Claim No: 6BM30100     
Neutral Citation Number: [2009] EWHC 2695 (Ch) 
IN THE HIGH COURT OF JUSTICE                                              
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Birmingham District Registry
33 Bull Street
Birmingham
B4 6DS

Date: Wednesday, 16th September 2009

BEFORE:

HIS HONOUR JUDGE PURLE QC
(sitting as a Judge of the High Court)
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BETWEEN:
ROBERT CAPEWELL
CLAIMANT

-v-

PETER BOULTON
DEFENDANT
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The Claimant appeared in person

MR JEREMY CALLMAN instructed by Whiteheads appeared on behalf of the Defendant
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Transcript by Cater Walsh & Company
1st Floor, Paddington House
New Road, Kidderminster DY10 1AL
(Official Court Reporters to the Court)
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JUDGMENT
Wednesday, 16th September 2009

1.	JUDGE PURLE:  This is a claim by Mr Robert Anthony Capewell (“Mr Capewell”) against Peter Kenneth James Boulton (“Mr Boulton”) in relation to a company which upon incorporation was called Express Despatch (Central) Limited.  It was incorporated on 25th February 1999, a very long time ago.  The proceedings were commenced in 2005, nearly six years after the events giving rise to this dispute.

2.	There are two claims, broadly speaking.  In the first claim, Mr Capewell claims that it was part of an agreement between him and Mr Boulton made in February 1999 that Mr Boulton would ensure that certain indebtedness owed  to Mr Capewell by another company, RPM Logistics Limited (“RPM”), would be paid out of the new company, Express Despatch (Central) Limited.  It not a claim against the new company, but against Mr Boulton for breach of the terms of an oral agreement alleged to have been made between Mr Capewell and Mr Boulton.   Mr Capewell also claims to be entitled to half the shares in the new company.

3.	I should say a little bit about the background.  Mr Boulton and Mr Capewell were both equal shareholders in RPM, which carried on a parcel despatch business.  RPM became insolvent and went into creditors voluntary liquidation on 28th April 1999.  Mr Capewell claimed his indebtedness against the insolvent company in the liquidation, but there was no return for unsecured creditors.  The precise reasons for the insolvency do not matter, but it appears from the evidence I have heard that one of the reasons for the business failure, if not the principal reason, was that RPM had in the past used the services of a franchise operation (Panic Link) and carrier (Target) which were unsatisfactory, to put it mildly.

4.	However, in October 1997, at the latest, a new arrangement was entered into with another operator, trading as Express Despatch, who were much more satisfactory.  The impact of the previous problems nevertheless persisted, and the company did not recover from those problems.  There were hopes in early 1999 that new business would be got in, in particular from a prospective  customer, Churchill China Plc (“Churchill”), but those hopes had not materialised by February 1999.  Those hopes did not materialise until the new company started trading, and RPM ceased trading, in about the third week of March 1999.

5.	Mr Boulton and Mr Capewell had both been advised by accountants that there was a risk of personal liability on the grounds of wrongful trading.  It became evident to both that RPM could not continue.  They discussed between them setting up a new company, which would effectively carry on a similar, if not for practical purposes, identical business to RPM, free of the historical debt.  I am satisfied that there were continuing discussions about this topic from, at the latest, January 1999.  The insolvency advice from the accountants seems to have been given earlier, by October 1998.

6.	Mr Capewell’s case is that an oral agreement was reached with Mr Boulton in February 1999, specifically on the 5th, to the following effect: The new company would be set up under the name Express Despatch (Central) Limited, and Mr Capewell’s  investment in the old company, RPM, would be recouped out of the new company.  By “investment”, I mean the indebtedness of (Mr Capewell claims) approximately £77,000.  I should mention that that £77,000 has not been proved to my satisfaction.  It is, however, common ground that there was, at the very least, indebtedness of, in round figures, £59,250, and Mr Callman (Counsel for Mr Boulton) accepts that, if Mr Capewell’s case otherwise succeeds on the point, there should be an inquiry before a District Judge to ascertain the amount actually due.  That, however, presupposes that Mr Capewell will succeed on the point.

7.	It is clear that there were discussions at a meeting with Mr Stokes, who was Mr Capewell’s accountant, on 22nd January 1999 at which meeting, amongst other things, the formation of a new company was discussed.  It is also said on Mr Capewell’s part that there was a further meeting with Mr Stokes on 5th February 1999, which took place when he and Mr Boulton were returning from the premises of XPD Limited, who operated the Express Despatch parcel delivery network, following a meeting with two of their directors, Mr John and Mr Goult.  Mr Capewell says he remembers this as if it were yesterday.

8.	Mr Stokes, who was an impressive witness overall, supports Mr Capewell’s evidence of a meeting between himself and the two parties to these proceedings on 5th February 1999.  I believe, however, that both Mr Capewell and Mr Stokes are mistaken about that meeting.  There was no meeting with Mr John and Mr Goult on that date.  There was a meeting with them on the next day, the date being confirmed by the late production of Mr John’s diary.  Mr Capewell suggested that its late production puts considerable doubt over the genuineness of the diary entry.  I do not accept that submission.  Mr John explained its late production cogently.  The diary was found in the attic amongst his children’s books.  It does not follow from this, of course, that nothing else happened on 5th February 1999, but I do not consider that the meeting that Mr Capewell and Mr Stokes both say took place on 5th February in fact took place on that date.  

9.	A note which Mr Stokes made a few weeks later as an aide memoire dates a meeting as 22nd January 1999.  If there was another significant meeting with Mr Capewell and Mr Boulton on 5th February, it is surprising that Mr Stokes did not refer to it in this note.   In my judgment Mr Stokes, although a truthful witness, has (as Mr Callman submitted in paragraph 36 of his closing written submissions) muddled up what he now thinks was a meeting on 5th February with the earlier meeting.  On 5th February, Mr Callman accepts that Mr Stokes may well have had (as I find later that he did) a conversation with Mr Capewell alone, but not a meeting with both Mr Capewell and Mr Boulton.  There were not two meetings between the parties and Mr Stokes.  There was one.  Nonetheless, it is clear from what Mr Stokes says about the meeting (whenever it was) that discussions focused upon the formation of a new company, which was to be jointly owned and was to carry on as before.  

