BL-2020-CDF-000003 - [2025] EWHC 2226 (Ch)

This is an issue for which the slight ambiguity of the documents and the passage of time combine to create problems additional to those presented by the risks of deliberate falsehood. A year ago I gave judgment refusing to strike out Mr Lloyd’s claim on the grounds of Grovit v Doctor abuse of process: [2024] EWHC 2033 (Ch). The fact remains, however, that Mr Lloyd’s dilatoriness in pursuing his claim means that the court is now being required to consider issues of fact concerning events that took place up to nearly 12 years ago.

Mr Hayward’s evidence, most fully set out in paragraphs 67 to 72 of his witness statement, was to the following effect. There was initially an idea that Mr George Lloyd might stand in for his son at the Site. It very quickly became apparent that the arrangement was not working, and other arrangements would have to be and were made. (I discuss below the way the work was done on the Site while Mr Lloyd was in custody.) In December 2013 Mr Hayward told Mr George Lloyd that the Joint Venture would have to be ended, though he left open the possibility that there might be a working relationship with Mr Lloyd in the future. Mr Hayward then had a telephone conversation with Mr Lloyd, in which he told him that the Joint Venture was at an end because Mr Lloyd was unable to perform his duties and there was no certainty as to when he would be able to do so. Mr Lloyd accepted this position, but he was grateful for the prospect that Mr Hayward held out to him of further work in the future.

Mr Lloyd’s evidence was to the effect that the Joint Venture remained on foot when he and Mr Hayward met in May 2014; that the discussions then were focused on how to take it forward and expand into other projects; that such talk as there was about a parting of the ways was because his father had suggested that the Joint Venture had no future, in view of Mr Hayward’s attitude, so that the talk concerned merely the financial terms on which they might agree to bring the Joint Venture to an end; and that in fact they never did bring it to an end before Mr Hayward did so unilaterally in about September 2017. His evidence, supported by that of his father, is that Mr George Lloyd took over responsibility for the discharge of his duties and that neither Mr Hayward nor Mr Athay expressed any dissatisfaction regarding the position while he did so. Mr Lloyd says that the Joint Venture continued until it was terminated unilaterally by Mr Hayward in about September 2017.

I reject Mr Lloyd’s evidence. I find as facts that Mr Hayward had purported to terminate the Joint Venture before the meeting on 14 May 2014; that Mr Lloyd sought to get him to agree to change his mind, but Mr Hayward refused to do so; that Mr Lloyd nevertheless sought to persuade Mr Hayward to give him further work, which indeed Mr Hayward was in principle willing to do and actually did in due course; and that the further work carried out in 2015, 2016 and 2017 was done by way of the separate engagement by Alymere of Mr Lloyd’s companies, Topgrade and ADEL, not in pursuance of the Joint Venture. I make the following observations.

Further support for these conclusions is found in the written evidence of Ms Smith (formerly Ms Crickmore), which included the following:

“41.

I first became aware of problems between Mr Hayward and Craig when Craig was arrested.

42.

When he found out that Craig had been arrested by the Police, I think Mr Hayward believed he could use this incident to get his hands on the whole SA1 project; Mr Hayward said he couldn't possibly be seen to be involved with someone who had been involved with the Police.

43.

… Craig was in prison for quite a long time before he was released, and so Mr Hayward essentially had a free hand he didn't have to share the joint venture money, in his eyes. He acted as though Craig wasn’t going to be getting anything from him or the business after his arrest.

44.

… As soon as Craig was in prison, Kane took over his role, dealing with the tenants and collecting rents etc. I understand from Craig that he was eventually released but it seemed like he was in custody for a very long time, it felt like it went on for ever.

…

46.

Craig’s arrest was really the catastrophic event that triggered Mr Hayward to take control of SA1. Mr Hayward’s approach was effectively, ‘this is no longer a joint venture.’ …”

Ms Smith left her employment with RHP in late 2013; in cross-examination she said that she finished on 1 November 2013 and had no knowledge of the Joint Venture after that date. Her direct knowledge of events therefore finishes at that point in time, which was well before Mr Lloyd was released from custody. Her evidence nevertheless is of interest in several respects. First, it shows no knowledge of Mr George Lloyd’s involvement to cover for his son. Second, it suggests that Mr Lloyd’s remand in custody appeared at the time to be very prolonged. The chronology as it appears from the evidence suggests that, by the time Ms Smith left her employment, Mr Lloyd had only been in custody for three weeks. But the impression it made on her is striking and suggests a perception at the time that he was unlikely to return for the foreseeable future. Third, Ms Smith’s evidence tends to support the inference that Mr Hayward was concerned about reputational damage caused by Mr Lloyd’s arrest and remand. Fourth, it also supports the finding that Mr Hayward purported to treat the Joint Venture as at an end before the end of 2013.

