Jill Leddington v Sandercock Social Care Dispute

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2. Jill Leddington & Anor v Pamela Ann Sandercock & Anor

Jill Leddington & Anor v Pamela Ann Sandercock & Anor

[2026] EWHC 938 (Ch)

Jill Leddington & Anor v Pamela Ann Sandercock & Anor

[2026] EWHC 938 (Ch)

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Judge Keyser KC :

Introduction

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1. For some years until July 2023 the first defendant (“Mrs Sandercock”, or “Pam”) carried on the business of the provision of social care services via limited companies owned by her and her immediate family. Initially the company used was Arches Domiciliary Care Limited (for convenience, “Domiciliary”, though it was always known as Arches), in which she and her husband, Mr Trevor Sandercock, were the only and equal shareholders. In March 2017 Domiciliary was dissolved and its business was taken over by a newly incorporated company, Arches Support Services Limited, the second defendant (“Arches”). Mrs Sandercock was a director of Arches from March 2017 until October 2018, and her children, Mr Levon Sandercock (“Levon”) and Mrs Rebecca Williams (“Rebecca”), were directors from March 2017 until July 2023. The shareholdings varied, but from July 2020 until July 2023 Mrs Sandercock, Levon and Rebecca were the three equal shareholders. Arches was sold in July 2023, and its current owners have reached settlement of the claim made against it in these proceedings.

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1. Arches provided social care services at fourteen sites in Blaenau Gwent (“the Arches Sites”). Arches itself was the registered service provider. Mrs Sandercock was authorised by Care Inspectorate Wales to act as the “Responsible Individual”; as such, she was the person with responsibility for oversight of the management of the social care services and for ensuring compliance with relevant standards and regulations.

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1. The first claimant (“Ms Leddington”, or “Jill”) is a businesswoman. Prior to the present dispute, she and Mrs Sandercock were friends. She is the sole director and shareholder of the second claimant (“Camu”), which has been in the business of providing office administrative services. Between 2010 and 2023 Camu, through Ms Leddington, provided services, first to Domiciliary and then to Arches, at the Arches Sites. Two of the Arches Sites, both in Tredegar, have been referred to in these proceedings as “the Camu Sites”: Tŷ Pryn Helyg and Willow Grove House, both of which were owned by Ms Leddington’s partner, Mr Chris Sullivan. Domiciliary/Arches was the registered service provider, and Mrs Sandercock was the Responsible Individual, in respect of the social care provision at the Camu Sites, but there is an issue as to whether the business carried on at the Camu Sites was in reality that of Domiciliary/Arches or that of Camu.

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1. By her claim in these proceedings, Ms Leddington claims from Mrs Sandercock £333,333.33, or alternatively £330,000, on what is, in slightly simplified terms, the following basis.

• From around June 2011 until the sale of Arches in July 2023, the parties operated according to an oral agreement (“the Collaboration Agreement”) as follows: Mrs Sandercock would be the Responsible Individual for all the Arches Sites, including the Camu Sites; Camu and Ms Leddington would provide the administrative and management services for all the Arches Sites; Camu paid Mrs Sandercock a fee for acting as the Responsible Individual at the Camu Sites; all fee income from all the Arches Sites was initially received by Domiciliary/Arches, but it would then account to Camu for all income received in relation to the Camu Sites. The effect of this was that, although outwardly the business at the Camu Sites was simply part of the Domiciliary/Arches business, in reality it was an independent business operating under the cloak of Domiciliary/Arches.

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• By an oral agreement in February/March 2022 (“the 2022 Agreement”), made for the purpose of facilitating a sale of Arches on the best possible terms, Ms Leddington (on her own behalf and/or on behalf of Camu) and Mrs Sandercock agreed: (i) that the Collaboration Agreement would be varied so that Arches would be entitled to deduct and retain 30% from the moneys for which it was obliged to account to Camu in respect of the monthly income from the Camu Sites; (ii) Camu’s staff would be transferred to Arches with effect from March 2022; and (iii) Ms Leddington would receive one twelfth of the sale price ultimately obtained for Arches and its business—at that time it was believed that the sale price would be at least £6 million. The parties thereafter acted in accordance with the 2022 Agreement.

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• In or around July 2023 Arches was sold for a price of about £4 million. However, Mrs Sandercock has not paid to Ms Leddington the money due on the sale, namely one twelfth of £4 million: £333,333.

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• When Ms Leddington demanded payment of the money due, Mrs Sandercock offered and Ms Leddington agreed to accept £330,000. If Mrs Sandercock is for some reason not obliged to abide by the 2022 Agreement, she is bound by this later agreement.

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1. Mrs Sandercock denies liability on the claim, and she advances a counterclaim against Camu. Her case, in summary, is as follows.

• By a written contract made on 7 September 2010 between Camu and Domiciliary (“the 2010 Contract”), Domiciliary agreed to provide to Camu all the resources necessary to enable Camu to operate as a domiciliary care agency, in return for a 30% share of Camu’s distributable profits; that share was to be paid within nine months of Camu’s financial year end. The terms of the 2010 Contract were varied orally in about June 2011, so that the fees due from Camu would be paid directly to Mrs Sandercock rather than to Domiciliary. In March 2017 the 2010 Contract (as varied) was novated to substitute Arches for Domiciliary; alternatively, by their conduct Arches and Camu contracted on the terms of the 2010 Contract (as varied).

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• All fees from the local authority for the provision of social care services were, however, paid to Domiciliary and later Arches because it was the registered service provider and as such had the contracts with the local authority. Domiciliary, and later Arches, paid all revenues from the Camu Sites to Camu, on the basis that it would receive 30% of Camu’s distributable profits.

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• Camu’s payment of the fees due was erratic, and in 2015 Mrs Sandercock agreed, as a goodwill gesture to assist Ms Leddington and Camu in their financial difficulties, that Domiciliary would for the time being accept £2,000 per month instead of 30% of distributable profits, on the basis that the shortfall would be made up when the claimants’ financial position was better.

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1. The parties adduced large amounts of evidence that is at best only tangentially relevant to the real issues in the case and, to a significant extent, of no relevance at all. They also took full advantage of a case management order that permitted supplementary witness statements. (By way of example only: having made a first statement comprising 112 paragraphs and 26 pages, Mrs Sandercock made a supplemental statement comprising 82 paragraphs and 22 pages, most of which consisted of commentary on the claimants’ witness statements. I do not think this a helpful way of adducing witness evidence.) In this judgment, I shall seek to focus on the key issues and what I regard as the evidence most directly relevant to those issues. There is much of the evidence to which I shall not refer, even if it has some bearing on the issues, though I have had regard to it all in forming my conclusions.

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1. In summary, my conclusions are:

1) Ms Leddington’s claim against Mrs Sandercock fails, because I do not accept that anything said or done gave rise to a binding contract or estops Mrs Sandercock from denying the existence of a contract.

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2) Mrs Sandercock’s counterclaim fails, because I reject her factual case as to the agreement between the parties and because, anyway, Mrs Sandercock’s own evidence shows that the counterclaim, if it had any validity, would have been that of Arches.

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The Facts

The Business Arrangements between Domiciliary/Arches and Camu

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1. Before the events giving rise to this claim, Ms Leddington had a long career as an administrator and manager in the social care sector. She also had other, varied business interests. When cross-examined she agreed that she was an experienced businesswoman, though she said that she believed she had never entered into a written contract. In time, she formed the wish to set up her own business for the provision of social care. It was for that purpose that she procured the incorporation of Camu in November 2008. However, in order to be a registered social care provider, Camu required a Responsible Individual, registered with the Care Inspectorate of Wales (“CIW”) as the person responsible for overseeing the provider’s care activities. Ms Leddington did not have the necessary qualifications to be the Responsible Individual, and initial efforts to appoint another person to the role were unsuccessful.

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1. In early 2010, on the recommendation of a friend, Ms Leddington made contact with Mrs Sandercock. The two women became friendly.

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1. According to Ms Leddington, Mrs Sandercock agreed to become Camu’s Responsible Individual, and in about late 2010 representatives from the local social services department visited Tŷ Pren Helyg and approved it as suitable for the provision of social care. In her first witness statement Ms Leddington states that “Camu started providing care services in around June 2011” and that it did so on terms that she and Mrs Sandercock had previously agreed orally (the Collaboration Agreement): Mrs Sandercock, who would continue to be the owner and director of Domiciliary and its Responsible Individual, would also be the Responsible Individual for Camu’s care services at Tŷ Pren Helyg and any other site at which it provided such services, though she would not have any day-to-day role in Camu’s services; for this, Mrs Sandercock personally would be paid a fee; in addition, Camu and Ms Leddington would provide assistance to Domiciliary, which would include administrative and management help and assistance with the recruitment and training of staff and finding and retaining service users. As for the amount of Mrs Sandercock’s fee, Ms Leddington’s evidence was that Mrs Sandercock told her to pay “whatever you think”, and that accordingly she paid her a monthly amount that seemed fair on the basis of Camu’s income: initially £500 but increasing over the years until in 2018 it was about £2,000. Ms Leddington’s evidence was that the care business at the Camu Sites was Camu’s own business, though it would not be the registered provider of the care services provided at the Camu Sites.