10.	There was also discussion as to the payment out to Mr Capewell of the historical indebtedness; that is, the figure of £77,000 that I have referred to.  This matter was, however, according to Mr Stokes, left in the air because there was no obvious way in which the indebtedness of RPM to Mr Capewell could be extracted from the new company, given that the shareholdings were to be equal, and  Mr Boulton would have to receive a similar amount.  This was not Mr Capewell’s objective.  However, it was not Mr Boulton’s objective either to enter into an arrangement under which Mr Capewell would receive any payment ahead of himself.  Mr Boulton had been working extremely hard in RPM for little reward, and he saw, understandably, his contribution in kind as being at least as important, if not more important, than the contribution in cash of Mr Capewell.  As will be seen, Mr Capewell was unwilling to be a director of the new company, so that payment to him of increased director’s fees to compensate him for the loss of his previous investment was not feasible, even had Mr Boulton consented to this (which he did not).

11.	I do not accept that Mr Boulton ever agreed in a way which was contractually binding that Mr Capewell would receive his £77,000 or other indebtedness through the new company.  It was contemplated, and I dare say Mr Boulton, at least in the early stages of the discussions, gave some assurances to the effect that Mr Capewell’s investment, using that term loosely, would be secured by setting up the new company and continuing what was for practical purposes the self same business from the same premises, with the same telephone number as before, but that did not amount to a promise to ensure that the indebtedness was paid.  Accordingly, the first limb of Mr Capewell’s claim fails. 

12.	The second limb relates to the ownership of the shares in the new company, Express Despatch (Central) Limited, as it was then called.  As I have said, the setting up of a new company was discussed with Mr Stokes on 22nd January 1999.  Mr Stokes claims that he received instructions to incorporate the new company under the chosen name on 5th February 1999 from Mr Capewell over the telephone.  He says that he heard Mr Boulton’s voice in the background.  This ties in with a letter which Mr Capewell’s solicitors wrote in November 2004, which described the instructions as having been given by Mr Capewell in Mr Boulton’s presence.

13.	Mr Callman for Mr Boulton challenges this evidence, submitting that it was inherently unlikely that Mr Stokes could remember clearly a voice in the background, in a telephone conversation over ten years ago.  There is force in that point.  Nevertheless, there is no doubt that Mr Stokes did receive instructions to form a new company.  There is no doubt also that his instructions were that the shares should be divided equally between Mr Boulton and Mr Capewell.  Finally, there is no doubt, also, that he was told that Mr Boulton was to be the only director.  The issues are as to when that occurred and who was privy to this information.  

14.	I consider it likely on the balance of probabilities that the telephone conversation  Mr Stokes says he had with Mr Capewell did take place on 5th February because Mr Stokes wrote a letter on that date to Mr Capewell recording the instructions he had received, though the letter does not record any “background” input from Mr Boulton.  I also consider it improbable that Mr Capewell would have given those instructions without raising the matter with Mr Boulton. Mr Stokes in his letter said that he would thereafter liaise with Mr Boulton as sole director, which I do not think Mr Capewell would have been happy with if he had not already agreed this course of action, and the equal share division, with Mr Boulton.  Mr Boulton’s case (as reflected in Mr Callman’s written opening submissions) is that there was an agreement, but the agreement was merely that a shell company would be incorporated as a potential future vehicle.  The agreement so expressed by Mr Callman is silent as to who the new potential vehicle would belong to, once formed.  It is not however suggested that Mr Boulton gave any  instructions about the matter to Mr Stokes.  It is accepted that the person giving the instructions was Mr Capewell, who was Mr Stokes’ client.  Mr Capewell was not giving the instructions as a favour to Mr Boulton, and the instructions were not markedly different from what had been discussed on 22nd January 1999.  On 22nd January, I also find that there was discussed, amongst other things, the possibility of Mr Capewell’s wife becoming a director of the new company, which was unacceptable to Mr Boulton.  That arose because Mr Capewell, who had a separate financial services business of his own, was concerned that his involvement in RPM, and possibly in the new company, would affect his status with the Personal Investment Authority (“PIA”), and was therefore disinclined to be a director in the new company.

15.	The fact that these matters were discussed on 22nd January, as I find they were, confirms that Mr Boulton knew of Mr Capewell’s concerns about becoming a director.  That is why Mr Capewell’s wife was suggested as a director.  Further, Mr Capewell, also in January, resigned as a director of RPM, purportedly, by sending a form to Companies House recording his resignation.  However, although that was discussed with Mr Boulton as a possibility, I also find that Mr Boulton, as he told me, did not actually know of the resignation until much later, and, indeed, the resignation itself was backdated in the form that was sent to Companies House.  Nonetheless, what was discussed on 22nd January 1999 confirms to my mind that Mr Boulton was aware of the reservations that Mr Capewell had about becoming a director of any new company.  Mr Stokes’ handwritten notes also mention Mrs Capewell’s position, and refer (as I have noted) to the date 22nd January 1999.

16.	What then happened on 5th February 1999, which was a Friday?  In my judgment it is likely, as I have said, that Mr Capewell gave the instructions referred to in Mr Stokes’ letter, having agreed with Mr Boulton that the company would be established with himself not being a director but with equal shareholdings.  The date of the instructions (5th February 1999) is challenged partly on the basis of the evidence of Toks Olufemi, a representative of the company formation agents.  She claimed by reference to an invoice dated 11th February 1999 that the instructions could only have been given on that later date.  There is however an instruction form (internal to the company formation agents) which records the initial instructions by reference to what everyone accepts is the wrong date of 13th February.  It is evident from looking at it that the date must either have been changed on the original or the fax copy overwritten.  Only a fax copy has survived.    

17.	It is impossible to reach any firm conclusion about what the original date on the instruction form was.  I do not regard (as Miss Olufemi suggested) the date of the invoice as conclusive of the date upon which instructions were given.  Miss Olufemi said the invoice was always sent out on the day instructions were received.  That may be an aspiration, but I doubt whether even the best run organisations always live up to their aspirations.  What is more, Mr Stokes says that there was always a day or two between the giving of instructions and the invoicing.  By a day or two, I did not understand him to be saying precisely that it was one day or two, though he was surprised by the date 11th February.  I do not however imagine for one moment that he ever monitored these things on a temporal basis in his practice.  Moreover, it is possible that the instructions were not transmitted to the company formation agents until the following week, though given on 5th February to Mr Stokes.  No-one in reality can be expected to remember the precise sequence of events in any given case, and I do not think anyone did in this case.  Mr Capewell’s evidence (which he prepared himself) was marked by inaccuracies as to dates, which seriously undermined the reliability of his evidence, as the material facts in more than one significant respect became distorted around the wrong dates.   Nevertheless, the date on Mr Stokes’ letter is contemporaneous confirmation of when the instructions were given to him.  It seems to me probable, and I find, that Mr Capewell’s instructions were given on the 5th,  but not invoiced to Mr Stokes by the formation agents, for whatever reason, until the 11th.  In the events which happened, 25th February was the date of actual incorporation of the new company.  I should mention, for completeness, that Miss Olufemi herself played no part in the particular incorporation with which this case is concerned.  I would not in any event have expected the person receiving the instructions to have remembered anything meaningful about them.

