UT (Tax & Chancery) UT-2023-000064 - [2024] UKUT 00394 (TCC)

This ground relates to the amendments at 114A, 159, 160, 162D, 165 and 176. These paragraphs contain allegations that contrary to Mr Staley’s position, contact between Mr Staley and Mr Epstein continued to take place after 25 October 2015. Mr Staley objects to the references in these paragraphs to contact having continued between Mr Staley and Mr Epstein through Mr Staley’s daughter. These emails, which passed between 14 March 2016 and 23 February 2017, demonstrate that Mr Epstein asked Mr Staley’s daughter to make various enquiries of Mr Staley. Mr Staley did not reply directly to Mr Epstein but replied to his daughter who in turn relayed the essence of his responses to Mr Epstein.

The basis of Mr Staley’s objection is that in the amendments the Authority has unreasonably and inaccurately mislabelled these emails all of which were initiated by Mr Epstein, by inaccurately describing or characterising them in the draft pleading to assert that in some way this correspondence took place on Mr Staley’s initiative and/or with his consent or connivance, in order to support the Authority’s proposed case by way of allegations of lack of candour and recklessness.Mr Smith submits that it is self-evident that the fact that Mr Staley did not initiate any of this correspondence with Mr Epstein and did not personally engage with him by way of any form of response that he had, as he had consistently explained to senior executives and directors at Barclays and in interview with the Authority, ended his relationship with Mr Epstein upon joining Barclays and had ceased contact with him. The suggestion that Mr Staley intended to meet with Mr Epstein is not reasonably to be inferred from the correspondence in question. These emails were conducted between Mr Epstein and the Applicant’s daughter. The evidence given by Mr Staley when deposed in the United States was not an acknowledgement by him that he had contacted or been in contact with Mr Epstein. The Authority, bearing as it does the obligation to prove its case against the Applicant has been unable to produce a single instance of any contact or attempted contact with Mr Epstein by Mr Staley since October 2015; these five e mails are therefore consistent with that position. The Authority’s attempt to characterise this correspondence as “continuing their close relationship” is perverse.

In my view Mr Smith’s objections are all matters for submission at the hearing on the question as to whether these emails can be characterised as demonstrating that contact between Mr Staley and Mr Epstein continued after 25 October 2015. It is clearly a question of what is meant by “contact” and whether Mr Staley was aware that by not disclosing the fact of these emails in interview or in the Letter there was a risk that the statements in the Letter regarding the recency of his contact with Mr Epstein were misleading. It seems to me that the Authority has a realistic prospect of success on the question as to whether these emails demonstrate that contact between Mr Epstein and Mr Staley continued after 25 October 2015 and that Mr Staley was aware that by not disclosing that such contact had taken place that there was a risk that the relevant statement in the Letter was misleading.

If the Tribunal accepts that the emails exchanged between Staley’s daughter and Mr Epstein are evidence of ongoing contact between the two men, that will be evidence from which the Tribunal could find that the Letter was misleading.

I therefore permit the amendments referred to at [125] above.