Schweppe v Closier & Anor

INTRODUCTION

By applications dated 23 and 24 March 2017, the defendants seek to strike out the claim against them. Although a variety of grounds for the strike out were ventilated in the witness statements, it was agreed at the hearing on 14 June 2017 that, at least in the first instance, the court would confine itself to a consideration of two grounds only.

The first of these grounds is that the claims against the defendants are plainly and obviously statute-barred. That submission involves a consideration of the claimant’s actual knowledge of the critical facts prior to 29 November 2010 (6 years before the commencement of proceedings); or alternatively, whether the relevant information could have been discovered with reasonable diligence prior to that date. The second ground is that, in the light of the previous court proceedings relating to this same development, this claim is an abuse of process.

I have dealt with the issues between the parties in this way. In Section 2 I set out an outline chronology. It is to be noted that the relevant events that give rise to these applications cover a span of 27 years, and although I have had regard to all the documents included in the three bundles provided to me, I have endeavoured to set out here only the background information that is relevant to the issues I have to decide. Thereafter, I deal in Section 3 with the arguments as to limitation and in Section 4 the argument as to abuse of process. There is a short summary of my conclusions in Section 5.

I should make one further point at the outset. Although both defendants at different times suggested that the allegations against them (of fraudulent misrepresentation and/or unlawful act conspiracy and/or inducement to breach of contract) were absurd and fanciful, their applications to strike out do not require the court to consider the underlying merits of those allegations. Accordingly, for present purposes, it is appropriate to treat the claimant’s allegations as having at least a realistic prospect of success, even though there are numerous elements of the pleaded claim (which is at root a perfectly standard – albeit ancient - building dispute) which the claimant has elevated into allegations of fraud and dishonesty in a way which, in my experience, is unique.

OUTLINE CHRONOLOGY

The Development

Although many of the basic facts relating to the development in question are now disputed, it is possible to identify at least some background matters which appear to be agreed.

The site of the development was the Hogwood Lane Industrial Estate in Finchampstead. It appears that this was owned by the Marino Family Trust Company Limited (“Marino FTC”). Two brothers, Mr James and Mr Michael Murray, trading as a partnership called Murray Construction, carried out some early work at the Hogwood Lane site in early 1990. Following the incorporation of Murray Construction Limited (“MCL”), it was MCL who carried out the remainder of the works. MCL was dissolved for the second and final time on 15 May 2016. The claimant, who had no personal involvement in the development at all, became connected with MCL in about 1995. He brings these proceedings as the purported assignee of MCL.

It appears that, in 1992, shortly before the works were due to be completed, Marino FTC terminated MCL’s contract. Subsequently, as set out in greater detail in Section 2.2 below, MCL issued proceedings against Marino FTC claiming unpaid sums and damages. However, it is worth noting that the contract sum was stated to be £1,678,454.20, of which MCL had been paid £1,498,410 prior to the termination. Thus, as Ms McCann observed on behalf of the first defendant, if this was all designed as some sort of complex scam to cheat MCL, it was on its face a rather bizarre fraud, since MCL were paid £1.5 million as a result of it.

The principal individuals involved in the work comprising the development were Mr James Murray, who died in 2008, and Mr Carlo Marino, who died in 1991. The claimant told me during his submissions that he had had no recent contact with Mr Michael Murray who, he said, had chosen “not to be on board” with this claim. Thus, of the only three people who had any detailed connection with these works at the time, two are dead and one is deliberately not involving himself in these proceedings.

The two defendants had a role in the development, although they dispute the detailed involvement ascribed to them by the claimant. It is however accepted that the first defendant was the sole director of a company known as Herriard Developments Limited who were employed by Marino FCT in connection with the development at Hogwood Lane, and the second defendant is an architect who carried out some design works relating to the development.

The 1992 Proceedings

The 1992 proceedings involved a straightforward construction claim brought by MCL, the contractor, against Marino FTC, the employer. The claim was said to be worth just under £500,000. That sum was made up of certified and uncertified sums said to be due under the construction contract, together with claims for loss and expense/damages due to delay and disruption, and a separate claim for damages due to the alleged wrongful termination/repudiation.

In their defence, Marino FTC admitted the existence of the construction contract with MCL but denied that any further sums were due. They counterclaimed the sum of £640,000 in respect of defective design and construction. Marino FTC also issued a third party notice against the second defendant architect.

On 9 March 1993, HHJ Thayne Forbes QC (as he then was) made an order in the 1992 proceedings for security for costs. The order required MCL to pay £32,000 into court by way of security. MCL failed to pay and the proceedings were stayed. Subsequently, on 26 March 1996, MCL were struck off the companies’ register and dissolved the following month. Nothing further happened for nine years. Then, in March 2005, on the claimant’s application, MCL was restored to the register. However, the proceedings remained dormant for another six years.

In December 2011, the £32,000 was paid and the stay was lifted. On 7 March 2012, Ramsey J ordered MCL to pay a further sum of £45,000 by way of security. That sum was again not paid. There was an oral hearing before Ramsey J in May 2013, as a result of which the 1992 proceedings were struck out. MCL were ordered to pay Marino FTC’s costs of the proceedings but they have never done so.

The 2014 Proceedings

In April 2014, MCL issued fresh proceedings against Marino FTC. The claimant was solely responsible for those proceedings. Marino FTC sought to strike out the claim. Ramsey J concluded that the allegations in the 2014 proceedings were the same or substantially the same as the allegations made by the claimant/MCL in the 1992 proceedings. The claim was therefore struck out. MCL went into compulsory liquidation in April 2014 and was dissolved for the second and final time on 15 May 2016.