18.	Mr Boulton says, and I accept, that there was a meeting with Mr John and Mr Goult of Express Despatch on Saturday 6th February 1999, which took place during the luncheon interval of the AGM, at which all the agents and franchisees of Express Despatch were present; thus, it was not an AGM in the sense of a shareholders’ meeting.  It was an AGM of all the persons who were operating under the Express Despatch banner.

19.	He says it was only during that meeting that he appreciated for the first time that Mr Capewell  was unwilling to become a director, because Mr Capewell mentioned it at that meeting.  As I have said, I do not accept that this was the first he knew of it, although I am prepared to accept that Mr Boulton was uncomfortable about this being raised at the meeting with Mr John and Mr Goult.  I consider that he knew about it from 22nd January, when there were discussions as to Mrs Capewell becoming a director, and that he knew about it the day before when the instructions were given to Mr Stokes.

20.	The purpose of the meeting with Express Despatch was to ensure that the business could be carried out by a new company.  That, to my mind, made it more likely than not that Mr Boulton and Mr Capewell would need to have taken steps to form a new company at the date of the meeting.  It is not in the slightest bit surprising to me that Mr Capewell would have given instructions to his accountant, having discussed the matter with Mr Boulton, on the day before.

21.	Mr John and Mr Goult both claim to have a clear recollection that Mr Boulton was very upset at being told by Mr Capewell at the meeting that he did not wish to be a director of the new company, and they reached the view that this was the first he had heard of it.  They also said there was a great deal of tension between Mr Boulton and Mr Capewell.  However, I consider the evidence of Mr John and Mr Gould, and indeed of Mr Boulton in this respect, slightly unreal.  It is very unlikely that Mr Capewell would have been as negative as is made out in the witness statements when the object of the meeting was to be positive.  As I have said, the purpose of the meeting with Express Despatch was to ensure that the business could be carried out by a new company.  I consider that the tensions about which Mr John and Mr Goult gave evidence were exaggerated by them, and indeed by Mr Boulton.  There, undoubtedly, was some tension, however.  The tension had been created, or a least significantly increased, by the severe insolvency position of RPM and by a feeling on Mr Boulton’s part that he was doing the work for next to nothing, and without proper input, as he saw it, from Mr Capewell.  Mr Capewell accepted that there were tensions in all aspects of their lives, professional and private.  

22.	I am prepared to accept that some of that came out at the meeting with Mr John and Mr Goult.  Nevertheless, the upshot of the meeting was that the idea of carrying on the business through a new company was given the “green light” in principle.  I am not persuaded that there was any discussion on that day as to what the new company would be called, as Mr John and Mr Goult could be expected to have commented on the use of the words “Express Despatch” within the name, as that was the name under which their company carried on business.  I am nevertheless satisfied, as is not disputed, that the pending incorporation of the new company was discussed, and that Mr John and Mr Goult gave the go ahead for the continuation of the existing business through the new company.

23.	Thereafter, it appears that Mr John and Mr Goult, or one or other of them, discussed with Mr Boulton the future, and Mr Boulton reached the view that without Mr Capewell on board as a director, Mr Capewell should not be part of the new company at all.  Mr Capewell’s position on directorship before me was this: his reluctance to become a director was a temporary thing.  He had to clear matters with the PIA.  I think this is an over simplification.  He clearly was concerned that his main business of being a financial advisor should not be imperilled by association with insolvent companies.  Any question of personal liability would potentially affect his own financial standing and might cause him to lose authorisation.

24.	I consider, therefore, that his reservations were as to whether or not he should become a director at all, and not simply as to whether he should simply delay being a director until he had received clearance from the PIA.  As it happens, there was, as Mr Hulme, his own compliance officer, told me, no impediment to Mr Capewell becoming a director of the new company.  Mr Capewell did eventually speak to the PIA, who confirmed that to him also.  It seems to me that it is something he could have had confirmed very readily at an early stage.  

25.	Nevertheless, his concerns about becoming a director were genuine and did not stop Mr Boulton from going ahead with the idea they both had of setting up the business through the new company Express Despatch (Central) Limited, which had been formed on the instructions of  Mr Capewell.  Nonetheless, following the meeting of 6th February 1999, Mr Boulton became gradually more and more reluctant to proceed without Mr Capewell fully on board as a director, especially as Mr Capewell evidently had no further money to invest, a point which he made forcibly to Mr Boulton back in January when putting the last of his money into RPM.

26.	It is said by Mr Boulton that there ensued various discussions between himself and Mr Capewell, involving at times Mrs Capewell and Mrs Boulton as well.  Mrs Boulton confirms those discussions.  During the course of those discussions Mr Boulton made it quite plain that he was unhappy about Mr Capewell not being a director.  I accept that he made his unhappiness plain.  I do not, however, accept that he at any stage explicitly stated that Mr Capewell could not be a shareholder of the new company unless he was also willing to be a director.  Still less do I accept that Mr Capewell ever agreed that he would not be a shareholder.  The focus of the discussions was on Mr Capewell’s position on becoming a director.

27.	The company was incorporated on 25th February 1999.  It is necessary to consider who then were the beneficial shareholders.  This, it seems to me, is the logical starting point in relation to a claim that Mr Capewell owns half the shares.  The company formation agents did not provide an off the shelf company.  They formed this company to order.  The person to whose order they formed the company was Mr Stokes.  He was the person they invoiced prior to incorporation. Upon incorporation they sent the 288a forms (recording the change of director and secretary) to Mr Stokes.  When they were eventually returned, they sent further papers (at Mr Boulton’s request) to him as sole director, together with share surrender forms, and, it would appear, transfer forms.  The share surrender forms were ineffective as the company had no power to accept the surrender of shares, and I take them as doing no more than permitting Mr Boulton as director to transfer the shares.  If, however, the shares were not the formation agents’ to transfer, any transfer could not without more bind the beneficial owner.  The share transfers were backdated.  

