{"id":8338,"date":"2019-10-10T16:45:07","date_gmt":"2019-10-10T16:45:07","guid":{"rendered":"https:\/\/laweuro.com\/?p=8338"},"modified":"2019-10-10T16:45:07","modified_gmt":"2019-10-10T16:45:07","slug":"the-financial-conduct-authority-v-grout-2018-ewca-civ-71-31-january-2018","status":"publish","type":"post","link":"https:\/\/laweuro.com\/?p=8338","title":{"rendered":"The Financial Conduct Authority v Grout [2018] EWCA Civ 71 (31 January 2018)"},"content":{"rendered":"

Neutral Citation Number: [2018] EWCA Civ 71
\nCase No: A3\/2016\/3173 & A3\/2016\/3173(C)<\/p>\n

IN THE COURT OF APPEAL (CIVIL DIVISION)
\nON APPEAL FROM THE UPPER TRIBUNAL
\nTAX AND CHANCERY CHAMBER
\nJUDGE TIMOTHY HERRINGTON & MARK WHITE (MEMBER)
\n[2016] UKUT 302 (TCC)<\/p>\n

Royal Courts of Justice
\nStrand, London, WC2A 2LL
\nDate: 31\/01\/2018<\/p>\n

Before:
\nTHE RIGHT HONOURABLE LORD JUSTICE LONGMORE
\nTHE RIGHT HONOURABLE LORD JUSTICE MOYLAN
\nand
\nTHE RIGHT HONOURABLE LORD JUSTICE NEWEY
\n– – – – – – – – – – – – – – – – – – – – –
\nBetween:<\/p>\n\n\n\n\n\n
\u00a0<\/strong><\/td>\nTHE FINANCIAL CONDUCT AUTHORITY<\/td>\nAppellant<\/td>\n<\/tr>\n
\u00a0<\/strong><\/td>\n– and –<\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n
\u00a0<\/strong><\/td>\nJULIEN GROUT<\/td>\nRespondent<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

– – – – – – – – – – – – – – – – – – – – –
\nMr Paul Stanley QC (instructed by Financial Conduct Authority) for the Appellant
\nMr Richard Lissack QC, Mr Farhaz Khan & Mr Simon Paul (instructed by Signature Litigation LLP) for the Respondent
\nHearing date: 16th<\/sup> January 2018
\n– – – – – – – – – – – – – – – – – – – – –
\nJudgment Approved<\/p>\n

See Order at bottom of this judgment.<\/strong><\/p>\n

Lord Justice Longmore:<\/strong><\/p>\n

Introduction<\/strong><\/p>\n

    \n
  1. This appeal is a pendant to the case of Macris v Financial Conduct Authority<\/u> [2017] UKSC 19; [2017] 1 WLR 1095 in which sub-sections 393(1) and (4) of the Financial Services and Markets Act 2000 as amended by the Financial Services Act 2012 fell to be construed. That Act provides for warning notices or decision notices to be given to a person or firm under investigation by the Financial Conduct Authority (\u201cthe FCA\u201d) if it is minded to take (or decides to take) action against a firm or individual authorised to conduct investment activities.\u00a0 Sub-section 393(1) provides:-<\/li>\n<\/ol>\n

    \u201cIf any of the reasons contained in a warning notice to which this section applies relates to a matter which \u2013 (a) identifies a person (\u201cthe third party\u201d) other than the person to whom the notice is given, and (b) in the opinion of the regulator giving notice, is prejudicial to the third party, a copy of the notice must be given to the third party.\u201d<\/p>\n

    Sub-section 393(4) makes identical provision for a decision notice.\u00a0 The purpose of this procedure is to enable a person so identified and so prejudiced to make representations to the FCA or, as the case may be, the Upper Tribunal before a final decision is made.<\/p>\n

      \n
    1. In 2012 Mr Macris was the international chief investment officer and head of a London unit in JP Morgan Chase Bank NA (\u201cthe Bank\u201d), called the chief investment office (\u201cCIO International\u201d). In that capacity he managed a portfolio of credit instruments called the synthetic credit portfolio (\u201cthe SCP\u201d).\u00a0 By the end of the year 2012 the SCP had managed to lose US$6.2 billion and the FCA conducted an investigation.\u00a0 In the course of that investigation the FCA issued a warning notice, a decision notice and a final notice containing criticisms of the Bank\u2019s conduct in relation to the SCP under six heads:-<\/li>\n<\/ol>\n