Pausing there, the history outlined above demonstrates that, whatever else may be in issue, the claimant cannot now bring any further claims against Marino FTC. He has tried twice and both his claims have been struck out. Accordingly, to the extent that I find that the allegations in these proceedings against the two defendants are the same or similar to the claims against Marino FCT which Ramsey J struck out in 2013 and 2014, then there is obvious force in Ms McCann’s submission that these proceedings are an abuse of process, the clear inference being that the claimant is pursuing these defendants because he cannot pursue anyone else.

The Committal Proceedings

In 2015, the claimant issued committal proceedings against Mr Jason Marino, who had sworn a witness statement in the 1992 proceedings on 1 March 2012, to which I make further reference in Section 3.3.4 below. The committal proceedings were dismissed by Edwards-Stuart J on 17 March 2015, because they disclosed no reasonable cause of action. The judge found that the committal proceedings issued by the claimant were an abuse of the process of the court.

LIMITATION

The Applicable Principles

As noted above, the causes of action pleaded against the defendants, of fraudulent misrepresentation, unlawful act conspiracy and inducement to breach of contract, are tortious claims. It is common ground that the primary limitation period for such claims is six years from the accrual of the cause of action pursuant to section 2 of the Limitation Act 1980 (“the 1980 Act”). Because none of the relevant acts could have occurred after 1992, and these proceedings were not started until 29 November 2016, it is not disputed that the primary limitation period has expired. Therefore, the only way in which the claimant can keep these proceedings alive is to rely on section 32(1) of the 1980 Act.

Section 32(1) provides as follows:

“32.

Postponement of limitation period in case of fraud, concealment or mistake.

(1)

Subject to subsections (3) and (4A) below, where in the case of any action for which a period of limitation is prescribed by this Act, either—

(a)

the action is based upon the fraud of the defendant; or

(b)

any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant; or

(c)

the action is for relief from the consequences of a mistake;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

References in this subsection to the defendant include references to the defendant’s agent and to any person through whom the defendant claims and his agent.”

There is no suggestion in the present case that any fact relevant to the claimant’s right of action has been deliberately concealed from him by either defendant. Thus s.32(1)(b) does not apply. Neither does s.32(1)(c): this is not an action for relief from the consequences of a mistake. The only applicable subsection is therefore s.32(1)(a). The defendants rightly accept that a claim for fraudulent misrepresentation is an action based on fraud for limitation purposes: see Regent Leisuretime v Natwest Finance Limited [2003] EWCA Civ. 391.

What matters is the claimant’s knowledge of the precise deceit which the claimant alleges had been perpetrated on him: see Barnstaple Boat Company Limited v Jones [2007] EWCA Civ. 727 at paragraph 34. Knowledge of a fraud in a more general sense is not enough to start the limitation period running under s.32(1)(a): see Allison and Another v Horner [2014] EWCA Civ. 117 at paragraph 14. In the same way, “facts which improve prospects of success are not facts relevant to his right of action”: see Rose LJ in Johnson v The Chief Constable of Surrey, Transcript 19 October 1992, cited at paragraph 22 of Waller LJ’s judgment in Barnstaple Boat.

This has all been confirmed more recently by the Court of Appeal in Arcadia Group Brands Limited and Others Visa Inc and Others [2015] EWCA Civ. 883 (in particular paragraphs 62-65 of the judgment of the then Chancellor of the High Court).

The leading case on reasonable diligence remains Paragon Finance PLC v DB Thakerar [1999] 1 All ER 400 where Millett LJ said:

“The question is not whether the Plaintiffs should have discovered the fraud sooner; but whether they could with reasonable diligence have done so. The burden of proof is on them. They must establish that they could not have discovered the fraud without exceptional measures which they could not reasonably have been expected to take. In this context the length of the applicable period of limitation is irrelevant. In the course of argument May LJ observed that reasonable diligence must be measured against some standard, but that the six year limitation period did not provide the relevant standard. He suggested that the test was how a person carrying on a business of the relevant kind would act if he had adequate but not unlimited staff and resources and were motivated by a reasonable but not excessive sense of urgency. I respectfully agree.”

The Limitation Issues

The first issue between the parties is whether or not the claimant had actual knowledge of the precise facts which he now relies on to establish his allegations of fraud/conspiracy etc. This requires a comparison between the allegations in the current proceedings, and the claimant’s state of knowledge on or prior to 29 November 2010 (i.e. six years before these proceedings were issued). On this topic, the defendants relied heavily on the claimant’s own letters of 31 August and 9 September 2010. They say that, if those letters are compared with the allegations in the current proceedings, it becomes clear that, on his own case, the claimant knew everything he needed to know in August/September 2010 in order to bring proceedings based on these allegations. Since that was more than six years before the commencement of proceedings, they say that the claim is therefore statute-barred.

If I am against the defendants on the question of the claimant’s actual knowledge, then they maintain that, applying the test in Paragon Finance, the claimant could with reasonable diligence have discovered the relevant facts before 29 November 2010 and is therefore statue-barred on this basis too. This analysis depends on an identification of any facts which I find the claimant did not know by that date, to see whether or not he could have with reasonable diligence have discovered them earlier. It also requires a wider analysis of the lengthy delays between 1992 and 2016.

Actual Knowledge

The Allegations In The Current Proceedings

The allegations against the defendants in these proceedings are based on breaches of six alleged representations. These are respectively called i) ‘the Counterparty Representations’ (paragraph 7 of the Particulars of Claim [“PoC”]); ii) ‘the Indemnity Contract Representations’ (paragraph 8 of the PoC); iii) ‘the Intention to Pay Representations’ (paragraph 9 of the PoC); iv) ‘the Architect’s Instructions Representations’ (paragraph 24 of the PoC); v) ‘the Repayment Representations’ (paragraph 29 of the PoC); and vi) ‘the Defence Representations’ (paragraphs 34-36 of the PoC). It is alleged that in each case, the defendants acted fraudulently because the representations they made were false. I deal with what each allegation actually involves below.