28.	The matter is explained by the formation agents in a subsequent letter dated 22nd December 2004 to Mr Boulton, which reads as follow, omitting the first paragraph:  “We set up your company using our nominees, Company Directors Limited, as director and shareholder, and Temple Secretaries Limited as secretary and shareholder.  We sent our Forms 288as for completion by each new director and secretary of the company and returned to us for filing at Companies House, along with our early resignations.  Our policy is to resign as at the date of incorporation, as we acted for formation purposes only.  Therefore, the appointments of the new directors and secretary were dated the same date, otherwise the company would have been without officers for a time and therefore in default.  We hope this now clarifies the position, but should you require any further information then please do not hesitate to contact us.”

29.	It is thus clear that they regarded themselves as acting for formation purposes only.  Moreover, when the share transfers were eventually completed in favour, as it happens, of Mr Boulton, which seems to have occurred in around September 1999, they also were in backdated form, which I infer is the form in which they were provided - that is to say, backdated to the date of incorporation, and signed in blank on behalf of the two subscribers named in the letter I have just read.  Accordingly, it seems to me that the company formation agents never intended, or saw themselves as having, a beneficial interest.  

30.	It seems to me that the clear intent of the formation agents at the date of incorporation was that the company would be held to the order of Mr Stokes, upon whose instructions they acted and who was invoiced prior to incorporation.   Accordingly, as between the company agents and Mr Stokes, the shares were Mr Stokes’.  They must have belonged to someone.  I do not accept Mr Callman’s submission that they belonged beneficially to the two named subscribers in the circumstances I have set out.  That was not anyone’s intention and would have gone contrary to the formation agents’ instructions from Mr Stokes.  

31.	Mr Stokes, however, was not acting for himself.  He was acting for his client.  His client, he told me, was Mr Capewell, who gave him the instructions.  On the face of it, therefore, the shares were upon incorporation Mr Capewell’s.  However, Mr Capewell had in turn agreed with Mr Boulton that the shares would be held between them 50/50,and Mr Stokes knew this.  Therefore, as between Mr Stokes, Mr Capewell and Mr Boulton, the shares were at the date of incorporation held as to half each for the two parties to these proceedings..  That, undoubtedly, was the intention.  The intention, in my judgment, was acted upon.  Mr Capewell, in fact, formed the company and made it available to Mr Boulton to use as the sole director.  Mr Boulton accepted the directorship and took steps to get the business underway.

32.	Mr Capewell, strictly speaking, would have been liable to indemnify Mr Stokes (who was acting as his accountant and agent) in respect of the formation costs, although he could, of course, have claimed those off the company, if the company ever got round to undertaking business (as it did) and was able to pay them.  As it happens, the company did set up business and was more or less successful, although not enormously so from day one.  It did not require an overdraft facility, and eventually, some weeks later, the company paid Mr Stokes the formation costs.  That does not, however, answer the question as to who the shares belonged to until then.  Nor do I think the shares ever belonged to the company because the formation costs were always ultimately the company’s responsibility, and the shares were already beneficially owned by Mr Capewell and Mr Boulton.

33.	There is no evidence as to who paid the £2 for the subscription shares.  The evidence is to the effect that those two shares were eventually transferred for nil consideration to Mr Boulton .  Some time later, one share was transferred to Mrs Boulton (who was also company secretary) as was always their intention once they decided between themselves that Mr Boulton should go ahead without Mr Capewell.

34.	Pausing there, it seems to me that the agreement which I have found was made prior to the formation of the company had the result that the shares were as from 25th February held upon trust for Mr Boulton and Mr Capewell.  The transfer of the shares into Mr Boulton’s name appears to have been a voluntary transfer.  Therefore, Mr Capewell’s beneficial interest would on the face of it persist.  Moreover, Mr Boulton was on notice.  He knew of the facts which gave rise to Mr Capewell’s entitlement.  On the face of it, therefore, Mr Capewell’s beneficial interest persists to this day by virtue of the agreement under which the company was set up, and is something which the court can give effect to, subject to various other defences, to which I shall come.

35.	A number of points were taken, perfectly properly, by Mr Callman against this conclusion.  He says that the underlying agreement (which he denied anyway) failed  for lack of consideration, uncertainty or because there was no intention to create legal relations.  I have no doubt that what Mr Capewell and Mr Boulton both intended and agreed to do, when Mr Capewell instructed Mr Stokes to form the company, was to form a company under the chosen name for both of them equally.  Mr Boulton, for reasons which I can understand, thereafter became reluctant to proceed with that agreement so long as Mr Capewell was not to be a director, but that does not alter the agreement’s effect, which I have summarised.  The agreement to form a 50/50 company for the two of them under the chosen name was simple, certain and intended to have legal effect.

36.	So far as the question of consideration is concerned, consideration was provided by Mr Capewell in agreeing to give and actually giving the instructions to form the company, incurring prospective liability to indemnify Mr Stokes for the formation costs, and making the company available for the use of Mr Boulton as the sole director.

37.	The case as pleaded does not readily fit into that analysis, although I do consider that the words in the pleading, “The claimant agreed to participate in the new company”, as encompassing in a very broad way the matters to which I have referred.  Even if there was no binding agreement as such, it seems to me that the intention, which was common and continued down to and beyond the date of incorporation, as to the ownership of the shares was sufficient to give rise to a constructive trust, and that Mr Capewell acted upon that understanding both by giving instructions to incorporate the company and by making it available for the use of Mr Boulton as the sole director.  In those circumstances it seems to me that either through the route of an enforceable contract or constructive trust, the court should, subject to the other defences that have been raised, recognise the interest of Mr Capewell in half the shares of the new company.

38.	For the sake of completeness, it was also pleaded (as one of the heads of consideration) that Mr Capewell permitted the new company to acquire the business of RPM.  This allegation has not been made out..  There was no formal acquisition of goodwill prior to liquidation, and the reality is that RPM had no business it could readily dispose of.   It could not in practice do anything with its business without the compliance of Express Despatch, whose name they were using at the depot,  and the viability of the new company was not dependent upon an acquisition of the previous business but upon it successfully establishing exactly the same business on its own.  

39.	The matter was, as far as I can see, carefully scrutinised by the liquidator subsequently appointed in April 1999, who made no challenge to the ongoing business acquired by the new company, and indeed entered into a formal agreement with the new company relating to the acquisition of goodwill, furniture and fittings.  Next to nothing was paid for goodwill.  That is hardly surprising, as all the clients of the business were clients of the central hub - that is to say, Express Despatch - or had a personal relationship with Mr Boulton, who though bound by covenants would not have been restrained in the case of a company that had gone into liquidation, where the liquidator was not carrying on the business. 

