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Cite as: [2003] EWHC 1423 (Ch)

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Neutral Citation Number: [2003] EWHC 1423 (Ch)
Case No: HC01C0588

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London WC2A 2LL
26 June 2003

B e f o r e :

THE HONOURABLE MR JUSTICE LIGHTMAN
____________________

Between:
CHRISTOPHER EVANS
Claimant
- and -

(1) SMG TELEVISION LIMITED
(2) SCOTTISH MEDIA GROUP (JERSEY) LIMITED
(3) SMG PLC
(4) KENTFARM LIMITED
(5) GINGER RADIO LIMITED
(6) VIRGIN RADIO LIMITED
(7) GINGER MEDIA GROUP LIMITED






Defendants
- and -

GINGER TELEVISION PRODUCTIONS LIMITED
Part 20 Claimant

____________________

Mr Christopher Pymont QC & Mr Nicholas Peacock (instructed by Harbottle & Lewis,
Hanover House, 14 Hanover Square, London W15 1HP) for the claimant
Mr Geoffrey Vos QC & Mr Anthony de Garr Robinson (instructed by Herbert Smith,
Exchange House, Primrose Street, London EC2A 2HS) for the defendants
Hearing dates: 19 March - 7 May 2003

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    INDEX
              Paragraph(s)
    Part I Introduction 1 - 3
    Part II The Issues 4 - 12
    Part III Principal Characters 13
             A.    Mr Evans and his Witnesses of Fact 14 - 20
             B.    The defendants' Witnesses of Fact 21 - 30
             C.    Expert Evidence 31 - 43
    Part IV Virgin Radio and the Radio Industry 44 - 52
    Part V The Detailed Chronological History 53 - 162
    Part VI The Agreements 163 - 165
    Part VII The Presenter's Agreement and Related Issues     
             A.    The Terms of the Presenter's Agreement 166 - 175
             B.    Novation 176 - 189
             C.    Mr Evans's Obligations 190 - 193
             D.    Breaches of Contract 194 - 240
             E. Discharge by Breach 241 - 244
    Part VIII The Partnership Agreement 245 - 257
    Part IX The Sale and Purchaser's Agreement     
             A.    Terms of Agreements 258 - 266
             B.    Issues of Construction 267 - 276
             C.    The Character and Effect of the Circumstances 277 - 285
    Part X Conclusion 286 - 287

    Mr Justice Lightman:

    PART I

    INTRODUCTION

  1. This action relates to a series of agreements to which the claimant Mr Christopher Evans ("Mr Evans") was a party. The first is a Presenter's Agreement dated 5 March 1998 and made between (1) the fifth defendant Ginger Radio Limited ("Ginger Radio"); (2) the Kentfarm Partnership ("the Partnership"); (3) Mr Evans; and (4) the seventh defendant Ginger Media Group Limited ("Ginger Media"). The second is a Partnership Agreement ("the Partnership Agreement") also dated 5 March 1998 constituting the Partnership and made between (1) the fourth defendant Kentfarm Limited ("Kentfarm") and (2) Mr Evans. The third is a sale and purchase agreement ("the Sale Agreement") for the sale by the shareholders in Ginger Media (including Mr Evans) of their shares in Ginger Media to the second defendant Scottish Media Group (Jersey) Limited ("SMG Jersey"), a member of the Scottish Media Group of Companies ("the SMG Group"), in part consideration of payments of cash and in part consideration of ordinary and deferred shares in SMG Jersey. The fourth is an option deed ("the Option Deed") also dated l3 January 2000 made between (1) SMG Jersey; (2) the first defendant SMG Television Limited, formerly known as Scottish Media Group plc ("Scottish Media") (of which SMG Jersey was a direct and wholly owned subsidiary) and (amongst others); (3) Mr Evans.
  2. In this action Mr Evans sues for damages arising from the alleged wrongful termination of the Presenter's Agreement and the Partnership Agreement. Under these agreements Mr Evans agreed in return for very large payments for five years to present the Virgin Radio Breakfast Show ("the Show"). The defendants counterclaim for damages sustained as a result of Mr Evans's breaches of these agreements. Mr Evans also claims that he is (and has since 8 October 2001 been) entitled under the Option Deed as modified by a scheme of arrangement dated 7 April 2000 ("the Scheme") to convert certain deferred shares in SMG Jersey received under the Sale Agreement (the "Tranche C Shares") into shares in the third defendant SMG Plc ("SMG"). In the absence of such a right to conversion, the shares are valueless and effectively forfeited.
  3. In summary the sixth defendant Virgin Radio Limited ("Virgin Radio") is a leading national radio station. It is one of only three national commercial radio stations broadcasting in the United Kingdom and the only station with a mainstream popular music format. It has targeted male and female listeners aged between 25 and 34 (a market which is highly attractive to advertisers and sponsors). The Show has at all times been Virgin Radio's flagship programme. The Show (like the breakfast show of all commercial radio stations) has Virgin Radio's maximum available audience (or "reach") and is its showcase, establishing the station's identity and maximising its audience for the rest of the day. In September 1997 Mr Evans joined Virgin Radio as presenter of the Show and in December 1997 Mr Evans together with certain investors (through his company Ginger Media) bought Virgin Radio Holdings Limited ("VRH"), the parent company of Virgin Radio, for £83 million. As a crucially important part of the purchase transaction for the investors, Mr Evans entered into the Presenter's Agreement and Partnership Agreement which were designed to secure for Virgin Radio the continued provision for the term of five years of his services as presenter of the Show. In March 2000 the shareholders in Ginger Media (including Mr Evans) sold Ginger Media for £225 million to SMG Jersey, the SMG Group. The SMG Group now includes each of the defendants. The principal assets of Virgin Radio (besides its radio licences and goodwill) were the benefit of the Presenter's Agreement and the Partnership Agreement and in particular the right to the services of Mr Evans as presenter of the Show. As part of the consideration for the sale of his shares in Ginger Media to SMG Jersey Mr Evans became entitled as deferred consideration to the Tranche C Shares. On 28 June 2001 the defendants gave notices treating the Presenter's Agreement as discharged and expelling Mr Evans from the Partnership by reason of breaches of contract by Mr Evans.
  4. PART II

