Christopher Gary Hoole v Meredith Charles Limited & Ors

The claimant, a sub-introducer, sued his principal introducer (MCL) for unpaid commission under the Hoole/MCL Contract and sued the directors and related Pardus companies for losses caused by MCL's breach. The court found that MCL was in breach of contract for failing to pay commission due under the Hoole/MCL Contract. The purported January 2020 Settlement Agreement relied on by MCL was fabricated and therefore ineffective. Contractual clauses expressly preserving commission rights on termination (clause 3.13) and the obligation of good faith (clause 4.1) supported the claimant's contractual claim.

The court also held that the second defendant (director of MCL), the fourth defendant (director of the Pardus companies) and the three Pardus companies were jointly and severally liable in tort for: (i) conspiracy to cause loss by unlawful means and (ii) procuring the breach of contract by MCL. The court applied the established elements of those torts (combination, unlawful concerted action, intention to injure and damage) and found them satisfied on the facts. The director of MCL (the second defendant) was not protected by Said v Butt because he acted in bad faith and in breach of his s.172 Companies Act 2006 duties; his conduct therefore attracted personal liability.

The court gave weight to contemporaneous messages and documentary evidence and rejected explanations based on a lawful termination of the underlying Pardus/MCL Contract or any credible defence based on the involvement of a third party (Myers). The creation of fake documents and dishonest conduct by defendants undermined their credibility and supported findings of deliberate misconduct.

Background and parties. The claimant, a financial intermediary, was engaged as a sub-introducer by Meredith Charles Limited (MCL) under a contract dated 7 March 2019 (the Hoole/MCL Contract). MCL had a master introducer contract with Pardus Property Limited (the Pardus/MCL Contract) dated 26 February 2019. The Pardus group (Pardus Property, Pardus Capital and Pardus Wealth) and individual directors were sued as co-defendants.

Nature of the claim and relief sought. The claimant sought unpaid commission of about £800,000 from MCL for introductions leading to investment in the Pardus bond. He also alleged torts against the other defendants: conspiracy to cause loss by unlawful means, procuring breach of contract and unlawful interference with contractual rights, seeking damages for losses caused by MCL's breach.

Procedural posture. This was a first instance trial in the Commercial Court. The third defendant settled pre-trial and gave evidence. Other defendants were unrepresented at trial. The judge recorded serious procedural and disclosure failings by defendants, including fabrication of documents.

Issues for decision. (i) Whether MCL was in breach of the Hoole/MCL Contract and (ii) whether the other defendants are liable to the claimant for losses caused by that breach under the torts pleaded. Related issues included whether a supposed January 2020 settlement existed and whether Pardus validly terminated the Pardus/MCL Contract.

Key findings of fact and law.

• The alleged January 2020 settlement (payment of £65,000 in full and final settlement of future commissions) was fabricated; the contemporaneous documentary and messaging evidence, and witness evidence, showed no such agreement.
• The letter purporting to terminate the Pardus/MCL Contract dated 1 March 2020 was fabricated (backdated) and was produced to conceal steps taken to avoid paying the claimant.
• The Pardus/MCL Contract was not validly terminated for repudiatory breach in January 2020: there was no evidence of a repudiatory refusal to perform, no written notice as required by contract, and contemporaneous conduct contradicted any belief that lawful termination had occurred.
• MCL breached its contractual obligation to pay commission; clause 3.13 preserved commission obligations on termination and clause 4.1 imposed a duty to act in good faith.
• The court found that the director of MCL and the Pardus director combined and acted in concert to cause MCL to breach its obligations; the elements of conspiracy to cause loss by unlawful means and of procuring a breach of contract were established.
• The defendant director of MCL was not shielded by Said v Butt because he acted dishonestly and in breach of his s.172 Companies Act 2006 duties; the court therefore allowed personal liability to be imposed.

Outcome and remedies. Judgment was given for the claimant against MCL for breach of contract. Judgment was also given against the second and fourth defendants and the three Pardus companies, who were held jointly and severally liable in tort for the claimant's losses caused by MCL's breach. The judgment reserved consequential matters (form of order, quantum and costs) for a further hearing.

This was a first-instance judgment. The claimant's claim succeeded. The court found that MCL breached the Hoole/MCL Contract by failing to pay commission. The purported January 2020 settlement was fabricated and ineffective. The second defendant (director of MCL), the fourth defendant (director of the Pardus companies) and Pardus Property, Pardus Capital and Pardus Wealth were held jointly and severally liable in tort for conspiracy to cause loss by unlawful means and for procuring the breach of MCL's contract. The director of MCL was not protected by the Said v Butt principle because he acted in bad faith and in breach of his s.172 duties, warranting personal liability. The court reserved consequential relief (orders, quantum, costs) for further hearing.