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19th November 2019, 20:14

'No dishonesty or fraud' says Sir Peter Caruana QC on second day of Enterprise hearing at Supreme Court

If the ex-directors of Enterprise Insurance are fraudsters, then they are the most stupid fraudsters in history, because everything they did was in the full glare of the company’s auditors, the FSC and half of humanity.

This was the opening statement of Sir Peter Caruana QC on day two of the hearing on whether to allow the Liquidator of the collapsed firm to amend his claim against the former directors to “Dishonest Breach of Fiduciary Duty”.

Representing three out of eleven defendants, Sir Peter said the Judge would have to be satisfied that ALL of Enterprise’s non-executive directors had acted fraudulently over a period of thirteen years. This, he said, despite there being no evidence to support the claim.

Sir Peter Caruana began his clients’ defence by questioning why Enterprise’s Finance Director has not been accused of fraud, while all the non-executive directors have been tarred with that same brush.


Sir Peter, representing former Non-Executive Chairman Nick Cruz, focused on the inclusion of the word “Dishonest” in the Liquidator’s amended Claim filed at the Supreme Court.

He said the word “Dishonesty” equates to “fraud”, and stressed there had been no mention of this in the original Claim. Sir Peter said any references to the Enterprise Directors “not acting in good faith” cannot be considered the same as fraud, adding nevertheless, there is no evidence to support this.

By way of example, he cited the defamation case against the Liquidator Freddie White by ex-Enterprise Director Andrew Flowers. Mr Flowers alleges that Mr White wrote a letter to his bankers with allegations that amount to dishonesty and Fraud. However, Mr White’s lawyers Triay and Triay, argue that it does not.

And yet, Sir Peter said, those same basic allegations contained in the letter are the same one’s made in the Liquidator’s claim of “Dishonest Breach of Fiduciary Duty”.

In other words, he said, it’s not dishonest in the defamation case, but is dishonest in the misfeasance claim.

Sir Peter said this was not an amendment to a Claim, but rather a new Claim altogether for a collateral purpose that he would expand on tomorrow, and had no prospects of success whatsoever.

“Triangular model”

On the subject of the triangular business structure used by Enterprise Insurance, he said the FSC had approved this model when the business received its Gibraltar licence. Furthermore, the Commission agreed the terms of the Marketing Service Agreement which included the payments of 8% of gross written premium. As the company’s profits grew, so did the amounts paid in respect of the MSA.

Sir Peter argued, that if the Enterprise Directors knew the FSC was happy with the financial arrangements of the company, and if the accounts had been vetted and audited annually, then how could any reasonable person believe they had acted dishonestly? If the FSC believed the arrangements were not right, he said, then it was their statutory duty to do something about it.

Puisne Judge John Restano QC pointed out that the Liquidator's issue was not the company's structure, but the money that was paid to EIG Services Limited. However Sir Peter said Enterprise Insurance could not have written £150m of business if the triangular model had not existed.

Charles Simpson of Triay and Triay and Nigel Jones QC of Hardwicke Chambers is representing Freddie White, while Sir Peter Caruana QC is representing three of the defendants including Nick Cruz. Charles Gomez of Charles Gomez & Co and Guy Stagnetto QC of TSN are counsel for the remaining defendants.

The hearing continues.