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“Based on what Pam told me about the system with CIW and the regulators when agreeing that Pam would be the Responsible Individual for Camu, we agreed that Camu would officially sit under the [Domiciliary] registration and umbrella. This would make Pam’s interactions with the relevant authorities easier. For similar reasons, we agreed that it would be simpler for all income in respect of both Camu’s sites and [Domiciliary’s] sites to be paid to [Domiciliary]. Then, each month, [Domiciliary] would pay over to Camu all the income received for the Camu sites.”

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1. What this means is that, on Ms Leddington’s account of the arrangement, the objective and outward position was that the provision of care at the Camu Sites was carried out by Domiciliary/Arches as registered provider, not by Camu; similarly, Mrs Sandercock was simply the Responsible Individual for Domiciliary/Arches, though now with responsibility for two additional sites. Thus, in paragraph 38 of her first witness statement, Ms Leddington gave this explanation:

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“Because of this arrangement, Pam told me that all of Camu’s staff would have to have contracts with [Domiciliary], as the registered provider. One reason for this, as a I understand it, was that the contracts with the local authority said that they could not be sub-contracted to other companies, so there would have to be a connection between the Camu staff and [Domiciliary] so [Domiciliary] could be responsible for them. CIW would complete annual inspections of the staff files and so this paperwork needed to be in place. However, whatever the necessary formal arrangements, all the Camu staff were always paid by Camu through our payroll system through the PAYE system. Camu also paid for all DBS certificates and undertook all training and appraisals for its staff until I left end of March [2023].”

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1. This uneasy balancing of the relationship between the staff and the different companies, or something like it, was reflected in the documented practice. “Camu’s” staff all had written contracts of employment with Domiciliary, not with Camu, and signed Domiciliary’s policies and training records. But they were on Camu’s PAYE system; and, when some years later they were transferred to Arches’ payroll, Camu issued them with P45s.

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1. Ms Leddington’s evidence was that the parties continued to operate according to the Collaboration Agreement until April 2023, save only that Arches was substituted for Domiciliary in 2017 and that there were agreed variations in 2021 (mentioned below). Camu continued to make monthly payments to Mrs Sandercock for her services as its Responsible Individual, and Domiciliary/Arches continued to pay to Camu the income received from the Camu Sites. The terms of the Collaboration Agreement were never recorded in writing, because the two women were “best friends” and trusted each other implicitly.

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1. Mrs Sandercock’s evidence was different and to this effect. The agreement was that Ms Leddington would be employed by Domiciliary as a project manager (by which was meant “site manager”: what are here called sites were referred to at the time as projects) with responsibility for the staff who provided services at Tŷ Pren Helyg (and, from 2014, Willow Grove House). Because of her other business interests, Ms Leddington did not want a salary; she preferred to be paid via Camu. Mrs Sandercock refers to what was envisaged as “the employee/profit-sharing arrangement” (first witness statement, paragraph 19). She stated: “I wanted to keep the finances and affairs of Camu distinct from those of [Domiciliary] to prevent anything getting mixed up” (paragraph 18). Accordingly, she made an appointment for herself and Ms Leddington to attend at the office of her accountant, Mr Nick Barrell, for advice as to how best to give effect to the proposed arrangement. She states (the paragraph numbers are awry):

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“20. When Jill and I met with Nick, we explained what [we] were planning to do and to discuss how we were to manage the finances of it. We specifically sought Nick’s advice on the financial arrangements regarding payments. It was agreed that Nick would write up an agreement for us to that effect. I cannot recall who mentioned about putting the agreement together, but I do remember very well discussing fully how it would work in place. I have a very well recollection of that meeting and discussion in respect the agreement.

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1. Nick then drafted up a written agreement. We agreed verbally what the agreement should entail. Me and Jill then left the office (went separate ways) and Nick phoned me later that day to say he had typed up the agreement. I attended his office again the same day to collect the written agreement and took a blank copy home for Trevor to review and sign. Trevor was not in when I got home so I photocopied the blank copy of the agreement before showing it to him. I remember he came home quite late that day. I clearly recall having showed Trevor a copy of the agreement when he got home and we looked at it together before he signed it. I then took the copy (signed by Trevor only) back to Nick’s office the next day without making further photocopies.

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1. I attended Nick’s office with Jill and we both signed the agreement in front of Nick. I did not keep the original signed agreement, nor did I take a photocopy of it I did not really think I needed to do this. One of us (although I cannot remember who) said to Nick ‘can you keep this in the file’, he agreed, and we left the original with Nick to keep. That seemed a sensible thing given Nick was the accountant for both of us. I do not think that Jill took a copy of the signed agreement I do not remember it being copied when we were there. If Jill had taken a copy when I was there, I would have asked for one too.”

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1. Mrs Sandercock stated that she kept the unsigned copy of the agreement in her office at home and produced it after receiving the letter before action from Ms Leddington’s solicitors. (The document itself is discussed below.) She had, in fact, spoken to Mr Barrell on 22 May 2024 and asked him to send her a scanned copy of the signed 2010 Contract. The following day, she sent him an email: “I know you said yesterday you would email over the original signed copy of the contract between myself and Jill that you have in my file there, could you please send this through today please.” Mr Barrell replied, “Looks like the paperwork has been archived in the Maltings in Cardiff. I can retrieve it but it will take a few days at least.” However, on 6 June 2024 he wrote further:

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“Unfortunately, we will not be able to provide a copy of your agreement. The Maltings have standing instructions from us to destroy all records after five years (the legal time period accounting records must be kept). It never occurred to me to take the agreement out of the standard records and as the agreement was dated the 7 th September 2010, over 14 years ago I had completely forgot its existence. I do not think the agreement would have been of any benefit to you as it related to Arches Domiciliary Care Limited which was dissolved in 2019.”

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1. When a copy of the document produced by Mrs Sandercock was sent by Ms Leddington’s solicitors to Mr Barrell in August 2024, he replied:

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“I think there is some confusion over the contract you have included as an attachment and the settlement agreement when Pam sold Arches Support Services Ltd. I confirmed the existence of a settlement agreement between Pam and Jill not the attached contract. I cannot confirm or dispute the validity of the attached contract as I simply cannot remember every detail of approximately five hundred clients from fourteen years ago. I explained to Pam that I had no recollection but would ask the Maltings (storage facility) to check. Of course, any agreement would be with Arches Domiciliary Care Ltd Pam’s old company, not Arches Support Ltd. The Maltings have standing instructions to destroy any records over five years old if the company involved is not VAT registered and seven years if they are VAT registered. As Arches Domiciliary Care Ltd had been struck off, was not VAT registered and the records were over five years old the Maltings had destroyed them.”

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1. The unsigned document produced by Mrs Sandercock in respect of the 2010 Contract is dated 7 September 2010 and headed “Commercial Agreement between the Following Parties: Arches Domiciliary Care Limited [and] Camu Ymlaen Support Services Limited”. At the foot is space for signatures by Ms Leddington, Mrs Sandercock and Mr Trevor Sandercock. The document has been printed by an inkjet printer and is on high-quality paper with a Conqueror watermark. The substantive text of the document is as follows:

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“Arches Domiciliary Care Limited agree to provide Camu Ymlaen Support Services Limited, subject to it first satisfying its own requirements, all resources at its disposal to enable Camu Ymlaen Support Services Limited to operate as a domiciliary care agency.

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The Arches Domiciliary Care Limited for providing Camu Ymlaen Support Services Limited with the required resources will be entitled to a thirty percent share of Camu Ymlaen Support Services Limited distributable profits.

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Neither Camu Ymlaen Support Services Limited nor Arches Domiciliary Care Limited will have any claim on the commercial or intellectual assets of the other outside that already stated in paragraphs one and two above.

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Annual accounts will be prepared for Camu Ymlaen Support Services Limited and both parties to this agreement will be entitled to receive a copy of the final figures.

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Any distributable profits will be paid within nine months of Camu Ymlaen Support Services Limited year end.

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This agreement is subject to review annually from the date of this document.”

