Case No. CR-2019-LDS-000669

409.At the time when the trial commenced, the Petitioner’s case regarding sums drawn from the company by the Relevant Respondents was as follows.410.Although the same allegation was scattered throughout the pleading, the nub of the matter appeared in paragraphs 27 and 30 of the amended Petition (and relevant Schedules to the Petition):“27.The First to Third Respondents have in breach of their directors’ duties used the Subsidiary’s monies (including since August 2016 those borrowed from the bank at commercial rates as set out in paragraph 28 below) to fund their individual extravagant lifestyles including causing the Subsidiary to pay monies under the pretence that they are legitimate and necessary expenses of the Subsidiary when they are not. At this stage and pending disclosure the best particulars that the Petitioner can give are:(i)Sums spent by the Subsidiary on personal expenses and liabilities of the First to Third Respondents in breach of their directors’ duties set out in Schedule 1; and(ii)Sums spent by the Subsidiary on the personal hobbies of the First to Third Respondents including horseracing and show jumping in breach of their directors’ duties set out in Schedule 2;(iii)Sums spent on providing John Hughes with more than one luxury car at a time.”411.The matter was then complicated because, despite the amendments brought about to bring substantive allegations of unfair prejudice into the Petition and remove them from pleadings elsewhere (especially the Points of Reply), paragraph 27 concluded by placing reliance on, or at least said that the Petitioner “refers to”, paragraph 61 of her Defence in the Recovery Proceedings. In fact that paragraph of the Defence simply referred to the Petition and said that the defendant would seek an order for the petition to be heard together with the Recovery proceedings. The Schedules to the Petition were, unhelpfully, not included in the Trial Bundles with the amended Petition.412.As far as I could tell the Schedules to the Petition remained in their original form and in the trial bundle followed on from the original unamended petition. 413.Schedule 1 to the original Petition set out various matters referred to as “Personal Expenses and Liabilities” . The first series of listed items was a list of dates and amounts of money apparently obtained from Barclaycard statements of each of the Relevant Respondents. The dates in question fell within the period October 2015 to April 2017. The total of these amounts was approximately £215,000. Finally there was an item described as “John Hughes-Work at Tilts House” (with the address) Watch Construction Ltd and Lewmar Construction Limited said to have been expended between 2011 and 2012 (£197,220.20).414.Schedule Two to the original Petition set out various matters referred to as “Personal Hobbies including horseracing and show jumping”. The matters appeared to relate to what I will refer to as “equestrian matters”. The quantum of many matters was said to be “unknown”. Those that were specified totalled approximately £121,390,000. The items in question dated as far back as 2006.415.Paragraph 30 amounted to an allegation that, in leaving outstanding sums on directors’ accounts which the Relevant Respondents owed one or other of the Companies, the Relevant Respondents caused damage to LWC by reason of its tax liability under s455 of the Corporation Tax Act 2010.416.Finally in this context, it was said that the relevant personal benefits taken by the Relevant Respondents were disguised dividends in circumstances where dividends were not paid/declared after those in respect of the year 31 October 2015.417.In the petitioner’s skeleton argument for trial, the “particular matters of complaint” in connection with the allegation characterised as being the use of the Companies “as piggybanks to support the lifestyles of John and his family” were set out in five sub-paragraphs, but by reference to the expert’s report and not the Petition. The two did not match and different periods were referred to. In particular, for the first time reference was made to “substantial expenditure on salaries for family members”.418.In these circumstances I asked on the first day of the trial for the provision of one document setting out the petitioner’s case as regards the alleged financial irregularities relating to improper benefits taken from the Companies said to fund the Relevant Respondents “extravagant lifestyles”. That document set out at paragraph 2.1 the following:“2.1 It is accepted that payments prior to November 2015 do not of themselves constitute unfairly prejudicial acts or conduct of the Companies’ affairs. That is because they were consistent with the informal basis on which the Companies were operated, by common consent of the shareholders, whereby the Companies would be used to make payments for the benefit of family members, and in particular John and Lisa. Nora’s acquiescence to that means that such payments would not provide an independent ground for relief.”.419.In fact, Lisa had been well aware of these payments as she had been, in effect, the Companies’ bookkeeper. 420.The document went on to identify the following eight categories of expenditure relied upon. In this list I exclude the separate items that related to what is said to be the costs incurred by the Companies on the Recovery Proceedings and in relation to the dismissal of Charlie Pickering which of course do not form part of the financial complaints relating to using the Companies as a “piggybank”. The items were:421.By the time of closing submissions, it was sought to re-amend the petition to insert a new s27A relying on the following matters:(a)Lorraine’s salary of approximately £181,000 per annum;(b)The provision of two luxury cars at a time for the First Respondent’s use;(c)The provision of the benefit of racehorses, show jumpers and associated grooms vet bills horsebox services (including fuel and insurance) race sponsorship, stabling, livery, and training costs and other expenses;(d)The employment of Debbie Shawcroft and Martin Cooper as grooms, with payments being accounted for as R&D;(e)Payment of child support agency payments in respect of one or more of John’s children;(f)Payments by the LWC to James for investment in his property business (including four cheques in the sum of £25,000 on four dates between October 2016 and January 2017).The original paragraphs 27 and 30 and schedules 1 and 2 remained unchanged. However, after closing, a revised schedule, Schedule 3, was lodged which as I understand it sets out the entirety of the relevant financial allegations that the Petitioner relies upon. This schedule was thereafter subject to comment by the Relevant Respondents.422.I now turn to the matters in Schedule 3, but I take them in a different order to that set out in the Schedule.