Case Number: HC11C03202
Neutral Citation Number: [2013] EWHC 2629 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Rolls Building
7 Rolls Buildings
Fetter Lane
London, EC4A 1NL

Thursday, 20 June 2013

BEFORE:

MR JUSTICE MORGAN

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BETWEEN:

MARCO PIERRE WHITE
Claimant
- and -

ANDREW PARTON & ORS
Defendant

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MR R DEACON (instructed via Public Access) appeared on behalf of the Claimant

MR M MALLIN (instructed by Teacher Stern LLP) appeared on behalf of the Defendant

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Judgment
MR JUSTICE MORGAN:

The Case in Summary

1.	The claimant is Mr Marco Pierre White.  He is a well-known chef and restaurateur.  He describes himself in the Particulars of Claim as a renowned chef, restaurateur and media celebrity.  As will be seen, Mr White’s name and standing is of central importance in this litigation.  Before the events at the centre of the dispute in this case, Mr White owned 31.8 per cent of the shares in the third defendant, Yew Tree (Highclere) Limited, which I will call “the company”.  At the material times, that company ran a restaurant and public house known as Marco Pierre White’s Yew Tree Inn.  The first defendant, Mr Parton, and the second defendant, Mr Featherman, were also interested in the business in a way that I will describe.

2.	In these proceedings Mr White contends that he made an oral agreement with Mr Parton and Mr Featherman on 9 November 2007.  On that occasion he says that he met the other two gentlemen for a short meeting lasting perhaps as little as 20 minutes.  At that meeting the three of them entered into a binding contract on which Mr White now seeks to rely.  In addition to his case based on the discussions that took place on 9 November 2007, Mr White says that the arrangements were discussed again in January 2009.  The terms of the contract have been described by Mr White in different ways.  In the Particulars of Claim, in particular in paragraphs 10 and 13, Mr White pleads a number of detailed commitments that he says Mr Parton and Mr Featherman undertook.

3.	In his closing submissions, counsel for Mr White put the case more simply.  He submitted that Mr Parton and Mr Featherman described to Mr White a plan in relation to the company.  If that plan could be implemented, the result would be that the company would be owned by a new company, which I will call “Newco”, and that Newco would allot to Mr White 38 per cent of the issued ordinary shares in Newco.  Mr White was required to allow Mr Parton and Mr Featherman to pursue their plan, and in return they would procure that Newco would allot 38 per cent of its issued ordinary shares to Mr White.  In these proceedings Mr White points to the fact that Newco was formed.  Newco is the fourth defendant to these proceedings and I understand that it is in liquidation.  It had acquired all the shares in the company but no shares in Newco have been allotted to Mr White.  He says that he asked for the shares but was not given them.  He says that was a repudiatory breach by Mr Parton and Mr Featherman, and he has treated the contract made on 9 November 2007 as terminated as a result.  He now sues Mr Parton and Mr Featherman for substantial damages he says he has suffered by reason of their breach of contract.  He says that the damages are to be assessed by reference to the value of the 38 per cent shareholding in Newco at a date in the past when the underlying business was profitable.

4.	Mr Parton and Mr Featherman have pleaded a full defence and counterclaim.  They contend that they did not make the contract alleged by Mr White and, indeed, they did not make any contract with him.  They say they certainly did not make any contract on 9 November 2007.  They contend that Mr White's case ignores a vital ingredient: that Mr White would allow his name to be used by the business run by the company.  That was essential to his involvement as a shareholder originally of the company, and then as an intended shareholder of Newco.  Mr Parton and Mr Featherman say they have always been willing to procure that Mr White should become a 38 per cent shareholder in Newco, provided that he allows the company to use his name for the restaurant and public house.  Although Mr White was originally prepared to allow the use of his name in that way, he later resiled from that position.  Following his change of heart, Mr Parton and Mr Featherman were not willing to see Newco allot 38 per cent of its issued ordinary shares to Mr White on a fundamentally different basis where Mr White's name was not available to be used by the company.

5.	The counterclaim is said to arise only if Mr White establishes that he was legally entitled to be allotted 38 per cent of the shares in Newco.  In such a case it is said that the company had a claim against Mr White because he refused to allow the company to use his name in relation to its business.  The company has been wound up but it is said that it assigned this cause of action to Mr Parton and Mr Featherman.  Mr White in turn contends the company never had a cause of action against him, and even if it did the assignment was void under section 127 of the Insolvency Act 1986.  If necessary, Mr Parton and Mr Featherman would ask the court to validate the assignment under that section.  At the trial, Mr Deacon appeared on behalf of Mr White, and Mr Mallin appeared on behalf of Mr Parton and Mr Featherman.

The Evidence

6.	The evidence in this case falls into two categories.  The first category consists of the documents disclosing the formal legal position in relation to the company and Newco and the formal legal relations between the relevant parties.  The second category of evidence consists of the oral evidence of the witnesses supplemented by some, but not many, contemporaneous documents relating to the discussions over the years.  The first category of evidence is not the subject of much, if any, dispute.  The second category of evidence is hotly disputed.  Accordingly, before I make my findings of fact, I need to decide which parts of the evidence of the various witnesses are reliable and which parts are not.

7.	I start with Mr White.  There are large parts of his evidence I am unable to accept and I reach this conclusion for a number of reasons.  The first is that during the period I am concerned with Mr White did not attend to the details of the matters that are now relevant.  He left matters of detail, in particular formal and legal matters, to others.  It follows that when he sought at this trial to give evidence on these topics he did not do so by way of recollection of what he did and thought at the relevant time in the past.  Notwithstanding this, he confirmed the accuracy of the lengthy witness statement he had signed, but it was clear this statement had not been prepared by him.  It had been prepared for him by Mr Lyons.  Mr Lyons was not himself involved in most of the matters described in the witness statement.  I find that Mr Lyons looked at the contemporaneous documents and then built the story to link those documents.  No doubt he also had certain instructions from Mr White.