The first and most important of these representations is the Counterparty Representation. What is alleged is that the defendants represented to Mr James Murray/MCL that the employer under the building contract would be Marino FTC, and it was only because the employer was not Herriard or the first defendant that MCL agreed to go ahead. The allegation is that in fact the work had already been contracted by Marino FCT to Herriard/the first defendant and that, unknown to them, James Murray/MCL were going to be acting as a sub-contractor to Herriard/the first defendant. Although this is a very unusual allegation, it is central to the claimant’s case: on the face of the PoC, numerous allegations of fraud and breach come back to what is said to be this fundamental deception.

The Indemnity Contract Representations case relates to promised payments of £3,500 per day for the first four weeks of the project, before a formal contract was agreed. As noted in paragraph 8 of the PoC, this arrangement was set out in express terms in the second defendant’s letter of 26 April 1990. Paragraph 19 of the PoC makes plain that this is linked directly back to the Counterparty Representation: it pleads that the promise in the letter “was carefully worded so as to conceal the actual identity of the second defendant’s principal [i.e. Herriard/the first defendant]…or in the alternative, the sham nature of the construction contract shows that the indemnity representation was made fraudulently and only with the intention to induce Mr Murray to perform that contract.” That is the alleged relevance of the £3,500 per day; it is not suggested that those sums were not paid as promised.

The Intention to Pay Representation is also linked back to the Counterparty Representation: see the express reference in paragraph 9 of the PoC to the defendants’ conduct in respect of the Counterparty Representation. In essence, the claimant is alleging that, by making representations i) and ii) above, the defendants were representing that MCL would be paid for all the work that they carried out and that this was a further inducement to enter into the contract (which, on this premise, was really with Herriard/the first defendant).

The case as to the Architects’ Instructions Representations, and the consequential fraud, is to the effect that oral instructions were given by the second defendant and the engineer, and not put in writing (leading to a debate about whether or not MCL were entitled to be paid for the work done in consequence). There is nothing novel about such claims in building cases, although I have never before seen it suggested that this was a deliberate scam by the architect or developer.

The Repayment Representations concern an alleged subterfuge in respect of a sum of £30,000 which was added to one interim payment certificate issued by the second defendant on his own or the first defendant’s behalf, and then later deducted from a subsequent certificate for reasons unconnected with the Hogwood Lane project.

The final representations (representation vi) are the Defence Representations. These are concerned with the 1992 proceedings. It is alleged that it was really the defendants, and not Marino FTC, who were behind the defence and counterclaim in those proceedings. As made plain by paragraph 39 of the PoC, this is again linked back to the Counterparty Representations, and the claimant’s case that in 1990-1992, MCL’s true employer was Herriard/the first defendant, and not Marino FTC. It is also said that the covert involvement of the defendants explains why the defence and counterclaim averred that the contract with MCL was a design and build contract.

The PoC concludes by setting out allegations of conspiracy and inducement to breach contract against the defendants. These are all parasitic upon the matters previously pleaded and summarised above. There is a separate allegation against the second defendant, starting at paragraph 46 of the PoC, which is said to relate to the fees paid to the engineer, Mr Fallas.

The Claimant’s Letters of 31 August and 9 September 2010

Because both defendants said that there was a close correlation between the allegations in the current proceedings, summarised in Section 3.3.1 above, and the claimant’s own letters of 31 August and 9 September 2010, it is necessary to set out those letters in some detail.

The letter of 31 August was sent to the second defendant. It contained the following passages (for ease of refence, the numbering is mine):

“1.

My last email refers. I would now like to put to you your role in what I can now prove conclusively was a conspiracy to defraud this company on the Hogwood contract. Firstly let me point out that Jim Murray told me, ‘when I first got involved in Murray, that he refused to have anything to do with Ian Closier. Simply because he knew what happened to his Cousin Malcom on Hookers Farm. However, he was persuaded by you that the contract was to be with Hogwood Properties. They would be paying for the development.

2.

So enclosed are the brief notes Jim made regarding what he understood was the agreement brokered by you and Closier with him. Jim believed he was contracting with Hogwood. But in reality he was actually sub-contracting with Herriard. Herriard actually had the Design and Build contract with Marino Family Trust. This is why the cost of the development are exactly the same in Herriard and Marino FT accounts for the project, read and digest Jims notes please.

3.

I now have documentary evidence that Closier funded the project up until about September or October 1990 when Marino FT managed to get an overdraft from their Bank. A charge was taken by the Bank on the development as it stood at that time. Soon after this, Closier was able to repay £1m in loans that he had obtained from a finance company, and they had taken charges against a number of properties including his home, Hookers Farm.

…

4.

Moving on to the £30,000 that was deducted from Cert 4 and then deducted again from Cert. 5. This is well documented in the enclosed correspondence from Brian Freelander. When I broached the subject of why this £30,000 was added to Cert 4 for work carried out for RE for fitting out Unit B1, when it ‘was a separate contract between Murray and RE Instruments, you walked out of the meeting at Kew.

5.

I know the reason that this £30,000 was added by you to Cart 4. It was to facilitate Closier make payment to Carlo of £30,000 that he had to make to the Highways Agency so they would withdraw their objection to the development, and to fund safety work on the road outside the Indus. Estate. See details enclosed.

6.

I have over the years given you the benefit of doubt when you told me that you had nothing to do with what happened to Murray on the scam. That small doubt has now evaporated John and I am now fully convinced that you and you old buddy Ian set this company up. I am also fully convinced that you are still in contact with your old flatmate.

