Abubaker signed a document on behalf of SAMCO which facilitated the assignment or transfer of the appropriate Air Navigation contract and upgrade to Jet Connections. Whilst none of the e-mails are copied to anyone in the FAL Group, there is no obvious ruse being adopted to conceal what is happening and one would have thought that all matters surrounding an event such as this would be common knowledge. The Sheikh said he was unaware of it.

The next event of some significance in this context arises from discussions about a possible joint venture between GAMA and Jet Connections for providing medical evacuation services to the Saudi Ministry of Defence in the event of a military incident. The documentary material in the papers before the court is somewhat scant, but there is a fax on LAA fax paper dated 16 August 2005 from Mr Deir to Mr. Antoine Samara, the GAMA financial controller, in which he said:

“Please find attached a copy of the Certificate of Incorporation and the Memorandum of Association for Jet Connections which is a Company owned by me personally.

Please note that I do not have any objections for Jet Connections becoming part of the Joint Venture as London Ashford Airport (LAA) does not have the ability to manage and operate aircraft.”

I do find it impossible to accept that two separate people employed effectively by the Sheikh should fail to mention to him the involvement or potential involvement of Jet Connections in two separate and unrelated matters. I have already made an observation about the ending of the contract between SAMCO and Sheikh Al Hamrani. So far as the proposed joint venture is concerned, on the limited evidence available, it would seem to have been a major venture in which, I am sure, the Sheikh would have wished to have played a part if possible. I simply cannot accept that he was not kept in the picture about the negotiations as they unfolded even if he did not play an active part in them.

Irrespective of whether the Sheikh knew personally about Jet Connections at this time (and I consider it likely that he did) there are two observations to be made: first, at this stage two relatively senior people employed by him did know about Jet Connections; second, Mr Deir did not seem troubled at the emergence of documentation, whether from him or from anyone else, that referred openly to Jet Connections and his interest in the company. Whatever might now be said, it suggests that, so far as he was concerned, he perceived that what he was doing was “above board”.

Although Mr Deir has said that he told the Sheikh about Jet Connections, he was unspecific about when that was. I am unable to find, on the balance of probabilities, that he did say anything specific to the Sheikh about this company. However, I do consider it more likely than not that the Sheikh did get to know about the existence of Jet Connections at a relatively early stage and was simply unconcerned about it. From his point of view, Mr Deir was in the UK pursuing the Lydd Airport venture upon which the Sheikh placed an understandably high priority. Since there was no complaint made (and, I emphasise, there is still no complaint made) about what Mr Deir was doing (or did) in that regard or about the essential progress he was making (despite what the Sheikh will have perceived to have been unjustified delays in the planning process), I think the most likely scenario is that the Sheikh was not concerned about any other business venture that Mr Deir engaged in provided it did not interfere with that essential objective. As the evidence has unfolded, the actual number of transactions carried on through Jet Connections during the relevant period was small and there is no evidence that they interfered in any way with Mr Deir’s principal activities. I do not believe that the Sheikh would have been at all interested in seeking to share in the profits of the few transactions that were carried out during this period under the Jet Connections’ umbrella.

Subject to one matter to which I will refer shortly, I do not consider that the claim for an account of profits arising from the work put through Jet Connections has been made out. Before I turn to that one specific matter, there is one broad matter I should deal with. Mr Lewis was, in my view, justified in saying that some of the answers given by Mr Deir to the requests for further information concerning Jet Connections in the preliminary stages of this litigation where neither full nor, in some cases, frank. I do not, for example, understand how he could have answered that the company did not conduct any business until September 2008. Now that the relevant documents have been disclosed, as I have already observed, not a great deal of business was put through Jet Connections and the profits, if any, generated were not great. But to deny unequivocally at the outset that any business was conducted cannot be the result of an oversight. Not unnaturally, this has made me pause about this particular aspect of the case. However, the strength of the evidence that (i) whatever Mr Deir was doing was being done openly and (ii) that documents concerning Jet Connections were being sent to FAL Group representatives, at least in the early stages, has satisfied me that, at the time, he did not think he was doing anything of which the Sheikh would disapprove. Nonetheless, when the relationship broke down and Mr Deir sensed (as I am sure he did) that litigation was likely to ensue, he became concerned that he had not said specifically to the Sheikh at any stage precisely what Jet Connections involved and that this would be used against him in some way. I think he was less than frank about what had gone on because of that and possibly also because most of the dealings were with Sheikh Al Hamrani and his relatives with whom, as I understand it, the Sheikh had fallen out. I do not think that Mr Deir’s lack of frankness in this regard does him any credit, but it has not displaced the weight of the rest of the evidence to which I have already referred suggesting that, in truth, the Sheikh knew all that he needed to know about Jet Connections and was not the least concerned. In this tangled web, where separating truth from fiction is not easy, I consider that to be the most likely explanation.

The one matter that, in my judgment, requires consideration is the use to which the facilities of LAA were put for the purposes of Jet Connections. Whilst, for the reasons I have given, I do not think that the Sheikh can complain about the actual business conducted through Jet Connections, I do not think he can be said to have condoned or acquiesced in the use of LAA facilities (including staff) to further the aims of that company. Mr Deir accepted that, to a relatively limited extent, he used the office facilities when business was conducted through Jet Connections and Ms Lobb did some secretarial work for him in this regard. When the matter was put to him, he said that it was a fair point. As I have said, the extent of the business was not great during the 4½ years from March 2004 until September 2008, but I think that some balancing figure is justified to reflect that use. Since, in my view, this disputation should be brought to a close as soon as possible, I do not propose to adjourn that issue for consideration by another tribunal. I propose to paint with a broad brush and will permit £18,000 (in other words, £4000 per annum for 4½ years) to be set off against any sum payable by the Sheikh to Mr Deir on the claim. If the parties wish to contest that, they will have to persuade me that it is a proportionate exercise to send the matter to a Master for further consideration.