40.	It is also said by Mr Capewell that he ensured that the new company could obtain banking facilities.  I accept that he spoke with Mr Munday, the bank manager about a new company, but I do not think that his involvement was critical to the obtaining by the new company of banking facilities, which Mr Boulton could have done (and eventually did) on his own, as he also knew Mr Munday.  Moreover, the new company only needed bank accounts, not overdraft facilities, as it traded without the need for an overdraft from day one.

41.    It is also alleged by Mr Capewell that he allowed the new company to trade from the premises previously used by RPM.  That, however, was by arrangement with the landlord.  I accept, as Mr Capewell told me, that he himself had, or was present at, an initial meeting with the landlord.  I do not accept, as Mr Hide, the landlord’s representative told me, that that meeting cannot have taken place, as he did not make a note of it.  Whilst I accept that Mr Hide was in general an avid note taker, I do not accept that he would necessarily have noted every meeting down that he attended.  However, he would note significant meetings down, and the significant meeting was with Mr Boulton, not Mr Capewell, and Mr Hide made a note of it.  Accordingly, I would not regard this plea as made out so far as consideration is concerned.

42.	So far as certainty is concerned, I have already said that the agreement I am now asked to enforce is both simple and certain.  I agree, however, that were I looking at the alleged agreement as to the payment of the loan, that agreement has been expressed in various uncertain ways which I would find difficult to give effect to.   I do not, however, consider that this was a term, not even an uncertain term, of the agreement to set up the company and as to the way in which the shares would be held.  This, therefore, does not invalidate that agreement.

43.	It is said that I should not grant specific performance because of the delay that has occurred in this case.  It is, of course, trite law that a claimant must be ready, prompt, willing and able to carry out any agreement, and that delay can often be fatal, especially in the case of an agreement which is wholly executory.  However, in the present case I have found that Mr Capewell was beneficial owner of half of the shares, and that he did everything under the agreement that he was required to do.  He instructed his accountants to form the company and made it available for the use of Mr Boulton as sole director.  Mr Boulton said that he used this company because (a) it was there, and (b) it had the right name.  This clearly, therefore, was of some value and importance to Mr Boulton.  He could, of course, have gone off and formed a company of his own.  What the position would then have been, I need not decide.  He did not do that.  He used the company which he and Mr Capewell had agreed should be incorporated and used.

44.	The question of delay, therefore, is not of itself a disqualifying factor in the particular circumstances of this case.  I am not here concerned with the case between a vendor and purchaser of shares, where an agreement is reached that A will transfer shares to B for X pounds, and B simply does not sue on that agreement (or tender the price) for six years.  The agreement was not an agreement for the transfer of shares.  The agreement was an agreement between Mr Capewell and Mr Boulton that Mr Capewell should form a company for the two of them.  Mr Capewell has performed that agreement.

45.	As I have said, both Mr Boulton and Mrs Boulton gave evidence, which in the main I accept, that there were discussions which were ongoing in February and March 1999 concerning the basis upon which the company would proceed, and that during the course of those discussions Mr Boulton made his unhappiness about Mr Capewell not being a director clear.  As he saw it, he would be doing all the work.  Mr Capewell would be at no risk of personal liability as a director, and, moreover, Mr Capewell was not proposing to put any money in.  He eventually concluded that he would go on his own.  I have also found that he never made that explicit to Mr Capewell.  Had he done so, I consider that Mr Capewell would have remonstrated, but there is no clearly defined moment (prior to the incident I will now come to in late March 1999) at which that happened.  I certainly do not accept that Mr Capewell accepted that he should not be a shareholder of the company which he formed for the two of them.

46.	By the end of March, Mr Boulton had the new business up and running.  Mr Capewell attended the premises and was given a firm rebuff.  It is said by Mr Boulton that Mr Capewell only attended because Mr Boulton had by them secured, as was indeed the case, the Churchill contract.  Mr Boulton says, and I accept, that there was no guarantee that he ever would secure that contract before the company was set up, and it was only when Mr Capewell, while passing by, saw the level of business going on that he came in and changed his mind, and said he did now wish to be part of the new company.  

47.	Mr Capewell’s version of events is not dissimilar, but does differ in one significant respect.  He says that he had never indicated that he did not wish to be a shareholder, and I find that he had not.  He thought he was already a shareholder, and he was now willing to become a director because he had cleared the position, he says, with the PIA.  I accept that he had cleared the position with the PIA, although, as I have said, I do not see why he could not have cleared it much earlier, and I consider that he was to an extent using that as a bit of camouflage.  

48.	Nonetheless, I do not consider that this represented some major change of heart on Mr Capewell’s part.  He was always both willing and ready to be a shareholder, and  in that capacity to contribute in terms of discussions and making such contacts as he had available to the new company without actually being a director.  He had made contact with others in the past for RPM, which had (taking the dimmest view of the evidence so far as concerns Mr Capewell) been moderately successful, and very successful, taking the best view.  He was prepared to carry on doing that, but not under the formal banner of a directorship.  He had now changed his mind and was prepared to become a director, but he was roundly rebuffed by Mr Boulton, told that it was too late, and invited brusquely to leave.  Mr Capewell was clearly shocked and angry, and drove off, apparently at speed.  Snippets of the conversation between Mr Capewell and Mr Boulton were overheard by Janice Hassall, who worked in the office, but as these were only snippets, I did not find her evidence particularly helpful, save to the extent that she confirmed that the debate was heated.

49.	Not that long afterwards, the matter was raised by a letter from Mr Capewell’s solicitors.  Whilst the letter itself, dated 26th April 1999, was headed “Without prejudice”, no one has taken any point on that, and it was not in truth without prejudice at all.  That letter clearly alleged that it was agreed between Mr Boulton and Mr Capewell that the same arrangement would appertain for the new company as had appertained in relation to RPM.  The letter had previously stated that Mr Capewell and Mr Boulton were equal shareholders, and that Mr Capewell’s loan was shown as a director’s loan.  What was being said, therefore, was that Mr Capewell was entitled both to be a shareholder and to have his loan, apparently, shown as a director’s loan.  That seems odd because he was not,at least originally, to be a director.  However, the claim for the shares was clearly articulated, and the point made that, unless Mr Boulton had issued shares without Mr Capewell’s knowledge, he (Mr Capewell) believed no shares at all in the new company had been issued.  This was incorrect because of course there were the two subscribers’ shares, which at this time, as I have said, were held upon trust for himself and Mr Boulton.

