Mr Justice Nugee has dismissed all of entrepreneur Mark Holyoake’s claims against Christian and Nick Candy in a highly complex 193-page judgment.
In doing so, he reached a huge number of conclusions in relation to various aspects of the case and the key participants.
These are some of the judge’s key findings:
On the property at the centre of the case: “Grosvenor Gardens House (“GGH”) is a Grade II listed mansion block designed by the distinguished Victorian architect Thomas Cundy III and completed in around 1868. It is situated in the Grosvenor Gardens Conservation Area in the City of Westminster, on the eastern edge of Belgravia, just around the corner from Victoria station… When an opportunity arose to buy the freehold, Mr Mark Holyoake (the First Claimant in this action), who had some experience of developing property in the area, was attracted to the idea of buying it with a view to converting it back into high-class residential use, and on 18 July 2011 caused Hotblack Holdings Ltd (the Second Claimant, “Hotblack”), a Jersey company ultimately owned by him, to contract to buy the freehold for £42m.”
On the loan: “…after other attempts to raise funds had been unsuccessful, [Holyoake] approached Mr Nicholas (or Nick) Candy for a loan of £12m at very short notice, offering generous terms of interest at 20% per annum and 20% of the net profits of the development for an unsecured personal loan. Mr Holyoake had met Mr Nicholas Candy at university and they were close friends; by 2011 he and his younger brother Mr Christian (or Chris) Candy, universally referred to as ‘the Candy brothers’, had become famous as highly successful and wealthy property developers, well-known for expensive residential property development, not least at One Hyde Park, whose units were sold at what was then the highest price per square foot ever achieved in the London property market. Mr Nicholas Candy passed Mr Holyoake’s request to his brother, and a loan was duly negotiated over the course of the day and completed on 13 October. It took the form of a loan from CPC Group Ltd (the Sixth Defendant, ‘CPC’) to Mr Holyoake personally, initially unsecured but to be secured if not repaid within 5 months, with interest of 20% per annum, compounded quarterly, and carrying an entitlement to 30% of net profits with a minimum of £10m. CPC is a Guernsey company wholly owned, at least ostensibly, by Mr Christian Candy. The loan enabled Hotblack to complete the purchase of GGH on 13 October.”
On the claims in summary: “In this action, Mr Holyoake brings a number of claims, largely in tort. He claims that he was deceived into entering the loan in the first place by a misrepresentation by a director of CPC, Mr Richard Williams (the Third Defendant), said to have been made fraudulently, that his net asset statement was being sought as a formality and would not be used against him. A second group of claims is based on allegations that CPC used threats and intimidation to persuade him to enter into the supplemental agreements, this giving rise to claims that the agreements were entered into as a result of duress, undue influence, intimidation, extortion under colour of due process and unlawful interference with economic interests, and that he and Hotblack were the victims of an unlawful means conspiracy, the alleged conspirators being Messrs Nicholas and Christian Candy, Mr Williams, two other directors of CPC (Mr Steven Smith and Mr Timothy Dean, the Fourth and Fifth Defendants) and CPC itself. Mr Holyoake also claims that he is entitled to damages, and an injunction, for misuse of his personal misinformation; and has a further claim to reopen the terms of the loan agreements under the Consumer Credit Act 1974…
“I have now considered all Mr Holyoake’s and Hotblack’s claims and found none of them established.”
On the main parties: “The protagonists, Mr Holyoake on the one side, and Messrs Nicholas and Christian Candy on the other, were each cross-examined at great length. Each side made a sustained attack on the other’s veracity. The meticulous forensic examination of these matters has persuaded me that there is some justification for these attacks on both sides, and that each of these three has been shown to be willing on occasion to lie when they consider their commercial interests justify them in doing so.”
On Mark Holyoake: “I have already said that the evidence shows that he was willing to lie when his commercial interests justified it. The evidence reveals some striking examples of this. In April 2012 he and Mr Wells created a loan agreement between Mr Holyoake and Hotblack, and in July 2012 board minutes of Hotblack, both of which were backdated. In plain language these were forgeries, designed to conceal from CPC the fact that Hotblack had also borrowed money from Oscarone…
“…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, it need hardly be said that 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.”
On the Candy brothers: “I am entirely satisfied that the e-mails from Mr Candy to Mr Holyoake on 8 November contained a series of deliberate lies. The true position was revealed by some late disclosure given during the cross-examination of Mr Christian Candy.
“I was very unimpressed with Mr Candy’s evidence on this aspect of this case. There is a significant difference between what he was telling Mr Holyoake… and what he suggested in the witness box…; and an even greater difference between what he was telling Mr Holyoake and the reality…
“I am entirely satisfied that Mr Candy’s statements were a pretence designed to put pressure on Mr Holyoake…
“Mr Christian Candy is an intelligent man who pays close attention to detail and in his evidence showed an impressive knowledge of the disclosed documents, and I was left with the distinct impression that he had prepared for giving evidence by studying them with considerable care – that is no doubt why he felt constrained to admit to lying in shortening the time period from two weeks to two days – but that he was somewhat caught out by the late disclosure about the heliport which only came to light after he had gone into the witness box, and which he had therefore not had a chance to study beforehand.”