      \u201c(i) the employment of a high risk trading strategy;<\/p>\n

      (ii) a failure to properly vet and manage that trading strategy;<\/p>\n

      (iii) a failure properly to respond to information which should have alerted the Bank to the risk which was present in the SCP;<\/p>\n

      (iv) a failure properly to value the Bank\u2019s positions within the SCP;<\/p>\n

      (v) mismarking of the SCP; and<\/p>\n

      (vi) a failure to be open and co-operative with the Authority about the extent of the losses generated by the SCP as well as other serious and significant issues regarding the risk situation in the SCP.\u201d<\/p>\n

        \n
      1. The warning and decision notices were materially identical to the final notice and I shall just refer to \u201cthe Notice\u201d. In Mr Macris\u2019 case the question arose whether the reasons in the Notice related to a matter which identified Mr Macris for the purpose of the FCA being required to give him a copy of the Notice and allow him to make representations about it to the Upper Tribunal, as sub-sections 393 (9) and (11) of the Act entitled him to do.\u00a0 The Notice did not identify Mr Macris by name or job title but there were many references to \u201cCIO London Management\u201d.\u00a0 Although he was not the only manager in CIO International in London, he maintained that those active in the market would have known that it referred to him.\u00a0 He relied for this purpose (inter alia) on evidence from a senior sales representative dealing in credit instruments for another bank in London who said he knew that Mr Macris was the head of CIO International and did not share his responsibilities with others.\u00a0 He also relied on a US Senate sub-committee report on the Bank\u2019s losses in the SCP which identified him by name.<\/li>\n
      2. This court, in a decision of 19th<\/sup> May 2015 given by Gloster LJ (with whom Patten LJ and I agreed), held that the correct test for the required identification in section 393 of the 2000 Act was to ask whether the words used were<\/li>\n<\/ol>\n

        \u201csuch as would reasonably \u2026 lead persons acquainted with the claimant\/third party, or who operate in his area of the financial services industry, and therefore would have the requisite specialist knowledge of the relevant circumstances, to believe \u2026 that he is a person prejudicially affected by matters stated in the reasons contained in the notice.\u201d<\/p>\n

        Applying that test, this court held (see [2015] EWCA Civ 490; [2016] 2 All ER 265) that the Notice identified a person other than the Bank and that Mr Macris was a person so identified by the phrase CIO London Management.\u00a0 The court therefore upheld a decision of the Upper Tribunal to that effect.<\/p>\n

          \n
        1. The Notice did not refer only to CIO London Management but also referred to \u201ctraders on the SCP\u201d sometimes prefaced by the definite article. The appendix to the Upper Tribunal determination in the present case brings together the numerous such references made in the FCA\u2019s Notice and the determination itself summarises the findings of market misconduct against the traders on the SCP.\u00a0 They include mismarking by the traders (with the knowledge of SCP management), concealing losses from CIO Management and subverting the Bank\u2019s valuation control processes.<\/li>\n
        2. No doubt encouraged by the decision of this court in relation to Mr Macris, one of the four traders in the SCP has now asserted that he also is identified in the Notice published by the FCA and he relies on similar evidence to that relied on by Mr Macris particularly the US Senate sub-committee report in which he is named as the one of the two main traders responsible for the mismarking of deals done, the concealment of the losses from senior CIO Management and the subversion of the Bank\u2019s valuation processes. He also relies on press reports in English newspapers preceding the date of the Notice (18th<\/sup> September 2013), the existence of a US Department of Justice indictment and a Securities and Exchange Commission complaint against him (both of which were abandoned four years later).\u00a0 Before us, Mr Grout applied to admit further press reports and documentation said to identify Mr Grout but they were \u201conly more of the same\u201d and would be unlikely to affect the result.<\/li>\n
        3. The Upper Tribunal held a preliminary hearing on the question whether Mr Grout was identified in the Notice and, applying the test set out by this court in the Macris case, determined on 7th<\/sup> July 2016 that he was and, since he was prejudiced, should have been sent a copy of the FCA\u2019s Notice and now had the right to make submissions to the Upper Tribunal.<\/li>\n
        4. All this happened before the Supreme Court held on 22nd<\/sup> March 2017 that the test stated by this court in Mr Macris\u2019 case was incorrect. The right approach to the question of identification was that it had to be apparent from the Notice itself that it applied to only one person who had to be identified from information which was either in the Notice or publicly available elsewhere and then only if it enabled one to interpret the language of the Notice.\u00a0 It was impermissible to resort to additional facts to make it apparent from those additional facts that they referred to the same person.\u00a0 Moreover the relevant audience was the public at large not some specially knowledgeable section of the public.\u00a0 This approach would appear to exclude evidence from market participants and evidence of the findings of US Senate sub-committee which, although available on the internet, would only be known to persons with knowledge of the market and not to members of the public generally.<\/li>\n<\/ol>\n