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1. Mr Barrell declined to provide a witness statement, because he did not want to become involved in a dispute between two people whom he knew and with whom he had had a business relationship. However, he was called to give evidence on behalf of the claimants and was examined in chief and cross-examined regarding the 2010 Contract and events in the autumn of 2023. His evidence concerning these events seemed to me to be straightforward and honest. However, given the passage of time I cannot assume that his memory of relevant events is wholly reliable. In short, he had no recollection of anything to do with the 2010 Contract and was confident that he did not draft it and that he would not have drafted any such agreement, because it was outside the area of his competence and the scope of his professional insurance and because there would have been a potential conflict of interest between two of his existing clients. The one qualification that he placed on this was to say that, as the events in question were so long ago, he could not say with “absolute certainty” that he had not drafted the document. He said, further, that the document produced by Mrs Sandercock did not match anything that would have been produced in his office: his office used budget photocopier paper and had always used laser printers. Again, he accepted that he could not say with absolute certainty that his office had never at any time had a small inkjet printer or used a batch of different paper, but he said that these possibilities were highly unlikely. Mr Barrell was asked about his responses to Mrs Sandercock in May and June 2024, which appeared to accept the existence of the 2010 Contract. At first, he said that he had initially understood Mrs Sandercock to be asking about an agreement from 2023 (discussed below). That cannot be right, in my view, because it is clear that his enquiry of Maltings related to a file more than just one or two years old. In cross-examination he gave what I regard as the likely explanation: that, when asked for the agreement by Mrs Sandercock, he had no recollection of it but did not like to say so before looking for it, because in view of the lapse of time he could have been mistaken; and that therefore he simply responded on the assumption that it existed.

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1. Ms Leddington’s evidence was that she had never seen the 2010 Contract or anything like it until Mrs Sandercock’s solicitors produced it in 2024, and that she had never agreed to any such terms as it records. She stated: “I can only assume that Pam or her children have created it for this claim, to avoid paying me what they promised and to seek to take moneys from me.” (I should state here that no case based on an allegation of forgery was pursued at trial.) Her statement continued:

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“The [2010 Contract] suggests that I was paying large sums of money (30% of Camu’s income) to [Domiciliary]. That is completely wrong and never happened. … [I]n mid- 2021 (i.e. about a decade into our arrangement), I did say that Arches … could retain 30% of Camu’s income, as requested by Pam. That was the first time we discussed any deduction or retention and it only happened after that point.”

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1. Expert evidence regarding the document was given by two forensic document examiners: Elisabeth Briggs for the claimants, and Ellen Radley for Mrs Sandercock. The evidence did not greatly advance matters beyond the information recorded above. The experts were unable to say when the document was created or, in the absence of comparison document, whether it was likely to have been produced in Mr Barrell’s office. The paper was expensive and not of the kind one would expect to be used for day-to-day printing. There were indented impressions of handwriting on the document. The text was “Mrs P Sandercock” followed by her address. The impressions were consistent both with the document, which was folded in half, having been inside an envelope on which the address was then written and with the document having been underneath paper on which the text was then written. The former is the more likely possibility. The experts could not say whose the handwriting was.

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1. I make the following observations and findings regarding the document and the 2010 Contract.

1) The document is not a fabrication or forgery. No such allegation was advanced at trial. Further, it seems that the document was folded and placed inside an envelope on which Mrs Sandercock’s name and address were then written. It therefore appears probable that it was prepared by a third party and either posted to Mrs Sandercock or left for her collection.

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2) The document does not appear to have been drafted by a legal professional, yet it is not without some degree of professionalism. On the basis of the evidence before me, and despite Mr Barrell’s honestly given evidence to the contrary, I think it probable that he did indeed draft it and procure its printing. The fact that an accountancy practice would not use paper of this high quality for its commercial purposes does not exclude the possibility that Mr Barrell or someone else had a pack of such paper for occasional use. (The experts observe that, as such paper would not be used for general printing purposes, a packet might last for a considerable time.) I bear in mind Mr Barrell’s evidence that there were no inkjet printers in the office, but on balance I think it more likely that he or the office had such a printer than that the document was produced elsewhere. Anyway, it was produced somewhere other than at Mrs Sandercock’s home, as it was placed in an addressed envelope.

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3) I do not accept, however, that the 2010 Contract was ever signed or that it reflected the agreement between the parties. First, no signed copy has been produced. Mr Trevor Sandercock says that he signed it. I think that his evidence was honestly given, but I am extremely doubtful whether he has a genuine recollection of signing the document and consider it more likely that he is mistaken. Even if he did sign it, it does not follow that it was ever executed. Second, Mrs Sandercock’s own account is problematic. If what she says were correct, it would follow that she collected the printed original on high-quality paper, took a photocopy, and then used the photocopy for execution, while keeping the original in its unsigned state for her records but failing to obtain any copy of the executed document. That is not impossible, but it is not at all likely. The obvious thing to do would be to sign the original, get Mr Trevor Sandercock and Ms Leddington to sign it, and then either take and keep a photocopy of the executed document or give the executed document to Mr Barrell and ask him to provide photocopies. The very fact that Mrs Sandercock has produced the original document makes it unlikely that the 2010 Contract was ever signed. Third, the parties did not in fact operate on the basis of the financial arrangements in the 2010 Contract. Mrs Sandercock explains this as a concession, whereby Camu would make payments on account and would pay the balance when it was in a position to do so. This is not supported by any documentation, whether in the form of communications or as debtors shown on Arches’ accounts. It is also implausible. The counterclaim brought by Mrs Sandercock rests on the entitlement to 30% of Camu’s distributable profits in accordance with the 2010 Contract. The total figure claimed for the period February 2013 to March 2021 is £444,393. To take one example from the schedule particularising that counterclaim: for the period from February 2015 to December 2016, it is said that Camu owed £97,778.06 but paid only £8,198.30 and so owes £89,597.76. In my view, it strains credulity to say that there was, year on year, such a mismatch between obligation and performance and that nothing was done about it.

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4) I have considered the evidence given by Levon and by Rebecca relating to the 2010 Contract. Levon’s evidence was that his parents told him about the contract in 2010 and that he saw and read it when his mother photocopied it. He said that his mother told him of the underpayments in 2021 and confessed to him that she had felt embarrassed about raising the matter with Ms Leddington, not least because she knew that Ms Leddington had financial problems. Rebecca’s evidence was that she did not see the document until these proceedings were under way but that her mother told her about its terms, including the 70:30 profit-split, when she became a director in 2017. I do not accept their evidence. Mrs Sandercock was perfectly clear in her evidence that the payments supposedly due from Camu were owed to Arches, not to her personally. Levon and Rebecca were directors of Arches from March 2017 until July 2023; from October 2018 they were the sole directors. They were also each the holder of a one-third shareholding. And from at least late 2021 they were looking to sell the company. If it were true, as Levon says, that his mother had told him of the underpayments, he would have ascertained the amounts in question (which he says he did not do) and ensured that the matter were addressed (which he demonstrably did not do). I regard his evidence on that point as deliberately false. His evidence that he saw and read the 2010 Contract at the time of its production does not in my view represent a true memory, and on balance I think that it too was a deliberate falsehood. As for Rebecca’s evidence, I do not accept that she believed there was an agreement for a profit-split: if she had done so, she would have done something to ascertain the money due, not allowed a debt of several hundred thousand pounds to go unnoticed, unrecorded and unaddressed. On balance, I think that she has allowed her recollection to be distorted by knowledge of what others are saying and by the fact that there was indeed later an arrangement involving a 70:30 split.

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1. I accept that the Collaboration Agreement was the operative agreement between the parties and that they acted in accordance with it, with Arches taking the place of Domiciliary in 2017. The Collaboration Agreement was a device to conceal from the local authority what the parties at least considered to be the true position: that the business of care provision at the Camu Sites was Camu’s business, not Domiciliary’s/Arches’ business. The concealment was necessary because Camu was not a registered provider, the contracts for provision of social care were made by the local authority with Domiciliary/Arches, not with Camu, and (according to the evidence) the contracts prohibited the sub-contracting of the services. The concealment was facilitated by the fact that the staff contracts for those who worked at the Camu Sites were with Domiciliary/Arches. The running by Camu of the payroll for the staff at the Camu Sites was clearly not just the provision of an administrative service for Arches, as Arches was quite capable of running its own payroll and did so for the other staff; rather, it was an internal arrangement that enabled the finances of the two companies to be administered separately.

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1. According to Ms Leddington, in the first half of 2021 she and Mrs Sandercock agreed to vary the Collaboration Agreement. Instead of accounting to Camu for all of the income received each month from the Camu Sites, Arches would in future pay only 70% of that income and retain 30%. Ms Leddington said that the variation was requested by Mrs Sandercock on the basis that it was necessary to ensure that the local authority did not realise that Arches was in effect subcontracting the care provision at the Camu Sites to Camu. Ms Leddington agreed to this, although she suspected that the request was made because Arches was struggling financially. From July 2021 Arches accounted to Camu for 70% of the income from the Camu Sites and retained the balance of 30%.