50.	The response to that, on 30th April, from Mr Boulton was that Mr Capewell was fully aware of the formation of the new company, and in fact instigated the formation by his accountant.  It continued, “Mr Capewell specifically expressed the desire to have no involvement as a director of the new company”.  The letter did not say that Mr Boulton expressed the desire or agreed not to be a shareholder.  What it went on to say was that no agreement was made as far as share issue was concerned, and that the directorships and shareholdings of RPM pertained only to RPM.   I have found that there was an agreement in relation to share issue, but, if there was not, then the shares might be said to have belonged to Mr Capewell as the person upon whose instructions the company was incorporated.  However, that is not Mr Capewell’s case, as he is perfectly willing to accept, and does accept, that Mr Boulton has throughout been an equal shareholder beneficially with him, as he formed the new company for both of them.

51.	The letter went on to ask whether Mr Capewell was offering to assume the role of director, and if not what level of responsibility was he proposing.  Mr Boulton accepted in evidence that he was really trying to put Mr Capewell on the spot, and would not have had Mr Capewell as a director had he answered positively.  This is how I think Mr Capewell saw it too and, unwisely, Mr Capewell ignored it.  However, it is clear from that letter that whilst Mr Boulton was rebutting Mr Capewell’s claim to half of the shares, he was certainly aware of it.

52.	One other point should be mentioned.  Mr Callman relied upon the failure of Mr Capewell to rely upon any agreement in various points he subsequently made in correspondence with the liquidator..  This demonstrates, Mr Callman suggested, that there was no agreement.  However, the agreement had been asserted earlier, in Mr Capewell’s solicitors’ letter of 26th April1999, which cut no ice with Mr Boulton.  Mr Capewell therefore knew from Mr Boulton’s rebuttal that the agreement he relied on was not going to be honoured voluntarily, and sought the assistance of the liquidator to achieve a solution.  I do not regard any of that as disproving or undermining the agreement he has asserted from an early stage.

53.	It does appear that there was a meeting in June 1999 in an attempt to resolve matters, but it came to nothing, and thereafter the correspondence was silent for a long time on the question of share issue.  On 18th February 2000, Grindys, a firm of solicitors then acting for Mr Capewell, wrote to Mr Boulton recording that there had been another meeting on 7th October 1999, and saying amongst other things, “We agreed that you will prepare a statement setting out details of your negotiations and discussions with Mr and Mrs Fearns which led you and Rob Capewell to form the company which purchased the franchise”.  It appears at that stage that what was being considered was a possible claim in relation to the failure of RPM against the persons originally dealing with the franchise, but at that stage no further claim was intimated about the shares in Express Despatch (Central) Ltd.

54.	Subsequently, on 24th May 2000, Grindys wrote to Whiteheads (acting for Mr Boulton) saying, amongst other things, “You client holds himself out as the sole shareholder and director of Express Despatch (Central) Limited.  Our client contends that the company was set up by his accountant on his instructions with Mr Boulton and Mr Capewell as joint shareholders.  Please find enclosed a copy of the letter from Keith Stokes, dated 5th February 1999, addressed to Mr Capewell, which would appear to support our client’s understanding of the position.  Your client contends that this is not the correct position”.

55.	The same letter also raised a point on a guarantee that Mr Capewell had given to Barclays Bank in relation to RPM.  Mr Capewell’s solicitors invoked the provisions of a shareholders’ agreement made between Mr Boulton and Mr Capewell relating to RPM, and said that Mr Capewell, as turned out to be correct, was entitled to a contribution from Mr Boulton in respect of one half of that liability.  This was a liability of approximately £20,000.  It appears that Mr Capewell had been called upon by Barclays Bank, and had to take out a loan to cover his liability under the guarantee.

56.	Nothing thereafter of any relevance as regards the shares appears to have happened until January 2002.  There was, however, ongoing debate about the contribution under the shareholders’ agreement, and it is evident that the loan that Mr Capewell took out caused him some financial embarrassment.  The liability was eventually admitted, and in the course of the negotiations, by a letter dated 19th December 2000, Whiteheads, who represented Mr Boulton, wrote to confirm that an offer that they had put forward in a previous letter “does not incorporate within it an offer to compromise your client’s claim to be a 50 per cent shareholder in Express Despatch (Central) Limited”.  What that appears to demonstrate is that as of that date, December 2000, Mr Boulton and his solicitors were aware of that claim, but they were not seeking to compromise it.  Nor, by the same token, was Mr Capewell, by negotiating a resolution of the contribution claim, giving up any rights in relation to the shares.

57.	There were two sets of proceedings arising out of the RPM shareholders’ agreement.  One was an application by Mr Boulton to set aside a statutory demand, which was eventually acceded to, and the other set were ordinary proceedings to recover a contribution.  There was an early admission of liability as regards £7,500, leading to judgment in that amount in April 2001, and ultimately there was an agreed order in relation to the balance, although there was some moderation of the interest claim in Mr Boulton’s favour.  In truth, Mr Boulton never had a real defence to those proceedings, and I find that it was Mr Capewell’s financial embarrassment at this time which caused him to concentrate on recovering the monies due.

58.	It may well be that Mr Boulton genuinely believed that he might have some defence to the claim for contribution.  I am prepared to accept that the terms of the RPM shareholders’ agreement, when drawn to his attention, surprised him.  What I do not, however, accept is that there ever was a defence, and it is a matter I should take into account when considering this early period of delay.  Although Mr Boulton was, as I am prepared to accept, acting in good faith, he was in fact keeping Mr Capewell out of money which was due to him.  

59.	It was not until 23rd October 2001 that Whiteheads wrote to Grindys, agreeing to pay the balance of £3,000 plus interest to date, “plus your reasonable costs to be assessed if not agreed in satisfaction of all heads of claim”, and a cheque for £3,400 odd was sent on 30th October 2001, with a consent order coming back from Grindys on 7th November 2001.

60.	That matter having been dealt with, Grindys, on 30th January 2002, took up the cudgels in relation to the shareholding.  Mr Capewell, apart from protestations about putting money before shares, and his financial embarrassment, did not, to his credit, seek to justify the period of delay down to January 2002.  He said that the delay was down to him.  There was a suggestion that he received some encouragement from his legal team to take one thing at a time.  It is not for me, however, to apportion responsibility for the delay.  It was, as Mr Capewell said, down to him, though, as I have said, it was his financial embarrassment which caused him to concentrate in the first instance on the contribution claim.

61.	In January 2002, however, Grindys returned to the point, and, after setting the history out in some detail expressed the view that the recent annual return was wrong and that Mr Capewell was a 50 per cent shareholder.  They also said, “We have no doubt that our client would be prepared to devote the necessary time and resources to realise his interest in the company”.  I do not think this letter can have come as much of a shock to Mr Boulton, unpleasant though it would have been, because, as I have said, the issue as to what was being compromised was adverted to in the correspondence emanating from his own solicitors during the course of the earlier dispute.  The Grindys letter did not however produce any joy for Mr Capewell.