7.

You were working for Herriard and not Carlo, however Carlo was paying you fees and those of Richard Fallas. That was part of Closier’s agreement with Closier [surely Marino?]. At the same time he, Closier would pay the fee of £30,000 for the Highways Agency.

8.

Your track record with a large number of small builders which ended up being conned is compelling evidence of your lack of honesty and integrity. Coupled with my own problems over Archray proves conclusively that you cannot be trusted.”

The letter of 9 September was also sent to the second defendant. Again the numbering is mine; relevant extracts include:

“1.

Since my letter of last week I have spent many days re-reading all the legal papers myself, plus the substantial files of documents I now have in my possession. It is now very obvious John that your Defence to being enjoined as Third Party in this matter is a smokescreen. It lacks a considerable amount of information that you were privy to, and had on file. Information that any honest professional would have brought to the notice of Murray’s Solicitors, Mason’s, but also the High Court. As a matter of fact an honest professional would passed every single document in his file’s to Murray’s Solicitors to defend himself.

2.

Providing this information would have driven a coach and horse through Marino’s version of events. That being that Murray had a Design/Build Contract. The substantive documentation that I have obtained from various sources including Wokingham Council prove that you had in your possession at the time, information that was crucial to Murray’s defence. You had evidence only you and Closier were privy to, going back as far as 1988. But disclosure of this would have shown that you were contracted to Herriard.

3.

I have now come to the incontrovertible conclusion that it was you and Ian Closier that conspired to defraud this company on the Hogwood Shaw development. Carlo was a convenient fall guy to all this. He really did not know what was going on, and neither did he care. Everything is now explained in the note’s of Jim Murray I sent you last week, relevant pages enclosed again, marked 1.

…

4.

There is now no doubt in my mind, that Herriard had the contract with Marino Family Trust to design/build this development. Herriard also funded it up to Sept./Oct. 1990 when Marino FT’s were granted an overdraft on the development as it was then.

5.

The fact that there is not one document on your headed paper to either Murray, or the Council that identifies your “client” is further evidence that you were very aware of what was going to happen to Murray on this contract, and you covered your tracks accordingly. Despite you acting for Herriard on a large number of Planning Applications prior to, and subsequent to Hogwood, you did not make the application for the Hogwood development. Closier did this himself, but with your design drawings.

…

6.

You were not acting for Hogwood Properties on this contract as is your stated case. You John, were acting for Herriard, and between you and Closier, Murray Construction Ltd. was well and truly screwed. However, the email from Richard Fallas now proves that Carlo was paying fees, in fact had already paid both your fee’s and those of Richard Fallas directly to you.

7.

I had a long phone conversation with Richard after I traced him to New Zealand, and following on from my conversation he provided me with a fairly detailed account of what he understood was the situation at the time. This is contained in the email he sent me in January, which I forwarded to you last week. a previous email to that one is now enclosed marked 5, in which Richard states that it was you who informed him, that Murray would be paying his fees.

…

8.

This is a damning indictment of your role in the fraud perpetrated by you and Closier on this company. It also proves you personally defrauded Murray in relation to the fees that were paid directly to you and Richard Fallas by this company on your instructions.

9.

In view of what Richard disclosed in his email I decided to track down Brian Freelander. He is now living in Dorset, and was very keen to discuss the matter.

10.

The most interesting fact that he divulged, one of many, was that you had tried to flip Murray’s contract from a building contract, to design/build soon after Jim went on site. This information John, now fully cements your role in this scam. You knew exactly what was going on, and persuaded Jim to pay your fees and those of Richard Fallas was part and parcel of setting up the story that Murray had design/build. It totally compromised Murray’s position. However, the information from Richard Fallas now proves that you were also playing a double game. Fee’s from Murray and fees from Carlo.

11.

I have given you the benefit of the doubt all along John, regarding what happened to Murray on this contract, but that one percent doubt has now evaporated with the information from Brian and Richard Fallas.

12.

I was prepared to settle this matter of the fees reasonably and amicably, but you have changed your position, and now even deny that you owe Murray the money. There is absolutely no question now that the money paid to you and Fallas was a set up. The other set up was the £30,000 that you added to the 4^th payment cert for the fitting out to RE’s unit, when you categorically knew that the fitting out for RE was a separate contract with Murray and RE.

13.

I have explained why this was done at our last meeting in the Pub at Kew Bridge. It was done to fiddle £30,000 from Murray’s to pay to the Highways Department of the Council, so they would withdraw their objection to the development. See correspondence from Closier agreeing this enclosed marked 5A. Closier was responsible for this, and you used the 4^th payment cert to enable Closier to transfer this £30,000 to Hogwood. Then claw it back from Murray on the next payment, which was cert 5.

14.

You are in receipt of Brian Freelanders correspondence which explains all this. With this money deducted, and the £4500-00 VAT that had to be paid, plus your fee and that of Fallas, Murray was out of pocket £97,500 even before the scam on the actual contract is taken into consideration.

15.

At our last meeting at Hogwood I asked you why Murray’s invoices were not addressed to Hogwood Properties at their office at Wick Hill Lane, but given to you for delivery, copies enclosed marked 6. You had no answer to this question and the reason is now obvious. These Invoices were for Closier. This was another smokescreen to hide the fact that Closier had the design/build contract with Marino. Closier also funded this development, not Carlo. He transferred funds to Hogwood Properties to meet these Invoices, and Murray were then paid by Hogwood cheque. I now have evidence that Hogwood Properties and Marino Family Trust are two separate entities.

…

16.