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The Sale of Arches

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1. In her first witness statement Ms Leddington states that in about February 2022, in a meeting at Arches’ office, Mrs Sandercock, Levon and Rebecca told her that they intended to sell Arches and that they would give her a share of the sale price to reflect the work she had done and the value she had contributed to the business, including by agreeing to Arches retaining 30% of the income from the Camu Sites. The statement continued (paragraphs 51 and 53):

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“Pam promised to pay me a share of the sale price once Arches was sold. She said that the value of this share and payment would depend upon the final sale price but she said that it would result in a payment to me of £500,000 to £800,000. I understood this to mean that I would get at least £500,000 when the sale concluded but that the actual amount would vary in line with whatever the final sale price was. Pam was obviously expecting to sell it for at least a price that resulted in my share being worth £500,000.

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Pam did not tell me the percentage she was using to calculate those numbers but she had clearly thought about this and was telling me how much the percentage share she had decided upon would be worth, based on her estimates of the potential sale price. … [I]t is now clear to me that she was expecting a sale price of at least £6 million and that was the basis for the £500,000 lower-end figure for my share. As the Particulars of Claim say, that is a 1/12 share. … I accepted this offer at the meeting, confirming that in return I would support Pam in selling Arches, including by letting it keep 30% of Camu’s income.” (Footnote: 1)

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1. When cross-examined, Ms Leddington said that no figures were mentioned when the initial promise of a share of the purchase price was made at the meeting in the office, and that the assurance or promise came from Mrs Sandercock and Levon, “not so much Rebecca”. It was later, when she and Mrs Sandercock had gone outside and were sitting together in a car in the car park outside Arches’ office, that Mrs Sandercock told her that the share would be between £500,000 and £800,000 but that she had not wanted to discuss the matter in front of her children.

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1. Ms Leddington’s letter of claim to Mrs Sandercock, dated 26 March 2024, put the matter as follows:

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“In February 2021 [sic], Ms Leddington attended a meeting at Arches’ office … with you and your children, Levon and Rebecca, who also worked for Arches. You said that you intended to sell the business, and it was agreed that you would pay Ms Leddington a share of the proceeds of sale. You had a private discussion with Ms Leddington after the meeting in which you estimated that her share would be at least £500,000 - £800,000. At a subsequent meeting outside your office in or around May 2021, you asked Ms Leddington if Arches could henceforth deduct 30% from Camu’s monthly income from its sites in order that Arches would appear a more attractive proposition for potential purchasers which Ms Leddington agreed to. In March 2022 you asked Ms Leddington if from April 2022 Arches could take over the employment all of Camu’s staff, again to make it a more attractive proposition for potential purchasers which again Ms Leddington agreed to.”

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That letter is broadly consistent with Ms Leddington’s evidence at trial as to what was said concerning the share of the sale price. It is also consistent with her evidence regarding the transfer of employees; see below. Importantly, however, it is inconsistent with her evidence regarding the sequence of events as regards the deduction of 30%. This is because the letter misdates the discussion about receiving something from the proceeds of sale: any such discussion was in early 2022, not in February 2021, and was after, not before, the variation of the Collaboration Agreement. The correction was duly made by amendment of paragraph 14 of the particulars of claim, which had originally given the date of the meeting where the promise of a share was made as February 2021.

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1. Mrs Sandercock’s evidence is very different and to this effect. On an occasion when Ms Leddington had come to the Arches’ offices, the two of them sat together in Mrs Sandercock’s car while having a cigarette break. In the course of a light-hearted conversation, they talked about what they might do after the business was sold and they had retired. Mrs Sandercock made a passing comment to the effect that perhaps she would give Ms Leddington something nice, like a day out shopping or at a spa. She might have said something along the lines of, “I may even give you some money, but I’ll have to have some first.” This was a one-off, passing remark and Ms Leddington made no particular response. There was no mention of any specific gift and certainly not of a particular amount of money. Mrs Sandercock did not accept that there had been any mention of the prospective sale in a meeting with Levon and Rebecca. They, too, denied that they had discussed the prospective sale at all with Ms Leddintgon, let alone assured her that she would receive anything from the sale.

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1. Ms Leddington’s evidence was that in March 2022, a few weeks after the discussion concerning a share of the sale proceeds, Mrs Sandercock asked her if Arches could take over the employment of all Camu’s staff as from April: “This meant not just formal contracts … but a full transfer of the full employment relationship, with Arches also assuming the payment obligations that Camu had been responsible for and had paid throughout the life of the Camu sites to that date” (first witness statement, paragraph 55). She said that Mrs Sandercock explained that the transfer of the employees would make Arches a more attractive target for potential purchasers and that she repeated the promise to pay £500,000 to £800,000 from the sale proceeds. Ms Leddington says that it was on this basis that she agreed to the transfer of the staff. In the course of cross-examination, she insisted that she would not have signed over “[her] staff” if she had not been given anything in return. When it was put to her that Arches had no need to ask for a transfer of staff, because the staff were already employed by Arches, she said that the staff had never been on Arches’ payroll.

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1. Mrs Sandercock’s written evidence was that the transfer of the payroll to Arches was by way of preparation for Ms Leddington to end her involvement in the business, as she had said in late 2021 that she no longer wanted to work in social care: first witness statement, paragraphs 74 to 76. When examined in chief at trial, Mrs Sandercock said that on the occasion of the discussion about the sale of the business in early 2022 she had told Ms Leddington that she was looking to sell the business and would be retiring, and that Ms Leddington had replied, “I want to finish, so I’ll probably leave as well.”

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1. I shall set out my findings on material issues of fact later in this judgment.

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1. On 23 March 2022 Camu issued P45 forms to all the staff on its payroll. Those Staff were thereafter on Arches’ payroll. Ms Leddington continued to be involved in the business at the Camu Sites.

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1. By early 2023 Ms Leddington’s mental health had significantly deteriorated and she wanted urgently to end her direct involvement in care provision. On 28 February she sent an email to Mrs Sandercock:

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“Pam sorry I got upset in front of you today but that’s because I’ve come to the end. Last couple of years my confidence has totally gone, others have even said I’m not the person I used to be. My whole life revolved around work and like I said bit by bit it’s been taken away from me. I really struggle with change and have my own way of doing things. I’m too old to change now and to be honest I couldn’t if I wanted to. …

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I’ve felt like a spare part for a long time I’m certainly not needed and deep down I don’t feel part of Arches but that’s one thing I will keep my promise and never give you cause for concern or cause any problems. I’ve set TPH [Tŷ Pryn Helyg] which as you know runs really good so I’m not even going to be missed there my relationships with staff and service users has also dwindled away. I give you my word I would never let you down with TPH that’s their home for as long as they want. …

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I know you mean well but please don’t book any spas or trips cos my heads not in the right place. Been here before and the only person who can help me is myself and I will pull myself out of this rut in my own time. I’ve been putting a front on for a long time and it’s mentally exhausted me. Sleep deprivation doesn’t help either my memory is shocking. I’m just not interested in anything anymore and don’t want that rubbing off on my staff. …”

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It was probably a few days later that she sent a text message to Rebecca:

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“… It’s mentally draining putting a front on all the time everything going against me atm.

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Got a lot to catch up with

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My dbs [Disclosure and Barring Service certificate] is out of date and I’m not renewing it or my scw [Social Care Wales registration] I get everything up to date for you etc and lisa will step up …

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I’ve tried to keep it together and can’t and don’t want it to rub off on my team

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I got to get my life sorted out cos it’s a mess tbh …

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I did explain to ur mam when I came over last Monday

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I’ve been here before and need to pull myself together and I will”.

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1. In March 2023 Ms Leddington attended a further meeting at Arches’ office with Mrs Sandercock, Levon and Rebecca. Ms Leddington says that it was agreed that she would take a reduced role in the business and that Arches would retain 50%, rather than 30%, of the income from the Camu Sites. This is denied by Mrs Sandercock, Levon and Rebecca, and I do not accept it.

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1. On 23 March 2023 Ms Leddington left a note for the staff, saying goodbye. She did no further work at the Camu Sites.