I will deal with each aspect separately, but I would begin with a general observation. When Mr Deir came to the UK, apart from the commitment to the additional director’s fees to which I have previously referred, there had been no concluded agreement about his remuneration package save that commitment when appointment to directorships occurred. For the first two months, it appears, he worked for no pay and with no clear understanding of what he would be paid on a regular basis. Whilst there was tacit acceptance of the position after the Sheikh’s letter of 1 March, nothing ever became committed to a final written contract as contemplated in the Sheikh’s letter. Essentially, practices became established over a period of time. The 2005 Audit report (April 2005) was essentially complimentary about what had been achieved since the beginning of 2004. The General Comment was as follows:

“The new management who took over the helm in January 2004 have done a significant transformation in the image of the airport [through] massive expansion programme, securing political backup, hiring qualified and professional staff, strengthening airports presence in the market, and implementing internal controls in finance, administration and operation.

The objective of this internal audit report is to constructively highlight the weaknesses of the existing internal control system for correction and rectification.”

Much has been made of the failure of Mr Deir to ensure that FAL Holdings policies were not being applied. However, it is a fair point in his favour that when a new set of FAL policies was distributed on 21 January 2004, less than three weeks after he arrived to take control at Lydd Airport, it was not sent to LAA.

As I have previously indicated, an audit did take place in April 2005. By then Mr Mutlaq had been in harness for approximately two years. Some recommendations for strengthening the internal financial structures were made and there is no doubt that the response in respect, for example, of Business Travel Policies and Procedures and business trips was that the intention henceforth at LAA was to follow what was called “FAL Policy”. It was, however, when being questioned about why that was not followed up that Mr Al Nouti said what I recorded in paragraph 158 above.

Against that background, it is clear that, whatever those who conducted the audit in 2005 might have wished, those at the head of the organisation were less concerned about the strict controls at that stage than they have subsequently said that they were. Indeed even when the controversial 2007 audit was conducted, the report (which Mr Deir asked by e-mail of 4 October 2007 to see) was withheld from him (apparently on the Sheikh’s instructions) until April 2008 because, it was said, there was a possibility that the airport would be sold. I have said that the audit was “controversial”. Mr Deir wrote a very strong letter to the Sheikh on 17 July 2007 (following a telephone conversation between them the previous day) complaining about the conduct of the audit, apparently conducted personally by Mr Al Nouti.

With those general observations made, I will turn to some of the more detailed issues.

Per diem payments

There appears to be some dispute about whether per diem payments were permitted at all within the FAL Group. The Sheikh said that they were permitted throughout the whole group, but subject to what he described as the FAL Holdings policy. Mr Al Nouti said that there was no per diem scheme within the group. The policy documents indicate that food, accommodation and travel expenses would be reimbursed up to a maximum daily limit depending on the status of the person within the group. It is said in the policy document that the specified limits “are not to be considered as a ‘per diem’ allowance.” Mr Deir says that, so far as he was concerned, when he worked for SAMCO he was paid a per diem rate of US$96 and did not think it was contrary to FAL policy. Given that background, it is not that difficult to see why the boundaries between what was mere reimbursement of expenses up to a daily limit and a true per diem rate were somewhat blurred. At all events, after his arrival at LAA Mr Deir claims to have issued a policy on 27 July 2004, drafted or substantially drafted by the HR department, which appears to represent an amalgam of both aspects. He described it in this way in his witness statement:

“On 27 July 2004, I issued a Memorandum on behalf of LAA whereby employees were to receive a per diem payment when out of the office. Under the terms of this Memorandum, very senior personnel including myself were to receive a daily allowance. I was to receive £200 a day in addition to incurred expenses whereas Mr Mutlaq the Finance Manager was to receive £150 a day. The Marketing Director was entitled to receive £150 a day. This was a standard policy adopted by many companies; the same policy had been in place at Samco from the outset. I received US $96 per diem plus expenses when I was at Samco. To my knowledge, all aviation companies in the Middle East use a per diem policy.”

As I have said before, obtaining a precise picture of the way everything was handled within LAA during the relevant period is not easy and, in some respects, it is made less easy when almost every single aspect of what Mr Deir is said to have done from the moment he arrived there is characterised on behalf of the Sheikh as fraudulent, dishonest, underhand or whatever other pejorative adjective can be found - and every aspect of his evidence and that of any witness he called where it differs from the perception of the Sheikh’s side as being a “lie”, “incredible”, “ludicrous”, “concocted” and so on. Since he was, throughout the whole of his time there, endeavouring to further the primary objective of the Sheikh and, on any view, had moved things forward at the airport significantly and in a very positive way from that perspective, this whole case is one that is difficult to understand. I have no doubt that he will have had an eye to his own self-interest from time to time: it would be odd if he did not. However, that is a rather different matter from the picture sought to be painted.

For my part, looking at the document itself, there is nothing about it that suggests that it was not made on the date it bears and indeed if, as appears to be the case, it was produced electronically, there is an electronic date stamp at the foot of it indicating the date 27 July 2004. If one considers the position at Lydd Airport at about this time, Mr Deir would have been there for some months, various employees were being engaged and one can see the need for internal policies to be put in place. It is, of course, very easy to say that this particular policy was put in place largely to benefit Mr Deir. Indeed that may have been so. But it is a very large jump from that to say that, in order to cover up some £32,000 worth of unjustified claims (which, as I shall indicate, were signed off by Mr Mutlaq) three years later, a document of this nature was fraudulently created. I am not prepared so to hold on the evidence and I am, on balance, prepared to accept that what Mr Deir has said about the creation of the policy and its subsequent implementation is correct.

Furthermore, a somewhat belated attempt was made to suggest that the claims that Mr Deir was making in this regard were sought to be disguised in order to deceive the auditors. Despite the intense preparations that preceded the hearing before me, and the nature of the allegations to be made having been foreshadowed, no such proposition had been put forward positively before and it was not something specifically put to Mr Deir when he gave his evidence. Against that background, I am not prepared to consider making any such finding and indeed, whether Mr Mutlaq was right or wrong in approving these claims, they do appear to have been made openly and without any evident attempt at concealment.

Mr Deir described the procedure adopted as follows:

“There was no secret about these claims for per diem payment as specific expense forms were completed and sent to the accounts department relating to these. My PA completed out of office expense forms for me by checking my diary. I would then sign these off and she would then send them on to Mr Mutlaq at Accounts and retain copies ….”

Family travel to and from Jordan

Whilst I can see the attraction of Mr Hill-Smith’s submission, I do not think I can accept it in this instance. Mr Lewis says that Mr Deir was not contractually entitled to family travel and that the Sheikh had expressly removed the suggested family travel allowance feature of the remuneration package put forward by Mr Deir in his fax to the Sheikh of 20 January 2004 (see paragraph 47 above).