Your Defence document John, can now be seen for what it is, a complete smokescreen to cover up the fact that you were contracted to Herriard. It is also obvious now that you being enjoined as Third Party was a ploy dreamed up by Closier with your connivance. The documents in my possession prove this statement conclusively. You agreed to be sacrificed on the alter of convenience to hide the facts of the balls up with the Building Regulation Approval and other matters, from the Marino’s. They were well and truly “kept in ignorance” on this development, because all the correspondence regarding it was never shown to Carlo.

17.

When the blatant disregard of the Planning Consent materialised, after the Senior Planning Officer visited the site on 10^th July 1991, see letter enclosed marked 11, the shit hit the fan as far as Closier was concerned with the Marino’s. It is probably from this date you retired from the project. With your agreement, Murray were the scapegoats, and to confuse and compound matters it is now obvious you agreed as part of the con to be enjoined as Third Party.

18.

Closier then formulated the Defence/Counterclaim, with his own Solicitors, Titmuss, Sainer, Webb. None of the Marino’s could have possibly put that document together it is designed to shift blame from Herriard to Murray with your agreement.

19.

Looking at the other Tenders that were submitted for this development by Fentons and Pearse Construction, I can see that these are all around the £2m mark. This figure is contained in the Marino’s accounts for 1990 as an earmarked Capital Expenditure for the development. Enclosed marked 11A.

20.

This is what the development finally cost the Marinos. See detail from Marino’s accounts of 1991, note 7, marked l1B. Closier was paid the balance of the money due to Murray some £500,000.

21.

Closier needed a small competent builder, but financially weak, to get away with this scam. You knew from experience that Jim was an excellent builder, but more importantly, you also knew that he was weak financially. Like most of the other small builders that you and Closier had conned previously. The Merry’s on Odiham and Jim’s cousin Malcolm on Hookers Farm.

…

22.

Then we have the massive £1m scam on Weatheralds on the Basildon job for Northampton Hospital Trust, resulting in Weatheralds’ bankruptcy. I enclose Richard Pickards letter to myself, marked 15, explaining how you conned him on this particular job, which graphically illustrates exactly what a devious crooked bastard you really are.

23.

If I do not hear from you within ten days John, from the date of this letter, that you will return the £63,000 illegally obtained from this company, I will immediately take all appropriate steps to recover these funds and interest thereon totalling circa £100,000. Including, but not confined to, laying charges of fraud against you personally for the fee fraud with Thames Valley Police. Richard Fallas will be delighted to provide a detailed, statement to the Police to prove this.

24.

Do not be under any illusion John, that this matter will somehow fade away. You have spent most of your professional life defrauding decent, honest, hard working people. Yet at the same time you cultivate an air of decency as a church going family man in Tingewick.

25.

If you don’t come to your senses, and very soon, I will inform the good people of the Church in Tingewick, that you and your wife attend, exactly what a dishonest and crooked individual you really are.

26.

Including the documents above, I enclose a selection of other documents that I will circulate to your fellow parishioners, with a detailed synopses of how you have fraudulently enriched yourself over many years, at the expense of others.

27.

I doubt John that Mrs. Horsman would be a happy bunny if you allow it to come to this.”

Comparison and Analysis

The letters of August and September 2010 are the best possible evidence as to the claimant’s state of knowledge at the time when the letters were written. In my view, they make an overwhelming case that the claimant knew of the “precise deceit” which now underpins the six representations in the PoC. I therefore find that, by reference to his own letters, the claimant knew all that he needed to know to bring these proceedings more than six years before they were issued. My detailed reasons for that conclusion are set out below.

As I have already said, the critical allegation in these proceedings is the so-called Counterparty Representation and the fraud alleged to result from it. There is the repeated assertion in the PoC that MCL were duped into entering into the contract which they thought was with Marino FCT whereas, in truth, it was with Herriard/the first defendant. Without this alleged representation, most if not all of the claimant’s pleaded case falls away.

But that self-same allegation is made repeatedly throughout each of the claimant’s letters. Indeed, the letter of 31 August 2010 starts with the assertion (paragraphs 1 and 2) that MCL would have had nothing to do with Herriard or the first defendant and that MCL thought they were contracting with Marino FCT. The claimant goes on in that letter to allege a conspiracy to defraud because, so it is said, it was hidden from MCL that Closier had the design/build contract with Marino FCT and that Closier was funding the development. Precisely the same point is made again in the letter of 9 September: see in particular paragraphs 3, 4, 5, 6, 8, 10 and 16.

Accordingly, the Counterparty Representation and the alleged fraud in consequence of it are present, front and centre, in the claimant’s letters of August and September 2010. The claimant cannot possibly argue that he did not know all the facts relevant to that allegation more than 6 years before the commencement of these proceedings.

As to the Indemnity Contract Representation that is, as I have said, an allegation that links back to the Counterparty Representation, so it is covered by my findings in paragraphs 37-39 above. The only other matter alleged in respect of that representation is the promised £3,500 per day in the letter of 26 April 1990. Nobody suggests that this was not a letter that MCL had at the time: on the contrary, the claimant relies on this promise as being known to all parties at the outset of the works. Therefore there is nothing on the face of the PoC in relation to this second representation which the claimant did not know in August/September 2010 in order to make this claim.

As to the Intention to Pay Representations, those also link back to the Counterparty Representations, so my findings at paragraphs 37-39 above apply again. Moreover, the other matters which are alleged in the PoC relating to this part of the case involve MCL’s claims for further sums due under the contract. Those claims were generated between 1990 and 1992, and were expressly the subject of MCL’s claim in the 1992 proceedings. There is nothing to suggest that there was any relevant information missing before 29 November 2010 that was necessary to bring these claims: indeed, how could there have been, since the quantum of the current claim is almost identical to the quantum of the 1992 claim, and covers the same heads of loss?