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1. A number of messages passing among Mrs Sandercock, Levon and Rebecca in April to July 2023 give some insight into what was happening on the Arches side, although the context of the messages is not always entirely clear. Rebecca and Levon were anxious that Mrs Sandercock would be indiscreet towards Ms Leddington and would adversely affect the planned sale; Rebecca, in particular, appears to have feared that Ms Leddington had some hold over her mother and was trying to use it to exploit her. (In my view it is probable that Rebecca’s concern was that Ms Leddington might try to make use of her knowledge concerning the irregular relationship that had existed between Arches and Camu.) For her part, Mrs Sandercock thought that her children appeared to be on a “crusade” to harm Ms Leddington. On 27 April 2023 Levon wrote, with reference to Ms Leddington, “She’s not to get a penny more from Arches.” On 10 May 2023 Rebecca told her mother not to have any correspondence with Ms Leddington and not to reply to any messages from Ms Leddington without first speaking to her. She wrote, “It’s really really important that you listen to this, because she will cause some damage now so we need damage limitation as it will affect a sale.” On my interpretation of the message, Levon’s remark in a message on 20 June 2023 is an example of expressions of anxiety about the irregular arrangement with Camu: “Good thing is tho all the contracts belong to Arches.” On 25 June 2023 Mrs Sandercock wrote: “Do you think we cud drop in wen we say who landlord is Jill partner that she left cos we Wundt back her to make complaint about her being put through dbs.” In what appears to be a reply, Rebecca wrote on the same day: “Damage limitation because we know Jill is going to cause more problems don’t don’t [sic] want to add fuel by commissioners picking up on that etc. let sleeping dogs lie a minute just want to sell and get out.”

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1. A sequence of text messages between Ms Leddington (JL) and Mrs Sandercock (PS) on 6 May 2023 is worth setting out in full.

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“JL Have u sorted my 50% out yet x

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PS What 50%

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JL Remember I said take 50% of my part of business not 30%

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PS Then you said you give it all up want nothing to do with it

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JL My head was fried didn’t think I was getting anything

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PS You av walked away from it all I told you not to you was adamant that’s what you wanted that’s what you told Rebecca

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JL It’s not going to sell yet though

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PS Won’t be long got data room back open with solicitors waiting on agreement

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There 3 companies after it

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We are not making sale exclusive to 1 made that mistake last time it will go to the first one that puts money on the table

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We are not holding out for money and taking a cut to get rid

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JL So I won’t get anything for the house either

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PS You got the rent from the s/users there now and will continue to do so

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JL Do u still want to buy it

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PS Yes if you want me to cant’s do it til sale comes through

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Can buy it off you straight with cash then

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JL What about jls [a service user resident at one of the Camu Sites] cos his rent doesn’t cover the cost to Andrew

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PS What is the shortfall Lisa trying to get him a rental local but looks like we gonna av to bring in his s/worker if I can’t get anywhere probably lose that contract then

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JL I’d rather have my 50% and nothing from the sale[.] Shortfall rent is 170 four weekly

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PS Rebecca back on thurs I speak to [her]

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JL Don’t matter leave it has it is[.] I thought u were still the boss

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PS I taken step back only do payroll and accounts

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I want out ASAP

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I being doing admin down there setting up new system

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JL I always told u I wouldn’t do it without you[.] There was more to why I left but no one to talk to[.] And no matter what they say about me I would never cause u any problems and will keep my word[.] Please don’t think I stupid cos I’m not I know what just been grinning and bearing it for a long time”.

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1. Having regard to the text messages and to the other evidence, I consider the probability to be as follows. In early 2023, when Ms Leddington was increasingly unable to cope with continued work in the Arches business, there was discussion about her taking a reduced role and Camu receiving only 50% of the income from the Camu Sites. Whether or not it was she who had initially proposed such a course, Ms Leddington decided not to take it but instead said that she wanted to have nothing more to do with the business and just walk away from it and receive nothing. This was, at least in part, because she assumed that the sale of Arches was imminent. When she came to think that the sale was not imminent after all, she sought to revive the proposal of 50%, but Mrs Sandercock rejected it on the not unreasonable basis that she could not expect money for nothing.

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1. In or around June 2023 Mr Sullivan gave six months’ notice to the residents at the Camu Sites, requiring them to leave. Ms Leddington accepted that she knew the notice would cause problems for the sale of Arches and that Mr Sullivan would not have given the notice without speaking to her first, but she insisted that she had not wanted a notice to be served and that the decision was his alone. I do not believe that the notices were served without Ms Leddington’s approval. The service of the notices was contrary to Ms Leddington’s assurance in February 2023 that the residents at Tŷ Pryn Helyg would be able to remain as long as they liked and her similar assurance in the text message on 6 May 2023. The question arises why Ms Leddington and her partner should have taken action adverse to Arches’ interests at a time when she believed (as she claimed) that she stood to receive £500,000 or more from a successful sale of the business. At all events, the residents left and Arches did no further business at the Camu Sites after December 2023.

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1. In July 2023 the shares in Arches were sold for a total price of £4,145,000, shared equally among Mrs Sandercock, Levon and Rebecca. On 20 July 2023 Rebecca sent an iMessage to Mrs Sandercock: “Jungle drums will be going and no doubt even tho we stressed confidentiality, Jill will know soon if not already. Make sure you let me know if she makes contact with you, if she does … Do not reply”. The following day she sent another iMessage: “I’m expecting Jill to make contact with you at some point asking for money lol. Don’t reply to her tho. And let me know if she does”.

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1. Ms Leddington did indeed learn of the sale through a third party shortly afterwards. In August 2023 she sent a long and rambling manuscript letter to Mrs and Mr Sandercock. The letter said that Ms Leddington had been advised by her counsellor to set out her thoughts; she repeated that in oral evidence and I accept it. I shall set out only brief extracts of the letter, in order to give its flavour and pick up a few particularly relevant points.

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“[T]he real reason I had to leave [Arches] … was because what Arches has done to me. You gradually took my business off me and demoralised me. I had to leave otherwise I would have had a breakdown. … I was pushed out / worked out of my company, same has happened to Trevor [Mr Sandercock]. … You gave me the opportunity to operate under your registration which I do appreciate but you have also forgot how much I done for you. …

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It’s obvious Pam you had to sell the business it was either that or you would have lost it anyway. I know that and so do you. You make out Levon done a good job selling it but everyone has letters with companies offering to buy other companies. …

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I have never felt so worthless in my life and will never be able to work in Social Care again. I have ways and means of finding out info what was being questioned by S.S. (LDT) they were questioning why is the Willows run so well compared to other projects. There’s lots I could tell you but no point now. … You yourself was made to feel incompetent and worthless and you agreed with me when I told you. You had been controlled and isolated from other. You can try to convince yourself otherwise but you know it’s true. How many times did I have to pick you back up and say, ‘You are the parent’, again you agreed. You and Trevor made Arches, no one else. … Our friendship changed about 3 – 4 years ago, we used to be close you were like my right arm and I am going to miss our friendship. Don’t be controlled in future Pam, find a voice and stick up for yourself. …

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I know Chris served notice through the solicitor because I wouldn’t do it, but Chris should have been contacted because you did tell me you wanted to buy for a source of income. I hope you will pay the agreed amount of £500,000 as you gradually pushed me out knowing full well it was being sold.

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We would have sold you the house if you had emailed Chris. …

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The reason I was gradually worked/pushed out was because you were sub-contracting work out to me. We can then put all this behind us at the cost of our friendship.

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P.S. I clearly remember what I said in our meeting. Yes I did tell Rebecca she could have it all (because that’s what you all wanted anyway). But I also said just give me 50% and you have 50% instead of 30%.

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…

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I’m not a greedy person Pam. I’m very much like you and will give my last, you know that, but I worked hard for myself and you and will not walk away from what I’m due. You know it’s tax deductible from the sale and you will claim entrepreneurs tax benefits.

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You know that everything I have written in this letter is true.”

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1. On or shortly before 23 August 2023, Rebecca reported this letter to the police as being threatening and constituting blackmail. She wrote: “We are concerned that although Jill appears to be somewhat mentally unstable, that she has high potential of continuing further threats and possibly carrying out acts to compromise safety of our family. I am most concerned of the safety and vulnerability of my parents following this blackmail and threat.” However, when the police asked what action she wanted to be taken, she replied: “In fear of repercussions / escalation in threats / blackmail we do not wish for Jill to be visited by police at this point. If we receive any further threats/blackmail/escalation we will make contact with police to report and pursue the complaint further.”

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1. Having received no response to her letter, Ms Leddington contacted Mr Barrell with a view to him acting as an intermediary. Evidence on what happened was given by Ms Leddington, Mr Barrell and Mrs Sandercock. There are also some emails, which I shall refer to presently.

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1. The account given by Ms Leddington in her first witness statement is as follows:

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“I called my accountant, Nick Barrell, who also worked for Pam to ask about this. He then contacted Pam about my share of the sale price. He called me back and told me that Pam had confirmed our agreement about my share of the sale price but had told him that she had sold Arches for a price 30% less than she was hoping for and so wanted to deduct 30% from the £500,000 she had agreed to pay me based on her expected sale price. As such, Nick told me that Pam had agreed to pay £330,000, which is actually less than 70% of £500,000, but by this point I was happy to agree to £330,000 because I wanted it all over and done with. I told Nick this and asked him to communicate my agreement to £330,000 to Pam, which I am sure he did because otherwise what happened next would make no sense. I believed and believe we had reached an agreement then and was expecting [her] to honour that payment. These exchanges took place over about a week in October 2023.”