          The submissions<\/strong><\/p>\n

            \n
          1. Mr Paul Stanley QC for the FCA submits<\/li>\n
          2. the decision of the Upper Tribunal, based as it is on the erroneous decision of this court in Macris<\/u>, cannot stand; and<\/li>\n
          3. on the facts as found by the Upper Tribunal, it is clear that Mr Grout was not \u201cidentified\u201d for the purposes of section 393(1) and that this court should so declare.<\/li>\n
          4. Mr Richard Lissack QC for Mr Grout contends that the decision of the Upper Tribunal is still correct notwithstanding that it applied the wrong test in law. The matter had to be approached in two steps:-<\/li>\n
          5. a decision whether the Notice used a person\u2019s name or a synonym and in the case of a synonym whether the Notice referred to one person only; and<\/li>\n
          6. a decision, if a synonym was used, whether information in the Notice itself or publicly available elsewhere identified that particular person.<\/li>\n
          7. In the present case Mr Lissack submitted in relation to the first stage<\/li>\n
          8. the phrase \u201ctraders on the SCP\u201d or \u201cthe traders on the SCP\u201d was a synonym for or, at least, included Mr Grout, since it was a collective term which must include individuals;<\/li>\n
          9. in any event any isolated reference in the Notice to the activities of a particular trader sufficed, with publicly available information, to identify Mr Grout;<\/li>\n<\/ol>\n

            iii)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 references in the Notice to the mental states of the traders inevitably referred to individual SCP traders which, with the publicly available information, identified Mr Grout; and<\/p>\n

              \n
            1. any other interpretation would infringe Mr Grout\u2019s rights under Article 8 of the European Convention on Human Rights since a person\u2019s reputation was part of his private life.<\/li>\n
            2. In relation to the second stage he referred to the contemporaneous newspaper articles which referred to Mr Grout by name, the Department of Justice indictment and the Securities and Exchange Commission complaint as well as the Senate Committee Report.<\/li>\n<\/ol>\n

              The ratio of the Macris case<\/strong><\/p>\n

                \n
              1. The ratio of Macris<\/u> is contained in paragraph 11 of Lord Sumption\u2019s judgment (with which Lord Neuberger of Abbotsbury and Lord Hodge agreed):-<\/li>\n<\/ol>\n

                \u201cIn my opinion, a person is identified in a notice under section 393 if he is identified by name or by a synonym for him, such as his office or job title. In the case of a synonym, it must be apparent from the notice itself that it could apply to only one person and that person must be identifiable from information which is either in the notice or publicly available elsewhere. However, resort to information publicly available elsewhere is permissible only where it enables one to interpret (as opposed to supplementing) the language of the notice. Thus a reference to the \u201cchief executive\u201d of the X Company may be elucidated by discovering from the company\u2019s website who that is. And a reference to \u201cCIO London Management\u201d would be a relevant synonym if it could be shown to refer to one person and that person so described was identifiable from publicly available information. What is not permissible is to resort to additional facts about the person so described so that if those facts and the notice are placed side by side it becomes apparent that they refer to the same person.\u201d<\/p>\n

                  \n
                1. In his concurring judgment Lord Neuberger said this in paragraph 26:-<\/li>\n<\/ol>\n

                  \u201c\u2026in order for the section to apply to an individual, either he must be named in the notice, or the description in the notice must be equivalent to naming him. On this basis, a reference to the Chairman of the Board of a United Kingdom-registered company would \u201cidentif[y]\u201d the individual concerned, as it would be easy for anyone to find out his name. (And, depending on the facts, the same might be the case with a reference to the Chairman of the Board of a foreign-registered company). It is true that even that form of identification would require the reader to have some outside knowledge, but as a matter of ordinary language, I would accept that an individual is \u201cidentified\u201d in a document if (i) his position or office is mentioned, (ii) he is the sole holder of that position or office, and (iii) reference by members of the public to freely and publicly available sources of information would easily reveal the name of that individual by reference to his position or office.\u201d<\/p>\n