    THE ISSUES

  5. During 2000 and early 2001, the relationship between Virgin Radio's management and Mr Evans deteriorated, a state of affairs which the defendants attribute to a series of breaches of the Presenter's Agreement. These alleged breaches fall into two categories: (1) those considered by the defendants of secondary importance ("the Secondary Breaches"); and (2) those considered of primary importance ("the Primary Breaches"). The alleged breaches gave rise to the two notices served on 28 June 2001.
  6. The first issue I must determine is whether any relief is available to any of the defendants in respect of the alleged breaches of the Presenter's Agreement by Mr Evans which are established, and in particular whether Virgin Radio has the necessary standing to sue. This issue arises because Ginger Radio has since 1998 been totally inactive: any role it previously occupied as producer has been assumed by Virgin Radio. In the circumstances the loss occasioned by any breach of contract was to Virgin Radio alone. If Virgin Radio is to recover such losses, (though various ingenious alternative mechanisms have been pleaded), as it seems to me it is necessary for Virgin Radio to establish a novation under which it was substituted as a party to the Presenter's Agreement in place of Ginger Radio.
  7. The second issue to be addressed is whether the breaches of contract alleged are established and if so whether Virgin Radio (if substituted as a party to the Presenter's Agreement) can establish a claim in damages.
  8. The third issue is whether (assuming breaches of contract are established) Mr Evans's conduct constituted a repudiatory breach by the Partnership of the Presenter's Agreement (which justified the removal of Mr Evans as presenter of the Show).
  9. The fourth issue is whether Mr Evans's conduct likewise constituted a breach of the Partnership Agreement entitling Kentfarm to expel him from the Partnership. This issue is simplified by the fact that Mr Evans has rightly conceded that Kentfarm was justified in expelling him from the Partnership if Virgin Radio was entitled to treat the Presenter's Agreement as discharged.
  10. If Mr Evans's conduct did not justify the action taken against him by Virgin Radio and Kentfarm, Mr Evans has a claim for damages for breach of contract against Virgin Radio, Ginger Media and Kentfarm. In this latter case the fifth issue arises, namely whether Mr Evans took reasonable steps to mitigate damages.
  11. The sixth issue only arises if Kentfarm lawfully expelled Mr Evans from the Partnership. That issue is whether or not Mr Evans satisfied the conditions entitling him to convert the Tranche C Shares into shares in SMG and in particular whether the circumstances giving rise to the expulsion of Mr Evans from the Partnership were or were not materially adverse either to SMG Jersey's business or to its financial position.
  12. At this trial, the issues of entitlement, liability and mitigation are to be decided. The assessment of any damages is postponed to a separate hearing at a future date after judgment on the issue of liability.
  13. Two subordinate issues required determination when the trial commenced. These related to the entitlement of Kentfarm under the Partnership Agreement to monies standing to the credit of the Partnership and to payment by Mr Evans of some £1.95 million compensation for loss occasioned by his premature determination of the TFI Friday Presenter's Agreement ("the TFI Agreement") under which he agreed to present a television series entitled "TFI Friday". Mr Evans wisely and inevitably conceded both these issues in the course of the trial and accordingly they do not require consideration in this judgment.
  14. PART III

    PRINCIPAL CHARACTERS

  15. Before I recount the history of events in this case I shall paint a thumbnail sketch of the principal characters. Their credibility is critical in the resolution of the multitude of issues of fact raised in this case, and some knowledge of their personalities (and most particularly the personality of Mr Evans) is essential to an understanding of events and the conduct of the parties. I shall begin with Mr Evans and his principal witnesses. I shall then turn to the principal witnesses for the defendants who were involved in the matters in contention.
  16. Practically all Mr Evans's witnesses were friends of his and to varying degrees partisanship was apparent in their evidence.
  17. (1) Mr Evans

  18. This case very much focuses on the personality of Mr Evans. His character plainly emerges from his evidence in the witness box, the autobiography which he is in the course of writing and of which the first 38 pages of have been put in evidence, and the evidence of his friends and those who had dealings with him. Mr Evans is a talented radio performer. His distinctive appearance, spontaneity, inventiveness and irreverence are his trademarks. He is very experienced in matters of publicity. He knows how to play the media and obtain a good splash. In paragraph 99 of his witness statement he says: "In terms of publicity I know what I am doing." He does not hesitate to telephone the press when he wants a splash in the newspapers or to manipulate the media to convey the message he chooses. As he says in his autobiography, in all he does, whether work, play or drink, he will only do it "to the absolute nth degree". He is given to extremes: moderation has no part to play. Drinking to excess is part of his lifestyle. He is a binge drinker. He told me with pride and no trace of embarrassment that more often than not he presented the Show with a hangover. He has a reputation for laddish behaviour including drunkenness. Despite his confident front, he is very insecure in himself and as a consequence frequently (but not invariably) has recourse to any means (legitimate or otherwise) to avoid confrontation or unpleasant or unpalatable situations, and others who know him and want any continuing future relationship with him must necessarily likewise avoid any confrontation or cause for upsetting him. (As will subsequently appear, one notable exception is that he insisted on himself informing Mr Dan McGrath ("Mr McGrath") and Mr John Revell ("Mr Revell") of their impending dismissal when he wanted to get rid of them.) To achieve what he wants without confrontation, he is manipulative and has resort to any means, fair or foul, to achieve his ends. Nowhere is this more strikingly demonstrated than in his dealings with Mr McGrath and Mr Revell leading to their being dropped from the Team. His success and character have combined to create a personality making him strong-willed and both accustomed to and insistent on getting his own way. He is petulant and given to sulking and walking away from situations whenever he considers himself thwarted. He is not ready to make concessions to others. He is a person who cannot tolerate either criticism or the exercise by management of authority over what he does. As he told me in his evidence, newspapers were necessary to provide topicality for the Show, but in May 2001 the Team had instructions to cut out any articles critical of him and any bad publicity before he saw them. He agreed with the diagnosis of his doctor that he found intolerable any conflict between the exercise of his creative talent and any perceived interference with his freedom of action by the exercise of authority by management. He was spoiled during the period between his purchase and sale of Virgin Radio, for during that period he was effectively the owner of Virgin Radio and accordingly the management. He could never acclimatise to a more subordinate role after the sale. He has the temperament of a prima donna. He always expects and demands compliance with his wishes. He has a low "tolerance" threshold and he has a marked propensity displayed throughout his career of "walking out" on his contractual commitments when (as he perceives it) the going gets hard. He has at all material times been the principal client of his agent Mr Michael Foster ("Mr Foster") and the principal (and indeed practically indispensable) asset of Virgin Radio and he has made plain to both that he knows it and has exploited his position to the whole. Neither have been able to assert themselves or stand up to him because of the very real risk that to do would jeopardise any continuing relationship in the future.
  19. His talent in his field and the substantial returns he has achieved have enabled him to leave to Mr Foster and to his accountant Mr Kirit Doshi ("Mr Doshi") all business decisions and thinking. He never gave any, or any proper, consideration to the obligations which he assumed under the Presenter's Agreement or the Partnership Agreement and these never figured in his thinking. It is not surprising in the circumstances that he failed to comply with those obligations. As one example Mr Evans pleaded in paragraph 142 of his reply that he recognised no obligation to prefer to his own views the views of management, and in particular Mr Anthony John Pearson ("Mr Pearson"), Virgin Radio's Chief Executive, and Mr Bobby Hain ("Mr Hain"), Virgin Radio's acting Programme Director, as to what would make the Show successful. Mr Evans in the course of his evidence on critical episodes and issues professed no recollection of events. When I asked him about the quality of his powers of recollection, he told me that indeed he did have a terrible memory. That part of his evidence I fully accept. Beyond this where it suited his purposes, he had resort to lies. He lied about the time during which, and place where, he waited for a meeting with Mr Pearson and Mr Jackson on 20 June 2001. His verified pleadings stated that he waited in his office on the first floor for three hours. His evidence finally established that he was in the zoo area on the third floor for an hour and a quarter and that he was not waiting for a meeting but waiting for his wife Mrs Billie Evans (whom I shall refer to as Billie). He lied to Mr McGrath and Mr Revell about what Mr Jackson had said to him about their futures with the Show. He was an unimpressive witness more concerned with advocacy and making an impression than answering questions. In the circumstances I can attach only limited weight to his evidence on any issue of fact where what he says is not inherently probable or corroborated.
  20. (2) Mr Foster