I have had regard to witness evidence that tends the other way. Ms Julie Collier worked as Mr Hayward’s PA from October 2015 until June 2016 and said in evidence that he was “not a very nice man”. She said that it was common knowledge in the office that Mr Lloyd was Mr Hayward’s business partner or that there was a joint venture; she said that both terms were used. Ms Adele Davies was employed as an accountant and Head of Finance for RHP and associated companies from November 2015 until July 2016. She gave evidence at trial on behalf of Mr Lloyd and did so with unconcealed hostility to Mr Hayward. She said that Mr Hayward introduced Mr Lloyd as his “partner in SA1 building the units”, and that on a later occasion he said that Mr Lloyd would receive half of the money. She also said that in late 2015 or early 2016 she was present at a meeting at which Mr Hayward told Mr Lloyd that he had remortgaged SA1 (which, she said, was true) because the bank had changed the repayments (which, she said, was false), and that Mr Lloyd had objected that there was not meant to be any remortgage of the property.Mr David Ford was employed by RHP as a building surveyor between January and September 2016, and he said that Mr Hayward introduced Mr Lloyd to him as “one of my business partners”. These pieces of evidence must be taken into account, but I do not find them persuasive against the conclusions expressed above. First, evidence of things said nine or so years ago has to be viewed with circumspection, particularly when weight is supposed to be put on particular words or expressions used in informal conversations. Second, this case has been brewing for many years; I am mindful of the risk of innocent contamination. Third, I cannot overlook the overt hostility to Mr Hayward demonstrated, in particular, by Ms Davies. Fourth, Mr Lloyd certainly was involved at the Site in late 2015 and throughout 2016, and I would not place much weight on remarks about him being Mr Hayward’s “partner”.

Fifth, Ms Davies’s evidence regarding remortgage in late 2015 or early 2016 does not correlate with any clear evidence of Mr Lloyd’s. I put it this way, because Mr Lloyd’s written evidence and oral evidence regarding the mortgages were rather confused. Paragraphs 70 to 72 of his witness statement refer to finding out, through an email from Mr Kevin Hill of RHP, about a “Lombard loan application”. This probably relates to emails in March 2016, when Mr Lloyd was told that Longbow Investment No. 3 S.A.R.L. had approved the release of funds to Alymere for payment to ADEL for the purpose of carrying out works at SA1. That does not appear to have been a remortgage; Longbow Investment had taken a charge over SA1 when Alymere purchased it from Sirocco. As regards any question of increased interest payments, there is no documentation to show that this was an issue for Mr Lloyd or that it had any bearing on his position vis-à-vis SA1. His email of 16 March 2016 to Mr Hill simply begins, “Good news on organising the extra funds”. Further, there is no reason why Mr Symons or anyone else should think that Mr Lloyd would be unhappy about further drawdowns under the mortgage. The only thing that would be of concern would be a requirement to make payments in respect of the interest on the further funds. There is no evidence that Mr Lloyd was asked to make additional payments. Indeed, there is no evidence at all that he was paying anything in respect of mortgage interest in 2015 and 2016, because at that stage he was simply receiving money on invoices from Topgrade and ADEL for such work as they carried out.

Finally on this point, I have borne in mind the facts relating to the counterclaim and in particular the fact that the vehicle leasing agreements for Mr Lloyd’s benefit were continued after May 2014 and indeed a new agreement was taken out in 2016. This is relied on by Mr Lloyd as evidence that the Joint Venture was continuing. I have concluded that this is not the reason for the continuation of the leasing agreements. The matter is discussed further below.

There are two further questions. First, on what basis was the Joint Venture terminated? Second, when was the Joint Venture terminated?

