CA-2024-001924 - [2025] EWCA Civ 1206

The Judge concluded in paragraph 447 of the Judgment that “[t]he fact that there was a background relationship between some or all of the parties” was “irrelevant to remediation”. He had said in paragraph 441 that the contents of the SHA seemed to him “both entirely typical for a transaction of this nature and entirely inconsistent with the idea that the wider relationship, if any, between some or all of the parties (and indeed non-parties) to it is relevant”. Having noted in paragraph 442 that there was no duty of trust and confidence, he expressed the view that, “[t]o accept that remediation is harder simply because of the parties’ prior relationship would … introduce through that back door that which Mr Kulkarni could not secure through negotiation”. In paragraph 443, the Judge said that it was “obvious from the facts of this case that at the time the SHA was negotiated Mr Lewis was acting in his own commercial interests, as he was entitled to do”. The Judge went on:

“443.

… [Mr Lewis] secured control of the board, a reduction of Gwent’s capital investment and the majority of the A shares. All of this was conceded reluctantly by Mr Kulkarni – not because of any sense of friendship for Mr Lewis but because he had no choice.

444.

On the issue of control it is important to be clear on what insisting on control for Gwent meant in practice. As Mr Kulkarni described it in his witness statement, following the ouster of Mr Staples and Mr Jenkins, ‘I ran the Hospital and appointed a new board to help me.’ Mr Lewis was taking control away from Mr Kulkarni. This was the ‘ruthless’ Mr Lewis that Mr Davies described to me. I stress that this is no criticism of Mr Lewis; but it was the act of a businessman, not of a friend.

445.

Moreover, Mr Kulkarni was prepared to respond in kind, albeit he had much the weaker hand. When Mr Lewis pushed too far at the Pre-Meeting, Mr Kulkarni threatened to collapse the whole transaction if he did not secure some concession. I have found that the concession he secured was inadequate, but the method he used is what matters here. This was not a loose arrangement between friends. It was a business negotiation.

446.

By the time negotiations entered January and February 2020 Mr Lewis did nothing to suggest that he was acting as a friend and everything to show that he was acting as a commercial investor. Mr Davies saw that clearly, and repeatedly told Mr Kulkarni to operate on the same basis.”

Returning to the subject in paragraph 468 of the Judgment, the Judge said:

“I do not accept that there was a relationship of trust and confidence or anything resembling it either in the negotiation of the SHA or on the terms of the SHA as agreed. This was a commercial arrangement.”