KB-2024-003652 - [2025] EWHC 1900 (KB)

In setting out the background to this claim, I am fortunate that disagreements about the conduct of the affairs of the Company have been the subject of earlier litigation.

First, in Kebbell & Anor v Hat & Mitre PLC & Ors (As Joint Administrators of Hat & Mitre PLC) [2020] EWHC 2649 (Ch), two shareholders who held a majority shareholding in the Company (Mr Kebbell, 51%; and Mr Kitchen, 17%) brought an application with a view to obtaining a ruling from the Court that the Company was not, or should no longer be, in administration. That application was heard by Trower J in July 2020, and resulted in his reserved judgment dated 8 October 2020, whereby it was dismissed. Trower J rejected criticisms concerning the manner in which the joint administrators of the Company had been appointed, and concerning the way in which they had conducted the administration. He also accepted (at [210]) that the “obvious and appropriate way forward” would be for the Company to go into liquidation. Further, (see [5]), he was critical of the fact that Mr Young (a 10% shareholder) and the present Defendant (who held a shareholding of around 8.8% through his SIPP) had not been joined as parties “[f]or reasons which were never explained, and which caused difficulties in getting to the bottom of what occurred”. By a further decision dated 28 October 2020, Trower J ordered indemnity costs against Mr Kebbell and Mr Kitchen.

Second, in McAteer v Hat & Mitre Plc & Ors [2024] EWHC 1601 (Ch), Sir Anthony Mann had to consider an appeal by the present Claimant from a decision and order of ICCJ Jones delivered and made in May 2023, whereby the Claimant’s application for relief seeking the intervention of the court in the liquidation of the Company failed on the basis that he lacked standing to bring the application. Sir Anthony Mann held that the Claimant had standing, but nevertheless dismissed the application on the basis that the Claimant’s shareholding in the Company (of about 0.02%) did not give him “an ultimate legitimate interest in the relief claimed bearing in mind his otherwise intended direction of travel” (see [57]). In this regard, Sir Anthony Mann observed at [56]-[57]:

“At the end of the day Mr McAteer’s plan seems to be to get claims made by the company in order to swell its assets. However, as Mr Curl pointed out, Mr McAteer’s interest was 0.02% of the shareholding in the company. That meant that for every additional £1m which might be available for distribution, Mr McAteer would be entitled to just £200. No rational person would seek to spend time and money for such meagre potential rewards, particularly when the other shareholders did not support any further action being taken. The situation was analogous to the sort of abuse identified in Jameel v Dow Jones [2005] QB 946 (CA) where it was held to be an abuse where pursuing a claim was “not worth the candle” (para 69).

I agree with Mr Ramel that the mere fact of a small shareholding, without more, will not necessarily bar an application under the Act. The fate of any particular application depends on what the application is and what the end result is going to be. However, on the facts of this case I agree with Mr Curl that the size of the shareholding and the likely returns, against the background of unanimous opposition from the other shareholders, means that the invocation of sections 108 and 112, (assuming for these purposes that their intended effect would be to enable claims to be brought against others) would not be justified. If £5m were recovered (which might be thought to be a fancifully large amount) and there were no deductions from it (even more fanciful), Mr McAteer would receive just £1000. That is not real-world commercial litigation and is capable of being a Jameel type abuse.”

The following narrative is taken in substance from the judgment of Sir Anthony Mann.

Until it was sold by the liquidators, the Company owned a very substantial property (eventually sold for over £7 million). The property was an office block which was let to a sister company, Maxwell Stamp plc (“Maxwell Stamp”). The Company was placed in administration as a result of a resolution of the board on 19 December 2018 on the footing that it was cash-flow insolvent. At the time the board was controlled by minority shareholders, including a Mr Young against whom criticism was levelled for doing so by two shareholders constituting the majority, namely a Mr Kebbell (51%) and a Mr Kitchen (17%). Mr Kebbell’s two children each had 1%. The remainder of the shares were held by six other shareholders, including Mr Young (10%) and the present Defendant. The share capital of the Company comprised 50,000 £1 shares. The administrators became the liquidators of the Company when a liquidation ensued.

The administration was challenged by Mr Kebbell and Mr Kitchen and that challenge was heard by Trower J who dismissed it in decisions dated 8and 28October 2020 (see above).