  21. Mr Foster became Mr Evans's agent in 1990 and (save for a break between 5 September 1998 and 14 February 2001) has remained his agent ever since. As he told me, he had no role in creative matters. Mr Evans has been Mr Foster's principal client since 1995 and it is plain from his evidence that Mr Foster has had as a primary goal both whilst acting as his agent and in his evidence to this court the preservation of that valuable relationship. He cannot stand up to Mr Evans and is unwilling to give him unpalatable advice or pass on unpalatable information if in any way or at any costs this is avoidable. For this reason (for example) he would renege on assurances to Mr Pearson to consult on a matter with Mr Evans if he thought that Mr Evans would prefer not to be disturbed. In giving his evidence, he appeared to find it difficult, and was often unwilling, to give straight answers to questions, his memory was both defective and selective and he saw his role as a witness as being that of supporting Mr Evans's case so far as he could rather than assisting the court in the search for the truth.
  22. (3) Mr Doshi

  23. Mr Evans's other adviser was Mr Doshi who has been Mr Evans's personal accountant for about ten years. In particular he advised Mr Evans in 1997 on the occasion of the purchase of Virgin Radio and again in 2000 on its sale. His evidence was primarily directed at establishing three things. The first was the insistence on the part of Mr Evans's advisers on the occasion of both transactions for legitimate tax reasons that Mr Evans retained his self- employed status. That proposition has never been in doubt. The second was that under the Presenter's Agreement his services should at all times be made available to Ginger Radio alone and no-one else. Mr Doshi's insistence on the second proposition was an attempt at bare advocacy on behalf of his valued client. This latter proposition is totally inconsistent with the novation provisions in clause 10 of the Presenter's Agreement and though, when referred to this clause, Mr Doshi appreciated that this was so, he nonetheless stuck to his brief. Where Mr Doshi's evidence conflicts with that of Mr Mollett (another witness for Mr Evans likewise inclined to be partisan in his favour) I unhesitatingly prefer the evidence of Mr Mollett. The third proposition was to the effect that the statements in Ginger Radio's accounts that Ginger Radio was dormant and had neither traded nor incurred liabilities was consistent with Ginger Radio continuing to be party to and fulfilling its obligations under the Presenter's Agreement by reason of the existing of alleged back-to-back arrangements between Ginger Radio and Virgin Radio. Under cross-examination Mr Doshi was forced to concede that this further blatant attempt at advocacy on behalf of Mr Evans was unsupportable.
  24. (4) Ms Charlotte Blenkinsop ("Ms Blenkinsop")

  25. Ms Blenkinsop was appointed by Virgin Radio as head of communications in March 2000. She was responsible for the day to day public relations within Virgin Radio until 21 December 2001. She would regularly consult and seek the advice of Mr Callum Spreng ("Mr Spreng") who was responsible for communications across the SMG Group. She has provided three witness statements, the first two to the defendants and the third to Mr Evans. Her third witness statement and her evidence before me were primarily directed to the publicity and public relations aspects of the dispute and (in contrast with the contents of her first two witness statements) were plainly partisan favouring Mr Evans and unconvincing. I received no satisfactory explanation for the change of front from that disclosed in her two witness statements made when she was part of Virgin Radio management to that disclosed in her witness statement made after she had left. She was always bound by deep personal bands of loyalty to Mr Evans. For this reason she failed to pass on to Virgin Radio the information which she received on 3 May 2001 from Mr Gillett that Mr Evans was getting married though (as she well knew) she was duty bound to do so. The only explanation consistent with her conduct and evidence in court is that, after she ceased to be part of management, she felt free to give full vent to that loyalty. I did not find her (most particularly in respect of events on 20 June 2001) to be a satisfactory witness. Notwithstanding this fact, her evidence is significant on a number of issues where she could not gainsay Virgin Radio's case. In particular: (a) she conceded that Mr Evans could be very difficult (plainly an understatement); (b) in her professional view Mr Evans was wrong not to agree to do an interview and photo-shoot for a Radio Times feature; (c) Mr Evans's proposed "all day" show on 6 June 2001 was "a risky thing to go for" and there was a good chance that Mr Evans would have become bored by about 11 am; and (d) in her view press articles about Mr Evans damaged Virgin Radio where it appeared that Mr Evans had behaved in a manner which disclosed that Virgin Radio was not in control of the situation.
  26. (5) Other witnesses