Although Mr Deir never regarded himself subjectively as having accepted the Sheikh’s contractual package put forward in response to his, the fact is that he was effectively treated as having agreed to it and, objectively speaking, where something had been specifically proposed, but then rejected and thus expressly excluded from the eventual contract, it seems to me that the contractual position has to be that there was no provision for family travel in the way that there had been previously. It would, in my view, be difficult to see how an agreement about such an issue could then be implied from a course of subsequent dealing when it had been expressly excluded at the outset. It is different from a situation such as that, for example, obtaining in relation to the “per diem” payments where no discussion at all had occurred in relation to them at the outset.

I do not think that there was anything fraudulent in Mr Deir making the claims as he had done before, but a strict analysis of his contractual entitlement seems to me to lead to the conclusion that he should not have received the sums he claimed in this regard.

The Sheikh’s exclusion of this aspect of the previous remuneration package (if indeed it was he who formulated the proposed package) could be seen as somewhat mean. However, as I understand it, in the initial years of his employment by SAMCO, Mr Deir’s close family lived in the UK and travelled with him from time to time to Jordan which is where Mr Deir’s wider family lived. It might have been thought that this was a matter for him and his family now rather than some kind of “perk” under his contract of employment. Furthermore, the commitment to director’s fees could be seen as partly repairing the position.

At all events, this aspect of the counterclaim is, in my judgment, made out. Credit for the appropriate sum will have to be given against the amount of Mr Deir’s claim.

Other air travel

Another issue surrounds the attendance of Mr Deir, Ms Lobb and another LAA employee, Ms Walkley, in October 2005 at the National Business Aviation Association convention in Orlando and, in relation to Mr Deir and Ms Lobb, a one or two night stay in New York between 23 and 25 May 2006 - although at one stage the suggestion is that this was in effect part of the trip to Orlando. I am not entirely sure what the final allegation was in relation to these matters. It was at one stage in issue about whether Ms Lobb should have been taken at all on the trip to Orlando, but it seems to have been accepted that it was within the Managing Director’s discretion to decide whether to take his PA on an important business trip to the convention. If that was not accepted, I would so hold. It is still not entirely clear to me whether the allegation is that the New York stay represented nothing more than a “holiday” and, accordingly, there should be reimbursement of the cost of those two nights. It is also said that there should be reimbursement of the difference between the business class cost of the outward travel for Ms Lobb and Ms Walkley to Orlando since they should have only travelled economy or premium economy class.

I am bound to say that the cost of litigating this point may well have exceeded the differential in the relevant airfares. However, since the issue has been raised, I must deal with it.

It is now accepted that Ms Lobb travelled business class to Orlando (it is said because there was no economy or premium economy seats on the flight out). The same reason is given for Ms Walkley even though she took a different route out. This is, of course, possible, but it seems to me unlikely. I suspect that Mr Deir was being more generous than he ought to have been. I have no real evidential basis upon which to work, but I will order reimbursement of a total of £2000 in relation to the airfares of Ms Lobb and Ms Walkley.

However, I do not accept that the stay in New York was a holiday or a frivolity, as seems to have been suggested. Ms Lobb recalled a business meeting at the airport and I am prepared to accept that that was so.

I was troubled one stage during the course of the evidence that this issue, along with another occasion when it was suggested that Mr Deir purchased a gift for a female he was with, was simply raised to embarrass Mr Deir. I was assured that this was not so and will, of course, accept the assurance. However, it seems to me that there were more legitimate areas for the raising of questions than this one.

Expenditure above the daily limit

It seems to me that Mr Hill-Smith is justified in saying that it was only when the 2007 audit report (strictly speaking, in draft form) was supplied to Mr Deir in April 2008 that any mention was made of that particular policy. It was one that was implemented by Mr Mutlaq during the period he was in charge of monitoring expenditure and, accordingly, it seems to me to be far too late to seek recovery of these sums now. In any event, given the way in which the issue has emerged, it has not been established to my satisfaction that the policy did indeed apply to Mr Deir whilst employed as managing director of LAA.

Credit card claims

Some of the items that appear under this part of the counterclaim relate to the family travel expenditure which I have dealt with in paragraphs 173-178 above and some to the Orlando/New York trips which I dealt with in paragraphs 179-184 above. There cannot be double recovery here and, accordingly, the full value of those items should be deducted from the above sum before the application of the approach to which I will refer below.

I do not intend to deal with each and every item. Some of the items sought to be challenged are items that Mr Deir said constituted gifts to councillors. He says that it is part of the culture from which he comes that this kind of approach is adopted. In the UK it is, not unnaturally, a sensitive matter and if any gift (certainly one over a certain value) is accepted by someone in a position of influence, it is customary for it to be disclosed publicly. The position is taken on behalf of the Sheikh that any such expenditure would be wholly wrong and contrary to the interests of the company. I am bound to say that I think that the position taken is a little too spotless in its connotation to be accepted. I am quite sure that, if the purchase of a gift was thought by Mr Deir to help in furthering the interests of the company, the Sheikh and those who were his advisers would not have objected. I simply say this so that it is understood that I have not disallowed any such item simply because of this objection. However, there were one or two matters where I found the account concerning such gifts difficult to accept (for example, over the gym membership) and I have, accordingly, said to myself that such items have not been shown by Mr Deir to be legitimate expenditure.

I discouraged detailed cross-examination about these matters because it seemed to me that the time spent in investigating them would be disproportionate to the costs at stake. I am proposing again to paint with a very broad brush. I think there are some items that, even if “business orientated”, contained a personal element that ought not properly to be regarded as company expenditure. I propose, therefore, that 25% of the amount claimed on the credit cards as set out in Schedule 1, Parts A-C, less the full value of the airfares that have been dealt with elsewhere, be treated as having this personal element and should be repaid by Mr Deir to the Defendants. As I have said before, if either party wishes to suggest that there is unfairness in this approach, I will need persuading that any further time and expenditure is justified in relation to it.

This element of the Counterclaim succeeds on that limited basis.

Beechcraft Bonanza aircraft

Mr Mutlaq agreed that the airport incurred no extra cost in having the aircraft parked there when it was and he accepted that another person who parked his aircraft was not charged hangarage. He appeared to concede that he should not have charged the amounts claimed and, accordingly, there does not seem to be any basis upon which this aspect of the counterclaim could succeed.