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The cross-examination of Ms Leddington produced only a rather disjointed account, which was not entirely easy to interpret. At one point she agreed with Mr Lloyd when he put to her that Mr Barrell had not communicated an offer of £330,000 but had asked whether she would be prepared to accept a reduction of one-third, which would equate to £330,000; and that, after she had said that she would, he told her that Mrs Sandercock was happy to offer £300,000, to be formally recorded. My note records that Ms Leddington’s answers to my questioning at the end of her evidence were to the following effect:

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“When I heard that the business had been sold, I got in touch with Nick Barrell, probably by telephone (I usually contacted him by telephone). I told him that I had a deal with Mrs Sandercock for £500k. He said he’d contact her. After he had spoken to her, he got back to me. He said that she told him she had sold the business for one-third less than she originally hoped, so she would pay one-third less. He said that was about £330,000. I said that was OK. I didn’t hear from him again. Eventually I chased him, and he said that Pam had told him that she wanted the agreement recorded in a solicitor’s letter and that he was to leave the matter to the solicitor and not be further involved.”

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1. Mr Barrell’s evidence was to this effect. His role was purely as a go-between. Ms Leddington contacted him first; he thought, but was not sure, that she came to see him in his office; and his recollection was that this was before Arches had actually been sold. She told him that Mrs Sandercock had agreed to pay her money when the company was sold. Mr Barrell recalled a “settlement figure” of £500,000 that had been agreed before he became involved. After speaking with Ms Leddington, he contacted Mrs Sandercock, who told him: “I am not going to get the full price, so Jill is going to have to accept one-third less.” When he asked Mrs Sandercock how she would like to proceed, she said that she was willing to pay £300,000 on condition that the matter were formally recorded in a solicitor’s letter, and she asked him to liaise with the solicitor and explain the position to him. He conveyed this to Ms Leddington, who remarked that £300,000 was not two-thirds of the agreed amount. His recollection was that she was agreeable to a solicitor’s letter; however, he could not remember whether she said that she would not accept £300,000. Nevertheless, he went to see the solicitor and explained what was required. The solicitor told him that he would draft the necessary documentation. Mr Barrell did not recall having any further involvement in the matter.

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1. Mrs Sandercock denied that her conduct in the negotiations conducted through Mr Barrell reflected acceptance that she had promised money to Ms Leddington. She said that at the time she was in a vulnerable state, as she believed she was dying of lung cancer, and that she felt threatened by Ms Leddington and frightened. She interpreted the letter in August 2023 as representing an implicit threat to make trouble unless a payment were made; she thought the letter was “blackmail” and thought that Ms Leddington was “dangerous”, as demonstrated by the erratic nature of the letter. Mrs Sandercock said that it was for these reasons that she initially agreed to pay £300,000. However, she denied that she had acknowledged to Mr Barrell any prior agreement for a larger amount. She said that, when she had reflected further on the matter, she decided that she ought not to conclude the settlement agreement. Rebecca confirmed that her mother had been “very emotional, upset and frightened” upon receipt of the August letter and that she had made the report to the police on her mother’s behalf. Levon’s evidence was to broadly similar effect.

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1. On 11 September 2023 there was an exchange of emails between Mr Barrell and Mrs Sandercock. The first was from Mr Barrell:

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“I spoke to Jill regarding our discussions and having explained to her that the sale price is one third less than was originally offered is happy to accept one third less than the original settlement figure of £500k.

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How would you like to proceed.”

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Mrs Sandercock replied:

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“I want a solicitor letter signed by her as full and final payment £300,000 and no further claims. This agreement as previously when set up is between me and her.”

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An hour later, Mrs Sandercock sent another email to Mr Barrell:

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“You can also remind Jill that she was party to the contract knowingly so that she could also be done for entering into the contract. [I]t is legally classed as cohersion.”

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1. I note the following things about this exchange. First, it is clear that Mr Barrell and Mrs Sandercock had discussed the matter. Second, Mr Barrell refers to an “original settlement figure of £500k”, and he does not give any indication that this was a matter of dispute. (For example: he does not say, “I told her that you deny having agreed anything, but she insists that there was an agreement for payment of £500,000.”) Third, Mrs Sandercock does not dispute the reference to “the original settlement figure of £500k”. Fourth, the very mention of the sale price being one-third less than originally offered can only have any relevance if there had been at the very least some original discussion or agreement that made the sale price relevant. Fifth, Mrs Sandercock’s remark, “This agreement as previously when set up is between me and her”, most naturally implies that there was an existing agreement of some sort between the two of them, and it makes best sense if that existing agreement related to the same matter as the proposed new agreement. Sixth, Mrs Sandercock’s second email appears to be an acknowledgment that both she and Ms Leddington had made some prior “contract” for which they could be “done”. That cannot be a reference to an agreement to pay and receive a share of the sale proceeds. In context, it is probably a reference to an irregularity in the arrangements between Domiciliary/Arches and Camu, namely the element of “sub-contracting”, which was alluded to in Ms Leddington’s letter and was probably what led to Rebecca characterising the letter as “blackmail”.

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1. On 1 November 2023 the solicitor, Mr George Williams, sent an email to Mr Barrell, Mrs Sandercock and Ms Leddington, attaching a draft Settlement Agreement and giving instructions for its execution. The draft agreement provided for a payment of £300,000. The email read:

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“Dear Nick, Pamela and Jill,

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Sorry for the delay in getting this to you. However, I’ve now attached the draft Settlement Agreement and my invoice and firm’s bank details.

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Please can you carefully check through the draft Agreement to make sure you fully understand and approve its contents. I understand neither of you want to, but I’m obligated to remind you that you are both entitled to seek independent legal advice on the Agreement.

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If the Agreement is approved as drafted, Pamela and Jill, you will both will have to sign on the final (“Execution”) page of the document to the right hand side. I understand that Nick will witness the agreement, so he will sign and print his details to the left.

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The agreement will also need to be dated and a date when payment has to be made in terms of days (which may be arbitrary if the payment has already made) needs to be put at section 1 on the second page of the agreement (I have underlined a space).

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Please can you then email me a copy of the signed agreement so that I’ve got it on file.

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If the agreement needs amending in any way, then please do not hesitate to contact me.”

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The invoice was addressed to Mrs Sandercock.

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1. On 3 November 2023 Ms Leddington sent an email to Mr Williams in the following terms:

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“Im not sure if there has been a misunderstanding regarding the amount but I agreed with Nick £330 thousand pounds. Before our working relationship became unbearable I was told by Pam that I would be paid £500k plus. Even though she stated that she didn’t sell the business for the initial price I am aware that she sold the business for nearly 4 million pound because her granddaughter told someone. I agreed to £330k and will not accept any less because I am already at a loss accepting £330 has Pams company had my overall monthly profit of approx £15k totalling approx £45k. I previously stated before this is about principal and nothing else, the timescale of this agreement has made me very anxious therefore I have nothing to lose.”

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1. Early on the morning of 8 November 2023 Mr Williams sent an email to Mrs Sandercock and Mr Barrell:

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“Jill has emailed me individually to say that the settlement sum is actually £330,000. Please can you confirm this is indeed correct and then I can email you all an amended agreement for your approval and signing. I look forward to hearing from you as soon as possible.”

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A few minutes later, and before receiving any response, Mr Williams sent a further email:

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“I’ve attached an amended version of the Settlement Agreement to reflect settlement at £330,000, if that is the agreed settlement figure. I’ve also emailed this to Jill.”

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A corresponding email, with amended version of the Settlement Agreement, was indeed sent to Ms Leddington. It read:

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“I’ve attached an amended draft Settlement Agreeement to reflect settlement at the sum of £330,000. This is attached for your approval and signing.

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I’ve emailed it to Pam and Nick too.”

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1. Ms Leddington signed the amended (£330,000) version of the Settlement Agreement and took it to Mr Barrell to take to Mr Williams. Having heard nothing further, on 17 November 2023 she sent an email to Mr Williams, saying that she had signed her copy but had heard nothing further. Mr Williams then sent an email to Mrs Sandercock: “I’m just checking whether you have managed to sign the Settlement Agreement as Jill has emailed me to say that she has. I look forward to hearing from you.” On 20 November 2023 Ms Leddington sent further emails to Mr Barrell and to Mr Williams, asking for an update on progress. Mr Barrell replied that Mrs Sandercock had told him that she would deal directly with the solicitor and he should no longer get involved. Mr Williams sent a message to Mr Barrell, saying: “[W]hen I spoke to Pam on the telephone today to chase her signed portion, she informed me that the agreement was not appropriate and that she wasn’t proceeding any further.” Mr Williams did confirm, however, that Mrs Sandercock had paid his invoice.