  27. Mr Evans called a number of other witnesses. In the case of Mr Revell, he was only prepared to provide and did provide a witness statement for Mr Evans after Mr Evans had paid him £1 million in settlement of a recently made claim to a (moral) entitlement. The evidence of these witnesses was of peripheral (if any) value.
  28. B. THE DEFENDANTS' WITNESSES OF FACT

  29. Mr Pymont on behalf of Mr Evans made a number of challenges to the honesty and credibility of the witnesses called by Virgin Radio, and in particular he charged Mr Pearson, Mr Hain and Mr Paul Jackson ("Mr Jackson") with conspiring to conceal relevant evidence from the court, namely the meeting with Mr Ian Grace ("Mr Grace") on 16 May 2001 at the Arts Club. It is perhaps surprising that none of them recalled the meeting or referred to it in their original statements, but with so much going on at the time and (unless Mr Grace's account of what Mr Jackson said about Mr Evans is true) the absence of any relevance or significance of what occurred affords a reasonable and honest explanation which I accept. It is unfortunate that the defendants made late disclosure of SMG's Main Board Minutes. But there was nothing wilful in this regard and the default affords no basis for challenging the credibility of Mr Flanagan or Mr Pearson. I think that Mr Pearson, Mr Hain and Mr Jackson were less than forthcoming (no doubt because of embarrassment) in giving evidence as to the activities undertaken by Mr Jackson during the period of his gardening leave in respect of his previous employment. Their recollection was fallible and on occasion proved faulty but, where it did prove faulty (e.g. about when Mr Pearson was last in touch with Mr Grace), that fault was either later corrected or of marginal significance. But with the above qualification I find that all the witnesses called by Virgin Radio were honest and did their best to assist the court.
  30. (1) Mr Pearson

  31. Mr Pearson has been at all material times the Chief Executive of Virgin Radio and, subject to Mr Andrew Flanagan ("Mr Flanagan") the Chief Executive of SMG plc, has had management responsibility for Mr Evans and the Show. Mr Pearson recognised the supreme importance of Mr Evans and the Show to Virgin Radio. He also had a clear understanding of Mr Evans's volatile character. He attached the highest importance to maintaining good relations with Mr Evans and to this end displayed extreme patience and tact in dealing with him. Whilst it can be seen in retrospect that his efforts to moderate Mr Evans's conduct and provide constructive assistance and incentives to him to fulfil his contractual role in the end failed to achieve the results desired, no criticism can fairly be laid at his door. Mr Evans was any management's nightmare and (as in a Greek tragedy) the eventual outcome (given Mr Evans's predisposition and the change of role forced on him following his sale of Virgin Radio) practically inevitable.
  32. (2) Mr Hain

  33. Mr Hain was Assistant Programme Director of Virgin Radio from September 1996 to October 1998. He was then Programme Director until July 1999. He worked with Mr Evans on a day to day basis between 5 October 1997 and July 1999. He explains how the job of managing Mr Evans after his purchase of Virgin Radio became a delicate matter. In November 2000 he rejoined SMG as Business Development Director (Radio) of the SMG Group. In December 2000 at Mr Evans's request Mr Hain sorted out certain problems which Mr Evans had with the station. In January 2001 he started to become involved with Virgin Radio again and between March and June 2001 (after Mr Owens quit the post of Programme Director following expressions of dissatisfaction with him by Mr Evans and before Mr Jackson assumed the appointment as his replacement) Mr Hain was acting Programme Director of Virgin Radio. Mr Hain in his evidence detailed the acute problems which arose after Mr Evans relinquished his ownership and control. This is a critical period in the breakdown in relations between Virgin Radio and Mr Evans. Mr Hain had over 20 years of radio programming experience and a well developed awareness of the needs of a successful national radio station and of the demands of management of a mercurial presenter. Mr Evans told me that he had a lot of respect for Mr Hain. Mr Hain was an impressive witness who understood well both Mr Evans and the industry in which he worked.
  34. (3) Mr Jackson

  35. Mr Jackson joined Virgin Radio as Programme Director on 11 June 2001 very much because he wanted to work with Mr Evans and he had two very successful meetings before he began work for Virgin Radio with Mr Evans who endorsed his appointment. His baptism at Virgin Radio was a nightmare because, for reasons totally unconnected with him, Mr Evans rejected all his overtures to meet him. Nonetheless Mr Jackson acted with the greatest tact and sensitivity in his unsuccessful attempts to defuse the situation.
  36. (4) Mr Flanagan

  37. Mr Flanagan has been Chief Executive of SMG since May 1996. He met Mr Evans as part of the process leading to the purchase by SMG Jersey in 2000 of Virgin Radio, in the course of which Mr Evans assured him that, though his contract only required him to present the Show four days a week, his professionalism was such that he worked six days a week and he gave the assurance that he would continue to present the Show five days a week. Mr Flanagan recognised Mr Evans's talent and that he was temperamental and needed careful handling, and he ensured careful handling securing that Mr Evans continued in his role as presenter of the Show until the situation arose at the end of June 2001 when he made the decision to terminate the Presenter's Agreement and the Partnership Deed.
  38. (5) Mr Callum Spreng ("Mr Spreng")

  39. Mr Spreng since August 1998 has been director of corporate affairs at SMG responsible for communications across the SMG Group and in particular press relations. Mr Spreng convincingly explained the extreme anxiety and caution required in dealing with the press when bad publicity was occasioned by the conduct of Mr Evans. In this regard it is plain that Virgin Radio and Mr Evans were in safe and competent hands.
  40. (6) Ms Kathryn Jacob ("Ms Jacob")

  41. Ms Jacob was commercial director of Virgin Radio, responsible for managing all commercial matters including advertising campaigns, sales of air time, advertising spots, sponsorships and promotions. In her evidence she dealt with the issues relating to Mr Evans's conduct in regard to these matters and the impact of his conduct on Virgin Radio's business. There was and could be no serious challenge to her evidence which I fully accept and which I reflect throughout this judgment.
  42. (7) Mr Lee Roberts ("Mr Roberts")