                  He added in the next paragraph that, \u201cin order to satisfy the test, any research or investigation should be straightforward and simple \u2026 any investigation process should not require any detective work; and so jigsaw identification \u2026 would not do\u201d.<\/p>\n

                    \n
                  1. Lord Mance (para 33) referred to Lord Sumption\u2019s test as \u201ca dictionary approach\u201d and would have preferred a slightly wider test but concurred in the majority judgment that Mr Macris was not identified. Lord Wilson dissented on both the formulation of the test and in the result.<\/li>\n<\/ol>\n

                    The terms of the Notice<\/strong><\/p>\n

                      \n
                    1. There can be little doubt that the FCA went to some trouble to avoid identifying Mr Grout by name in the Notice and that it was perfectly entitled to do so if it could, see Lord Sumption\u2019s third reason for his conclusion, as stated in paragraph 14 of his judgment. That does not, of course, conclude the matter since the question whether Mr Grout was identified is a question to be answered by reference to the actual terms of the Notice not the FCA\u2019s subjective intentions.<\/li>\n
                    2. Most of the findings of misconduct of the individuals below the management level refer to \u201ctraders on the SCP\u201d. That is clearly not a synonym for Mr Grout.\u00a0 In some places the Notice refers to \u201cthe traders on the SCP\u201d.\u00a0 Mr Lissack submits that is equivalent to saying \u201ceach and every trader on the SCP\u201d (there were in fact 4 traders) and that that identifies Mr Grout.\u00a0 For this purpose Mr Lissack primarily relied on paragraphs 2.8-2.10, 5.4(c)(ii) and 5.12 of the Notice. \u00a0They are in the following terms:-<\/li>\n<\/ol>\n

                      \u201c2.8 From 2007, at the direction of SCP management, the traders on the SCP\u2019s approach to marking the SCP\u2019s positions was such that they provided an estimate of what they, the traders, thought the position was worth, rather than necessarily picking the mid of what the market thought the position were worth.\u00a0 In February and March 2012 as the SCP began to lose substantial amounts of money, traders on the SCP began to mark their positions in a noticeably favourable manner.\u00a0 At the direction of SCP management, they priced the positions at the most beneficial end of the bid-ask spread.\u00a0 This had the effect of making the SCP appear more profitable and enabled the traders to conceal the scale of the losses arising in the SCP from CIO Senior Management.<\/p>\n

                      2.9 The IG9 10 year index was the biggest contributor to the profit and loss in the SCP.\u00a0 As February 2012 month-end approached, traders on the SCP, with the knowledge of SCP management, engaged in substantial trading in that index, in particular on 29th<\/sup> February.\u00a0 One of the purposes of part of this trading was to \u201climit the damage\u201d to the SCP.\u00a0 This could have been achieved if the market price of the index moved closer to the SCP\u2019s mark.<\/p>\n

                      2.10 By March 2012, it was clear to the traders on the SCP that the adverse market moves were continuing against the SCP\u2019s positions.\u00a0 In order to conceal this from CIO Senior Management, traders on the SCP continued to mark aggressively.\u00a0 By mid-March, they had gone further and, at the direction of SCP management, deliberately mismarked the SCP in order to conceal what one trader believed to be genuine losses.\u00a0 On 16th<\/sup> March 2012, the traders calculated that the losses appeared to be understated by almost $500 million, based on their estimation of market mid-prices.\u00a0 Nonetheless on that day the portfolio only showed a loss of $4 million in its internal reporting to CIO Senior Management.<\/p>\n

                      \u2026<\/p>\n

                      5.4 In breach of principle 2 the Firm has not conducted its business with due skill, care and diligence by virtue of \u2026<\/p>\n

                        \n
                      • The Firm failed to price certain positions in the SCP accurately and failed to prevent or detect mismarking in a timely manner (in the first quarter of 2012) (see paragraphs 4.55 to 4.70 and 4.78 to 4.98) as a result of:<\/li>\n<\/ul>\n

                        (i)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 the subversion of the valuation control process in February 2012 by the traders on the SCP;<\/p>\n

                        (ii)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 the traders on the SCP and SCP management concealing losses; and<\/p>\n

                        (iii)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 a flawed valuation process (see paragraphs 4.78 to 4.98 and principle 3 below).<\/p>\n

