A MULTI-MILLION pound civil case between the Coop and its former chief executive was elongated because a number of senior figures for the society left out important information from their witness statements, a Royal Court judgment has said.
In a decision made in December, the Royal Court said the Channel Islands Co-operative Society owed its former chief executive Colin Macleod more than £3 million after a years-long battle in the courts.
Now, the reason for the costs order has been published, with the Royal Court finding that the Coop took an “unjustified approach to its own financial accounts” and the key documents had “not been preserved”.
After a trial last year, the court found that Mr Macleod suffered psychological injury after three of the company’s directors acted “in bad faith”, dismissing him as he was coming back from a period of sickness.
Advocate Michael O’Connell, representing Mr Macleod, said the Co-op had refused an offer to settle in 2022, which would have avoided “very significant” costs.
Instead, he said the Co-op had fought an “oppressive” and “attritional” trial, failing to keep documents and trying to claim the Co-op’s finances were in a bad state during Mr Macleod’s tenure.
Advocate Jeremy Heywood, representing the Co-op, said Mr Macleod should be repaid costs on a standard basis with a 25% discount.
Commissioner Matthew Thompson, presiding, said the case was “hard fought” up until the start of trial preparation, with nothing that would make him “express [his] displeasure”. Up until then, the Co-op should pay Mr Macleod back standard costs.
But once both sides started to prepare the trial, he said, Mr Macleod and his lawyer had to do a huge amount of work – because three Co-op witnesses didn’t address important WhatsApp messages in their witness statements.
Jennifer Carnegie, Carol Champion and Paula Williams had all failed to address the messages – meaning Advocate O’Connell “had to take each of those witnesses through the relevant messages and place them in context”.
He added: “The issue, however, is more serious than this.
“This was a case where the witness statements of the main individuals failed to address at all what the WhatsApp messages revealed and which turned out to be highly significant.”
This, he said, was “an abuse of the Court’s procedure”.
The messages, it was alleged, showed a conspiracy to oust Mr Macleod, referencing “evidence gathering” and a “noose” around Mr Macleod’s neck.
For the second part of the process, Mr Macleod was owed 60% of costs on an indemnity basis and 30% of costs on the standard basis. He wouldn’t get back the last 10% of his costs because of an application the Commissioner said he shouldn’t have made, and because of his “failure to demonstrate actual foreseeability”.
In addition to costs, the Commissioner awarded Mr Macleod £3,515,407 in total, including loss of earnings and loss of congeniality.
Mr Thompson, in the judgment, said: “The conclusion I reached therefore was that significant time at trial and therefore in preparation for trial had to be spent in establishing bad faith which was the springboard for the findings of breach of duty that the court ultimately made.
“The key to that was the WhatsApp messages and the Co-op’s witness statement entirely failed to deal with these WhatsApp messages and why documents had not been preserved, in particular, Ms Williams’ application for Mr MacLeod’s job.
“I have also taken into account that Mr MacLeod recovered much more than he was prepared to settle for before issuing his claim. The extent of the difference between his offer and the final amount awarded adds to why some form of indemnity costs order was justified. Finally, I have taken into account the Co-op’s unjustified approach to its own financial accounts as referred to above.”
Because the Co-op wanted to lodge an appeal, the court agreed they shouldn’t pay Mr Macleod right away – as during the trial, Mr Macleod spoke about his difficult financial situation, meaning he might not be able to pay back the damages if the Co-op’s appeal is successful.