8.	However, I find that Mr White's witness statement is far more reconstruction than recollection.  It is not always possible to tell which parts of the history Mr White genuinely did recollect.  In the course of his cross-examination he stuck to at least parts of the reconstruction in the witness statement.  When he was asked about a particular meeting he would assert that the meeting had never happened when it was plain that it had happened.  It is not possible to tell whether he was sticking to an account knowing it to be untrue or whether he did not mind whether this evidence was true or false.  He was plainly an unreliable witness.  In particular, he was unreliable in giving evidence about the brief discussion that took place on 9 November 2007, which is absolutely central to the case he is putting forward in this action.  Having said all of that, when he was cross-examined on the subject of the company's use of his name, he gave evidence that was very much in line with the defendants’ own case.  There is no reason for me to reject those parts of his evidence.

9.	Mr White called two other witnesses, Mr Robert Clark and Mr David Lyons.  As it happened, they had fairly limited evidence to give.  Mr Clark might have been a relevant witness as to what happened at a lunch meeting on 19 March 2010.  He says that he has no recollection of what happened at the lunch, as explained to me by another witness, Mr Guy, whose evidence I accept.  It is not necessary to speculate whether Mr Clark's lack of recall was due to a genuine lack of recall, possibly because he was not there throughout the lunch, or whether he was seeking to be of help to Mr White by not recalling certain matters.  As to Mr Lyons, I do not think it is necessary to form any opinion as to his reliability.

10.	For the defendants, I have heard oral evidence from Mr Parton, Mr Featherman and Mr Guy.  In addition, I was provided with a witness statement from a Mr Kirkpatrick, although that did not take matters much further.  Of these witnesses I will start with Mr Guy.  He is not party to this dispute and attended court pursuant to a witness summons.  It was not suggested to him that he had any reason to do other than give his genuine recollection of events.  It was not suggested to him that his recollection was faulty in any material way.  I find him to be a truthful and reliable witness.  I also consider Mr Parton to be a truthful and reliable witness.  Although he is a party to this dispute, it was not suggested to him that his recollection was not genuine or accurate.  Indeed, the cross-examination of Mr Guy and Mr Parton was not particularly lengthy in relation to the key matters on which I need to make findings.

11.	I need to be a little more careful when assessing the evidence of Mr Featherman.  He is, or was, an accountant.  It was pointed out that a disciplinary tribunal of his professional body had recently determined he had dishonestly diverted funds totalling at least £160,000 belonging to a certain limited company.  The charge was not in any way connected to the events in this case.  However, the charge was serious and the disciplinary tribunal took a serious view of Mr Featherman's dishonest conduct.  They ordered that he be excluded from his professional body.  I received somewhat inconclusive submissions about the evidential status of this decision.  Mr Featherman was cross-examined about the matter and he did not dispute that the facts were accurately stated in the decision of the tribunal.  As regards Mr Featherman, what matters is whether he gave reliable evidence as to his involvement in the events in dispute in this case.  His evidence was largely supported by the evidence of Mr Guy and Mr Parton, whom I have held to be reliable witnesses.  Where it is so supported, accordingly I have no difficulty in accepting Mr Featherman's evidence.  But I go further, and in this case I consider that Mr Featherman's evidence was generally reliable.

My Findings of Fact

12.	The company was incorporated on 15 January 2003.  There were 350,000 issued ordinary shares.  The shareholders were Mr Parton, Mr Collins, Mr Wilkin and Mr Kirkpatrick.  These four shareholders were also the directors of the company.  In around 2005, new arrangements were made in relation to the company.  In particular, three further persons invested in the company in return for shares.  The new shareholders were Mr White, Mr Guy and Mr Lloyd‑Jones.  The new arrangements became effective from 1 April 2005.

13.	I will describe the position as to shareholders on and after 1 April 2005.  The shares were divided into ordinary shares and preference shares.  As to the ordinary shares, Mr White had 38.1 per cent, Mr Lloyd‑Jones had 27.4 per cent and Mr Guy had 27.4 per cent.  The earlier shareholders, Mr Collins, Mr Kirkpatrick, Mr Parton and Mr Wilkin, had comparatively modest shareholdings that I need not describe.  As to the preference shares, the earlier shareholders, Mr Collins, Mr Kirkpatrick, Mr Parton and Mr Wilkin, had substantial numbers of preference shares.  Mr Collins had 50,000 preference shares and the other three had 100,000 each.  These preference shares became significant in the events that later transpired.

14.	On 1 April 2005 the company and the shareholders, including Mr White, entered into a detailed shareholders and subscription agreement.  The agreement had been prepared by solicitors and contained this recital:

“The new investors have agreed to subscribe for shares in the company and have entered into this agreement with the company and the existing investors to regulate their subscriptions and to regulate the management of the company and the relationship between the parties.”

The new investors included Mr White.

15.	Clause 8 of the agreement was headed “Management of the company and warranties”.  In clause 8.2 each of the parties to the agreement severally undertook with the others certain obligations.  Clause 8.2.4 is material in the present context.  It provided:

“The company will be entitled to use the name ‘Marco Pierre White’ in relation to the business until the preference shares are redeemed or converted into new ordinary shares, and that such name will not be used in conjunction with any business that is similar to or competitive with the business within five miles of the Yew Tree.”