As to the first question, I find that Mr Hayward validly terminated the Joint Venture on account of Mr Lloyd’s substantial non-performance. Miss Dzameh’s submissions did not seek to dispute that a substantial failure to perform would have given rise to a right to terminate the Joint Venture; rather she submitted, first, that Mr Hayward had not in fact purported to terminate the Joint Venture and, second, that there was not in fact a substantial failure to perform. I reject both of those submissions.

Mr Lloyd’s case is that, while he was in custody, his father had been covering his work and done so satisfactorily. I reject that case. First, it rests on the idea that, when no construction works were being carried out, all that remained to be done was collection of rent from the few tenants who did not pay by BACS. I do not accept that. Mr Lloyd was responsible for the management of the Site; Mr Hayward’s evidence was that this involved “the letting of the units and collect[ion of] the rents, much of which transpired to be cash. He had to arrange to keep the place clean and tidy, arrange repairs and manage the electrics, which were on a landlord’s supply”. Second, Mr Lloyd insisted that his father’s involvement meant that Mr Athay did no more on the Site than previously. Again, I do not accept that. Mr Athay’s evidence (witness statement, paragraph 51) was: “When Craig was in prison, the management of the Site was taken over by RHP, mostly by me. I did all the work he had previously done as well as the work I had been doing anyway, but Paul Hayward-Medway (husband of Richard's daughter Leone) may have helped. Craig's father had no involvement at all that I remember, and, being a car dealer in Swansea (to which I once went, GLC Autos), I think he had no relevant experience.” In oral evidence he said: “There was some idea his father would do the work. I had no particular issue with this, but I knew that I would end up doing it, as I knew the tenants and he was not a property manager. I honestly do not remember what he did.” I accept Mr Athay’s evidence. Mr George Lloyd’s evidence is significant. He said that he was working full-time on his own business but was able to afford an hour a day to the paperwork on his son’s business affairs. Those affairs included other business activities, not just the Joint Venture, and as I have already indicated the records kept by Mr George Lloyd in relation to activity at SA1 are negligible. Further, he did not carry out any practical activity in relation to any site where his son had business involvement; rather, he sent an employee, Mr Michael Davies, to do any necessary tasks. When cross-examined about the extent of his activities at SA1, Mr George Lloyd conceded: “I am not claiming that I took over Craig’s role at SA1. I said I hadn’t got the time.” I refer also to the evidence of Ms Nicola Smith, a witness for Mr Lloyd, who said that his duties were taken over by Mr Athay.

The finding that Mr Hayward on behalf of Sirocco did indeed exercise the right to terminate the Joint Venture is supported by the evidence of Mr Hayward himself as well as that of Mr Athay and, indirectly, that of Ms Nicola Smith. Ms Smith left RHP before any purported termination, but her evidence shows clearly what Mr Hayward’s attitude was and makes it very improbable that he did not act accordingly. (Both she and Mr Athay give some support to the view that Mr Hayward was largely motivated by concern at being seen to be in a close business relationship with someone implicated in criminal proceedings. Whatever his personal motivations may have been, however, the relevant question is of objective entitlement to terminate.)

As to the question of when the right to terminate was exercised, I find that it was exercised in about December 2013, as Mr Hayward has given evidence. The probability is that he did not wait long after he had formed the view that he should bring the Joint Venture to an end, which according to Ms Smith’s evidence was within a few weeks of Mr Lloyd’s remand in custody, and that he acted when Mr Lloyd had been in custody for a couple of months and there was no end in sight. The main piece of evidence that has caused me hesitation in reaching this conclusion is the Joint Venture profit and loss account produced by Mr Symons on 2 September 2014, which extends until April 2014 and might suggest that any purported termination of the Joint Venture was not until that date. In the end, I have come to the view that I should not rely on that document to override the other evidence. First, no one has suggested, in evidence or submissions, that there was a purported termination in April 2014. Second, I have not found any particular reason why that of all months should have been the date when Mr Hayward purportedly terminated the Joint Venture. Third, I think it very probable that the meeting on 14 May 2014 was not the occasion for the purported termination but was held after the purported termination and with a view to discussing the way forward. Anyway, a purported termination at that date would not justify choosing April as the termination date for accounts. Fourth, I do not know the basis on which the profit and loss account was prepared by Mr Symons, or indeed what if any use was made of it. The present question was not explored in evidence, nor was any mention made of the possibility that the document might be relevant in this connection.