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The Claim

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1. The primary claim is put on the basis of an entitlement to one-twelfth of the sale price of Arches, on the basis of either contract or estoppel. (Various alternative formulations of the claim in reliance on a number of torts were not pursued at trial.)

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Contract in 2022

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1. Having regard to all the evidence, including in particular the evidence recited above, I am not persuaded that was any mention of the payment of money in a meeting involving Levon and Rebecca. However, I find that, while the two women were sitting in a car in the car park at Arches’ offices, Mrs Sandercock told Ms Leddington that, when Arches was sold, she would pay her a share of the money she received and that this would be £500,000 or more. The following matters are of particular relevance in reaching this conclusion. First, Mr Barrell’s evidence indicates that, during the settlement discussions in September 2023, Mrs Sandercock did not dispute Ms Leddington’s case as to what had previously been discussed. I regard Mr Barrell as a truthful witness and, importantly, an impartial one. Second, the written communications in respect of settlement are more consistent with Mrs Sandercock’s acceptance that such an assurance had been given than with a dispute on that point. Third, despite the attempts by Mrs Sandercock to explain her conduct in other terms, I regard it as improbable that she would initially have been agreeable to pay £300,000 if she had not previously said that she would pay a larger amount. Fourth, the internal communications passing among Mrs Sandercock, Levon and Rebecca show that they anticipated that Ms Leddington would ask for money when she learned that the business had been sold. In reaching this conclusion, I am not unmindful of a number of matters that might point in a different direction. These include Ms Leddington’s complicity in the service of notices on the residents at the Camu Sites, which was liable to hinder rather than help a sale of Arches, and her apparent willingness to forego money after a sale in return for a mere 50% of the income from the Camu Sites. However, I think that these matters are probably reflective of Ms Leddington’s rather unstable mental state at the time, as well as of a degree of spite. I do, in fact, regard her letter in August 2023 as containing an implied threat; it is understandable that Rebecca interpreted it as blackmail. The text of that letter is inconclusive as to the existence of a promise to make payment. By itself, the reference to £500,000 could be an allusion to such a promise; or it could be, as Mr Lloyd suggested, “a hook being formed in real time”.

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1. However, I do not regard what Mrs Sandercock said in the car as having contractual force. I find that it was simply a gratuitous assurance or promise of a future payment, given out of friendship and in acknowledgment of Ms Leddington’s contribution to the success of Arches. That contribution was not consideration for the promise: past consideration is no consideration. The same is true of the agreement that Arches would retain 30% of the income from the Camu Sites, because that agreement was made in 2021. I find that, when the promise of money was made, there was no discussion at all of anything to be done or given in return; I reject Ms Leddington’s contrary evidence. Ms Leddington seeks to rely on the agreement in March 2022 for the transfer of staff from Camu’s payroll to Arches’ payroll. In my judgment, that was neither consideration for the promise of money nor an agreement made in reliance on it. I reject Ms Leddington’s evidence that the promise of money was repeated on that occasion; I do not believe that anything was said in that regard but consider that Ms Leddington’s evidence was given in an attempt to address the problem that the promise made to her was gratuitous. Nor do I accept that in agreeing to the transfer of the payroll Ms Leddington was relying in any way on the promise of money or that it was a factor in the agreement. I have already explained the position regarding the staff. Camu’s operation existed only within and in dependence on the Arches business, and no kind of independence or separation of the staff could survive or be consistent with a sale of Arches. The regularisation of the payroll was an obvious and necessary step. It is also to be remembered that the staff contracts were with Arches, not with Camu, and that the division of the payroll was in order to avoid complications in the financial arrangement between Arches and Camu. Further, by this time Ms Leddington was desirous of retiring from all work in social care.

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Estoppel

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1. If the promise of payment was non-contractual, Ms Leddington’s case is advanced, in the alternative, on the basis of estoppel by representation or estoppel by convention.

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1. Estoppel by representation is explained as follows in Chitty on Contracts (36 th edition) at para 7-005 (citations omitted):

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“There are three key requirements for estoppel by representation: (1) a clear representation of fact or (probably) law intended to induce the representee to adopt a particular course of conduct; (2) an act of the representee reasonably taken in reliance on the representation; and (3) the representee must be able to show that they will suffer detriment if the representor is not held to their representation. The burden lies on the representee to establish an estoppel by representation. This may be possible even in the face of an entire agreement clause. Estoppel by representation has been described as an ‘an estoppel in the strict sense of the term’ and is the basis of the majority of claims in estoppel. It has sometimes been described as a rule of evidence, but is best viewed as a substantive rule of law.”

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1. The argument for Ms Leddington is essentially as follows. The conversation or conversations between Mrs Sandercock and Ms Leddington constituted or implied a representation by Mrs Sandercock of an existing fact (or a state of affairs that was a mixture of fact and law), namely that she had an entitlement to a share of the sale price. The representation was made with the intention that Ms Leddington should rely on it “in transferring key value and aspects of Camu’s business to Arches” to Arches’ advantage in the proposed sale (skeleton argument, paragraph 97). Ms Leddington did so rely on the representation and would suffer detriment if Mrs Sandercock were permitted to deny the truth of the representation.

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1. I reject this argument.

1) First, estoppel by representation is not a cause of action; it operates defensively, to prevent a party denying the truth of something he or she has said. See, for example, Low v Bouverie [1891] 3 Ch 82, per Lindley LJ at 101 and per Bowen LJ at 105. It is quite true that this defensive effect can be used to enable a claimant to establish a cause of action that he or she would not otherwise be able to establish; an example is Silver v Ocean Steam Ship Co. [1930] 1 KB 416. That is how Mr Waistell seeks to advance the case: “Mrs Sandercock is estopped (by representation and/or convention) from denying that a binding agreement was reach[ed] in the terms of the 2022 Agreement as pleaded above” (amended particulars of claim, paragraph 34). This, however, is a straightforward attempt to negate the requirement for consideration: it is to say that a promise that was non-contractual because unsupported by consideration is enforceable as a contractual promise because the promisor is estopped from denying the existence of consideration. Mr Waistell seeks to avoid this difficulty by characterising the matter giving rise to the alleged estoppel as a representation of legal entitlement to receive a share of the sale proceeds. This will not work, because what was said in the car was a promise, not a statement of existing fact. Insofar as Mr Waistell attempts to address this by invoking subsequent statements of existing fact (to the effect: “You have an entitlement to receive a share of the sale proceeds”), the attempt fails on the facts.

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2) Second, I do not accept that Mrs Sandercock made the promise with the intention that Ms Leddington act in reliance on it. She simply made it with the intention of performing it.

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3) Third, I do not accept that the promise was a factor in Ms Leddington’s agreement to transfer the staff payroll or that she relied on it (in the sense that it was a contributing factor) in any other way.

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4) Fourth, I would not have accepted that Ms Leddington did anything that would have made it unjust for Mrs Sandercock to resile from her promise. (It is generally immoral to resile from a promise. But that is a different matter.) The primary reason, which should by now be apparent, is that Ms Leddington and Camu had no independent business but was simply dependent on Arches and Mrs Sandercock, and the staff’s contracts were actually with Arches.

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1. The requirements of estoppel by convention were considered at length by the Supreme Court in Tinkler v Revenue and Customs Commissioners [2021] UKSC 39, [2022] AC 886. At [45] Lord Burrows cited with approval the dictum of Briggs J in Revenue and Customs Commissioners v Benchdollar Ltd [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 at [52]:

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“(i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them. (ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it. (iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.”

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Lord Burrows glossed Briggs J’s proposition (i) by noting that there must be conduct that “crossed the line” between the parties, such that from that conduct (which may be by words or acts) the sharing of the assumption can be inferred: see Tinkler at [49]-[50]. Lord Burrows continued:

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“51. It may be helpful if I explain in my own words the important ideas that lie behind the first three principles of Benchdollar. Those ideas are as follows. The person raising the estoppel (who I shall refer to as ‘C’) must know that the person against whom the estoppel is raised (who I shall refer to as ‘D’) shares the common assumption and must be strengthened, or influenced, in its reliance on that common assumption by that knowledge; and D must (objectively) intend, or expect, that that will be the effect on C of its conduct crossing the line so that one can say that D has assumed some element of responsibility for C’s reliance on the common assumption.

