The High Court has accepted that an incomplete collection of records, supplemented by a report and narrative prepared by former stockbroker Pramit Ghose, was sufficient to meet the obligation to account for funds managed for Kenneth Best, a ward of court. The court declined to order further reports or a reconstruction of every investment movement, saying there was little to be gained from that costly exercise.
In a supplemental ruling delivered on 9 June 2020, Ms Justice Baker said the issue was limited to whether the accounting obligation identified in an earlier judgment had been fulfilled. The proceedings were not concerned with whether the investments had been negligently managed, why the fund had fallen in value, or whether management fees or commission had been paid. The judge said she drew no conclusions on those matters.
The earlier judgment found that Bloxham Stockbrokers Partnership had an obligation akin to that of a trustee or fiduciary to provide an account and narrative of transactions involving funds lodged in court for Mr Best. The records available included documents held by the Wards of Court Office, the High Court Accountant’s Office and the firm’s liquidator. The court heard that the records had gaps, and that regular or periodic reports had not been provided since 2007, although such reports would normally be expected in an investment relationship.
The parties’ experts disagreed on whether Mr Ghose’s report was adequate. The Committee’s accountant, David Croft, considered it too sparse to explain the fund’s movements to a lay reader and noted missing transaction details and individual fees, expenses and taxes. Bloxham’s accountant, Myles Kirby, considered it accurate and sufficiently detailed for a professional adviser to assess the fund’s management. The judge said the account could be understood by people with financial and legal advice, and that proportionality and practical common sense mattered.
Ms Justice Baker concluded that the gaps did not prevent an expert from understanding the fund’s movements and investment choices. Taken together, the available documents, Mr Ghose’s narrative and reconciliation, and supporting material sufficiently complied with the obligation to account. No further order was made on that issue.
The judge separately ruled that Bloxham must meet the experts’ costs of examining the documents and preparing the account. She said the absence of regular, complete statements had led to the litigation and the later work to assemble and reconstruct records over 15 years. However, she did not make a final costs order in the ruling. Further submissions were to be heard on the appropriate order, including how the expenses might be met given Bloxham’s insolvency and liquidation, and on the costs of the proceedings and subsequent hearings.