16.	Clause 9 was headed “Working capital”.  Clause 9.1 provided:

“The new investors will subscribe or procure subscribers for additional new ordinary shares at £1 per share on each occasion that the management accounts for any calendar month shows a loss.  Each such subscription to be equal to the amount of the loss afforded by £1,000 in aggregate, whichever is the greater, subject to a maximum total subscription of £180,000, including the subscription under clause 4, and such subscription shall, to the extent that it is not otherwise made, be made by the new investors in the same proportions as were shown in part 2 of schedule 1.”

Clause 9.2 went on to provide:

“If (a) a subscription is required under the terms of paragraph 9.1 and it is not made within 40 days of the end of the relevant month or (b) the management accounts, for any month after the NI [new investors] have subscribed £180,000 in aggregate, show a loss exceeding £25,000, the existing investors will have the right to convert their preference shares into new ordinary shares at the rate of 99 new ordinary shares for each preference share, by written notice to the company of not less than seven days.”

17.	Finally, I refer to clause 15 of this agreement headed “Redemption of preference shares” which provided:

“The company will, to the extent that it may lawfully do so, redeem the preference shares on or before the fourth anniversary of the date of this agreement in tranches of not less than 5000 preference shares.”

Immediately after 1 April 2005 the directors of the company were Mr Parton, Mrs Guy, Mrs Lloyd‑Jones and Mrs White.  It is not necessary for me to describe every event that occurred from April 2005 onwards.  Nor is it necessary for me to discuss every difference of opinion or recollection on the part of the witnesses.  Instead, I will make my findings on what I consider are the matters relevant to the determination of this dispute.

18.	In the autumn of 2007, some of the shareholders in the company were concerned about the performance of the company and, in particular, the performance of Mr Lloyd‑Jones as manager of the company.  In September 2007, Mr Parton and Mr Guy agreed that an independent person should be appointed to look at the financial position of the company.  They asked Mr Featherman to undertake this task and he agreed to do so.  On 28 October 2007, Mr Featherman reported in writing to Mr Parton and Mr Guy.  He advised that it was essential to take control of the business without delay.  Mr Guy, Mr Parton and Mr Featherman considered it would be appropriate to remove Mr Lloyd‑Jones from the management of the company.  As Mr White had 31.8 per cent of the shares in the company and Mr Lloyd‑Jones had 27.4 per cent of shares in the company, the removal of Mr Lloyd‑Jones effectively required Mr White to back the proposal to remove him.

19.	In November 2007 or thereabouts, Mr Parton went to see Mr White.  He may have spoken to Mr White on more than one occasion, but it seems that he certainly spoke to Mr White on 9 November 2007.  Mr Parton brought with him a form of proxy for Mr White to sign in favour of Mr Parton.  On this occasion, or perhaps a slightly earlier occasion, Mr Parton made Mr White aware of Mr Featherman's findings and the proposal to remove Mr Lloyd‑Jones.  Mr Parton also told Mr White that the preference shareholders would be within their rights to convert their preference shares into ordinary shares, in effect claiming the business back from Mr White, Mr Guy and Mr Lloyd‑Jones.  However, Mr Parton told Mr White he would like Mr White to stay involved.  That could be done by restoring the shareholding of Mr White and Mr Guy after Mr Lloyd‑Jones had been effectively removed from the company.  Mr Parton explained that Mr White was important, if not vital, to the future success of the company's business.

20.	Having heard this, Mr White agreed with Mr Parton to appoint him as his proxy.  He also said that he would continue as before.  He would leave “his name over the door”, the phrase that was often if not universally used to describe permission from Mr White for the company to use his name in connection with the business.  Mr White signed a proxy in these terms:

“I, Marco Pierre White, of [address], being a member of The Yew Tree (Highclere) Limited, the company, irrevocably appoint Andrew Lewis Parton to act as my proxy at all meetings of the company and at any adjournment thereof for a period of 12 months from the date of this form of proxy.  I direct my proxy to vote on any resolutions in the manner he thinks appropriate in the circumstances.”

21.	Mr Featherman was not present at the meeting between Mr Parton and Mr White when the proxy was signed.  Mr White says that he was but I am unable to accept his evidence.  I find that Mr White first met Mr Featherman in early 2008.  That causes some problems for Mr White's case that Mr Featherman and Mr Parton contracted with Mr White at this meeting in November to procure that a company to be formed in the future was to allot shares to Mr White.  If Mr Featherman was not at the meeting he could not have said anything himself at that meeting to undertake that contractual obligation.  In addition, it was not pleaded that Mr Parton acted as an agent for Mr Featherman, duly authorised by Mr Featherman.  The possibility of such an agency and such an authority was not put to Mr Parton or Mr Featherman when they gave their evidence.

22.	On Mr Parton's account of the discussion with Mr White in November 2007 he said in terms that the general plan involved Mr White continuing to be involved with the business, permitting the business to use his name and having his shareholding restored to its original level or somewhat more after the dilution of the shareholding caused by the conversion of the preference shares to ordinary shares.  Although Mr White claims he was entitled to be allotted shares in Newco without being involved with the business and without the business having an entitlement to use his name that was not the evidence he gave when cross-examined.  He said he expected there would be a shareholders’ agreement and pursuant to that agreement he would be entitled to be allotted 38 per cent of the shares in the business.  The shareholders’ agreement would provide for the business to have the use of his name while he was the main shareholder.

23.	He said that if he had been asked to sign a shareholders’ agreement he would have done so.  He found it strange that there was no shareholders’ agreement.  He was asked whether he agreed to leave his name over the door and said there was no need to discuss that question.  His name would be over the door because he was still part of the business.  After the reorganisation of the shareholdings it would go without saying that his name would be over the door.  He said that it went without saying that when he was given a shareholders’ agreement it would contain a clause providing for the use of his name.  He would take advice from Mr Lyons as to the terms of the clause providing for the use of his name.  He later added that the Zena Trust would have to be a party to the shareholders’ agreement as it would be the shareholder and the party permitting the business to use Mr White's name.  He also expected that he would be a party to the shareholders’ agreement to specify the way he would be involved in the business.

