Legal notes: learning lessons from Holyoake v Candy

Key points: ■ The way in which witnesses give testimony can have a profound effect on how a judge treats their evidence ■ When oral evidence is in conflict, documentary evidence is crucial ■ The facts are often more important to a trial outcome than the law I found Nugee J’s judgment in Holyoake and another v Candy and others [2017] EWHC 3397 (Ch); [2017] PLSCS 224 to be a thoroughly depressing read. A lengthy one as well: 526 paragraphs – taking up just shy of 193 pages – all managing to shine a less-than-flattering light on the business dealings of some of the best-known names in the UK property industry. As the judge put it in his summary of his decision: “None of the protagonists (Mr Holyoake, Mr Christian Candy and Mr Nicholas Candy) emerges from the trial with great credit. Each has been shown to have been willing to lie when they consider their commercial interests justify them doing so.” But, leaving aside the way in which the protagonists appear to have conducted their business dealings, what, if any, legal lessons can we learn from the case? The facts In 2011, Holyoake and a development company he owned – Hotblack Holdings – wanted to buy and develop Grosvenor Gardens House in Belgravia. Hotblack, which had already exchanged contracts, lacked sufficient funds to complete. Holyoake asked Nick Candy, then a friend, if he could borrow £12m. Candy arranged for CPC Group Limited, a company owned by his brother, Christian, to make the loan. There was a dispute over whether Holyoake had complied with the terms of the loan, and various supplemental agreements were entered into. In 2014, and despite planning permission having been obtained, CPC enforced the terms of one of the supplemental agreements and forced Hotblack to sell the property for £86m. This enabled Holyoake to repay £37m to CPC. Holyoake and Hotblack made significant losses and sued the Candys and various other directors of CPC for circa £132m. A number of different claims – predominantly in the law of tort – were considered by the court. The judge found none of Holyoake’s and Hotblack’s claims established. When witnesses are dishonest Although in many ways the case is one that turns on its own facts, there are some very useful judicial pointers hidden in the judgment’s 193 pages. The case contains a stark reminder that judges reach conclusions about the veracity of individual witnesses based on the evidence given in court and the manner in which they answer questions and conduct themselves. These conclusions, in turn, affect which version of events the judge accepts as being more likely than not to be true (the burden of proof in civil cases). For example, having been highly critical of Holyoake’s willingness “to lie when his commercial interests justified it”, including in the course of the trial itself, Nugee J concluded: “…I approach Mr Holyoake’s evidence with very considerable reserve. And while I doubt whether the law ever regards lies as an acceptable way to conduct business dealings… the Court is bound to take a particularly adverse view of a litigant who lies in the course of litigation, as this undermines the Court process itself.” By way of contrast, and despite her being “fiercely loyal to her husband and deeply supportive of him”, the judge found Holyoake’s wife Emma to be “a credible witness… one who was giving her own independent evidence to the best of her recollection”. Put simply – the manner in which you give your evidence, and the honesty of your recollections – can have a significant effect on a judge’s reasoning. The importance of contemporaneous evidence Perhaps most fundamental of all, however, is how Nugee J dealt with the conundrum that he felt that a number of witnesses – including Holyoake and both Candy brothers – told lies. His solution is to take the same approach when a judge hears conflicting recollections from two sincere and honest witness: “I have had regard in particular to the contemporaneous documentary material (of which there is an abundance in this case, particularly e-mails) and the inherent probabilities. This indeed is what the Court usually does when faced with a conflict of oral evidence…” Two things are key here. First, maintain up-to-date records wherever possible – be it a well-kept day book or a quick e-mail to confirm the key points discussed in a phone call – because, should there be a dispute in the future, that evidence could be key in persuading the courts that your version of events is correct. Secondly, judges are only human and will try to reach a conclusion that is plausible and not far-fetched. Facts are often more important than the law The proceedings were legally complicated. Nugee J categorised 11 different heads of claim, often involving tricky legal concepts. Torts such as extortion under colour of due process, unlawful means conspiracy, duress and intimidation don’t appear overly often in the law reports. In each instance, the claimants failed because the facts did not support the legal principles they were trying to support. Clever legal arguments are only as good as the facts which can be proven to support them. Heed them well Nugee J’s judgment is a welcome reminder to anyone considering litigation of certain key principles. They may well seem obvious with the benefit of hindsight, but, as Holyoake and Hotblack can no doubt attest, getting them wrong can be an expensive business. Be honest, keep contemporaneous evidence of your business dealings and have the evidence to support the legal arguments you are looking to raise. You have been warned. Stuart Pemble is a partner at Mills & Reeve