Mr Hill-Smith has drawn attention to the fact that, notwithstanding that concession, a sum of £1,652.72 was paid by Jet Connections in June 2008 and that credit should be given for that sum. It seems to me that that contention is justified and, accordingly, an appropriate adjustment must be made.

It follows that the Counterclaim in this regard fails and the credit in favour of Jet Connections to which I have referred should be given.

1999 BMW

The short point is that there is no evidence that it was an over-valuation and, accordingly, this aspect of the counterclaim cannot succeed.

Agreed issues

It is accepted that the sum of £3,898.43, representing work carried out by Phoenix Aero-Engineering Ltd to the Beechcraft Bonanza Aircraft, needs to be met. That claim is, therefore, admitted.

Mr Deir accepts that he has retained a laptop computer that, strictly speaking, belongs to LAA. He agrees that some credit should be given in relation to that. I trust that agreement can be reached on this.

There is no doubt that the Piper aircraft was disposed of shortly before 8 October 2004. On that day it was registered by the Civil Aviation Authority in the name of LAA. The registered owner of the aircraft, pursuant to whatever transaction had taken place, was, therefore, LAA. That registration does not, as I understand it, necessarily reflect the actual beneficial ownership of the aircraft. It is, I believe, common ground in the case that an aircraft cannot be registered with the Civil Aviation Authority unless the owner is a UK or Commonwealth citizen or, if an aircraft is owned by a company, the company must be controlled UK or Commonwealth citizens.

Mr Deir says that the intention behind the transaction that took place shortly before 8 October 2004 was that he was to become the beneficial owner of the aircraft and that the only reason that the aircraft was registered in the name of LAA at that time was because he was not a British citizen. He did become a British citizen in May 2007 and in January 2008 the aircraft became registered in the name of his company, Jet Connections Ltd.

In his witness statement he referred to the background to its acquisition in this way:

“I joined LAA on the 1 January 2004 and I assisted with the day to day running of Lydd Air along with Jonathan Gordon and I put the extra time and effort to get Lydd Air on its feet along with my duties for the airport, (Michael Winskell may have had theoretical control over the company Lydd Air but in practice he had no input after I joined whatsoever.)

I was a qualified pilot and I had obtained a private pilot’s licence a few years before joining LAA. Jonathan Gordon encouraged me to start flying the Piper and to use it to commute between Lydd and Oxford, a trip I used to do at the end of the week as my family home was near Oxford. Jonathan Gordon started using another aircraft he owned, namely a Beech Baron with twin engines. The cost of operating his aircraft was paid by LAA and he was never charged for landing or parking fees, during his time as CEO of LAA (I know that because it was an issue which was discussed with the Sheikh at the time).

In return for my hard work for the first 9 months, Jonathan Gordon wanted me to have the Piper Aircraft as recompense for the token price of £1. I agreed and Jonathan Gordon executed the appropriate Bill of Sale on behalf of Lydd Air dated 6 September 2004. At this time the Piper Warrior aircraft was 27 years old, DOM 1977. It was not worth even £5000 at that time since it required a replacement engine and propellers and thorough overhaul to the airframe.”

Leaving aside all questions of ownership for the moment, a reference to the log that records the use of the plane shows that it was piloted almost exclusively by Mr Deir from about August 2005 onwards. It was not put into service immediately after it was acquired apparently because it needed a substantial overhaul including the installation of a new engine. It appears that LAA paid for this overhaul and the new parts incorporated in the aircraft. There is ample evidence that Mr Deir’s use of the aircraft was well known to everyone at Lydd Airport. He used it for showing visitors to the airport a view of the airport from the air and, he says, on other company business for the purpose of attending meetings. He used it from time to time to commute to and from his home in Oxfordshire.

Before I deal with such documentary evidence as there is concerning the aircraft, I would merely record that it is LAA’s case, supported by evidence from Mr Jonathan Gordon, that the intention of the sale was that the beneficial ownership of the aircraft should go to LAA, not Mr Deir personally, as part of the overall transaction completed in early 2005 by virtue of which the Sheikh acquired a yet further interest in the airport from Mr Gordon leading to a 93% shareholding overall. In his witness statement of 27 July 2010, Mr Gordon said this:

“ … I am quite clear that ownership of the plane transferred in October 2004 from Lydd Air Ltd directly to London Ashford Airport Ltd, and not to the Claimant personally. The reason that I say this is that the Piper cropped up in negotiations between Sheikh Fahad and I. [Mr Deir] should be aware of this because he negotiated exclusively with me on the Sheikh’s behalf when I was contemplating selling my shares. Mr Deir, on behalf of Sheikh Fahad indicated that he wanted the airport to take the aircraft as part of the overall deal to use for its benefit. I was not willing to give up the Piper for nil consideration. This, therefore, was initially a stumbling block but, ultimately, a value of £10,000 was attributed to the Piper and factored into the ultimate sum that Sheikh Fahad paid me for my shares.”

Mr Deir’s evidence is that he asked Mr Gordon to register the aircraft in the name of LAA because of his lack of British citizenship at the time.

There is no other immediately contemporaneous evidence relating to this transaction. A Bill of Sale was produced (in controversial circumstances to which I will return later), but there is no contemporaneous documentary evidence to show how the title to the aircraft changed. There are two other documentary features of some relevance: first, the aircraft was not listed in the fixed asset register of LAA for the year to 31 December 2004 which, if it was a company asset, it should have been; second, the Share Sale Agreement by virtue of which South East Airports Ltd (of which Mr Gordon was a shareholder) sold 1,923,076 shares in LAA to Lydd Holdings Ltd for the sum of £1.69 million was dated 17 February 2005, thus several months after the new ownership of the aircraft was registered.

The Share Sale Agreement, which was not between LyddAir Limited (the owner of the aircraft in September 2004 before the change of ownership) and LAA (its registered owner after the change of ownership), makes no reference at all to the aircraft being part of the consideration for the deal.