24.	I find that at the discussion between Mr Parton and Mr White in November 2007 the plan expressly involved the restoration of Mr White’s shareholding in the business, his continued involvement in the business and his continued permission to the business to use his name.  If this was not expressed, although I find that it was, that would have been because it went without saying.  Not long after November 2007, Mr Parton, Mr Guy and Mr Featherman went to call on Mr Lloyd‑Jones.  At that meeting Mr Lloyd‑Jones was persuaded to relinquish his role as manager of the business and Mrs Lloyd‑Jones was to cease being a director of the company.  Indeed, that was what happened.  Not long thereafter Mrs Lloyd‑Jones did resign as a director of the company and Mr Lloyd‑Jones relinquished his management responsibilities.

25.	Time moved on.  By 3 May 2008 Mr Featherman had taken advice or had otherwise considered the steps to be taken in relation to the conversion of the preference shares and the restructuring of the shareholding in the company.  He provided a step plan to Mr Guy on that date.  The steps involved the conversion of the preference shares, Mr Lloyd‑Jones giving up his shares and then a reorganisation of the shareholdings.  The particular form that the reorganisation would take was not specified and appears to have been unsettled at that point.

26.	In May 2008 there were relevant emails about the shares Mr White was to have following the reorganisation.  The email chain of 8 May and 9 May 2008 started with Mr Robert Clark on behalf of Mr White.  He had claimed he had been informed of something about the proposed arrangements.  On 8 May 2008 he sent an email to Mr Tim Curle.  Mr Curle was responsible for the affairs of the trustees of the Zena Trust.  This was described as a family trust set up by Mr White.  At this time Mr White apparently envisaged that what I have described as “his” shareholding in the business would be vested in the Zena Trust.  Mr White told me that the Zena Trust had the rights to the use of his name.  The trademark documents I have seen do not quite demonstrate that was the position, but Mr White seems to have proceeded on that basis at least for some of the time, although at other times he proceeded on the basis it was for him alone to decide whether his name could or could not be used.

27.	  At any rate, what is important for present purposes is the email Mr Clark sent to Mr Curle on 8 May 2008.  That reads as follows:

“Please could you contact Andrew, who will give you details of his contact, and Marco's shareholding in the Yew Tree, 38 per cent?  Please confirm with MPW that this should go to the Trust for the use of his name.”

The defendants naturally stress the part of that email referring to the shares going to the Trust “for the use of his name”.  The email chain of 8 May and 9 May 2008 was copied to Mr Guy and Mr Featherman, and in that way they could see what was being proposed on behalf of Mr White and the trust was an issue of shares in return for the use of Mr White's name.  That, indeed, is the arrangement that I consider was contemplated by the earlier discussions involving Mr White personally.

28.	It is also clear from an email sent by Mr Curle on 9 May 2008 that the proposed arrangements had been explained to him.  He said in his email to Mr Guy, copied to Mr Featherman:

“I will therefore update the trustees of your plans regarding the Yew Tree and will come back to you with any comments that they may have.  As a starting point I know that they will want to see the reconstituted articles of the company as well as an indication of its financial position of current trading.”

As it happens, Mr Curle did not come back to Mr Guy or Mr Featherman around that time.  As I will explain, the next contact with Mr Curle was in September 2009.

29.	The next thing that happened in relation to the formal position of the company was a matter of great significance.  The preference shares were converted into ordinary shares.  It is not necessary to read into this judgment the detailed documents that were created and entered into to bring about that result.

30.	The effect of the conversion was that the former preference shareholders again acquired substantial ordinary shareholdings in the company.  For example, Mr Parton, who had previously had 3.8 per cent of the ordinary shares, now became the owner of 26.8 per cent of the ordinary shares.  Mr White, who had previously had 31.8 per cent of the ordinary shares, became the owner of 2.2 per cent of the ordinary shares.  A similar fate occurred in relation to Mr Lloyd-Jones and Mr Guy.  Their former shareholdings of 27.4 per cent were shrunk to 1.9 per cent.  Effectively, the new investors, including Mr White, were swamped; their shareholdings were diluted massively in that way.

31.	The board of the company met on 7 August 2008.  The members of the board were Mr Parton and Mrs Guy.  Mr Guy and Mr Featherman were recorded as being present.  The minutes explained the circumstances in which the preference shares were converted and the conversion was approved by the board.

32.	I described the effect of the conversion of the preference shares on the ordinary shareholdings in the company.  There was a further effect.  It will be remembered that the right of the company to use Mr White’s name pursuant to clause 8.2.4 of the agreement of 1 April 2005 provided that such a right was until the preference shares were converted into new ordinary shares.  As explained, that event had now happened.

33.	Mr White says that matters were discussed between himself and Mr Featherman in January 2009.  That may or may not be the right date for such a discussion.  Mr White says that they discussed the mechanics of the reorganisation.  Mr White says the question of the company using his name was not discussed.  If he is right about that, then that does not involve a departure from what had been the original plan or intention from November 2007 up to this time and which continued to be the plan or intention after January 2009.

