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

Introduction

TheClaimants are Peter Marples, his wife Sarah, his son Thomas, and his nephew Lee. In 2016 they were the holders of shares or share options in Aspire Achieve Advance Group Limited (“the Parent Company”) which is the parent company of Aspire Achieve Advance Ltd (“3AAA/the Company”), an apprenticeship and vocational training provider. Together they bring a claim against the Defendant, the Secretary of State for Education, for negligence and misfeasance in public office, in relation to the actions of public officers at the Skills Funding Agency (“SFA”), for which the Defendant is responsible.

The Company had a contract with the SFA for the provision of apprenticeship training services. Clause 5.10 of that contract provided that the Company “must notify the SFA if there is a change in its name and/or ownership. The SFA reserves the right to terminate the Contract if it considers in its absolute discretion that the change in ownership would prejudice the Contractor’s ability to deliver the Services”.

In 2016 the Claimants (and the other shareholders of the Parent Company) had negotiated and were about to sign a share purchase agreement (“the SPA”) in relation to the Parent Company with a private equity firm called Trilantic Capital Partners LLP (“Trilantic”). The Company notified the SFA of the proposed change in ultimate ownership of the Company and sought the SFA’s prior approval. By a letter dated 23 December 2016 the SFA informed the Company that it did not approve the change of ownership (“the Decision Letter”). That decision was taken by Peter Lauener, who was then the Chief Executive of the SFA (by the time of the trial Peter Lauener had been made Sir Peter Lauener, and I shall refer to him in the rest of this judgment as Sir Peter). Shortly after the Decision Letter, Trilantic withdrew from the sale.

In October 2018 the Company was wound up, having lost its contract with the SFA amidst allegations of deliberate data manipulation by the Company. It is common ground that the Claimants’ shares and share options were thereafter valueless.

The Claimants seek compensation in respect of the acts of the SFA which they allege prevented them from selling their shares to Trilantic for around £27 million in cash, plus a lost chance of converting around £10 million in rollover loan notes.

The claim is put in several ways. Firstly, the Claimants say that the SFA owed them a duty of care in taking its decisions which it breached by not approving the change of ownership. But for the Decision Letter, the Claimants say that the Trilantic SPA would have been signed on 23 December 2016, and further that the refusal of the change of control had the effect of making their shares unsaleable thereafter. Secondly, the Claimants say that Sir Peter Lauener made the decision in the Decision Letter with the malicious intention of causing the Claimants harm and so the Defendant is liable to pay damages for the tort of misfeasance in public office under the limb of that tort that is referred to as “targeted malice”. Thirdly, the Claimants say that the tort of misfeasance in public office is also made out under the other limb of the tort - “ non-targeted malice ” - because Sir Peter and two of his staff at the SFA, Keith Smith and Sharon Forton, were subjectively reckless as to the risk that they were wrong as to their powers and went ahead regardless, knowing that there was a serious risk of the Claimants suffering loss.

The Defendant denies that the SFA owed the Claimants any duty of care in relation to the Decision Letter, or that any such duty was breached by sending the Decision Letter which she says was entirely appropriate. She also denies that the Decision Letter was the cause of any loss to the Claimants as they retained their shares in the Parent Company and she denies they were rendered unsaleable by the Decision Letter. In the alternative she disputes the valuation placed by the Claimants on their shares before and after the aborted Trilantic deal and asserts that had it proceeded Trilantic would have had a substantial claim against the Claimants for breach of warranties in the SPA arising from the alleged data manipulation. The Defendant denies Sir Peter acted with malicious intent in reaching the decision in the Decision Letter and denies there is any basis for a claim for non-targeted malice which she also says is not adequately pleaded.