Similarly, in respect of the Architect’s Instructions Representations, paragraph 24 of the PoC makes clear that this is again based on the terms of the contract itself, which was in MCL’s possession at the time and which was used to found the claim in the 1992 proceedings. Thus, although this claim is not expressly referred to in the letters of August and September 2010, that is immaterial, since there is nothing on the face of the pleadings which suggests that the allegations turn in any way on any information that was not available in 1990/1992.

The Repayment Representations, involving the £30,000 which was added and then subsequently deducted, is expressly referred to at paragraphs 5 and 7 of the letter of 31 August 2010 and repeated at paragraphs 12 and 13 of the letter of 9 September 2010. It was therefore an express allegation which the claimant was making then and has made again in these proceedings, more than six years later.

Finally, in respect of the Defence Representations, the allegation that Marino FCT’s defence in the 1992 proceedings was effectively created and run by the two defendants in this case is expressly made in paragraphs 16 and 18 of the letter of 9 September 2010. The claimant says in terms that “your defence document, John, can now be seen for what it is, a complete smokescreen to cover up the fact that you were contracted to Herriard.” He also states that “Closier then formulated the defence/counterclaim, with his own solicitors... None of the Marino’s could have possibly put that document together.” Thus, this allegation was again something that was known to and being expressly made by the claimant in September 2010. As for the related point about the contract being, in reality, a design and build contract, that can also be found at paragraph 2 of the letter of 31 August, and again at paragraphs 2 and 10 (in particular) of the letter of 9 September.

There is also the stand-alone allegation against the second defendant at paragraphs 46 and following of the PoC, in connection with the payment of the engineer’s fees. The allegations are frankly hard to follow, but that does not matter for present purposes because, whether there could ever be anything in them or not, the same allegations are made at paragraphs 6, 10 and 12 of the claimant’s letter of 9 September 2010. Again, therefore, this was something that the claimant knew about long ago.

On this analysis, therefore, the relevant facts now relied on in these proceedings were a repetition of the contractual claims that were the subject of MCL’s own claim in the 1992 proceedings, or they had been expressly identified by the claimant in his letters of 31 August and 9 September 2010, or both. Either way, I am in no doubt that the claimant had possession of all the relevant information more than six years before these proceedings were commenced.

The Claimant’s Response

The claimant’s response to these points is very limited. Broadly, it consists of a general assertion that his letters of August and September 2010 were based on suspicion rather than knowledge, and that what made all the difference was the documentation attached to the witness statement provided by Jason Marino in March 2012, which was later the subject of the claimant’s failed committal proceedings. On analysis, however, these response points go nowhere.

In paragraphs 121-125 of his witness statement the claimant is almost deliberately vague in his attempt to differentiate between what he asserted in 2010, and what he asserts as fraud now. Putting it as its highest, it appears that the claimant is now saying that in his letters, notwithstanding his suspicions, all that he was actually alleging was that the defendants had worked together to ensure that MCL’s contract with Marino FCT could be breached. He said that this was very different to the fraud he now asserts, which involves the allegation that the contract was with the defendants, not Marino FCT at all.

I do not accept that submission. I consider it owes everything to the distinction drawn by the courts between suspicion and knowledge in Nomura International PLC v Granada Group Ltd and Others [2007] EWHC 642 (Comm) and Kazakhstan Kagazy PLC v Arip [2014] EWCA Civ 381, the two cases on which the claimant expressly relied, and nothing to the actual facts of this case. It ignores the content of the letters of August and September 2010. Those letters are not based on suspicion but on the same material facts that the claimant now pleads in the PoC. Furthermore, those letters make clear that, far from complaining that the defendants had worked together to ensure that Marino FTC had breached MCL’s contract, the claimant was alleging that the defendants had fraudulently conspired to dupe MCL as to the identity of the real contracting party.

Moreover, paragraph 124 of the claimant’s witness statement appears to support that analysis, because there the claimant expressly states that, in those letters, he was complaining about “the duplicity over the contracting party”. I agree; that is the so-called Counterparty Representation which lies at the heart of the PoC.

For these reasons, I find that the claimant’s suggestion that he did not fully know or understand what he was suggesting in his letters (and/or that he was suggesting something different to that which he now alleges), to be wholly unfounded.

It is then necessary to look at the claimant’s case in respect of the letters attached to Mr Marino’s witness statement of March 2012. Were these letters in some way critical to the claimant’s state of knowledge? Did they make all the difference to his ability to bring this claim against the defendants?

I note at the outset of this analysis that Jason Marino’s statement had been provided in answer to a statement from the claimant dated 10 August 2011. That statement was designed to restart the 1992 proceedings. The claimant’s statement makes many of the allegations which are now the subject of the current PoC: see for example, paragraphs 6, 7, 24, 25, 84 and 85 of the statement, and the repeated references to the extensive documentary evidence which the claimant says supports those claims. Indeed, the claimant expressly states: “Now I can plead fraud”. Nobody suggests that anything happened between August/September 2010 (the dates of the relevant letters from the claimant) and August 2011 (the date of the claimant’s witness statement), or that any new documents were provided during that period. So this is further support for my conclusion that all the material on which the allegations in these proceedings is founded was available to the claimant more than six years before the commencement of these proceedings.