  43. Mr Roberts was commercial development director for SMG Radio responsible for developing and operating the systems which monitored and analysed all the commercial deals in the business generally. His evidence primarily relates to audience figures and the demand and charges for advertising and the impact of Mr Evans on them. Again there was and could be no serious challenge to his evidence which I likewise accept.
  44. (8) Mr Grace

  45. Mr Grace was a programme consultant with Virgin Radio resident in Australia. Between April and December 1997 he was programme director at Virgin Radio and resided in London to fulfil this role. He provided a witness statement on behalf of the defendants and a Civil Evidence Act notice was served giving his residence in Australia as the reason for not attending the trial. The thrust of his evidence (which I accept as inherently probable and consistent with the body of evidence before me) was that the key to the success of Virgin Radio and the Show was the careful selection of the music to be played and the playing of that selected music, and that it is of the utmost importance that the music played on the station throughout the day including the Show be consistent with the station's music policy, for the music is the thread by which the listener identifies with the station; that he regularly requested Mr Evans to talk less and play more music; and that Mr Evans constantly deviated from the production schedules. His importance in this case however derives from a dramatic intervention which he made in the course of the trial. He telephoned Mr Hain and told him that he intended to inform Mr Evans that Mr Jackson had said at a meeting at the Arts Club on 16 May 2001 with Mr Pearson, Mr Hain and himself that he did not want to work with Mr Evans. Neither party sought to obtain a witness statement from Mr Grace in regard to the happenings at the meeting in question or an order directing or permitting him to give evidence by video link or otherwise. Mr Pearson, Mr Hain and Mr Jackson all gave evidence that such a meeting took place and that they had not referred to the meeting in their witness statements because nothing relevant had occurred. Most particularly they categorically denied that Mr Jackson made the statement attributed to him. I accept their evidence on this issue.
  46. Two video recordings and two compact discs were put in evidence in particular to throw light on the character and contents of the Show and the media perception of and response to the conduct of Mr Evans in issue in this action.
  47. C. EXPERT EVIDENCE

  48. Expert evidence was called on both sides in four distinct disciplines. Although the evidence was extensive, the product of value in these proceedings was limited. I shall consider each discipline in turn. When considering the expert medical evidence, it is convenient at the same time to resolve the issue raised by Mr Evans whether he was suffering from, or prevented from fulfilling his contractual obligations by, ill-health.
  49. (1) Medical

  50. Clause 9(2) of the Partnership Agreement provided that, unless prevented by accident or ill-health, Mr Evans was required to devote the whole of his working time and attention to the business of the partnership. Mr Evans was however entitled to be absent for illness which in the case of illness for less than seven days did not need to be certified by a doctor. (There was no like provision in the Presenter's Agreement.) I may add at this point that Mr Pymont rightly conceded that, so far as Mr Evans's consumption of alcohol contributed to his condition, Mr Evans could not claim that he was ill.
  51. Paragraph 36 of the amended particulars of claim pleaded that on 1 May 2001 Mr Evans decided that the existing format of the Show was unworkable and that the best thing was to leave the Team to present the next few shows and spend some time away from the station recovering his confidence and planning a new format. Paragraph 37 stated that accordingly Mr Evans left for a short break in the USA. Paragraph 38 read as follows:
  52. "Mr Foster told Mr Pearson on 1 May 2001 that Mr Evans would not be able to present the breakfast show the following day. He said Mr Evans was ill, which was, so far as he was concerned, true."

    It is to be noted that ill-health is not pleaded as excusing the failure of Mr Evans to present the Show.

  53. Paragraph 61 of the amended particular of claim read as follows:
  54. "61. Mr Evans's reaction to these events [the events of 20 June 2001] and the intolerable pressure placed on him by the Virgin Radio management was to drink heavily during the rest of 20 June 2001 with the result that he was not able to attend work on 21 June 2001."

    Paragraph 65(b) pleaded the provisions of the Partnership Agreement entitling Mr Evans to be absent for illness.

  55. Paragraph 70 read as follows:
  56. "70. [On the evening of 27 June 2001] Mr Evans was also examined by a doctor (Dr John Gayner) who concluded that Mr Evans manifested an acute anxiety state resulting from chronic stress. He advised him that he needed time off."

  57. Paragraphs 99(i) and 100 of the reamended defence pleaded that Mr Foster's explanation for Mr Evans's absence on 1 May was that Mr Evans was ill was false and that Mr Evans knew he was not ill. In paragraph 110 of the reply Mr Evans denied both the falsity of the statement and knowledge of the falsity.
  58. In paragraph 38 of the further information in answer to a request made on 29 May 2002 Mr Evans made plain that it was his case that he was ill in late June 2001 and in support of that contention he was relying on the diagnosis of Dr Gayner.
  59. As will subsequently appear Mr Evans consulted Dr Gayner a general practitioner whom he had never seen before and has never seen since, to arm himself with possible medical evidence for this trial. The examination took place between press interview which Mr Evans was busily conducting at the same time. Mr Evans did not tell Dr Gayner the very material fact that the purpose of the examination was to obtain evidence which would be available in later proceedings. Remarkably however though Dr Gayner communicated with Mr Evans's lawyers in July 2001, his statement is dated 7 February 2003. Dr Gayner's conclusion from his examination was that at the time of the examination Mr Evans manifested an acute anxiety state resulting from chronic stress and advised him that he needed time off. In answer to the evidence of Dr Gayner, the defendants called a specialist in psychiatry, Dr Reveley. Dr Reveley gave her diagnosis "on the papers" without ever examining Mr Evans. Mr Evans was invited (if he wished) to submit to such an examination, but that invitation was not taken up. Dr Reveley gave evidence to the effect that Mr Evans was not suffering from any form of illness, let alone a recognised form of psychiatric disorder. All she would concede was that on the evening of 27 June 2001 when Dr Gayner examined him Mr Evans disclosed a degree of distress which warranted advice to take time off work.
  60. Dr Reveley was a most impressive witness and I fully accept her evidence. I was not equally impressed by Dr Gayner, and still less by his attempts in the joint report by experts to extend and elaborate long after the event the ambit of his original report and suggest that Mr Evans's condition may have predated 27 June 2001. The basis put forward for this extension was his reliance on further material supplied by Mr Evans's solicitors which he did not particularise in the joint report. This part of his evidence had the flavour of advocacy on behalf of his client and patient and was not in my view credible. The conclusion to be drawn from the medical experts which accords entirely with the other evidence before me is that on 27 June 2001 (but not before) the joint effect of a lengthy period of excessive drinking and the anticipated shame and financial loss arising from imminent dismissal induced in Mr Evans a degree of distress which warranted advice to take time off work. Accordingly his state of health affords no support to Mr Evans's case.
  61. (2) Services and standards of a first class presenter