                        Conclusion<\/u><\/p>\n

                        5.12 The failings set out above are particularly serious because they demonstrate shortcomings from the SCP traders through to Firm Senior Management.\u00a0 Further, there were multiple issues and breaches, including flaws in the CIO VCG process that pre-existed the problems in the first quarter of 2012.\u201d<\/p>\n

                          \n
                        1. In spite of Mr Lissack\u2019s valiant attempts to persuade us to the contrary, I cannot accept that the phrase \u201cthe traders on the SCP\u201d is a synonym for Mr Grout. It does not identify \u201cone person\u201d as Lord Sumption\u2019s test requires; indeed even if the Notice had used the phrase \u201call traders on the SCP\u201d or \u201ceach and every trader\u201d (which it did not) I rather doubt that it could be said to be a synonym for Mr Grout.\u00a0 But that question does not arise and can be safely left for determination if and when the FCA decides to use some such phrase.<\/li>\n
                        2. Mr Lissack then sought to rely on some isolated references to a single trader in the Notice. There is one such reference in paragraph 2.10.\u00a0 There are further references in the section of the Notice which deals with mismarking of the SCP and refers to the activities of the Valuation Control Group in the Chief Investment Office (\u201cCIO VCG\u201d) which had responsibility for valuing the SCP:-<\/li>\n<\/ol>\n

                          \u201c4.59 SCP management directed traders on the SCP to mark their positions such that they did not necessarily pick the mid of what the market thought the positions were worth (which was described by SCP management as \u201cpressing F9 like a monkey\u201d) but instead provided an estimate of what they, the traders, thought the positions were worth.<\/p>\n

                          4.60 In February 2012, the aggregate difference between mid-market prices and the SCP\u2019s marks began to increase significantly.\u00a0 Traders on the SCP began to mark their positions more aggressively (moving away from the mid towards the more favourable end of the bid-ask spread).\u00a0 CIO VCG recognised the differences but did not notice this as a trend and therefore did not challenge the traders effectively.<\/p>\n

                          4.61 Traders on the SCP provided additional broker runs to CIO VCG which persuaded CIO VCG to reduce the difference between the SCP\u2019s marks and CIO VCG\u2019s own independent marks from at least $31 million to $11 million on 1st<\/sup> March 2012.\u00a0 The traders considered they were producing \u201cbetter\u201d broker quotes for CIO VCG to \u201cjustify\u201d the marks.\u00a0 Although traders on the SCP saw CIO VCG as a control function, one trader considered that accepting CIO VCG process was not \u201cthe way things worked at CIO\u201d.\u00a0 The CIO VCG process was flawed and in addition was easily subverted at February 2012 month-end.<\/p>\n

                          4.62 In March 2012, as the losses on the SCP mounted, SCP management gave a further direction as to how the SCP should be marked, telling traders on the SCP to ignore the losses arising on the portfolio through the underperformance of the trading strategy and only record those which could be explained by a particular Market event.\u00a0 In essence, this amounted to an instruction to mismark the portfolio in order to conceal mark to market losses from CIO Senior Management.<\/p>\n

                          4.63 Between 12th<\/sup> and 19th<\/sup> March 2012, traders on the SCP kept a spreadsheet recording the difference between the estimated mid-market prices and the marks that had been applied to the SCP, broken down into certain positions.\u00a0 One of the purposes of this spreadsheet was to inform SCP management of the size of the difference.\u00a0 On 12th<\/sup> March 2012, this spreadsheet showed that the difference amounted to $203 million.\u00a0 By 16th<\/sup> March 2012, the difference had risen to $498 million, and one trader had formed the view that this amount was now an actual loss that should be reported.\u00a0 Nonetheless the profit and loss estimate produced by traders on the SCP that day showed a loss of only $4 million.<\/p>\n

                          4.64 On 20th<\/sup> March 2012, the difference between the mid-market prices and the marks being applied to the SCP was so large, that the bid-ask spreads began to give traders on the SCP a \u201cheadache\u201d.\u00a0 In order to keep within the bid-ask spread, the traders on the SCP showed a loss of $40 million.\u00a0 Had the full difference been reported on 20th<\/sup> March 2012, according to the spreadsheet maintained by the traders on the SCP, the year to date loss for the SCP would have been of $500 million.<\/p>\n