34.	On 1 April 2009 Mr and Mrs Lloyd-Jones entered into an agreement with the company.  In substance, Mr Lloyd-Jones agreed to transfer his shares in the company to such persons as the directors of the company should decide in return for an aggregate payment to him of £1.  In April 2009, Mr Parton, Mr Featherman and Mr Guy were in the course of taking legal advice as to the structure of the proposed transaction.  There were emails of 16 April 2009 between these parties and their solicitor as to that structure.  It was proposed that there be a change to what had earlier been considered to be the appropriate structure.  What was proposed in April 2009 was that a new company would be formed and it would acquire all of the issued share capital of the company.

35.	It was around this time that there was more detailed discussion as to the company’s use of Mr White’s name.  Mr Guy and Mr Featherman met Mr White.  Mr Featherman says the meeting took place on 2 April 2009.  If so, that was before the legal advice of 16 April 2009 but it may be that what was advised on 16 April 2009 had been considered a few weeks before that also.

36.	I can take what was discussed at the meeting on or about 2 April 2009 from the evidence of Mr Guy and the evidence of Mr Featherman.  Mr Guy states that he discussed with Mr White what was to be done.  They discussed an arrangement whereby Mr White should grant a licence for the continued use of his name.  Mr White indicated that he was happy to agree.  He was happy to agree for the name to be used at the Yew Tree for so long as the business remained in the control of what was described as the new team, namely Mr Guy, Mr White, Mr Featherman and Mr Parton.  This agreement was in return for a shareholding in Newco.  It was also agreed that Mr Featherman was to continue to manage the finances of the business and there was to be no real change as regards Mr White’s day‑to‑day involvement; that is his involvement in the kitchen and in the branding of the business.

37.	Mr White specifically referred to the meeting in April 2009.  He said that it was at Frankie’s Restaurant in Knightsbridge.  He said he attended that meeting with Mr Featherman.  The three of them discussed the licence that Mr White had agreed in return for his shareholding in Newco.  Mr White suggested to the others that the licence would be for a period of ten years.  He asked Mr Featherman to prepare a document to give effect to that intention.  There was no mention at the meeting of any form of payment, fee or royalty of any description in relation to Mr White continuing to provide his name.

38.	Mr Featherman’s evidence was essentially to the same effect.  He referred to the meeting between Mr Guy, Mr Featherman and Mr White at Frankie’s on or about 2 April 2009.  I quote what he says in his witness statement:

“Marco suggested a period of ten years, specifically requesting that such licence should cover ‘use of image rights’.  Andrew Guy and I agreed to this and at Marco’s request I drafted a brief form of words which he later approved at Frankie’s, Knightsbridge, on 20 August 2009 and told me to retain it to be formalised in due course.  This licence, however, was never signed.”

I will revert to the meeting in August 2009 in chronological order in due course.

39.	Newco was incorporated on 22 June 2009.  On 29 July 2009 Mr Guy and Mr Featherman received an email from a Mr Fitzgerald who had been at the Yew Tree the previous day.  He overheard a conversation where Mr White was complaining about standards not being maintained in the restaurant.  Mr White was overheard to threaten to “take his name from the business”.

40.	Whether the email of 29 July 2009 was the catalyst or not, there was another meeting between Mr White, Mr Guy and Mr Featherman on 20 August 2009.  At this meeting, there was produced for Mr White’s consideration a document which was called a draft of a licence.  That document read:

“Draft 20/08/09.  Yew Tree (Highclere) Holdings Limited license [misspelled with an ‘s’].  Marco Pierre White, ‘MPW’, grants to Yew Tree (Highclere) Holdings Limited (Yew Tree) a licence for a period of ten years for the use of MPW’s name and related intellectual property, including image rights to be used in connection with the business of the Yew Tree, for nil consideration.”

41.	Mr Guy gave evidence about this meeting.  He said this, and I quote from his witness statement:

“I was at a later meeting in about August 2009, also at Frankie’s, where Peter produced a licence agreement that he had prepared and gave it to Marco, who briefly glanced at it and returned it unsigned to Peter saying, ‘You keep it’.  Peter took back the document and no more, as far as I was aware, was said and Marco never signed a written form of the licence.”

42.	Mr Featherman also gave evidence and I have quoted from his witness statement when he dealt with the meeting in August 2009.  In around August 2009 there were a large number of transactions in connection with the company and with Newco.  Many of these transactions were dated 28 August 2009, although it is clear that at least some of them were actually effected later than that date.  First, some of the shares owned by Mr Lloyd‑Jones in the company were transferred to Mr White.  That increased Mr White’s shareholding from 2.2 per cent of the issued ordinary shares to 3.2 per cent.  Next, Mr White had to sign a number of formal documents in connection with these transactions.  First of all, he signed a document to accept an offer from Newco for his shares in the company.  Secondly, he signed a stock transfer form in relation to those shares.  Then he entered into a detailed share sale and purchase agreement, which had been prepared by solicitors.  Applications for shares in Newco were made by various persons and shares were allotted to them.  Mr Parton, Mr Featherman, Mrs Featherman, Mrs Guy and Mr Guy were all allotted shares.  There was no application by Mr White for shares in Newco and no shares were allotted to him.

43.	After the takeover of the company by Newco and the allotment of shares in Newco, naturally the question of Mr White’s share in the business needed to be addressed.  On 16 September 2009, Mr Featherman sent an email to Mr Curle, who had been identified as the person acting for the trustee of the Zena Trust.  The email referred back to the earlier emails of May 2008.  It will be recalled that it was in the earlier exchange in May 2008 that Mr Clark on behalf of Mr White had stated that the shares were to go to the trust for the use of Mr White’s name.

44.	In his email of 16 September 2007 from Mr Featherman to Mr Curle, Mr Featherman sketched out the background to the matter.  He said, “Marco is now to subscribe an amount of £9,500 for a 38 per cent shareholding in Newco”.  The email continued:

“Please can you advise in what name the shares should be issued and also how the subscription monies will be defrayed?  Also attached for your information is the share purchase agreement relating to the acquisition by Newco of the company.  Naturally, I would be pleased to provide any further information you may require.”