  62. Clause 4 of the Presenter's Agreement provided that the Partnership shall ensure that Mr Evans shall render all services usually rendered by a first class presenter and perform his services in a first class professional manner. The parties called expert evidence on what these obligations and standards involved and on the importance of music in a commercial radio station such as Virgin Radio. In the case of Mr Evans the expert was Mr Story and in the case of the defendants Ms Oldham. Both were helpful witnesses. In particular Ms Oldham was impressive: she was demonstrably well qualified and straightforward in this discipline (as well as the other) on which she gave evidence. In their agreed report the two experts substantially agreed all that was necessary for adjudication of these issues. I set out the areas of agreement when I consider the express terms of the Presenter's Agreement. So far as there is a difference in view between them on the importance of music on the Show, I find more impelling the opinion of Ms Oldham.
  63. (3) The business life of a commercial radio station

  64. Issues have arisen as to how a commercial radio station operates and is financed and the essential ingredients for its financial success. On this issue and on the issue whether Mr Evans's alleged breaches of contract were damaging and his dismissal were damaging and adverse to Virgin Radio's business and financial position, Mr Evans called Mr Morse and the defendants called Ms Oldham. Whilst Ms Oldham was impressive, Mr Morse was less so, for he adopted a somewhat defensive and argumentative stance and his reading of the papers in this case was limited. After production of their joint report and exploration and clarification of their evidence in cross-examination, the relevant areas where there was any significant difference between them were limited, and where they disagree, I favour the evidence of Ms Oldham.
  65. (4) Accounting evidence

  66. The defendants called Mr Murrell and Mr Evans called Mr McGregor as their experts on accountancy matters. Accountancy expert evidence was directed essentially to three issues: (i) the accountancy meaning of the terms "material", "business", and "financial position". (One of Mr Evans's contentions was that these terms as used in the Option Deed bore this technical meaning). As will subsequently appear I reject this contention; (ii) whether the alleged breaches of contract had a material adverse effect on SMG Jersey's business and financial position; and (iii) whether (as contended for by Mr Evans) the fact that SMG's accounts for the year ended 31 December 2001 did not report any impairment in goodwill was inconsistent with the defendants' contention that the circumstances giving rise to Mr Evans's expulsion from the Partnership were materially adverse to SMG Jersey's financial position. Again as will subsequently appear I reject this contention also.
  67. I have already resolved the issues to which the medical expert evidence relates. The other expert evidence generally informs this judgment, and it is unnecessary in what must necessarily be an already lengthy judgment to subject it to detailed analysis. I shall accordingly only occasionally make any specific reference to it.
  68. PART IV

    VIRGIN RADIO AND THE RADIO INDUSTRY

  69. The industrial or commercial context in which the conduct of the parties to this litigation is to be viewed is important in this case. In understanding this context I have received substantial assistance from the various witnesses of fact as well as the experts.
  70. The income of a commercial radio station is obtained from advertisers, sponsors and promoters and this in turn depends on the station's available audience (or "reach"). There is a five to six month lag between audience ratings and revenues. The goodwill of the listening public and advertisers, sponsors and promoters is the essential lifeblood of a station. To achieve and maintain this goodwill, the radio station is very much in the hands of its presenters: in a very real sense the station's fortune and reputation are placed in their hands and the station must feel able to place its full trust and confidence in them. A radio station's breakfast show is its most important show and may fairly be described as its flagship (Ms Jacob likened it to its Crown Jewels) and a radio station will seek to obtain for that show its most important and valued presenter. The breakfast show is the showcase determining the image perception of the station and the level of its audiences for the rest of the day. The station's reach is at its peak for the its breakfast show. There is a natural decay in a station's audience throughout the day: the larger the audience to its breakfast show, the larger the audience for the rest of the day. Hence arises the supreme importance of the presenter of the breakfast show. As Mr Pearson strikingly expressed it, the presenter of the breakfast show is the "face" of the station and Mr Evans was a paradigm example. Everything must be done to maintain and (when possible) improve the quality of the breakfast show and urgent action must be taken to rectify any problems. For this purpose it is essential that management and the presenter are at all times co-operative and fully communicate with each other.
  71. The maintenance of the goodwill of a radio station likewise requires that the presenter shall at all times be, and be seen by providers of advertisements, sponsorships and promotions as well as the audience to be, "under the control" of the station. For advertisers, sponsors and promoters, such control is essential if (as they must) they are to feel confident that they can rely on him as both willing and able to fulfil his obligations to them as presenter. Likewise in view of the personal and intimate relationship perceived by audiences to exist between them and the presenter, the audience expect him to be faithful to them and not (in the language of Mr Evans) to disenfranchise them e.g. by failing for sufficient reason to present their show or otherwise acting in a manner which audiences may consider to be or involve a breach of faith to them. Mr Evans, in the course of his evidence on the need to fix his holiday dates well in advance, graphically explained the importance of keeping faith with audiences and avoiding unplanned absences and their adverse effect on them. He said:
  72. "We had to [decide dates for holidays quite a long time in advance] because we had to plan for other disc jockeys coming in, we had a massive schedule — you had to do that when you are making radio shows, because you cannot disenfranchise the listeners."