                          4.65 On the last trading day of March 2012, traders on the SCP were aware that, as usual, the marks they ascribed to the SCP that day would be reviewed by CIO VCG.\u00a0 Given the increased scrutiny over the SCP following CIO Senior Management\u2019s instruction to stop trading, the profit or loss figure for the day was also of particular interest to CIO Senior Management.\u00a0 SCP management instructed one of the traders to remain in the office, after the close of the London markets, in order to review the prices in the New York market in the hope of getting \u201cany better numbers\u201d.\u00a0 The marks to be applied were the subject of repeated discussions involving SCP management, who requested that the loss shown on the SCP should be as low as possible.\u00a0 The losses reported to CIO Senior Management at March 2012 month-end were \u00a3138 million for the day and $583 million for the year.\u00a0 This did not however include the hundreds of millions of dollars of losses concealed from CIO Senior Management by traders on the SCP at the instruction of SCP management.\u201d<\/p>\n

                            \n
                          1. Again I cannot read these references to \u201cone trader\u201d as being a synonym for Mr Grout. It is so deliberately vague that it can legitimately be described as \u201canonymous\u201d rather than \u201csynonymous\u201d.\u00a0 It is, moreover, relevant that the references to one trader appear in a section of the Notice that is critical of (and thus prejudicial to) CIO Management (on one view of the matter Mr Macris) rather than to the one trader referred to.\u00a0 In the context of the Notice, read as a whole in all its 62 pages, it is impossible to say that it identifies Mr Grout.<\/li>\n
                          2. The fact that there might be references in the Notice to decisions (and thus the mental states) of the traders (see Mr Lissack\u2019s third submission in paragraph 11 above) does not help Mr Grout for the reasons given in paragraph 17 of Lord Sumption\u2019s judgment. Mr Lissack (rightly in my view) did not develop any specific argument in relation to Article 8 of the ECHR since Parliament has enacted a proportionate response to any possible damage to reputation in section 393 of the Act.\u00a0 In any event, it played no part in the decision of the Supreme Court in Macris<\/u>.<\/li>\n
                          3. Since Mr Grout was not \u201cthe sole holder of the position of\u201d trader, it is unnecessary to consider whether \u201cfreely and publicly available sources of information would easily reveal his name\u201d to adopt Lord Neuberger\u2019s phraseology set out above. But if it is appropriate to look at the position at about the time of the publication of the Notice, I would rather doubt it.\u00a0 Ordinary members of the English public would be unlikely to recall the details of articles in the Financial Times some months earlier, let alone details of investigations in the United States.\u00a0 But since the inquiry never gets to that stage, I need say no more about it.<\/li>\n<\/ol>\n

                            Conclusion<\/strong><\/p>\n

                              \n
                            1. For these reasons I would decline Mr Grout\u2019s application to admit further evidence on the basis that it could not affect the outcome of the appeal and would allow the FCA\u2019s appeal. That is no criticism of the Upper Tribunal which actually followed and applied this court\u2019s decision in Macris<\/u> which has now been overturned.<\/li>\n<\/ol>\n

                              Lord Justice Moylan:<\/strong><\/p>\n

                                \n
                              1. I agree.<\/li>\n<\/ol>\n

                                Lord Justice Newey:<\/strong><\/p>\n

                                  \n
                                1. I also agree.<\/li>\n<\/ol>\n

                                  __________________________________________<\/strong><\/p>\n

                                  \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 ORDER\u00a0 ____________________________________________<\/strong><\/p>\n

                                  UPON HEARING Leading Counsel for the Appellant and the Respondent<\/p>\n

                                  IT IS ORDERED THAT:<\/p>\n

                                    \n
                                  1. The Respondent\u2019s application to admit further evidence is dismissed;<\/li>\n
                                  2. The Appellant’s appeal is allowed;<\/li>\n
                                  3. The Respondent\u2019s reference to the Upper Tribunal (Tax and Chancery Chamber), reference number FS\/20014\/0002 (previously FS\/2014\/0007), is dismissed; and<\/li>\n
                                  4. The Respondent pay the Appellant\u2019s costs of \u00a318,799 (legal fees of \u00a314,666.67, VAT of \u00a32,933.33 and court fees of \u00a31,199) by 31 March 2018.<\/li>\n
                                  5. Permission to appeal to the Supreme Court is refused.<\/li>\n<\/ol>\n

                                    Dated this\u00a031st\u00a0January 2018<\/p>\n