The Claimant was acting as an adviser to Mr Kebbell and Mr Kitchen. In April 2020 the Claimant, Mr Kitchen and Mr Kebbell signed a Memorandum of Understanding (“MOU”) which conferred certain rights of pre-emption over the shares of the company. The Claimant was not a shareholder at all at this stage. The Claimant relied on the MOU as giving him standing to make the application that came before Sir Anthony Mann, but it conferred no standing on him for that purpose (see [75] and [94] of the judgment).

On 16April 2021 Mr Kebbell apparently signed a stock transfer form in respect of 10 of his shares in favour of the Claimant. The validity and force of that transaction was not necessarily accepted by the liquidators (or Mr Kebbell) but it was assumed for the purposes of the appeal before Sir Anthony Mann that it was a valid document. The Claimant was not registered as a shareholder in respect of those shares. So far as it conferred an interest on the Claimant, it was an interest in 0.02% of the shareholding.

On the same day, the Claimant submitted a rescue plan to the administrators, with the support of Mr Kebbell and Mr Kitchen, in respect of the Company. The liquidators rejected that plan on 19April 2021, a matter which became a considerable source of criticism and complaint by the Claimant. Also on 19April 2021, the Company entered into creditors’ voluntary liquidation. The administrators became the liquidators. The Company was heavily balance sheet solvent, owning the above property worth millions of pounds and with creditors of, at most, a few hundred thousand pounds.

On 14October 2021, the Claimant and Mr Kebbell entered into an option agreement (the “Option Agreement”) conferring on the Claimant an option to purchase the remaining shares (26,990) of Mr Kebbell. The Option Agreement was also relied on by the Claimant as giving him standing to make the application before Sir Anthony Mann.

The liquidators were proposing to sell the property. The Claimant, and Mr Kebbell and Mr Kitchen opposed that sale. On 12January 2022 the Claimant (but not the other shareholders) issued an application which, inter alia, sought an injunction restraining the sale. Despite that, the Claimant never sought an injunction restraining the sale. At that stage the application sought the following relief as against the liquidators (so far as material to the appeal before Sir Anthony Mann): (i) An order that the liquidators be directed to direct qualifying decision procedures to be instigated forthwith to ascertain the wishes of the contributories and creditors as to whether the Claimant’s rescue plan or the liquidators’ sale plan should be adopted or whether the liquidators’ proposed sale should go ahead. (ii) A stay of the liquidation pending the determination of the application. (iii) In the alternative, further or other relief, including an injunction restraining the sale pending the determination of the application. (iv) Disclosure of the accepted price for the property.

By about 30March 2022 the property had been sold for just over £7m. The liquidators proposed an interim distribution, and the Claimant did not oppose that distribution. In due course it took place. The liquidators made a significant retention to allow for future costs and expenses. The amounts paid to Mr Kitchen and Mr Kebbell were, it seems, adjusted to reflect claims for misfeasance that the liquidators had made against them. Subject to finalisation of costs and expenses, and (as Sir Anthony Mann presumed) when the liquidators had become sufficiently satisfied that they were not going to have to face future litigation, there might be a final distribution to come in future.

At [53] of his judgment, Sir Anthony Mann said this about the state of the evidence before ICCJ Jones in May 2023:

“On the evidence before the judge it was plainly the case that none of the other members, with the vast majority of the shareholding, wished to have a stay. They had expressed their wishes to allow the liquidation and distribution to go ahead and did not wish to prolong the liquidation further. On a fully fought application as to whether there ought to be a stay those wishes would plainly have great force, and it is inconceivable that Mr McAteer’s tiny shareholding would be able to carry the day in the face of opposition from the other shareholders.”

It is clear from this that, by May 2023, the Claimant no longer had the support of Mr Kebbell and Mr Kitchen. Before me, the Claimant accepted this, although he voiced a dispute, which is not suitable to be resolved at this hearing, as to why this was so.

It is also clear that, quite apart from the fact that the Claimant’s application before ICCJ Jones was opposed by the joint liquidators of the Company and was not supported by any of the other shareholders, and was therefore plainly not warmly received by any of them, the litigation instigated by the Claimant occasioned financial detriment to the other shareholders. The reason for this is that the application caused legal costs to be expended by the liquidators, and if and to the extent that those costs were not recouped in full from the Claimant this will have reduced the assets of the Company, and the monies available to be distributed to the shareholders. Typically, the unsuccessful party in litigation is ordered to pay the costs of the successful party, but equally typically the successful party does not recover all of that party’s costs. In the case of the application, it is apparent from the emails referred to below that the Claimant considered that the costs of the liquidators were unacceptably large, and it is clear from what I was told at the hearing that the Claimant has not paid those costs in full (or maybe at all). It would appear that they are still proceeding through an assessment. Accordingly, although the Claimant maintains that he can and will pay whatever sum is assessed as being due, the liquidators are out of pocket, and will almost certainly remain so at least in part.