“Mr Nicholas Candy was also asked about these e-mails. He too refused to accept that his brother had lied in any respect other than shortening the time period from two weeks to two days. I found his evidence on this part of the case very weak.
“For the reasons I have given, I have found it difficult to accept the evidence of either Mr Candy on this aspect of the case. Not only were both willing that Mr Holyoake be told a series of lies at the time, but neither was willing to admit to it in the witness box. That naturally undermines the extent to which I can have confidence in their evidence, and as a result I have approached the remainder of their evidence with some caution.”
On the Candys’ tax affairs: “I remain of the view that I expressed at an interlocutory stage that the purpose of this trial is to determine the allegations in the action, not the tax affairs of the Candys, and that it would be wrong, on necessarily limited evidence, to reach a conclusion on a matter that I do not need to reach a conclusion on. Mr Stewart [counsel for Holyoake] asked me to find as a fact that Mr Nicholas Candy was a co-owner or partner in CPC. For the reasons I have given I make no such finding.”
On Holyoake’s former relationship with the Candy brothers: “It was suggested to Mr Holyoake, on the basis of certain e-mails, that despite his apparent friendship with him, he privately had a rather disparaging view of Mr Nicholas Candy. I am not persuaded that this was so, the e-mails in question (which I need not set out) not being anything other than jokey banter. I see no reason to doubt that Mr Holyoake and Mr Nicholas Candy were indeed in 2011 genuinely close friends who saw a lot of each other socially and enjoyed each other’s company. They had not however done any business together.
“Mr Stewart QC, who appeared for the Claimants, asked me to find that Mr Holyoake trusted Mr Nicholas Candy, and through him Mr Christian Candy, and was excited at the prospect of working together in relation to GGH. I accept that Mr Holyoake trusted Mr Nicholas Candy as a friend; and that he was excited at working with the Candy brothers in relation to GGH. I am not sure that he trusted Mr Christian Candy in particular – he was not a close friend of Mr Holyoake’s although he had met him through his brother on a number of occasions – but I accept that he had no particular reason to distrust him.”
On Emma Holyoake: “I found her a credible witness. She was obviously fiercely loyal to her husband and deeply supportive of him, but did not strike me as a woman who was simply repeating untruths at his behest, but as one who was giving her own independent evidence to the best of her recollection.”
On the loan agreement: “I find therefore that Mr Holyoake did not have net assets of £120m at the time of the Loan Agreement… In those circumstances Mr Holyoake was in breach of the Loan Agreement, both in not delivering a net asset statement that was in substance acceptable to CPC, and in not maintaining the Minimum Net Asset cover, and CPC was therefore justified in asserting, as it did, that there had been an Event of Default.”
On a January 2012 telephone call: “I do not think it ultimately matters whether Mr Candy was shouting and screaming or measured and focused. By his own account he was very blunt with Mr Holyoake, telling him, no doubt in no uncertain terms and with a great deal of swearing, that he had categorically lied to them; that he had breached the loan agreement; that his net assets were not certified and below £120m… For what it is worth I am sceptical as to whether Mr Candy was quite as measured as he sought to portray himself in the witness box: as I have said it is not in dispute that he was very, very angry and I think it entirely credible, and more probable, that he did lose his temper with Mr Holyoake, although I do not think anything turns on this.
“It was suggested to Mr Candy (and was Mr Holyoake’s evidence) that he told Mr Holyoake that he would do anything he could to take GGH from him, but he denied it, saying that he wanted repayment not the asset. I accept Mr Candy’s evidence on this. Mr Candy explained, and I accept, that having been confident that Mr Holyoake would repay at the end of January, he was now seriously worried about not being repaid at all and losing the entire £12m. What he wanted was a route to repayment, not the asset.”
On a crucial meeting in Guernsey in February 2012: “As to the particular statements said to have been made [by Christian Candy] and relied on as threats, it is convenient to take them in turn:
(1) Mr Candy said that they would “take a wrecking ball to your assets and leave you with nothing”.
Mr Candy accepted that he might have used this phrase, and Mr Williams positively recalled it being used by both Mr Candy and himself. The explanation given by both of them was that if they had to enforce the loan against Mr Holyoake, it would mean going after his assets but since most of them were already heavily charged with little equity left, they would need to pursue one after the other to recover the whole amount. I accept this explanation. The wrecking ball is a metaphor (it was obviously not intended, or understood by Mr Holyoake, literally), and an example of Mr Candy’s blunt, straight-talking about what would happen if CPC had to enforce the loan.