62.	In April 2002, after intermediate correspondence, Whiteheads said they had taken instructions and denied that Mr Capewell had any interest in PDD Logistics Limited (“PDDL”), as Express Despatch (Central) Limited had now become following a change of name, and proposed a joint valuation of the company.  That proposition was discussed in a desultory way over the ensuing months.  The point being made by Whiteheads was that once the company had been valued Mr Capewell would realise there was nothing worth arguing about.

63.	On 11th April 2002, Mr Capewell was subjected to a dawn raid of some sort, and was arrested, albeit then bailed, in relation to proceedings which he ultimately became bogged down in, concerning a carousel VAT fraud.  The carousel fraud was established. Various individuals were convicted, and those convictions remain to this day.  However, Mr Capewell, although initially convicted, subsequently had that conviction quashed, and there is, apparently, a retrial, due to take place later this year, subject to an abuse of process application soon to be heard.

64.	There can be no doubt that the criminal proceedings were the main focus of Mr Capewell’s attention from April 2002 onwards.  By coincidence he was convicted and imprisoned on 11th April, precisely four years later, in 2006, at Wolverhampton, and he came out of prison on 10th December 2008 following the quashing of his conviction.  There is no doubt that those factors go a long way to explaining some of the ensuing delay because his life was taken over by the criminal proceedings.  Moreover, in September 2002 a restraint order was made, and a firm of accountants were appointed as receivers, and ran up substantial costs, which I think are still owed.  Mr Capewell said this was a horrible time of his life.  The receivers were trying to get him out of his house and the Inland Revenue petitioned for his bankruptcy.  He was wrongly made bankrupt for a short while, but his bankruptcy was irregular and was annulled.  Faced with all that, taking Mr Boulton to court  was the last thing on his mind.  

65.	That is as it may be, but I have to consider both parties’ positions in this case, and the fact is that proceedings were not being pursued against Mr Boulton, and Mr Boulton was carrying on running the business with this sword of Damocles there in the shadows, although not exactly over his head.  As I have said, in 2002 there were desultory attempts to try and deal with the matter and the question of the joint valuation was pursued by Mr Boulton, but not (through no fault of his own) to a meaningful conclusion.

66.	In August of that year (2002) Mr Boulton commissioned a report from a private investigator, concerning Mr Capewell.  His hope was that this would reveal that Mr Capewell was in such a sorry state all round that he would not be in a position ever to pursue his claims.  That seems to me to be an understandable thing to do.  What it does show, however, is that Mr Boulton was not under the illusion that the claims had gone away.  He was hoping that they might through force of circumstances go away.

67.	On 4th December 2002, Whiteheads wrote to Grindys, by this time running out of patience, saying, “Our client instructs us that unless substantive proposals are received from you to progress this matter within the next 21 days then he”, that is to say, Mr Boulton, “will wind the company up”.  There seems to have been no reply to that, but Mr Boulton did not in fact wind the company up.  He chose to continue, no doubt hoping that the claim would simply go away.  I do not think it can be said that he thought it had gone away, and in fairness to him there is not a word in his witness statement saying that he proceeded on the basis that he thought that this claim had at any stage gone away or been abandoned.

68.	On 24th September 2004, nearly two years later, Grindys wrote to Whiteheads, saying, bleakly, “We refer to previous correspondence in this matter”, and saying that they had instructions from Mr Capewell to progress the claim in relation to PDDL,  as Express Despatch (Central) Limited had now become.  Whiteheads, understandably, responded on 28th September 2004, saying they were seeking instructions, and adding, “In the meantime we should be grateful to receive an explanation for the gross and inordinate delay occasioned by your client in this matter”.  Astonishingly, the response to that from Grindys was, “We will address the question of alleged delay when and if this becomes necessary.  At this stage it does not appear to be relevant to the question of realisation of our client’s interest in the company”.  I think what that letter demonstrates is that there was no explanation they could give for the gross and inordinate delay, other than what Mr Boulton already knew, that Mr Capewell’s life was rather taken up with other matters, and even that they did not bother to mention.

69.	Mr Capewell explained that he was not exactly flush with cash, as indeed he cannot have been following the restraint order, and that he had to borrow monies from family and friends to get these proceedings underway.  He could, of course, have done that at any time in the two years between 2002 and 2004.  He does not appear to have taken any steps to do so, preoccupied, no doubt, as he was, in the main with the criminal proceedings.  Yet, the criminal proceedings were still current in October 2004, when Grindys were promising to address the issue of alleged delay when it became necessary to do so.  I, therefore, accept Mr Callman’s submission that no real excuse had been advanced for the protracted period of delay in this case.

70.	On 22nd November 2004, Grindys wrote again referring to the instructions given by Mr Capewell to Mr Stokes in the presence of Peter Boulton.  This was following a meeting Grindys had with Mr Stokes, and the claim to the shares was formally articulated once more.  In the events which happened, proceedings were commenced not long afterwards at the beginning of 2005, and no complaint is made about delay in the proceedings since that date.  The actual issue date of the proceedings was 25th January 2005.  

71.	The facts I have recited are said by Mr Callman to give rise to a number of defences of the usual variety; namely, delay, laches, acquiescence and estoppel. So far as estoppel is concerned, this depends upon some representation by words or conduct which is relied upon to the detriment of the representee.  Representation may be inferred from standing by.  Acquiescence is similar.  What I am asked to infer, although Mr Boulton’s evidence is in truth silent on the point, is that Mr Boulton relied upon the inactivity as demonstrating that the claim was in effect being abandoned, and carried on working for the company and building up its business, when otherwise he would or might not have done so.

72.	I am unable to find as a matter of fact that that was Mr Boulton’s state of mind.  He was, I find, aware of there being such a claim throughout.  That is why he hired enquiry agents in 2002 to assess the likelihood of that claim being advanced.  What he did not ever conclude, and does not say he concluded, was that the claim was abandoned, or that he acted differently in consequence of the delay.  Nor do I think this is a matter of overwhelming inference.  Moreover, the early delay is attributable, at least in part, to Mr Capewell being kept out of the contribution to which he was entitled under the RPM shareholders’ agreement.  Much of the later delay, though not excusable, is at least explicable by reference to the criminal proceedings and restraint order.