The hearing before Sir Anthony Mann took place on 17 May 2024, and his reserved judgment was handed down on 25 June 2024. Accordingly, although the background events preceded the date of the Email, that hearing and ruling occurred at later dates. To complete the chronology: (1) the Claimant sought permission to appeal to the Court of Appeal against the decision of Sir Anthony Mann, and (2) on 17 February 2025 permission to appeal was refused by Snowden LJ on consideration of the papers.

In the meantime, and in the run up to the exchange comprising the 21 October Email and the Email, the Claimant was pursuing his own agenda.

On 28 July 2023, the Claimant sent an email to the solicitor at Ashfords instructed by the liquidators of the Company, the liquidators themselves, and the Defendant, referring to his application for permission to appeal against the decision and order of ICCJ Jones, and to a complaint process that he was “engaged in” with the regulator in respect of the liquidators. The Claimant asked each recipient to provide their best recollection of what was said at the hearing before ICCJ Jones on 25 May 2023 in relation to Ashfords’ costs, and stating that if they failed to do so by his deadline of 4pm on 1 August 2023, he would conclude that the recipients agreed with his own “analysis”.

On 6 September 2023, the Claimant sent an email to seven of the shareholders in the Company and the administrators of the Defendant’s SIPP (but not the liquidators) setting out his version of the history of the disputes relating to the Company and its affairs, and his complaints about the hearing before ICCJ Jones (in respect of which, he said that his existing appeal arguments were about to be supplemented), and saying “I intend pursuing my remedies”. He also wrote: (i) “I am prepared to immediately accommodate your exit from the Company, should you wish to exit”, (ii) “If my appeal is successful, I do intend pursuing those that damaged the interests of [the Company]”, (iii) “I am of course open to any sensible and commercially viable proposal [to resolve the ongoing dispute]”, and (iv) asking the recipients “if you would, individually, clarify whether or not you made a request to Mr Jones [of Ashfords] to explore discussing with me a resolution of the dispute”.

On 3 October 2023, the Claimant sent an email to the liquidators of the Company, which was copied to the same seven shareholders and the administrators of the Defendant’s SIPP, complaining about his “valuable time” being wasted “dealing with issues that serve no useful purpose other than to run up costs”. He explained why, according to him, his attempts to pay £40,000 as an interim payment on account of costs (it would seem, as ordered by ICCJ Jones) had been frustrated through no fault of his own, and protested that there was no need to commence enforcement proceedings against him. The immediate purpose of the email appears to have been to ascertain whether, in threatening enforcement proceedings against the Claimant, Mr Jones of Ashfords had or had not been acting on the instructions of the liquidators. In this regard, the Claimant ended by saying that unless he heard back from the liquidators by 4pm on the following day he would assume that Mr Jones was not acting on their instructions, but instead was acting on those of someone else, or without instructions.

On 18 October 2023, the Claimantsent an email to the same shareholders and SIPP administrators, copying in the liquidators. He said that he had brought proceedings “with a view to protecting the Company and my personal interest in it”, and that the way in which the hearing before ICCJ Jones had been conducted “was, quite frankly, scandalous”. He explained that he had been notified that his application forpermission to appeal would be heard at an oral hearing. He put forward aproposal (in essence, for the shareholders to sell out to him or else “Remain as a shareholder in the Company until I secure justice for the Company, which will result in an uplift for all shareholders”) that was said to be made in the context of “the possibility of future, prolonged and expensive litigation which I am trying to avoid”. He nevertheless made clear that “I have every intention of pursuing those shareholders who have damaged the interests of the Company, who have damaged the interests of my family and I, and who have attacked me personally”. The Claimant ended by requesting a response “by no later than 4pm on Wednesday 25 October 2023”.

Before this deadline had expired, the Claimant sent the 21 October Email, in which he invited the seven shareholders to endorse a proposed consent order (“the Proposed Consent Order”) pursuant to which his appeal “may become redundant” and which, according to him, would not damage the interests of the Company or of any of the shareholders, and would instead improve the interests of all of them. This suggestion was put forward in the context that the hearing of his appeal was listed for 2.5 hours but might require a day, and that the Claimant had already instructed his solicitors to write to the liquidators to ask them to agree to the Proposed Consent Order. The terms of the Proposed Consent Order were not set out, but involved the acceptance that (contrary to the judgment of ICCJ Jones) the Claimant had “standing in the Company by virtue of [his] shareholding and other documentation”. The Claimant asked for a response by the previously stipulated deadline of 4pm on Wednesday 25 October 2023, and further said that “In the event that I do not hear from you by that time, I shall conclude that none of you have any objection to the course of action proposed by me”.