45.	Mr Curle replied the next day, writing, “Thank you for this.  I will take instruction on this and revert to you as soon as possible”.  Mr Curle did not come back as indicated in his email.

46.	On 29 September 2009 the accountant who had been advising in relation to this transaction reminded Mr Parton, Mr Guy and Mr Featherman that they needed to know in whose name Mr White’s shares were to be taken.  From this time onwards, Mr White was asked on a number of occasions to specify the name in which “his” shares were to be taken.  Mr White did not provide that information.  Mr Featherman gave evidence that the reason Mr White gave was that it was not convenient for him at that point in time to have the shares allotted to him or to his nominee or to his trust.  This was said to be because he was then involved in very contentious divorce proceedings.  Ultimately, Mr White and his wife were reconciled and the divorce proceedings came to an end.  Mr White denies that this was his reason.  However, he did not put forward any other explanation as to why he did not tell the other parties of the name of the person in whom the shares would be vested.  What matters for present purposes is that Mr Parton and Mr Featherman were seeking to bring about an allotment of shares to Mr White or his nominee or his trust and Mr White was preventing that happening by not identifying the person in whose name the shares were to be allotted.

47.	At the end of December 2009 there appears to have been a difficulty as to Mr White continuing to allow the business to use his name.  However, that difficulty appears to have been resolved by 5 January 2010.  On that day, a Mr Gillman on behalf of Mr White referred to, “The Yew Tree coming on board with the rest of the MPW Group restaurants in terms of marketing”.  Mr Gillman said that was “great news”.

48.	By March 2010 the shareholders in Newco were concerned by various things which were happening at the Yew Tree.  In particular, they were concerned as to various aspects of the conduct of Mr White.  It is not necessary, perhaps, to go into the detail of those concerns.

49.	I can take up the relevant part of the history from the witness statement of Mr Guy.  Mr Guy had certain concerns.  He contacted Mr White.  He arranged to meet him for lunch at Wheeler’s Restaurant in St James on 19 March 2010.  Mr Guy remembers Mr Robert Clark being present at least some of the time during that lunch.  Mr Guy gave a detailed account of what happened at the lunch.  Mr Guy raised his concerns with Mr White.  Mr White did not take the matter well.  What Mr Guy said:

“At that time he became very angry indeed, saying, ‘I want nothing more to do with the Yew Tree’.  He told Rob Clark to, ‘Take my name off the front of the Yew Tree this afternoon.  I want it off by tonight and I want the Yew Tree off our website this afternoon.  Phone them now and get it done’.  He then said to me, ‘No one tells me how to run one of my restaurants.  No one speaks to me like this.  You are to have nothing more to do with the Yew Tree.  You are going to regret this’.”

50.	That is Mr Guy’s account of what Mr White said and I accept that account.  Mr Guy left the lunch.  He telephoned Mr Featherman and Mr Parton and relayed the entire episode to them.  I was given evidence as to later conversations involving Mr White.  Mr White, in effect, insisted that Mr Guy be expelled from the business and Mr Guy submitted to those requirements.  Mrs Guy, who was a director, resigned as a director on 23 March 2010.  Mr Guy resigned as a director on 30 March 2010.

51.	In October and November 2010 Mr White raised further questions as to the branding for the Yew Tree.  I can take what happened from the witness statement of Mr Featherman.  He says that seemingly out of the blue in October 2010 Mr White telephoned Mr Featherman to discuss the Yew Tree and his desire to rebrand Marco Pierre White’s Yew Tree Inn as Wheeler’s of St James.  Mr White suggested to him that as part of the proposed change the management of the business would be transferred to the team running Wheeler’s.  Mr Featherman did not like what he heard.  He asked Mr White to arrange a meeting with Mr Parton and Mr Featherman and Mr White refused.  There were further discussions about this proposal to rebrand the Yew Tree.  The shareholders in the company and Newco considered this proposal.  They were not prepared to agree the suggestion that the business be rebranded as Wheeler’s of St James.

52.	Mr Featherman goes on in his witness statement.  He says that when Mr White found that he had failed to persuade the other shareholders to change the branding of the business during late November he then threatened to withdraw his name, his culinary direction and his artwork from the business unless his proposal was accepted.  There were a number of mobile phone conversations in which this was stated to be the position.

53.	Then on 30 November 2010 Mr White went further.  He sent or caused to be sent an email to Mr Featherman which read:

“To board of directors, Yew Tree Inn.  I refer to previous verbal exchanges as to how we should move forward with branding the Yew Tree business.  Despite repeated requests, we have not resolved this issue and you have left me with no alternative but to terminate my brand association with the property.  Please ensure that all association with my name and the MPW brand in both electronic and hard copy collateral is no longer used with immediate effect.  Also remove all MPW signage and imagery.  Please be guided accordingly.”

54.	From that point, Mr White withdrew or purported to withdraw his permission for the use of his name by the company.  The company and Newco felt it had no option but to discontinue the use of the name.  Mr White’s name was removed from Yew Tree in January 2011.  It might have been thought that Mr White resiling from the original plan or intention as to his involvement in the business of the Yew Tree would mean that that was the end of any claim by Mr White to a shareholding in the business.  However, that is not what happened.

