Home Information Cases F&C Alternative Investments (Holdings) Ltd v Francois Barthelemy, Anthony Culligan (2011)

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F&C Alternative Investments (Holdings) Ltd v Francois Barthelemy, Anthony Culligan (2011)

Summary

It was not in the public interest for a final judgment which addressed a number of financial regulatory issues to be suppressed as a condition of a settlement agreement between the private litigating parties.

Facts

The applicants (B) applied for a final judgment not to be handed down in proceedings brought by the respondent company (F), to enable a settlement agreement to take effect. B and F had formed a limited liability partnership (LLP) to operate a hedge fund business. The agreement provided for B to have the right to exercise a put option requiring F to acquire B's interests in the partnership on preferential terms if F breached the agreement in certain circumstances. B asserted that they had validly exercised such put option rights. F contested that assertion and brought proceedings against B. There was a lengthy trial and a draft judgment was issued by the court with a date scheduled for final judgment to be handed down. Prior to that date the parties reached agreement, conditional on the court not handing down the final judgment in open court.

Held

In general terms, the courts existed to resolve extant disputes between litigating private parties and considerable weight should be given to the wishes of the parties where they succeeded in settling their dispute before judgment was finally handed down. There was also a public interest in avoiding the further expenditure of court time and resources. The considerable strain on B and their families, as individuals conducting litigation against a well-funded corporate group, and their desire to bring proceedings to an end, on terms which were favourable to them, also had to be taken into account. However, the practice of providing draft judgments was not carried out to allow parties "to have more material available to them to help them to settle their dispute", Prudential Assurance Co Ltd v McBains Cooper (2000) 1 WLR 2000 CA (Civ Div)followed. B and F had had a long time in which to settle their dispute and it was apparent that negotiations regarding settlement had been entered into on the basis of knowledge of the terms of the draft judgment. Moreover, the settlement agreement had been reached on a conditional basis with both parties aware that the court had a discretion to proceed to hand down the final judgment. The parties had therefore consciously taken a risk that the condition in their agreement might not be fulfilled. The public interest in the judgment being handed down strongly outweighed the private interests of the parties in suppressing the judgment. The judgment contained a detailed review of the conduct of a range of entities and individuals approved by the Financial Services Authority, and it was strongly in the public interest that a final and considered judgment making detailed findings of fact should be available to enable the FSA to assess the significance of any findings in the relevant regulatory context, as reflected in its rules requiring openness and co-operation in dealings with it. An agreed joint statement by the parties was not a satisfactory means of informing the FSA regarding the circumstances of the case. There were also the interests of other parties to be taken into account. Where a court had reached firm conclusions in a final form judgment which exonerated witnesses from serious charges publicly levelled against them, it was in the public interest that that judgment should be handed down. A range of legal issues had been addressed, including the question of whether members of an LLP owed fiduciary duties to each other, and it was in the public interest for them to be made the subject of a published judgment for the development of the law and guidance to others. Those considerations led to the conclusion that the final judgment should be handed down (see paras 7-11 of judgment).

Application refused

Chancery Division
Sales J
Judgment date
14 July 2011
References

​LTL 4/8/2011 : [2011] EWHC 1851 (Ch)