When giving his oral evidence Mr Gordon said, for the first time, that the agreed a figure of £10,000 as the value of the aircraft was achieved by reducing the sum of £1.7 million for the shares to the sum of £1.69 million referred to in the Share Sale Agreement. Mr Gordon had been prompted to say this apparently having just (or recently) noticed the figure of £1.69 million in the Share Sale Agreement. Since this precise suggestion emerged after Mr Deir gave his evidence it was not something about which he was asked. I rather suspect that had the boot been on the other foot, and Mr Deir had first suggested something like this when he gave his evidence, it would have been suggested that he was making up his evidence as he went along. Mr Lewis has, however, invited me to say that Mr Gordon was “a singularly impressive witness, who gave coherent and compelling answers”. Mr Gordon accepted that there was no contemporaneous evidence that this was the value attributed to the aircraft and the information from the accountants then acting for LyddAir Ltd (who subsequently acted for LAA) makes no reference to any such figure and there is no reference to any payment of that figure. However, when reviewing the papers for the purpose of preparing this judgment, I noted that in his detailed response to the Audit Report 2007 Mr Deir said that the value of the aircraft at the time it was acquired was “in the region of £10,000 as it required an engine overhaul which was carried out in 2005”. He was not asked about this and, accordingly, I really have no clear picture of his answer to the suggestion that the value attributed to the aircraft at the time was £10,000. Since the Bill of Sale (to which I will refer shortly) refers to a nominal consideration of £1, it will be appreciated that endeavouring to form a concluded and satisfactory view about precisely the circumstances in which this aircraft came to be transferred from one party to another and for what consideration is extremely difficult. Indeed it is rendered the more difficult by Mr Gordon’s evidence that however the substance of the agreement was concluded, it was simply done “on a handshake”. Given that Mr Gordon said in his witness statement that by mid-2004 it was clear to him that he could not continue working with Mr Deir because he disagreed with his management style, it is difficult to judge the basis upon which any deal “on a handshake” was concluded.

The notes prepared by Mr Small and Mr Carter concerning the Piper Warrior were in the following terms:

“Mr Deir explained that he purchased the aeroplane personally but because he was not a UK citizen he had to register it in the company name. He now has citizenship and has transferred the plane’s registration. No payments were made towards the plane by the company other than for fuel.

Miss Ricketts explained that they have now reviewed the fuel position as they realise that paying for all the fuel, including private fuel, constituted a benefit. Miss Ricketts showed Small her calculations taking account of payments due to Mr Deir for business fuel. Mr Deir will be making payment to the company for fuel at the going rate.

Small confirmed that he is happy that the making good is taking place and no benefit would arise. Miss Ricketts confirmed that this procedure will now stay in place and the company will be charging Mr Deir for private fuel.”

On 15 April 2008, Miss Ricketts replied to Mr Small’s letter dated 27 February 2008 and said this about the “company aeroplane”:

“We must first make the point that the aeroplane is not owned by the company. It is not shown as a company asset in the accounts and it is not insured by the company. Instead it is provided to the company by Mr Deir in exchange for the company paying for any fuel used. Thus the payment for fuel is effectively a payment for using the aeroplane on business. Most of the business uses flying around the immediate area of Lydd Airport so as to show off the advantages of its location. Although it is not really relevant since the aeroplane does not belong to the company, we can inform you that Mr Weeks as the pilot to ferries planes around for us.”

The registration document referred to in the letter from Miss Ricketts of 23 May showed that the Piper Warrior had been transferred to Jet Connections Ltd on 4 January 2008.

After Mr Deir’s departure from LAA and after this litigation was commenced Mr Mutlaq prepared a letter from Mr Jonathan Gordon to sign concerning the Bill of Sale to which I will refer in paragraph 230 below. The relevant part of the letter, dated 18 February 2009, was as follows:

“Can you please confirm by signing below that the Bill of Sale was signed on behalf of Lydd Air Limited (not the actual owner of the aircraft) and was executed only for tax purposes. I believe you were informed by [Mr Deir] that this matter was approved by Sheikh Fahad to issue such a document.”

The Bill of Sale was in the following terms:

“For and in consideration of £1 LyddAir Limited … who is the owner of the full legal and beneficial title of [the Piper Warrior aircraft]

dated this 6th day of [September] 2004

hereby sell, grant transfer and deliver all rights, title interests in and to such aircraft unto [Zaher Deir] of [address given] to have and to hold singularly the said aircraft for ever, and warrants the title thereof.”

Until Mr Deir’s letter to Messrs Phipps & Co of 11 June 2008 (see paragraph 216 above) no reference had been made in any other document to this Bill of Sale even though it purports to be dated 6 September 2004. That date has been added in handwritten form. Mr Gordon said this about the Bill of Sale in his first witness statement of 27 July 2010:

“In the summer of 2008, I cannot be sure of the precise date, Mr Deir approached me to discuss the Piper. Whilst I cannot be exactly sure, I believe the indicated to me that Sheikh Fahad had agreed to transfer the Piper to him by way of a bonus which would help him for tax reasons and as a consequence he wanted the Piper transferred into his sole name. He stressed to me that Sheikh Fahad, the board of directors and the company accountants had approved this. I saw no reason to disbelieve him and, in any event, it had no effect on my companies. The Claimant produced a bill of sale which he asked me to sign, on behalf of Lydd Air. Because of the background of being told that everything was above board and agreed, I did not treat this document with the importance I might have otherwise given it. I went ahead and signed the bill of sale. This is definitely my handwriting, but at the time I signed it, I do not believe I dated it - it is not unusual to leave a bill of sale undated. So far as I can see, the date on the bill of sale was not inserted by me.”

One of the documents discovered and disclosed by Mr Gordon was an e-mail to him from his brother, Robin, dated 30 May 2008 which referred to something said to him by Mr Deir during a meeting in relation to the Piper Warrior aircraft. The relevant part of the e-mail reads as follows:

“He asked me during the meeting for a bill of sale for the VU, value £10 (he had mentioned it to you) as he has personal tax issues.

Would you like me to mock something up based on the US BoS we have seen?

Not sure of the date Etc?”

Mr Jonathan Gordon’s response to this e-mail was short and simply said “Will discuss BOS”.

I have used the expression “tangled web” generally about this case previously (see paragraphs 4 and 152 above). Anyone reading the last 39 paragraphs of this judgment will think it an appropriate description of this particular part of the case and have in mind the famous words of Sir Walter Scott in ‘Marmion’:

“O what a tangled web we weave

When first we practise to deceive!”