  73. Since the presenter is the face and ambassador of the radio station, bad publicity for the presenter is likely to constitute bad publicity for the station, and bad publicity for the station threatens the future, if not the existence, of the station. (This is reflected in clause 4(c) of the Presenter's Agreement.) Mr Evans (on page 27 of his autobiography) accurately states: "Publicity is something that companies like Virgin Radio live and die by". The presenter's face must remain an acceptable face both on and off the show he presents and accordingly he must at all times act in an acceptable manner. If he appears out of control or acts in a manner which alienates listeners or advertisers, he jeopardises the goodwill, business and financial position of the radio station. News of bad experiences with presenters and radio stations travels quickly by word of mouth amongst advertisers and their reputations and goodwill are easily damaged.
  74. The role of presenter (and most particularly star presenter) is stressful: the stress and relative scarcity of those able to fulfil the role are reflected in his high earnings. A first class presenter must be able to fulfil his role in a responsible manner notwithstanding the stress inherent in his occupation. Indeed that is a necessary quality of such a presenter.
  75. It is common ground that Virgin Radio:
  76. i) is a leading national commercial radio station;

    ii) is the only national commercial station with a mainstream popular music format; and

    iii) targets male and female listeners aged between 25 and 34 (a market which is highly attractive to advertisers and sponsors).

    80 per cent of its revenue is derived from the sale to advertisers of advertising spots (to which nine minutes is allocated in every hour), 15 per cent from promotions and 5 per cent from sponsorship.

  77. The evidence establishes that Virgin Radio has two main objectives:
  78. i) to make itself attractive to its target market, and its core listeners within that market, who are those likely to spend a considerable part of their day listening to radio. To achieve this objective, it carefully controls both the format of, and the music played on, all its shows. It conducts extensive research and, on the basis of that research, it maintains playlists of approved music and draws up schedules of the music to be played on each programme;

    ii) to maintain and foster the relationships it has with clients and advertising agencies. Those relationships depend on Virgin Radio's ability to deliver the advertising services it offers in the manner and form which it has agreed with them.

  79. In seeking to achieve these objectives, Virgin Radio (like other stations) relies on its presenters (and particularly, its star presenter). This requires the presenters to operate within the format and music parameters set by the station, and to accept the station's ultimate right to control its output. For these purposes, presenters must communicate with the station, usually via its Programme Director. Within these constraints (most particularly in case of a star presenter such as Mr Evans) there is ample scope for individuality and self-expression by the presenter in his presentation of the Show. This freedom on his part and the high degree of dependence of the station upon the presenter places a premium on the existence and maintenance of open lines of communication of the relationship of trust and confidence between the presenter and the station.
  80. The audiences of radio stations are measured by "RAJAR" which publishes quarterly audience figures. The published audience figures, whilst regarded as authoritative as to those figures, afford no guidance as to why listeners are or are not listening to various radio stations. Accordingly a decline in audience figures revealed by RAJAR provides no assistance in determining the causes. A market survey is a possible method of determining the causes.
  81. PART V

    THE DETAILED CHRONOLOGICAL HISTORY

  82. In this chronology I shall seek to set out the principal events. There are innumerable events and innumerable issues of fact between the parties. To make this judgment manageable I must be to a degree selective in choice of events and generally resolve issues without detailing the conflicts of evidence.
  83. In 1993 Mr Evans obtained a contract to act as a radio presenter for Virgin Radio for 13 weeks. He walked out however after six weeks. In 1996 he obtained a contract to work as a presenter for Radio 1 presenting the Radio breakfast show with his team ("the Team") consisting of Mr McGrath (who had a production role), Mr Revell, Ms Holly Samos ("Ms Samos") and Mr Jamie Broadbent ("Mr Broadbent"). The show had a "zoo format", that is to say Mr Evans was the lead or principal presenter with the Team reacting to his conversation and contributing comments, stories, jokes and other items as appropriate.
  84. After working for a year Mr Evans walked out of this job because he refused to work (as was contractually required of him) on Fridays. (In his autobiography Mr Evans stated that he left because he had run out of ideas.) He left (again as he says in his autobiography) "with a bitter and self-centred on air display of arrogance and self-righteousness". Yet this did not constrain him from saying on air that "he had been forced out" and that this was "outrageous".
  85. By a letter dated 1 September 1997 Virgin Radio agreed to engage Ginger Radio, Mr Evans's company, and Ginger Radio agreed in return for the sum of £300,000 to procure that Mr Evans would present the Show between 13 October and 18 December 1997 four days a week Monday to Thursday 7 am until 10 am and that an ongoing contract from January 1 1998 should be negotiated. Although the contract and the subsequent Presenter's Agreement required Mr Evans only to work Mondays to Thursdays, practically from his first until his last day at Virgin Radio he worked five (and sometimes six) days a week. Indeed (as I have already recounted) at a meeting leading to the purchase of Virgin Radio by SMG Jersey Mr Evans assured Mr Flanagan that he would continue to present the Show five days a week if the takeover proceeded. This practice created an expectation on both sides that he would work Fridays such that (as he told me) Mr Evans would have been surprised (and no doubt affronted) if on any Friday he had found that Virgin Radio had drafted in another presenter to present the Show.
  86. Mr Evans brought the Team with him to Virgin Radio and the same zoo format was used and he began presenting the Show on 13 October 1997. It has been suggested on behalf of Mr Evans that Mr Evans through his company Ginger Radio, now a wholly owned subsidiary of SMG Jersey, produced the Show. I do not accept this allegation which is not made in Mr Evans's pleading and which is not supported by any documentation. At all material times Virgin Radio (and Virgin Radio alone): (1) employed all the staff other than the Team; (2) held the radio licence; (3) owned the studio; (4) arranged the programming; (5) sold the advertising; (6) claimed the right to exercise and (so far as necessary) exercised editorial control of, and the power to give directions regarding, the Show, its format and contents. It is beyond challenge (whatever the Presenter's Agreement said) that Virgin Radio exercised all the functions and powers of producer and was the producer and Mr Evans over the period that he was presenter recognised this fact and acted on this basis. Ginger Radio exercised none of the functions and powers and was not the producer.
  87. Mr Evans's office, like that of Mr Pearson and of Mr Hain was on the first floor of the building. The offices had see through glass partition walls. The layout was calculated to facilitate communication between management and Mr Evans. The studio and zoo area outside were on the third floor, The impact of Mr Evans on Virgin Radio's audiences, the press and advertisers was immediate and immense. The Times described Mr Evans as "a brilliant broadcaster who has elevated inanity almost to an art form". A surge in audience figures between the fourth quarter in 1997 and the second quarter in 1998 resulted from his arrival at the station.
  88. On 8 December 1997, Mr Evans through Ginger Media completed the acquisition of VRH (the parent company of Virgin Radio) from Richard Branson's Virgin Group for about £83 million. As a condition of obtaining the finance which Mr Evans needed for this acquisition, under a Shareholders' Agreement dated 6 December 1997 Mr Evans agreed to be tied into the Ginger Group of companies by several long-term contracts. The crucial agreements were: (a) the Presenter's Agreement by which Ginger Radio (now a subsidiary of Ginger Media) as producer of the Show engaged the Kentfarm Partnership to provide or procure Mr Evans's services as presenter for five years and Ginger Media as guarantor guaranteed the performance by Ginger Radio of its obligations thereunder; and (b) the Partnership Agreement which constituted a partnership between Kentfarm (a subsidiary of Ginger Media), and Mr Evans and by which Mr Evans agreed to perform the obligations of the Partnership under the Presenter's Agreement. The structure was designed to preserve for tax reasons Mr Evans's status as a freelance radio and television presenter.
  89. Thereafter Virgin Radio continued to produce the Show and from late December 1997 Mr Evans presented the Show on Fridays. In about March 1998 Mr Evans and Mr Pearson agreed to move the Show back from 7 am — 10 am to 6.30 am — 9.30 am. All invoices for payment of fees due under the Presenter's Agreement were addressed by the Partnership to Virgin Radio and paid by Virgin Radio. Ginger Radio ceased to trade by 31 July 1998 and became dormant.
  90. On 13 January 2000, Mr Evans agreed to sell Ginger Media to SMG Jersey. The total purchase price payable on this acquisition ("the SMG Acquisition") was to be approximately £225 million and:
  91. i) Mr Evans was to receive some £70 million, representing 31 per cent of the total consideration;

