BL-2022-002117 - [2025] EWHC 2794 (Ch)

Fecha: 28-Oct-2025

E.4 Discussion – targeted malice

E.4 Discussion – targeted malice

166.

The Claimants asserted that the SFA, and Sir Peter, had a grudge against Peter Marples and were obsessed with his wealth. They say that the Decision Letter was written with the intention of discouraging Trilantic from continuing with the acquisition so that the Claimants would not receive the cash due on the sale.

167.

The Claimants relied on Tony Allen’s evidence that people at the SFA, including Sir Peter and Keith Smith associated Peter Marples with the failure of Carter & Carter and felt that the SFA had been “let down”. I accept that the failure of Carter & Carter, and Mr Marples’ involvement with that business, was well known in the sector and at the SFA. I also accept that the SFA was concerned that lessons should be learnt from the failure of Carter & Carter and providers should not be allowed to become too big because of the risk of serious disruption if they failed. The revised Trilantic offer referred to above at paragraph 111 recited this concern. I do not accept that there was any animosity on the part of Sir Peter or Mr Smith to Peter Marples because of his involvement with Carter & Carter. Such animosity would have been an irrational and disproportionate response to the failure of Carter & Carter. Both of them denied it and I accept their evidence on this issue. As noted above at paragraphs 73 and 74, Sir Peter’s first reaction to the Company after his appointment was a positive one.

168.

The existence of a grudge or personal animosity of the strength required to generate a malicious intention to harm Peter Marples or the Company is also not consistent with Sir Peter’s actions in saving 3AAA from administration - see paragraph 79 above. His intervention was voluntary – he would have been perfectly within his rights to have done nothing.

169.

Tony Allen’s evidence was also that Sir Peter and others at the SFA were concerned by profit levels and regarded PTPs as a necessary evil in delivering the policy objective. There was, he says, a perception that the chief executives of PTPs all “drove around in Aston Martins” and made excessive profits. Sir Peter readily accepted in cross-examination that he was against excessive profits being made by PTPs. Both Sir Peter and Mr Smith were clear that their responsibilities at the SFA included delivering value for money for taxpayers. Mr Smith said there were strategic discussions at a senior level about taking steps to prevent excessive profits in the market. I accept the evidence of Sir Peter and Mr Smith that there was a concern about excessive profits being made by PTPs from public funds. There seems to have been no secret about this. The revised Trilantic offer referred to above at paragraph 111 recited this legitimate SFA concern.

170.

I reject the allegation that Sir Peter and others at the SFA held a grudge or held any significant personal animosity against Peter Marples. I accept Sir Peter’s evidence, and that of Mr Smith, that they did not.

171.

There is more force, in my judgment, in the contention that Sir Peter intended the Decision Letter to discourage Trilantic from proceeding with the acquisition.

172.

Sir Peter’s evidence was that Decision Letter was written in the terms it was written for the reasons set out in it. I am satisfied, however, that the Decision Letter was written with the real purpose of discouraging Trilantic from proceeding with the acquisition. My reasons are as follows:

There was clearly a tension between the PTPs’ profit making objective and the SFA’s strategic desire to prevent excessive profit being made from public funds. The Trilantic Acquisition represented a move by private equity into the sector in anticipation of the potential for very significant new growth and profits from the introduction of the levy. The business plan envisaged significant future profits and the value being paid for the business reflected that. Sir Peter was at pains to understand what value the sellers were taking out of the deal. It is likely that Sir Peter was concerned that the value being placed on 3AAA and the amounts that would be generated for the sellers on a sale were, in his view, excessive. It is likely that he was concerned with the huge anticipated growth in profits after the acquisition under the business plan. The “blood pressure” emails show his agitation at 3AAA being so “cash generative” and the interest it was attracting from Trilantic as a consequence.

Sir Peter then intervened in the SFA’s usual process for reviewing a change of control and took personal charge. That intervention was unique and unprecedented. Sir Peter referred to the request for approval as an “important test case for us” and anticipated a lot of media publicity. No satisfactory explanation was provided for Sir Peter acting in this way or why this was a test case for the SFA. The most plausible explanation is that Sir Peter was referring to the entry of private equity into the sector in search of profit, in light of the further significant funding that the new levy would bring. The anticipated publicity presumably related to the very large sums being paid for the Company and the significant profit that would be made by the shareholders.

Until Sir Peter’s decision, nobody else in the SFA involved in Sir Peter’s bespoke change of control process had any concern about the acquisition or that the standard letter should be sent. The clear recommendation made to Sir Peter was to send the standard letter. This was thought to be a strong company buying into a strong company.

The SFA’s concern about Trilantic’s business plan appears to have materialised for the first time in the call between Mr Smith, Ms Forton and Sir Peter on 22 December when Sir Peter made his decision. The over ambitious business plan appears to have provided Sir Peter with an excuse, which he latched on to, to not write the standard letter. That any actual concern was overblown is consistent with the fact that neither Sir Peter or the SFA intended to terminate the Funding Agreement if Trilantic went ahead with the transaction or if 3AAA continued with the same business plan. Mr Smith said he had no knowledge of any plans to terminate 3AAA’s Funding Agreement. Sir Peter seemed perplexed when asked whether there were any plans to terminate 3AAA’s Funding Agreement, saying that a termination of 3AAA’s Funding Agreement would have been ‘disruptive, or potentially disruptive’ and would have involved a crash team to manage the process, organising other providers to take over the learners, administration to close the books and so forth. That amount of work and the impact on learners was something, he said, which the SFA would wish to avoid.

The Decision Letter roamed much further than it needed to. The contract to which clause 5.10 related terminated in July 2017. Sir Peter accepted that the Trilantic Acquisition would have no impact on that contract, not least because of the significant carry over of pre-levy funding. The concerns expressed in the Decision Letter were, he said, really in relation to future years and 3AAA’s ability to deliver on future contracts. Clause 5.10 had no bearing on those future contracts, and any concerns as to delivery on future contracts were matters which would arise on a decision to grant a future contract.

Sir Peter’s concerns as expressed in the Decision Letter presented a pessimistic scenario, and this seems to have been deliberate. The Decision Letter was understood by Joe Cohen as discouraging private capital from entering the sector. Joe Cohen had also understood Sir Peter was trying to discourage him from making the acquisition when they had met in December 2016.

Sir Peter repeatedly referred internally to his expectation that Trilantic would abandon the acquisition as a consequence of the SFA correspondence. When Peter Marples sought to address the SFA concerns, Sir Peter felt the need to make the SFA response “tougher” and included information (about 3AAA’s failure to meet minimum standards) which was irrelevant to the change of control decision but “will be news to Trilantic and they will now drop out”.

That Sir Peter was trying to discourage private capital from entering the sector explains part of his “fireworks” email which ended by saying to Mr Smith that “we need to take stock and develop a plan for…what kind of market we want – and how should we regulate it in future.” (emphasis added).

173.

An intention to discourage Trilantic from continuing with the acquisition is not, however, sufficient to establish targeted malice. There must be a specific intent to injure the Claimants. A desire to prevent excessive profits being made from public funds, or to discourage private capital from entering the sector in search of profits, is not a specific intent to injure anyone, even if that may be a consequence of the action. Sir Peter’s intention appears to have been to protect the sector and public funds, not to injure the Claimants.

174.

I conclude, therefore, that the claim based on targeted malice fails.