I do not accept this account. Whilst, as will already be apparent, I have some concerns about Mr Gordon’s evidence, the evidence that this document was created on 11 June 2008 seems to me to be overwhelming. At all events, on the balance of probabilities, I find that it was created then. Indeed, because it was on 11 June 2008 that Mr Deir wrote to Phipps & Co referring to the Bill of Sale (which, as I have observed, had not been referred to in any other document at any earlier stage), it seems to me to be clear that it was on that day that the undated Bill of Sale was handed over to him. Leaving aside for the moment any possible similarity between the handwriting of the date on the Bill of Sale and Mr Deir’s handwriting, I am unable to understand why anyone else other than Mr Deir would have had an interest in putting in the date of 6 September 2004. Why should it be necessary to ask “somebody” to put the date in when he was the one person who knew the date clearly? There is, however, a marked similarity between the way the figure ‘4’ is written on that document and the way the same figure is written on another document in one of the many trial bundles which is acknowledged to be in Mr Deir’s handwriting (the document referred to in paragraph 165 above).

Putting all these various matters together, I am satisfied that the Bill of Sale was created on 11 June 2008, signed by Mr Gordon on that date and dated 6 September 2004 by Mr Deir on that date. I have no doubt that the document was created in the context of concerns about the taxation implications concerning the aircraft and its use. I cannot be more specific than that and have received no expert evidence to guide me towards an understanding of those implications. However, the contemporaneous evidence (in the form of Mr Robin Gordon’s e-mail and the general context of the correspondence between the Revenue and LAA) is that there may have been personal tax implications for Mr Deir or, looking at it another way, implications for LAA by reason of the failure to pay tax on his behalf for any benefits in kind he may have received. If it was the latter, Mr Deir was by this time (June 2008) fully aware that his days at LAA were numbered and that his life was likely to be made difficult once he departed finally. He may have been concerned that any tax liability would fall upon him personally when, as he would suggest, in substance it should have been a matter for LAA.

It is, of course, for the Defendants to establish that Mr Deir “converted” this aircraft to his own use. The relevant facts must be established on the balance of probabilities. Whilst I consider that there are some unanswered questions about the precise circumstances (see paragraph 249 below), I have to ask myself whether those unanswered questions are such as to undermine what Mr Deir has been saying fairly clearly and consistently since the issue was first raised by the Revenue in November 2007, namely, that he had acquired the aircraft personally at the time and that it was only put in LAA’s name pending the grant to him of British citizenship. I will answer that question shortly, but I should first address the question of whether the Defendants have proved the contrary. It seems to me that they do have to rely to a large extent on the evidence of Mr Jonathan Gordon. That is doubtless why Mr Lewis was anxious that I should make the finding to which I have referred above. However, Mr Gordon has signed two witness statements to each of which a statement of truth was appended, one of which he had to disown in a significant way before he gave his evidence. Without retracing the ground fully, I regret to say that he appears to have been prepared to sign various documents at various times without thinking clearly whether the contents were truly justified. I do not consider that, on this overall issue, I can place much reliance upon what he has said. If anything, because he (and, by inference, his brother) was prepared to go along with the preparation of the Bill of Sale that did evidence the transfer of the aircraft initially to Mr Deir (because Mr Gordon must have appreciated that it would be backdated to the time of the transaction), that does go to support Mr Deir’s case. I do not, of course, have any particular understanding of why Mr Gordon now wishes to be seen to be supporting the Sheikh in this litigation, but I think that his evidence on this issue has been generated to that end. Regrettably, I do not consider that it is persuasive.

What he appears to be doing in the response to which I have referred is challenging the assertion made in the Audit report that he should be responsible for all the running costs. By the time he composed his response to the 2007 audit report the aircraft had been in the name of Jet Connections for several months, but I think that what he said in his response reveals something approaching the truth about the use of the Piper Warrior, particularly given that its use by him on a regular basis was, I am satisfied, well known to everyone at Lydd Airport. I doubt very much that the Sheikh was unaware of it, particularly as Mr Al Nouti and Mr Mutlaq were occasional passengers in the aircraft, but if he was not personally aware of it, enough people within the FAL Group were aware of it for its use to be treated as well-known and readily accepted. There has been no serious challenge to what Mr Deir claims to have been the use to which the aircraft was put and, on the basis that he was truly the beneficial owner, then there will have been a substantial amount of use that will have enured to the benefit of the company and, of course, some that will have been of benefit to him personally. The taxation implications of this are, strictly speaking, not relevant to those issues as they arise within the company itself. How the company treats the benefits arising from, for example, the use of fuel or the provision of maintenance may be different from the way in which the Revenue treats them.

How the company viewed the financing of the use of this aircraft during the period from which it was acquired until it was transferred to Jet Connections is very difficult to determine on the evidence. I believe it was yet another “non-issue” until the beginning of the rupture of the relationship between the Sheikh and Mr Deir in mid-2007. Given that, on my finding, the aircraft was owned beneficially by Mr Deir from the outset, any issues arising from the alleged conversion of the aircraft do not arise. However, Mr Deir recognises that he must make a contribution to the running costs of the aircraft to reflect the personal element in its usage. It seems to me that that must include, in the absence of any evidence of a capital payment by him at the outset, a contribution to its acquisition cost given that, in the broadest sense, the aircraft formed part of the discussions leading to the deal between Mr Jonathan Gordon and the Sheikh towards the end of 2004. The extent to which it was taken into account in the overall figure is unclear, but it does not appear to have been an asset with a value of less than £10,000.

I could put the matter over for assessment by a Master but, as I have already made clear, I am anxious to bring an end to this litigation provided that no injustice is done in the process. I propose to award the Defendants the £30,000 that Mr Deir offered in May 2008 (not with any interest because it could have been accepted then even if only “on account”), the basis being broadly as indicated in Mr Deir’s witness statement (see paragraph 252 above) although I would regard £10,000 of that as being referable to an initial acquisition cost and the balance as a contribution to the costs identified in his witness statement. I will award also a sum equivalent to 25% of the running costs the aircraft (including fuel) between 6 September 2004 and when the aircraft left Lydd Airport finally (which I believe was in April 2008) to the extent that these running costs are not embraced in the annual inspection costs to May 2008 (a proportion of which is to be taken to be included in the balance of the £30,000 after deduction of the £10,000 referred to above). The parties should be able to agree such a figure. If either party feels aggrieved by this approach and wishes to have a more detailed analysis, I shall need persuading that putting the matter over for further consideration by a Master represents a proportionate expense in the context of the amounts involved.