It is self-evident from the contents of the Email, and in any event supported by the evidence of the Defendant, that it was written in direct response to the 21 October Email. I return to this below, when considering the Defendant’s arguments on the current application. Before doing that, I will complete the narrative relating to context.

The Claimant replied to the Email on 25 October 2023, keeping all recipients in copy. He said that it was “deeply offensive and insulting” and asked the recipients to confirm whether the Defendant’s comments were his alone or whether the recipients adopted them, failing which he would assume they were the Defendant’s alone, and would “proceed accordingly”. It appears that the Claimant received no reply to that email.

On 2 November 2023, the Claimant sent an email to the Defendant alone, which again referred to the Email being “deeply offensive” and intimated “future litigation”.

On 14 November 2023, the Claimant sent an email to the liquidators of the Company, copying in the seven shareholders, and referring to the Email. He wrote that he thought that he should “set the record straight” about the payment of the £40,000 ordered in respect of costs by ICCJ Jones, saying that he had paid this amount “not once but twice” and that it was “[the liquidators’] solicitors that have refused to accept the payment”. He said that he had a genuine interest in preserving the Company, and that he believed that “[the Defendant’s] desire to kill off and bury the Company is motivated by factors which are not in the interests of the Company”. He asked the liquidators to say if they disagreed, and said that, in the absence of a reply by 4pm on Thursday 16 November 2023, he would conclude that they accepted his version of events as being accurate.

As set out above, the Claimant’s appeal against the judgment of ICCJ Jones was heard by Sir Anthony Mann in May 2024, was dismissed by a judgment handed down in June 2024, and was then made the subject of an application for permission to appeal to the Court of Appeal, which was refused by Order of Snowden LJ dated 17 February 2025. While the attempt at appeal was extant, the Defendant sent an email to the Claimant on 22 August 2024 on behalf of all of the shareholders in the Company, saying “We have no interest in selling shares to you; We wish you to desist from further communication with us; We desire that the liquidation of Hat & Mitre is brought to a rapid conclusion”.

The Defendant’s evidence is that he heard nothing further about the Email until he discovered the existence of the present proceedings when he was searching online for a judgment relating to the Claimant on 6 April 2025. The Defendant called the Court on 7 April 2025 and received an email from Master Dagnall attaching the Claim Form and Particulars of Claim, and explaining that he would need to decide whether to file an acknowledgement of service, and then, within 14 days, whether to contest jurisdiction or file a defence, along with a suggestion that he seek legal advice.

The only additional background matter that it is convenient to mention at this stage is that one other piece of litigation with which the Claimant had been involved before the Email was sent was the case of Sanjeev Guram and Anoop Guram v Daniel McAteer and Aine McAteer [2008] NIQB 162. In that case, the plaintiffs alleged that they had been induced to enter into an agreement in November 2001 by the undue influence of the Claimant, and they sought to have that agreement set aside. They also alleged that the Claimant was in breach of fiduciary duty to them, and was negligent in advising them. The case was tried by Peter Smith QC, sitting as a Deputy Judge of the High Court in Northern Ireland, and he handed down judgment on 20 June 2008. The Deputy Judge held that the plaintiffs’ case based on undue influence succeeded, that their claim that the Claimant was a fiduciary added nothing to that case, and that their case based on negligence also succeeded (see [77]-[86]). He was also highly critical of the Claimant. At [98], the Deputy Judge said that the Claimant “presented as cunning, dogmatic, obsessive and ruthless”. At [99], he said that he found the Claimant “generally unconvincing” and that there was one aspect of the Claimant’s evidence, in particular, which seemed to the Deputy Judge “to exemplify his preparedness to dissemble when it suited him”. And at [100], the Deputy Judge referred to the Claimant’s “lack of candour” in relation to one matter, to the Claimant’s “untruthful denial” in relation to another matter, to “the vague and evasive nature of his evidence” in relation to other events, and to the Claimant’s “preparedness to say whatever suited him”.

There is no doubt that the Defendant and the liquidators knew about the contents of this judgment before the Email was sent, because the Defendant referred to numerous passages from it in an email that he sent to the liquidators dated 15 November 2021.