Why being an overly aggressive litigator may cost you your dream home!

By Thom Vaughan – Solicitor
EAD Solicitors LLP

Every party approaches litigation differently.
There are those who are measured and
careful, others who are devilishly strategic
and set traps, and then there is the class of
bellowing, red – faced bullying litigant who is
driven to distraction and hell bent on
menacing his opponent.
Mr Giles Patrick Cyril Mackay falls into this latter category
according to the recent High Court decision of Walter Lilly
& Company Ltd v Mackay & Anor [2012] … and it may cost
him his home. The case has nothing to do with agency law
but is valuable in terms of illustrating why a forceful
approach to litigation does not always pay. It is also a
greatly entertaining read in places.
Mr Mackay is a very wealthy and successful property
developer who, via an investment vehicle with others,
owned three adjoining properties and was desirous of
converting them into dream homes of considerable
opulence. He appointed a building contractor, Walter Lilly
and Company Ltd, to make his dreams a reality.
Mr Mackay personally owned one of the three properties
and the judgment records its specification as follows:

The basement at No.3 comprises on the west side a
large habitable space, designated as the Library
where the extensive bookcases are covered in
stitched leather. The Library windows, which largely
comprise a large sliding door, look out onto a
courtyard with a water feature, on the other side of
which behind a similar sliding door is the swimming
pool, on the western side of which are glass screens
behind which there are changing rooms, a lavatory
and shower.
The very substantial sliding doors which lead out
from the swimming pool and the Library are known
as the Courtyard Sliding Doors. The glass screens on
the western side of the pool comprise and
incorporate a lighting feature which allows a flow of
changing coloured light from top and bottom to be
diffused through the whole of the screen; this is
known as the Light Wall.
In the basement there is also a cinema and below
the external area immediately outside the front
door is a garage accessed by a car lift. The ceilings
of the swimming pool and the cinema comprise
what is known as Barrisol ceilings which essentially
are a stretch light coloured fabric which conceals a
substantial bank of lights which also change colour
and are supposed to be diffused evenly through the
ceiling downwards. There are also a wine cellar,
guest toilet facilities, a kitchen, laundry and staff
quarters.

The building work progressed slowly and Mr Mackay and his
wife expressed their concerns to the contractor. Mrs
Mackay was concerned that her black walnut had changed
colour in the sun and there were concerns about the leather
work in the library.
Mr Mackay considered that he was well placed in the
dispute because the contractor would be obliged to pay
considerable liquidated damages in the event that the
project was not finished on time.
He became frustrated and expressed his views forcefully in
an exchange of emails with Mr Howie of the contractor,
including the following remarks:

Guess what – when I have forgotten about
you in a years time enjoying my 100 million
home or sailing on one of my 40 meter yachts –
you’ll still be trying to wind up some other poor
unsuspecting customer with your brand of
mediocrity – a sad loser – gaining your kicks and
being irritating. Suggest a new career as a traffic
warden might be ideal at least it wouldn’t involve
lying.

…or is it the fact that your little Victorian 1800
sq ft cottage in Pulborough can fit into my dining
room…
What is it that makes you so chippy little man?
Well whatever it is you’re costing your company
of fortune. I reckon around £1.5 million so far.
Sent a note to your bosses last night saying your
way isn’t working and asking when they might
fire you….
You’re such a loser. I’m going to enjoy finishing
you off over the summer. But don’t worry you’ll be
reading the contract and I’ll be on the beach.
50 this year – midlife crisis as well – nearest to a
Ferrari you’ll ever get is a toy one…
My middle name is relentless. I have the money
and anger at this point to push on and make sure
that you have to deliver or get punished for not
delivering. I don’t want to have to fight for that,
but trust me I will NEVER give up if you don’t
start to change your attitude it will cost WL time
and money – it may eventually cost you your job.
Who knows. Never underestimate me.

The judge, in considering Mr Mackay’s evidence, suggested
that “I have formed the view that he is and has been for a
long time angry.” Aside from this statement of the
blindingly obvious he continued “I found him to be an
unsatisfactory witness. From my observations, I have
formed the view that he has lost nearly all sense of
objectivity in relation to this development and I consider
that he simply does not understand why, given the amount
of money which he has spent, the house is not perfect or
exactly as he and his wife wanted. His attitude has almost
become in the nature of a vendetta against WLC.”
Ultimately, the court found against Mr Mackay and ordered
him to pay a net sum to the contractor of around £2.5m.
The parties had expended between £9 – 10m in costs and if
costs “follow the event” then he may have to pay a further
proportion of these, having already been ordered to pay
£1.9m on account.
Following a further application for leave to appeal by Mr
Mackay the court has allowed more time to pay. In allowing
this the court took into account evidence from Mr Mackay
that he is “extremely asset-rich but relatively illiquid”. This
means he has to sell the property, 3 Boltons (that was the
subject of the dispute), valued at around £60 million in
order to satisfy the judgment. The judge said it would be
wrong to put Mr Mackay at risk of insolvency proceedings
while he was doing this and awaiting the outcome of his
application for leave to appeal.
In considering this case potential litigants should bear in
mind the advantage of being careful, restrained and
moderate when dealing with contracts that are
experiencing difficulties or in litigation itself. This includes
being courteous and respectful in correspondence.
Bullying, bravado and immoderate forcefulness do not
impress judges.
If your middle name is “Relentless” or you have a yacht to
sail away on then you may be well advised to avoid litigation
altogether; however, if you do require advice please
contact the writer Thom Vaughan of EAD Solicitors LLP at
thom.vaughan@eadsolicitors.co.uk

Case reference:
Walter Lilly & Company Ltd v Mackay & Anor
[2012] EWHC 1773 (TCC) (11 July 2012),
http://www.bailii.org/ew/cases/EWHC/TCC/2012/1773.html

Head Office: Prospect House,
Columbus Quay, Liverpool L3 4DB
Tel: 0151 735 1000
www.eadsolicitors.co.uk

Thom Vaughan

Disclaimer: This column does not contain legal advice and is for general guidance only. Agentbase, E.A.D. Solicitors, Prime Forensic Accountants and the writes accept no liability in connection with the general guidance given in this column.

 

Download PDF