It is not disputed that Mr Deir handed over a significant number of “hard” documents (including files of documents) to Mr Mutlaq on his departure because an inventory of these documents was drawn up, signed and agreed. Furthermore, for reasons I have given in a number of places in this judgment, a great deal of what has been characterised on the Sheikh’s behalf as “wrongdoing” on Mr Deir’s part was carried out quite openly during the period of three and a half years or so when no criticism of his actions as managing director of LAA (or in any other capacity) was made. To that extent, during that period at least, there was no motive for undertaking the kind of activity to which this head of counterclaim refers. I recognise that for the last 12-15 months of his time at Lydd Airport he must have felt under siege to some degree and could, therefore, have had the motive for doing something like this, if only to frustrate any process of subsequent disputation. Most people know, however, that it is very difficult, if not impossible, to delete electronic files completely such that they can never be recovered.

It was accepted on the Sheikh’s behalf that Mr Deir would not have had the technical ability to delete his user account and his “My Documents” folder, which appeared to have been the actions taken. The only person within what might be termed Mr Deir’s “camp” was Mr Simeonidis who certainly worked with Mr Deir in an IT capacity for a fair part of the time they were both at Lydd Airport. He denied absolutely having anything to do with the actions to which I have referred. He did say, in unchallenged evidence, that it was the policy of many companies to delete the user account of an employee when he or she leaves so that the ex-employee does not have access to the system. He also said that, if that had occurred in this case, the “My Documents” folder would have disappeared too. However, he added that it was not LAA policy to store company documents in the “My Documents” folder but on the various departmental folders.

If that is correct (and, as I have said, the witness called on behalf of the Sheikh could not dispute it) then, even if the user account or “My Documents” folder had been deleted on Mr Deir’s instructions, it would have represented no more than a nominal breach of contract because no damage would have flowed from it.

One of the reasons for the reduction in the quantum of this head of counterclaim, subject to liability, seems to have been the revelation during the trial that the invoice from the company engaged to retrieve the electronic information referred to the retrieval of this information because of a “hardware fault”. Obviously, if the loss of information was due to a hardware problem, that is plainly nothing to do with the kind of allegation made here. Mr Proctor, who gave evidence on behalf of the Sheikh, did accept that there was a hardware fault, but said that it occurred subsequent to the quotation from the retrieval organisation. However, certain e-mails written at the time do not support that recollection.

Whilst I cannot wholly discount the possibility that Mr Deir instructed someone to interfere in some way with the computer system on his departure, if I ask myself the question, has it been proved on the balance of probabilities that he did, my answer has to be “no”. As I have already indicated, even if he had done so it could only have amounted to a nominal breach of contract in any event.

On that basis I do not consider that this head of counterclaim has been established.

I have found in favour of the Defendants (or those that are relevant) on certain of the heads of counterclaim and have rejected others. Some consequential calculations will have to be done.

I will invite submissions on the final form of the order if no agreement about it is reached.

I would express my appreciation to Mr Hill-Smith and Mr Lewis for their assistance in a case not free from difficulty. I am very grateful also to Miss Emily Betts whose typed notes she provided to me and to all parties. They afforded a useful check against my own note in a case where some witnesses were not always easy to follow and it is testimony to their accuracy that Mr Hill-Smith referred to them several times in his Closing Submissions.

In a document entitled ‘Factual Errors/absence of findings’ dated 24 January Mr Lewis said in relation to my conclusions concerning the claim for director’s fees (see paragraphs 118-120 above) that “no findings of fact have been made as to when the Claimant’s ‘active management’ ceased (in respect of the relevant companies).” He suggested that because, as he put it, ‘active management’ was “not part of the Claimant’s case … understandably no evidence was led on this issue by any party.” Accordingly, he invited me “to find that the directorship fees claim fails, or to reject the claims as unproven from the point of view of quantum, on the premise that the Claimant has not, and cannot on the evidence before the Court, prove periods of active management and therefore quantify loss.” Mr Hill-Smith also reminded me that I had not dealt specifically with two companies in the context of the claim for director’s fees. Accordingly, I invited further submissions from both parties which I received on 27 January. This postscript is designed to deal with the issues thus raised. As will become apparent, I have revised slightly the draft judgment originally sent to the parties to reflect some of the submissions made. For the avoidance of doubt, I should, perhaps, emphasise that this postscript forms part of the judgment and the reasoning that lies behind it.

In relation to the issues raised by Mr Lewis concerning the expression “active management”, there are two initial matters I would mention, both of which I would have thought were obvious from the terms of the judgment: (a) my conclusion was that “active management” was required before any director’s fees became payable (see paragraph 123 above); (b) I said also in relation to the need for “active management” (at paragraph 120) that “where more than merely nominal duties were carried out, the fee would be payable”. “Active management” plainly did not, therefore, necessarily mean that, for example, daily attention to the activities of the relevant company was necessary to engage the obligation to pay fees and to continue paying them. Indeed that would not have been necessary given the conclusion I reached about what lay behind the Sheikh’s commitment to pay director’s fees to Mr Deir: see paragraph 116. A readiness to act in a role that was more than merely that of a nominal director in a company that still had a potential trading future would have been the way I would have defined the essential test of “active management” for this purpose had I realised that it would not be possible for the parties to agree on an end-date in relation to a particular company. It was, perhaps, over-optimistic of me to think that they might, but given that Mr Deir had confined his claim to certain cut off dates (see paragraph 89 above), it might be thought reasonable to have assumed that agreement could have been reached once the decision in principle about the payment of director’s fees had been made.

Whilst I do not resile from the conclusion expressed in paragraph 120 that the intention to pay director’s fees did not extend to “those companies where Mr Deir was to be appointed managing director and for which he was to be paid a salary”, it is clear from the context (namely, the next sentence in that paragraph) that what I had in mind specifically was his appointment as managing director of LAA. It is clear from the next paragraph that I did not look on the companies associated with the Golf Club in the same light. If a conclusion about whether Mr Deir was ever appointed formally as managing director of those companies is relevant, then the short point is that there is no real evidence, one way or the other about it, other than the inference (that I am prepared to make) that at some stage before the letter he wrote to the Sheikh on 2 August 2007 (see paragraph 85 above), which refers to his position as managing director, he had been appointed managing director. Equally, given the fact that he could not have been appointed managing director before he was appointed a director, his appointment as managing director could not have been before 4 October 2005. However, for the reasons I have given I do not consider this disentitles him from receiving director’s fees in relation to these companies: at the earliest, his appointment as a director and managing director would have been about 21 months after his appointment as managing director of LAA and about 10 months after, on my findings, Sheikh's commitment to the payment of director's fees was confirmed.