73.	A number of cases of some antiquity were cited to me, all of which I have in mind.  I consider, however, that so far as laches, acquiescence and estoppel are concerned, I can take the law from the recent decision of the Court of Appeal in Re Loftus (deceased) [2007] 1 WLR 191.   It is clear from that case that the enquiry is a broad one.  The question is whether in all the circumstances it would be unconscionable for a party to be permitted to assert his rights.  As was said at [42], “The modern approach to the defences of laches, acquiescence and estoppel was considered by this court in Frawley v Neill, The Times 5 April 1999, to which reference was made in the judgment of Mummery LJ in Patel v Shah  [2005] EWCA Civ 157 at [32].  After reviewing the earlier authorities - and, in particular, observations in Lindsey Petroleum v Hurd (1874) LR 5 PC 221, 229, and Erlanger v New Sombrero Phosphate Company (1878) 3 App Cas 1218 at 1279 - Aldous LJ, with whom the other members of the court agreed, said: 
‘In my view the more modern approach should not require an enquiry as to whether the circumstances can be fitted within the confines of a preconceived formula derived from earlier cases.  The enquiry should require a broad approach, directed to ascertaining whether it would in all the circumstances be unconscionable for a party to be permitted to assert his beneficial right.  No doubt the circumstances which gave rise to a particular result in the decided cases are relevant to the question of whether or not it would be conscionable or unconscionable for the relief to be asserted, but each has to be decided on its facts, applying the broad approach”.  
That citation is relevant to the questions of laches, acquiescence and       estoppel.  

74.	Standing back and asking myself the question, is it in all the circumstances unconscionable for a party to be permitted to assert his beneficial right?  That party is, of course, Mr Capewell, and in my judgment it is not unconscionable for him to be permitted to assert his right to half the shares of the new company.  I say that for these reasons: the shares were from the outset beneficially his, for the reasons I have given.  This is not a case in my judgment where Mr Capewell has, as in  Patel v Shah, (referred to in the passage I have just cited) stood by to see which way the wind blows.  He did everything that was required of him under the agreement he reached with Mr Boulton in February 1999, by forming the company and making it available for the use of Mr Boulton as sole director.  He asserted his rights at an early stage both orally at the meeting at the depot with Mr Boulton, which he was invited to leave, and in his solicitors’ letter of 26th April 1999.  

75.	It is true that Mr Boulton has continued to build up the business, but there is no suggestion that he would not have done so anyway.  He does not say that acted any differently because of the delay on Mr Capewell’s part.  He no doubt took comfort in his view, which I find to be genuine but wrong, that Mr Capewell’s claim was a bad one anyway and would not succeed.  Mr Boulton has a view on the merits of the case, which is as strong as that of Mr Capewell.  Sadly, I have to decide who is right.  Moreover, Mr Boulton has not been working for the company, as he was for RPM, for next to nothing.  He has, as he accepts, made provision for payment to himself of a proper salary.  Mr Capewell hinted that it was more than a proper salary. Be that as it may, Mr Boulton has been paid for the work he has done, or he is at any rate entitled to payment for work done for which he has not been paid.  I put it that way because there was some suggestion in his evidence that he has not drawn all his entitlement in recent times.  If, however, it is properly provided for in the accounts, then he can do so.

76.	In those circumstances I consider that Mr Boulton proceeded with his eyes open in carrying on running the company, hoping that Mr Capewell’s claim would either go away or that it was, as he thought it was, a duff claim, and providing for proper remuneration in the meantime.  I do not consider it to be inequitable now, in the absence of any real detriment on the part of Mr Boulton, for Mr Capewell to assert his beneficial interest.  True it is that Mr Boulton has now transferred one of his shares to his wife, but that was something that he intended to do at the outset of his going it alone, and is not in any way causally linked to Mr Capewell’s inactivity.

77.	Mr Callman suggested in opening that I could not grant Mr Capewell the relief he seeks (that Mr Boulton holds half of the shares on trust) because Mr Boulton no longer holds all the shares.  However, as I put to Mr Callman, if Mr Capewell’s case is otherwise well founded I would apply the presumption that the share he transferred to his wife was his own share, and not Mr Capewell’s share.  On that footing, his remaining share is held on trust for Mr Capewell.  Mr Callman indicated that he would consider the matter further.  He did not come back to contradict me on this particular point, his point being that the case was ill founded anyway.

78.	In the circumstances I reject the defences of laches, acquiescence and estoppel.  Delay adds nothing to laches, in the absence of some sort of abandonment or waiver, which a prolonged period of silence and inactivity would sometimes infer.  I conclude that here the long period of inactivity was not in the particular circumstances in which it arose such as to give rise to an abandonment or waiver, nor was it ever so regarded, I find, by Mr Boulton.  I have earlier considered and rejected delay as a defence in the context of the remedy of specific performance.

79.	A separate defence is raised of abuse of process.  This is based upon the fact that there were earlier proceedings, namely the contribution claim under the RPM shareholders’ agreement.  Reliance was placed upon the principle that all proceedings ought to be brought forward at one time.  That principle was considered in Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1.  It is clear that the rule is not an absolute one.  In my judgment, given that the original proceedings were for an entirely distinct debt, and that Mr Capewell is not suing on the RPM shareholders’ agreement in this case, I do not consider that that makes the present proceedings an abuse of process.  I would be reluctant to reach that conclusion also given that the earlier proceedings were necessitated by Mr Boulton’s failure to acknowledge an indebtedness to which there was no defence and which ultimately he came to pay in full.

80.	It is said by Mr Callman that with the passage of time the quality of evidence as to events years earlier necessarily worsens because memories fade.  I have not however had any great difficulty in reaching my primary findings of fact in this case.  In my judgment it is perfectly clear, as has been common ground throughout, that Mr Capewell’s accountants formed the company.  They did not do so for Mr Boulton alone, and I do not understand how Mr Boulton could ever have thought that they did.  In those circumstances I shall declare that the share now held by Mr Boulton in the new company, PDDL, is held upon trust for Mr Capewell.  

81.	I shall decline all other relief as I do not think there is any question of Mr Boulton being accountable to Mr Capewell, as no dividends or other profits have (on the evidence before me) been derived from his trust shareholding  If he is accountable to anyone, he is accountable to the company.  Specifically, I decide nothing in this case as to the propriety or otherwise of the subsequent formation and operation by Mr Boulton of other companies, which might be said to amount to a breach of his duties as director, a suggestion which he denied.  The point was raised on the pleadings and the clamant purported to reserve his rights in relation to those other companies.  Mr Callman made it clear that he would regard any attempt to bring further proceedings in relation to those other companies as an abuse of process.  As the issue is not before me, I decide nothing about it one way or the other.