55.	By February 2011 Mr White asked a business associate, a Mr Paul Clark, to take up matters on his behalf.  There was an exchange of emails on 5 February 2011.  That led to a meeting on 16 February 2011.  It was attended by Mr Parton and Mr Featherman on the one side and by Mr Lyons and Mr Paul Clark on behalf of Mr White.  I can take the position from Mr Featherman’s witness statement.  What he says was that the 38 per cent shareholding in Newco had been offered to Mr White on the basis that he would grant a licence for his use of the name.  It was said that as a goodwill gesture on 16 February 2011 the shareholders in Newco offered a stake of 22 per cent in Newco.  Mr White declined that offer.  In turn, he demanded a fee of £150,000 for the past use of his name.

56.	At this point it had become clear that Mr White was not prepared to adhere to the original plan or intention.  Conversely, Mr Parton and Mr Featherman were always prepared to adhere to the original plan or intention.  On 8 March 2011, Mr Lyons on behalf of Mr White wrote what was, in effect, a letter before action.  The letter alleged that Mr White had agreed proposals for restructuring the company in May 2008.  It was not alleged there had been an agreement in November 2007.  It was said that Mr White had a right to 38 per cent of the issued shares in Newco.  He was also entitled to damages for deceit.  There was no mention of the company having or not having the use of Mr White’s name.

57.	On 30 March 2011 solicitors acting for Mr Parton and Mr Featherman sought to refute the allegations in the letter of 8 March 2011.  They stated that Mr White was not entitled to be allotted shares in Newco and at the same time deny the company the use of his name.

58.	On 20 June 2011 Mr Lyons wrote on behalf of Mr White stating that the contract, which gave him the benefit of a 38 per cent share in the business, had been repudiated by the other parties and he accepted that repudiation as terminating the contract.

59.	In July 2011 the shareholders in Newco met to decide what to do.  The position was explained by Mr Parton in his evidence.  The shareholders were obviously concerned at what they describe as the barrage of emails and expanding legal costs.  They considered the position was untenable.  They decided to go back to Mr White to say that they would change the name of the business as required by him provided he continue to keep his name allied in some way, and there was a further point about staff in the kitchen.  In those circumstances, Newco would allot to him 38 per cent of the ordinary shares.

60.	Mr Parton then telephoned Mr White.  Mr White appeared to be in a car driven by a third party and took Mr Parton’s call.  The offer of 38 per cent of the shares in the company on those terms was made.  Mr White refused to accept.  He explained his behaviour in his witness statement in these terms:

“In late July 2011 I received a call from the first defendant unconditionally offering me a 38 per cent share in Holdings.  I rejected this as I had already accepted the defendant’s repudiation of our agreement and fundamentally because I no longer trusted the first and second defendants.”

61.	The claim form was issued on 14 September 2011.  Mr White asserted a contract binding Mr Parton and Mr Featherman to procure the allotment to him of 38 per cent of the issued shares in the new company for him to acquire the shares in the company.  Mr White did not seek an order that Newco allot those shares to him.  Instead he claimed damages from Mr Parton and Mr Featherman for the alleged value of the shares.  The amount of the claim was later quantified in the pleading in the sum of £174,000.  Mr White also claimed payment from the company for the use of his name from 7 August 2008 until early 2011.

62.	To finish the history of the matter, I need to refer briefly to one or two other matters.  The company’s business was sold for £900,000 on 20 June 2012.  Following that sale, the company was considered to have no remaining assets, although it had substantial liabilities.  The company entered creditors’ voluntary liquidation on 11 July 2012.  On 21 January 2013 Mr White petitioned for the winding up of the company.  On 31 January 2013 the liquidator of the company assigned or purported to assign to Mr Parton and Mr Featherman its cause of action in relation to a claim which it allegedly had against Mr White.  On 24 April 2013 the company was compulsorily wound up.  I understand that Newco is also in liquidation.

Mr White’s Claim

63.	Based on the above findings of fact, I consider that Mr White’s claim is a very bold one.  The parties had a plan or intention in general terms from around November 2007.  The plan involved the removal of Mr Lloyd-Jones and the consequence of what appeared to be about to happen, namely that the preference shares would be converted and the shareholding of Mr White would be diluted from 31.8 per cent to 2.2 per cent.  The other shareholders wanted Mr White to remain involved in the business.  They wanted to be able to use Mr White’s name.  The plan was that Mr White would stay involved.  His name would continue to be used and in return he would have a 38 per cent stake in the business.

64.	At all times after November 2007 the other shareholders had been ready, able and willing to give effect to this plan.  It was Mr White who resiled from the original plan.  He started threatening to remove his name from the business and on 30 November 2010 he carried out his threat and did remove from the business its right to use his name.  The company and Newco felt unable to resist his requirement that his name be removed.  One might have thought that would have been the end of the plan.  Mr White has, however, contended and to this day still contends that although he had walked away from his involvement in the business and although he denies the right of the business to use his name he is still entitled to a 38 per cent stake in the business or, now, damages for not having that stake.  Furthermore, the damages are to be assessed by reference to the value of the shares in Newco at a time when the business was profitable.

65.	How then does Mr White put his case?  In his pleading he ignores altogether the part of the plan which involved the business using his name.  In his witness statement, which was written for him by Mr Lyons, he asserts that the use of the name was separate from his contractual entitlement to 38 per cent of the business.  However, when cross‑examined he accepted that it went without saying that the business in which he was to have a 38 per cent stake was a business in which he was to be involved and a business which had the use of his name.

66.	In the light of the evidence, Mr Deacon for Mr White submitted that there never was a binding contract for the business to have the use of Mr White’s name.  The detailed terms on which such a right to use would be granted were never finally agreed.  Even if everyone understood that the business would use Mr White’s name there was no contract in that respect.  It was said that Mr White was free as a matter of law to take up the stance that he was not bound to permit the business to use his name.  Mr Deacon then submits that there was a binding contract that Mr White was to have a 38 per cent stake in the business.  That is the contract he wishes to enforce.