I will deal below with the specific assertion made by Mr Lewis that “active management” was not an issue in the case and that the Sheikh has been disadvantaged by my conclusion that it is a relevant matter for consideration (see paragraph 269), but I do not understand how it could be said that no evidence about this issue was led by any party.

In the first place, in a number of instances Mr Deir’s witness statement did deal with the issue of whether his involvement was more than being merely a nominal director: see, for example, his evidence in relation to Barton House (No 41) Ltd at paragraph 123 above, his evidence (at paragraph 90 of his witness statement) that he was involved in Lydd Golf Club and Driving Range Ltd and of Lydd Golf Ltd and his evidence concerning Phoenix Aero Engineering (see also paragraph 123 above). It is plain from other evidence in the case that in relation to FAL Aviation, for example, he was actively involved from July 2005 (see also paragraph 123 above). Secondly, Mr Deir’s own case is that there came a time when his right, as he saw it, to director’s fees came to an end before he departed finally from LAA in September 2008: the table at paragraph 89 shows that in relation to Lydd Golf Ltd and Basil Property Companies (see paragraph 123 above) he was not seeking fees beyond a certain date. (I should say that that is how I have interpreted the position also in relation to Lydd Golf Ltd. Mr Hill-Smith has said that this company was dissolved on 21 May 2008 so that this date, he submits, is the “cut off date”. I do not doubt that the date of dissolution was as he has suggested, but “dissolution” implies a formal end to the life of a company, not necessarily the cessation of trading which may be earlier. Accordingly, the date set out in the table at paragraph 89 seems to me to be the appropriate date in the absence of other evidence of which there is none.)

Given the apparent potential for endless disputation in this case, I set out below in tabular form the companies in respect of which, on the basis of this judgment, Mr Deir is entitled to director's fees and the periods of time concerned:

Mr Deir's pleaded case in relation to this issue was that -

“… it was an implied term as a matter of obviousness and/or business efficacy, that the figure of £20,000 would apply pro rata in respect of each directorship so entered into, so that the Claimant was not required to complete each calendar year to be entitled to the payment but would be paid, and is entitled to be paid, £1,666 per month for each directorship undertaken”.

If I am wrong about this, I would have said that the Apportionment Act 1870 could be relied upon to remedy what would otherwise be an obvious injustice.Section 2 provides that “all rents, annuities, dividends and other periodical payments in the nature of income ... shall, like interest on money lent, be considered as accruing from day to day, and shall be apportionable in respect of time accordingly.”

Mr Lewis has made much of the fact that the Act had not been relied upon at any stage before Mr Hill-Smith raised it in his additional representations following the sending of the draft judgement of the parties and that reliance upon it had never been pleaded. Mr Hill-Smith says that because it is a matter of law, reliance on the Act does not have to be pleaded. I think that is probably right, but if I am wrong about it, I would have unhesitatingly granted permission to amend the pleadings to incorporate reference to it because no prejudice could possibly have been caused to the Sheikh as a result. It would, as I have indicated, have enabled a clear injustice to be remedied.

The Apportionment Act would also have given legal authority for concluding that the periodic basis should be daily. Had it not been so, I would have concluded that it should have been on that basis in any event: it would be just as unfair to say that someone who has completed 28 days work should receive nothing for the work done in that month as it would be to say that someone who had completed 364 days work in a year should receive nothing for that year unless the express terms of the agreement demonstrate so clearly to the contrary.

I turn finally to the contention of Mr Lewis that raising the issue of "active management" in the context of the claim for director's fees has caused prejudice to the Sheikh because the matter had not previously been identified, no evidence in relation to the issue has been called and he has been denied the opportunity of presenting relevant evidence. If this matter goes elsewhere, it will be for others to judge whether there is any substance in that contention. I can deal with the matter very shortly.

First, it is a commonplace in all forms of litigation that the court may, if the evidence and argument justifies it, reach a position which lies somewhere between the extremes taken by the parties. In a sense, that is what I have done in relation to the issue of director's fees in this case. I have taken on board some of the arguments put forward on behalf of the Sheikh in determining how the agreement that I have found was concluded should be interpreted. Equally, I have rejected some aspects of the way in which the argument has been addressed on behalf of Mr Deir. However, I have rejected the principal contention on behalf of the Sheikh that there was no agreement at all and that it was a fiction dreamt up by Mr Deir. Given that that was the position taken on the Sheikh's behalf, it does seem to me to be somewhat fanciful to suggest that an alternative case based on whether "active management" as I have defined it (see paragraph 270) would have been addressed with any enthusiasm. Nonetheless, and this is the second point I would make, Mr Deir, whilst not advancing his case on the basis of the need for "active management", did put forward evidence from which management of that nature could be seen to have occurred: see paragraph 277 above. That evidence was there to be challenged in order to demonstrate the absurdity (as it would be contended that it was) of an agreement such as the one made. Indeed my notes of the cross-examination of Mr Deir (supported by those of Miss Betts) indicate that he was asked about what he did for several of the companies that underlie the claim for director's fees.

Thirdly, in a case where, frankly, no stone was left unturned in seeking to undermine anything said or done by Mr Deir, it is very difficult to accept that consideration was not given to suggesting that what Mr Deir was claiming he had done in return for the director's fees was so inconsequential as to make the claim preposterous. However, what must not be forgotten is that my conclusion about the rationale for this agreement was that it represented something of a makeweight for the rather low salary that Mr Deir was to be paid for his work at the airport. Over-exacting standards of work for any of these companies would not be consistent with that rationale: Mr Deir's principal work in the UK related to Lydd Airport.

Finally, it has been necessary to keep a sense of proportion about how much time and expenditure is incurred in litigating some of the issues in this case. A quest for a detailed account of Mr Deir's "active management" (and any relevant disclosure) in each of these companies would probably have generated more heat than light - and considerable expenditure in costs. To that extent, I can see nothing unjust (or contrary to the Overriding Objective) in dealing with matters in a relatively robust way on the material before the court.

Final conclusion