Turning to the three letters relied on by the claimant, which were attached to Mr Jason Marino’s statement, I consider them to be entirely inconsequential. The first is a short letter dated 11 June 1991 from the second defendant to the first defendant, dealing with the content and timing of certain Architect’s Instructions. The claimant said he relied on this letter to show that the second defendant received fees from the first defendant/Herriard in connection with the Hogwood Lane development. But the rhetorical response to that is: so what? The claimant was alleging in the August/September 2010 letters that Herriard was the relevant employer and that the second defendant was the architect (see paragraphs 1, 2 and 7 of the letter of 31 August and paragraphs 2, 3, 5, 6, 10 and 16 of the letter of 9 September). So at best the letter of 9 June 1991 is simply further evidence to support the assertion made in the letters of August and September 2010. Furthermore, I accept Ms McCann’s submission that this letter hardly shows a conspiracy, given the level of animosity that the letter reveals as between the two defendants.

Accordingly, I find that the letter of 11 June 1991 contains no relevant fact without which these allegations could not have been made. Indeed, I note that it is not even pleaded in the PoC as being relevant to either the Counterparty Representation or the breaches thereof.

The second letter relied on by the claimant, of 21 August 1989, is an even shorter letter from the second defendant to Mr Carlo Marino saying that he would act as the architect but that the list of services would exclude work stages E, F and G (detailed design). The claimant relies on this to say that, contrary to MCL’s understanding, this meant that they would be responsible for the detailed design pursuant to a design and build contract. But again, that was precisely the allegation being made at paragraph 2 of the claimant’s letter of August, and paragraphs 2 and 10 of the claimant’s letter of September 2010. So again, the most that the letter of 21 August 1989 can be is supporting evidence of the allegation that the claimant was making in August/September 2010; it does not contain any critical matter of fact and is not relied on as such in the PoC.

In any event, I consider that the claimant has got rather carried away with his allegations of fraud and conspiracy. He suggests that the letter of August 1989 is somehow a fake, although there is no evidence whatsoever to support that allegation, and it makes no difference to the outcome of this application anyway. The claimant also alleges that the last relevant letter, dated 4 October 1989, from another contractor altogether to the second defendant providing a Cost Plan, is a fake too. His suggestion was that this letter was forged because it did not contain the second defendant’s full address. As I pointed out to the claimant during the course of argument, that was a thoroughly bad point: it is commonplace for the authors of letters not to fill in the address to which the letter is being sent. Furthermore, although the claimant alleges that the relevance of the letter is the assumption by another contractor that this was a design and build contract, I have already noted that this allegation was made by the claimant in the letters of August and September 2010 (see paragraph 56 above).

Conclusions

For the reasons set out above, I have concluded that all the critical facts and matters which underpin the various allegations of fraud pleaded against the defendants in these proceedings were known to the claimant not later than August/September 2010. I do not consider that any other conclusion is possible on the material before me. On that basis, therefore, I conclude that the claimant had actual knowledge of the precise facts relevant to this claim more than six years before the proceedings were started, and that therefore s.32(1)(a) of the 1980 Act cannot be of any assistance. In those circumstances, the claim is statute barred and should be struck out.

I go on to deal with the argument as to reasonable diligence in case I am wrong as to my conclusion about actual knowledge.

Reasonable Diligence

The Facts Not Known

It is important to consider this alternative case by reference to the critical facts which, on this assumption, the claimant did not know more than six years before the commencement of the proceedings. Those can only be the matters at paragraphs 121-125 of his witness statement (his uncertainty over the precise nature of the allegations he was making in the letters) and the critical difference made by the three letters to which I have previously referred. In other words, even on the claimant’s own case, the facts allegedly not known to him are of extremely limited compass. Assuming that I am wrong to conclude that these facts were known, could the claimant with reasonable diligence have discovered them earlier?

Could These Facts Have Been Ascertained Earlier?

Applying the test in Paragon Finance, I am in no doubt that the limited facts which the claimant says were not available to him until less than six years before the commencement of these proceedings could, with reasonable diligence, have been obtained much earlier. There is a very simple way to test that conclusion.

On the claimant’s case, what matters are the three letters attached to Mr Jason Marino’s witness statement. That statement was, as I have said, provided in answer to Mr Schweppe’s own statement of 10 August 2011, which was provided in an attempt to reopen the 1992 proceedings. Thus, the claimant is effectively relying on MCL’s and/or his own delay between 1993 (when those proceedings were stayed) and 2011 (when he served his statement), because he says that he only obtained the crucial information when Mr Marino served his statement in response in 2012. Thus, if the claimant had sought to reactivate the 1992 proceedings earlier, it follows that he would have received Mr Marino’s information earlier, and thus he would have been in possession of the relevant information earlier.

That means that the claimant must argue that he was entitled to allow the 1992 proceedings to be dormant for such an immensely long period and/or that he could not, with reasonable diligence, have pursued those proceedings more quickly. Of course, there is no possible basis on which he can advance such a submission. It is not even a matter addressed in his witness statement.

For the avoidance of doubt, I find that, if the claimant had acted promptly, he would have sworn his statement a decade or more earlier, and the relevant letters would have been provided by Mr Marino a decade or more earlier. On that basis alone, I am in no doubt that the relevant facts on which the claimant now relies could have been ascertained far earlier than they were. On that basis too, therefore, the claim is statute barred.

Delays Generally

That conclusion is only confirmed by a consideration of the claimant’s unsuccessful attempts to explain away the relevant periods of delay. Thus:

Accordingly, on a proper analysis of the delays generally, the claimant, who has the burden of showing that he could not have discovered the fraud without exceptional measures which he could not reasonably be expected to take, has wholly failed to discharge that burden. Moreover, in my judgment, this is not a matter of missing the relevant deadline by a few months or even a few years. 25 years have elapsed between the last of any possible fraudulent misrepresentations, and the hearing before me. It was a nigh-on impossible task for the claimant to demonstrate that he could not have discovered the facts and matters relevant to his claims against the defendants earlier than he did. In my view, he has not come close to doing so.