67.	Accordingly, the question for me is whether the parties did make a contract and, if so, on what terms.  Based on the above findings of fact, the plan or intention in and after November 2007 was for Mr White to have a 38 per cent stake in a business in which he was involved and which had the right to use his name.  Was there a contract binding the parties to the essential elements of that plan?  Mr Deacon submits that there was no contract in relation to the use of the name.  I think he is right about that, but I also consider that if there was no contract as to an essential part of the plan it cannot seriously be said that there was a contract as to any part of the plan.

68.	In terms of legal analysis, if parties are negotiating a package which involves elements A, B and C and they reach a consensus on A and B but fail to agree the necessary terms in relation to C, then there is no contract.  There is no contract in relation to C and there is no contract binding the parties to A and B in the absence of a contract as to C.  Of course, if parties reach a difficulty about agreeing C and they expressly agree that they will leave C over as a collateral matter not subject to the contract and they then commit to A and B without C, then they bind themselves in relation to A and B.  But it cannot seriously be said that anything of that kind happened here.

69.	In my judgment, the parties did not make a binding contract of the kind alleged by Mr White.  The reason the parties did not make a binding contract to give effect to the plan is attributable to the fact that Mr White resiled from the plan.

70.	In the course of closing submissions, Mr Deacon put forward an alternative analysis.  Contrary now to his primary case that there was no contract in relation to the use of the name, he submits that after all I should hold there was a contract in relation to the use of the name.  This meant that there was a contract in relation to the use of the name and also a contract that Mr Parton and Mr Featherman would procure the allotment to Mr White of 38 per cent of the shares in Newco.  It was then said that Mr Parton and Mr Featherman had broken their contract and Mr White was entitled to damages.  It did not matter that he had broken his contract in relation to the use of his name.  The company in liquidation could pursue a claim in that respect if it wished.  That claim would be defended by Mr White.  None of this detracted from Mr White’s ability to enforce his contractual rights.

71.	I reject this alternative case.  First of all, it is contrary to Mr Deacon’s own case, which I have accepted, that there was no contract in relation to the use of the name.  Secondly, even if there had been a contract under which Mr White was to be entitled to a 38 per cent stake in the business which had the use of his name and the business had a contractual right to the use of the name, he was not entitled to a 38 per cent stake in the business when he had denied that business the right to use his name.  The other parties have not failed to honour the contract which it is to be assumed they have made.  On the facts of this case, the other parties were at all times prepared to comply with the contract which it is to be assumed they had made.  What they were not obliged to do was to give Mr White a 38 per cent stake in a business which did not have the right to use his name.  Their refusal to do something which they were not obliged to do was not a breach of contract by them.

72.	In terms of legal analysis, performance by Mr White of his obligation to permit the business to use his name was a condition precedent to the obligation of others to procure the allotment of shares to Mr White, or it was a condition to be performed at the same time as the obligation to procure the allotment of shares.  Mr White was not prepared to satisfy the condition precedent and was not prepared to perform his part of the bargain.  It follows that I will dismiss Mr White’s claim.

The Counterclaim

73.	I now turn to the counterclaim.  As pleaded and as presented, the counterclaim is said to arise only if I were to hold that Mr White has established that Mr Parton and Mr Featherman were contractually obliged to procure the allotment to Mr White of shares in Newco.  I have held that they were not so obliged.  It follows that the counterclaim does not arise and I will say no more about it.  It is, therefore, not necessary to consider the points arising under section 127 of the Insolvency Act 1986.

The Overall Result

74.	The result is that I will dismiss the claim and I will make no order on the counterclaim.

Costs

75.	I will award costs on the standard basis, not on the indemnity basis.  As the word “standard” suggests, standard is meant to be the basis in a typical case.  It is meant to be the normal basis.  The indemnity basis is for cases that are out of the norm.  There are two differences between the standard basis and indemnity basis.  The one that perhaps has the more significance is that with standard basis costs the paying party has the benefit of an assessment of proportionality of the receiving party’s conduct and expenditure.  The cases express again and again the importance of proportionality when it comes to incurring legal costs.  If anything, the importance of proportionality has become more significant in recent times with the Jackson reforms than it was earlier.

76.	Accordingly, I have to look for something out of the norm here before I depart from the normal order, which is the standard basis order.  Both counsel have described what was involved in this case, although they have described it in very different ways.  My reaction to the case is in the judgment I have given.  It was a witness action.  It involved a swearing contest between the rival witnesses.  Mr White has well and truly lost that contest.  He has had a knock-out punch delivered to him and that is how I assess it.  That is not itself a case that is out of the norm.  Witness actions are the standard type of dispute in the High Court and in the County Court and usually the right thing to do is to award standard basis costs.  Mr Mallin has said with force that Mr White is to be criticised rather more in this case than other unsuccessful litigants in other cases.  He may be absolutely right about that.  However, I am not persuaded to put this case on the abnormal side of the line.  That means that I adhere to the standard approach, which is that costs should be on the standard basis.

Payment on Account

77.	I order a payment on account of £240,000.  I take into account the fact that Mr Parton and Mr Featherman are individuals and they have been put to very considerable expense and disturbance by this claim.  I would not want them to be out of pocket to too great an extent for too long a time.

Application for Permission to Appeal

78.	I refuse permission to appeal.  I take the view that there is no real prospect of success.  The claimant is free, of course, to persuade the Court of Appeal otherwise.

Application for Grant of Stay

79.	I refuse the application for a stay on the order for payment on account.  I will leave it as the usual 14 days.  I think that it is not a bad thing for Mr White to face up to the consequences of his actions.  The £240,000 is to be paid 14 days after today.