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1. It will be apparent from that explanation of the ideas underpinning the first three Benchdollar principles that C must rely to some extent on D’s affirmation of the common assumption and D must (objectively) intend or expect that reliance. This is in line with the paragraph from Spencer Bower, The Law Relating to Estoppel by Representation, 4th ed (2004) p 189, which was cited by Briggs J just before his statement of principles:

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‘In the context of estoppel by convention, the question here is whether the party estopped actually (or as reasonably understood by the estoppel raiser) intended the estoppel raiser to rely on the subscription of the party estopped to their common view (as opposed to each, keeping his own counsel, being responsible for his own view).’

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For a similar statement, using the same wording of C’s reliance on ‘the subscription’ of D to the common assumption, see the present edition of that work, Spencer Bower: Reliance-Based Estoppel, 5th ed (2017), para 8.26. But this is not to suggest that C must be relying solely on D’s affirmation of, or subscription to, the common assumption as opposed to C relying on its own mistaken assumption. It is sufficient that, as D intended or expected, D’s affirmation of, or subscription to, the common assumption strengthened, or influenced, C in thereafter relying on the common assumption.”

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1. In the light of my observations on the claim based on estoppel by representation, the claim based on estoppel by convention fails, for essentially the same reasons.

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Contract in 2023

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1. The alternative basis of claim is that there was a concluded settlement agreement. This, too, has been advanced in alternative ways: first, that a concluded settlement was achieved in the negotiations conducted through Mr Barrell; second, that it was achieved by the actions of the solicitor who prepared the documentation that was intended to record the settlement. In my judgment, neither alternative is correct, and there was no concluded contractual settlement.

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1. I consider first the contention that settlement was reached in the communications passing through Mr Barrell. The evidence has been set out in detail above. The critical point in the negotiations comes before Mr Barrell told Ms Leddington that Mrs Sandercock wanted an agreement for £300,000 formally recorded in a solicitor’s letter. The question is whether there was a concluded agreement for payment of an amount representing a one-third reduction from £500,000. The argument for Ms Leddington is that there was: she made her claim for £500,000; Mrs Sandercock, via Mr Barrell, said that, as the business had sold for one-third less than was hoped, she would pay one-third less; Ms Leddington accepted that offer; anything that happened thereafter constituted attempts by Mrs Sandercock to alter the agreement reached. I reject this argument, essentially for two reasons, though they are related.

1) First, even leaving aside the consideration point (below), I do not consider that the communications via Mr Barrell are appropriately interpreted as involving either anything that could amount to offer and acceptance or any objective intention to create legal relations. It is true, of course, that Ms Leddington and Mrs Sandercock were seeking to reach agreement through Mr Barrell’s good offices. But I think it unrealistic and artificial to treat these communications as themselves being legally binding. Mr Barrell clearly saw himself as an intermediary facilitating the parties’ efforts to agree and has explaining each woman’s position to the other, not as someone authorised to make binding offers. The very vagueness of the communications militates against the existence of any intention to create legal relations: as, for example, in the fact that the actual amount of money in question was not specified and was only and roughly calculated by Mr Barrell in conversation with Ms Leddington. The precise terms of the conversations cannot be reconstructed now. But it seems to me that Mr Barrell was not purporting to convey an offer from Mrs Sandercock but was exploring whether Ms Leddington would be amenable to terms that might be acceptable to Mrs Sandercock. Ms Leddington’s own evidence in cross-examination lends support to this understanding, though her evidence taken as a whole was not entirely clear. When Mr Barrell asked Mrs Sandercock, “How would you like to proceed[?]”, he was in my view realistically understanding that the communications had not been of the kind to bring matters to a conclusive determination. Again, although Ms Leddington disputed the subsequent proposal of only £300,000, she did not reject the requirement for a solicitor’s letter; she does not appear to have believed that there was any concluded agreement.

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2) Second, and in any event, Ms Leddington gave no consideration. The starting point—and the premise on which the alternative case based on a settlement agreement rests—is that Mrs Sandercock originally made a gratuitous promise to pay an amount out of the money received for the sale of Arches, mentioning specifically £500,000, and that this is properly construed as a promise to pay one-twelfth of the sale price. On behalf of Ms Leddington, it is sought to conjure a contract out of Mrs Sandercock’s statement that she was willing to pay, and Ms Leddington would have to make do with, one-third less than the anticipated amount. Mr Waistell did not explain what the consideration moving from Ms Leddington was meant to be. The only possibility I can think of—though the matter was not in terms put this way—is the compromise of a disputed and bona fide claim. But in my judgment that would mischaracterise what was happening. In the August letter Ms Leddington had asked Mrs Sandercock to pay “the agreed amount of £500,000”. As she had received no response, she made a demand for payment via Mr Barrell (cf. paragraph 36 of the amended particulars of claim). In response Mrs Sandercock said she was willing to pay one-third less. If the original promise was gratuitous, so was this one (if indeed it could be counted as a promise). It does not become a contract because Ms Leddington said, “I agree to that.” That is not a contractual compromise: it is a promisor expressing willingness to pay less than she had promised.

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1. The alternative way in which the case for a settlement agreement is advanced is as follows. Mrs Sandercock instructed a solicitor, Mr George Williams, to prepare the formal contract. Mr Williams, who was acting for Mrs Sandercock, initially sent an agreement specifying the settlement amount as £300,000. When Ms Leddington told Mr Williams that the agreed figure was £330,000, he sent a revised document, containing the higher figure, for her “approval and signing”. Ms Leddington approved and signed the document. This was sufficient to conclude a contract. See paragraphs 38 to 42 of the amended particulars of claim, as developed in oral submissions.

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1. I reject this further alternative. The settlement agreement drafted by Mr Williams was clearly intended to require execution by both parties. Ms Leddington confirmed in evidence that she understood this and that she knew that the agreement would have effect only when signed by Mrs Sandercock. The fact that Mr Williams sent, for “approval and signing”, a revised draft to reflect what Ms Leddington says was a necessary correction does not mean that he was communicating an offer or confirming that Mrs Sandercock approved the alteration. And it certainly does not mean that a settlement agreement previously requiring execution by both parties would now become binding upon execution by one of the parties only.

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1. The claim is, accordingly, dismissed.

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The Counterclaim

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1. The counterclaim is brought by Mrs Sandercock against Camu. It is formulated as follows in the Amended Defence and Counterclaim:

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“16.5. Fees due under the [2010] Contract were payable to Ms Sandercock, and not to Arches. The terms of the [2010] Contract were varied orally in or around June 2011, at a meeting between Ms Leddington and Ms Sandercock. It was agreed at that meeting that payments would be made directly to Ms Sandercock.

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16.6. Further or alternatively, notwithstanding that the [2010] Contract provided for payment to be made to Arches, payments were in practice made by Camu to Ms Sandercock.

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…

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1. Pursuant to the [2010] Contract, [Domiciliary] was initially entitled to a thirty percent (30%) share of Camu’s distributable profits.

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1. As set out above at paragraphs 16.5 16.6, fees due under the [2010] Contract were payable to Ms Sandercock, and not to Arches. The terms of the [2010] Contract were varied orally in or around June 2011, at a meeting between Ms Leddington and Ms Sandercock. It was agreed at that meeting that payments would be made directly to Ms Sandercock.

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1. This arrangement continued to apply after the [2010] Contract was novated on or around 14 March 2017 to substitute Arches as a party thereto in place of [Domiciliary]. The 30% share of Camu’s distributable profits continued to be payable to Ms Sandercock.

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1. At all material times, payments were in practice made by Camu to Ms Sandercock.

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1. In breach of the [2010] Contract, Camu failed to pay the aforesaid sums. The balance due from Camu as at March 2021 was £444,393.07. …

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1. Ms Sandercock is entitled to and does claim the balance owed by Camu by way of debt.

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1. Further or alternatively, Ms Sandercock has suffered loss and damage in the sum of the balance owed by Camu and claims this sum by way of damages.”

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1. The counterclaim can be quickly disposed of. It rests on two pillars, both of which are essential: first, the 2010 Contract; second, the averment that the original agreement that Camu would pay moneys to Domiciliary was varied so that in future Camu would pay moneys to Mrs Sandercock. Neither pillar can stand. I have rejected the existence of the 2010 Contract and, with it, the existence of the original terms said to have been varied. Further, when cross-examined Mrs Sandercock was acknowledged unequivocally that the alleged agreement to pay her was no more than a mechanism, by which money actually owed to Domiciliary/Arches was paid into her personal bank account. Therefore, even if there were any substance to a claim for outstanding moneys, that claim would be Arches’, not Mrs Sandercock’s. Mrs Sandercock said that, if the money she recovered had to be paid over to Arches, she was “fine with that”. However, Arches did not advance this counterclaim and has reached settlement of these proceedings.

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1. The counterclaim is, accordingly, dismissed.

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Conclusion

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1. Both claim and counterclaim are dismissed.

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End of document

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