(2) Mr Candy said that they would not stop at any lengths to get what they wanted.
Mr Candy accepted that they would have made it clear that CPC would pursue all its legal options to recover the sums due to it. I am rather doubtful if he was so careful at the time as to insert the word “legal” into such a statement, but I do not see that this matters. I find it entirely credible that Mr Candy would say something to the effect that unless Mr Holyoake agreed to what CPC wanted they would pursue him by any means available, and I do not think it matters whether his exact words were “go to any lengths” or “pursue all its legal options” or some other variant; I am not prepared to regard it as connoting an intention or threat to do something unlawful or improper. It is not unlawful for a creditor to pursue a defaulting debtor nor to threaten to do so.
(3) Mr Candy said that they would call every lender that Mr Holyoake had worked with and use all their powers to ruin him…
I conclude that it is entirely credible that Mr Christian Candy would have told Mr Holyoake at the meeting that if he did not do what CPC wanted CPC would ring up all the banks who had lent to him and tell them that they intended to bankrupt him, and I find on the balance of probabilities that he did
(4) Mr Candy added that Mr Holyoake had not seen anything like the extent to which they could ruin his life, and that they would do so.
Mr Candy probably did say this or something along these lines; it seems to me to go with the statements that CPC would take a wrecking ball to his assets, leave him with nothing, and contact his lenders.”
On Christian Candy’s language: “But in the end I do not think it ultimately matters whether what was said was in an aggressive tone or not. What is significant is whether Mr Candy was threatening to do anything improper or unlawful. Threats to sue Mr Holyoake, pursue him as vigorously as possible, make him bankrupt and thereby ruin him, however unpleasantly expressed, in whatever tone of voice and with whatever colourful language, are not in my judgment threats to do anything more than any creditor is entitled to do. Nor do I think that vague expressions such as ‘doing whatever it takes’ to get his money back, or preparing for the ‘full weight of CPC to come down on him’ or destroying Mr Holyoake’s world and wiping him out are to be taken as threats to do anything unlawful: Mr Holyoake was in fact at one stage advised by his own solicitors that phrases such as ‘we will take a nuclear bomb to you’ are relatively common hyperbole in litigation.”
On alleged threats in relation to Emma Holyoake and her unborn child: “Mr Candy did make some reference to Mrs Holyoake at the meeting. I accept that this was in the context of saying how stressful the situation was for everyone – for Mr Candy, for Mr Holyoake and for his wife. Mr Candy also said something along the lines that he would not want anything to happen to her. I am not persuaded that he made specific reference to her being pregnant, as I accept Mr Williams’ evidence that he got the impression Mr Candy and Mr Holyoake knew something he did not. But Mr Candy knew that she was pregnant, and knew that she had had a miscarriage the year before, and in the context that could only be, and was understood to be, a reference to her condition. On the other hand, I am not persuaded that he said it in a threatening or menacing way, or was threatening to do anything in particular. He had been pointing out that unless Mr Holyoake and CPC could reach agreement on a way forward, the alternative would be disastrous for him as CPC would have to take steps to enforce the loan, taking a wrecking ball to his assets, and leave him with nothing, and in that context I find that he was referring to the fact that it would inevitably be immensely stressful for him and his wife. He may indeed, as Mr Williams said, have said it in an empathetic or compassionate tone. Nevertheless it was I think an ill-judged and insensitive thing to say.”
On Holyoake’s claim of alleged “intimidation”: “I find that the threats made by CPC, effectively a threat to pursue Mr Holyoake by litigation, were not illegitimate. CPC did make two threats which I have held to be unjustified: the threat on 8 November 2011 to reveal the loan to Investec, and the threat in Wragges’ letter of 2 February 2012 to advertise a statutory demand. But neither in my judgment had any substantive consequences. The threat to go to Investec did not cause Mr Holyoake to do anything (other than promise to repay the loan early); the threat of advertising a statutory demand was not the effective cause of Mr Holyoake signing up to the Supplemental Loan Agreement. That means that this claim is not made out.”
On Holyoake’s claim of alleged “duress”: “I find that none of the agreements entered into by Mr Holyoake are voidable for economic duress. The reality is that once he had signed the Loan Agreement, with its requirement for minimum net assets of £120m, he was always at risk of CPC taking a tough line and calling an event of default and hence he was always vulnerable to being sued, and very much more so after granting the Aeriance charges. It was that threat of litigation which I have found was the effective cause of his agreeing to the terms of the Supplemental Loan Agreement, and it remained that threat which at every stage persuaded him to agree to the terms required by CPC for the successive extensions of time and other agreements that he wanted.”
TRIAL AND TRIBULATION: Mr Justice Nugee rules in favour of Christian and Nick Candy in an explosive case that has dominated 2017. Find out more about the background of the trial, listen to expert views and look back at the at the case as it unfolded.