Summary

Accordingly, if I am wrong to conclude that the claimant had the relevant actual knowledge, I am no doubt that he has failed to demonstrate that he could not, with reasonable diligence, have discovered the relevant information years earlier than he did. In those circumstances, on this second limb too, the claim is statute barred.

ABUSE OF PROCESS

The Applicable Principles

The leading case is Johnson v Gore Wood & Co (No. 1) [2002] 2 AC 1. That case decided that whether litigation of a decided issue was an abuse depended upon all the circumstances. It was wrong to hold that, simply because a matter could have been raised in earlier proceedings, it should have been raised, so as to render the raising of it in later proceedings necessarily abusive. What was required is a broad, merits-based judgment, taking account of all the public and private interests involved and all the facts of the case.

Dexter Limited v Vlieland-Boddy [2003] EWCA Civ. 14 is authority for the proposition that, where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process. The later action against B is much more likely to be held to be an abuse of process than a later action against C. The court will rarely find that the later action is an abuse of process unless it involves unjust harassment or oppression of B or C.

Aldi Stores Limited v WSP Group Plc [2007] EWCA Civ. 1260 is authority for the proposition that the fact that the defendants to the original action and the later action were different was a powerful factor in the application of the broad merits-based judgment, but it did not operate as a bar to an application of the principle.

Should The Allegations Have Been Made In The Earlier Proceedings?

In my judgment, there can be no doubt that the allegations in the current proceedings should have been made in the 1992 or the 2014 proceedings. Indeed, many of them were.

As to the 1992 proceedings themselves, the claimant sought to revive those in 2011. By then, of course, he had made all the detailed allegations in his letters of August and September 2010, and his statement of August 2011 repeated all those allegations again. He was expressly alleging duplicity regarding the true identity of the employer. He therefore could and should have joined the first defendant into those proceedings and made his own allegations against the second defendant (who was already a third party in the 1992 proceedings).

The position in relation to the 2014 proceedings is even more stark. During the course of argument, I was taken to the Particulars of Claim in the 2014 proceedings. Yet again, that pleading (produced by the claimant) made precisely the same allegations as are now made in these proceedings. It would be unnecessarily wearisome to set them all out. But, by way of example only, paragraph 46 of the Particulars of Claim in the 2014 proceedings avers as follows:

“The claimant now asserts that the defendant and Ian Closier, colluded, together with the architect [the first defendant in these proceedings] to entice the claimant onto the site without the benefit of a signed contract, to cover up Herriard’s real role in the development. That is, as project manager and joint employer, with the architect retained as agent by Herriard, with responsibility for design and supervision of the claimant during the course of the contract. Now confirmed by the letter of 11 June 1991 from the architect to Ian Closier.”

In other words, there was the so-called Counterparty Representation, and the allegation of collusion, involving the two defendants to the present proceedings. Plainly, they could and should have been joined in the 2014 proceedings. The claimant was unable to advance a coherent reason as to why that had not happened.

The Wider Merits

There are a number of matters which need to be identified in respect of the wider merits because, in my judgment, those also support the conclusion that these proceedings are an abuse of process. The first is the observation that no proper trial of these allegations could ever now take place. The two principal players, Mr James Murray and Mr Carlo Marino, are both dead. The claimant was not involved at the time of the contract so can give no relevant evidence at all. Although the claimant referred to the possibility of material from Michael Murray, he also confirmed that Michael Murray had not wanted to be involved in the claim. There is no statement from him.

In those circumstances, I conclude that no fair trial could ever possibly take place of these allegations of fraud. Indeed, I note that that was a point made by Mr Jason Marino in his statement in 2012. Five further years have past. It is simply too long ago for this matter to be fairly tried now.

In addition, that explains why this is not a case where the court is likely to be in a much better position as to the facts at trial, rather than at this interlocutory stage. On the contrary, it is highly probable that there will be no further material from any source. The material before me is therefore as good as it is going to get for the claimant.

There is also the question of oppression. The evidence is that the claimant has regularly harassed both defendants in respect of these allegations. On that issue, I consider that the letters of August and September 2010 speak for themselves. They have a menacing tone which goes way beyond any acceptable assertion of a civil claim. They are threatening and deeply unpleasant. They might be said to be typical of the claimant’s vendetta against these defendants which, 25 years on, has shown no sign of abating. It is therefore time for the court to step in and bring these matters to an end: the court should not simply sit back and referee whatever game the claimant wants to play (to use the phrase of Lord Phillips MR in Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75).

Summary

For the reasons set out above, applying the principles in the three Court of Appeal cases noted in paragraphs 68-70 above, I conclude that these proceedings are an abuse of process. The allegations should have been made in the 1992 proceedings and certainly in the 2014 proceedings. They are incapable of fair trial. They are part of what appears to be an unpleasant personal vendetta (and which, on the basis of the letters of August and September 2010, may have its roots in events which are nothing to do with the Hogwood Lane development). They only exist because the same claims against the employer named in the contract have been struck out twice already. That therefore gives rise to a separate reason why this claim should be struck out.

CONCLUSION

For the reasons set out in Section 3.3 above, I consider that the claimant had actual knowledge of the precise facts relied on in support of these allegations more than six years before the commencement of proceedings. The claim is therefore statute barred.

For the reasons set out in Section 3.4 above, I consider that, if I am wrong in my finding as to actual knowledge, the claimant has failed to demonstrate that he could not, with reasonable diligence, have discovered the relevant facts years and years before he did. In those circumstances too, I have no hesitation in concluding that the claim is statute barred.

On the alternative argument, I consider that, for the reasons set out in Section 4 above, these fresh proceedings constitute an abuse of process and should therefore be struck out in accordance with the court’s inherent jurisdiction.

I will deal with questions of costs and other consequential matters following the handing down of this Judgment.