Review of multiple causes of action (Holyoake and another v Candy and others)

Review of multiple causes of action (Holyoake and another v Candy and others)

What is the court’s role in dealing with a commercial deal gone sour? Kate McMahon and Sofie Hoffman, partners at Edmonds Marshall McMahon, explain the judgment in the case of Holyoake v Candy and consider its potential implications.

In Holyoake and another v Candy and others [2017] EWHC 3397 (Ch), the Chancery Division rejected charges of extortion, blackmail, intimidation and breach of data protection legislation regarding the Candy brothers’ business dealings. The court held that, although the extension fees on a loan to Mr Holyoake were high, the relationship between the parties was not unfair.

What is the significance of this case?

Nugee J’s judgment dealing with the claims made by Mr Holyoake and his company, Hotblack, against the Candy brothers and others runs to just under 200 pages. The proceedings arose as a result of a loan made in October 2011 for the principal sum of £12m which CPC Group Ltd (CPC, a company the defendants alleged was solely owned by Christian Candy) provided to Mr Holyoake to assist with the financing for the purchase of a mansion block in Westminster, the subsequent amendments to that initial loan and the actions taken by the defendants to obtain repayment. Ultimately, Hotblack sold the mansion block for over £86m, which enabled him to repay CPC’s loan in full. However, overall the project made a substantial loss. Mr Holyoake bought a number of claims against the Candy brothers, CPC and others.

These claims included fraudulent misrepresentation, duress, actual undue influence, intimidation, unlawful interference with economic interests, unlawful means conspiracy, unlawful processing contrary to the Data Protection Act 1998 (DPA 1998) and misuse of private information, penalties and the Consumer Credit Act 1974.

The decision is important for its comprehensive review of these causes of action, many of which may be of relevance to practitioners advising parties to commercial deals that have turned sour. It is also an important reminder that, however dishonest the behaviour of the parties to the proceedings, the court’s role is to consider whether the evidence adduced is sufficient to prove the pleaded causes of action. For Mr Holyoake, the court found that it was not.

What should practitioners be mindful of when advising in this area?

Practitioners need to be alive to what extent evidence should be adduced in relation to matters which are not central to the issues the court is being asked to determine. The claimants alleged, contrary to the defendants’ position, that the Candy brothers were joint beneficial owners of CPC. This demonstrated that there was a lie at the heart of CPC, which on the claimants’ case was set up as a fraudulent scheme to evade very large amounts of tax for the benefit of both Candy brothers, thereby demonstrating the nature of their characters.

The judge held that:

In civil proceedings similar fact evidence is admissible in principle if it is logically probative of the issues (O’Brien v Chief Constable of South West Police ([2005] 2 AC 53)) but even if it were proved beyond doubt the Candy brothers had committed a tax fraud, I do not see that this would provide any meaningful assistance in resolving the quite different allegations (conspiracy intimidation and the like) on which these proceedings are based.’

Do you have any predictions for future developments in this area?

No doubt we will continue to see in complex commercial disputes where there are significant risks to parties’ financial and business reputations, that all possible causes of action will be vigorously pursued. In particular, we predict that alongside the more established causes of action, parties will also continue to consider what other claims can be raised (for example, breaches of DPA 1998).

However, as this decision demonstrates, the evidence in support of such claims must be critically and continually assessed throughout the proceedings.

Further guidance

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Interviewed by Alex Heshmaty. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.




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