    ii) Mr Evans's consideration (or rather its value), was not all to be paid immediately. Under the Option Deed over a third of his consideration (then valued at some £26 million) was effectively payable through two tranches of share conversions over two years;

    iii) the Presenter's Agreement was to continue in force without any change to the terms of or the parties to the Presenter's Agreement;

    iv) to reflect the change of ownership, some changes were however made to the Partnership Agreement; and

    v) the vast majority of the purchase price of £225 million was attributable to Virgin Radio.

  92. In the negotiations for the SMG Acquisition, SMG had proposed that there would be a new service contract directly between Mr Evans and the acquiring company. This proposal however was objected to by Mr Evans for tax reasons. He proposed that, if there were such a change, he should have a tax indemnity from SMG to cover the likely £500,000 tax charge that would arise; it was also pointed out that there was likely to be an adverse National Insurance charge for SMG (estimated at £250,000) because Mr Evans would probably be regarded as having been an employee throughout the period since December 1997. In the light of Mr Evans's response, SMG did not pursue the proposal.
  93. The SMG Acquisition was completed on 14 March 2000 and on the same date the agreed amendments were made to the Partnership Agreement.
  94. In February 2000 Mr Pearson together with Mr Grace and Mr Owens decided to change the Virgin Radio music policy away from the classic tracks of the type which had been the staple diet of Virgin Radio since its launch and which had featured on occasion in the Show towards contemporary pop music. On 11 May 2000 Virgin Radio issued a press release celebrating the fact that on the RAJAR figures for the first quarter for 2000 Mr Evans was pulling away from his breakfast show rivals increasing his audience and had retained the position of the UK's biggest commercial radio breakfast show. Mr Pearson was however concerned about the failure of Mr Evans to comply with the production schedules and instructed a Mr Feasey to make a log of records played and not played on the Show. Beyond this, however, he was satisfied with the Show itself. Later in 2000 a drop in RAJAR figures for the second and third quarters of 2000 amongst the core audience of 25-34 year olds caused management to doubt the wisdom of the change of music policy adopted earlier in the year and the policy was reversed early in 2001.
  95. On 26 June 2000 the Scheme dated 7 April 2000 came into effect. Pursuant to the Scheme SMG replaced Scottish Media as the ultimate parent company of the SMG Group, and all the shareholders in Scottish Media holding lop ordinary shares in that company effectively exchanged their shares for four times as many 2.5p shares in SMG. On 29 June 2000 SMG Jersey became a directly held subsidiary of Scottish Media.
  96. In Autumn 2000 the Programme Director Mr Owens without reference to Mr Evans took the Team to breakfast. Mr Evans was affronted, abused Mr Owens on air and thereafter refused to talk to him.
  97. In September 2000 Mr Evans and Mr Pearson agreed to vary the Presenter's Agreement by moving the hours back half an hour from 6.30 — 9.30 am to 6.00 — 9.00 am.
  98. On Friday 20 October 2000 without any prior consultation with management Mr Evans introduced the first "All Request Friday Show", on which listeners were invited to telephone in and request a particular record. The Show afforded flexibility in choosing from the requests records already on the production schedule for the day and (as was its practice) in fabricating such requests. But this novelty was the occasion for departures from the production schedule and management did not raise any complaint specifically in regard to this aspect of the novelty before Mr Jackson took on his duties in June 2001.
  99. The quality of the Show, and in particular of the performance of Mr Evans and the Team, declined during the latter part of 2000 as did the audience figures.
  100. In October 2000 Mr Evans (who had hitherto permitted Virgin Radio's sales team to organise tours to the studio for clients) made clear that he would not permit any further tours. On 25 October 2000 there was a studio tour during the Show by some graduates who had been recently employed by advertising agencies. These tours had been going on for some three years and were a way of getting the graduates excited about Virgin Radio. The surly behaviour of one graduate on this occasion annoyed Mr Evans. On the stated ground that such visits adversely affected the Show and the Team (and in particular Mr Revell) Mr Evans refused to allow further studio tours. Virgin Radio sought to persuade him to change his mind, but its attempts were largely unsuccessful. Recognising the inevitable on 29 January 2001, after another incident Mr Pearson sent out an e-mail to Virgin Radio management indicating that, in the absence of exceptional circumstances, to avoid distracting the Team there should be no more studio tours to the Show. There were, however, some further tours, including a tour by a representative of McDonalds (the sponsor of the Show) which took place in June 2001. In early February 2001 the Virgin Radio commercial team tried to get round the ban on studio tours by asking Mr Evans and a member of the Team to agree to greet a client at the end of the Show. Mr Evans however turned down the request.
  101. In November 2000 Mr Evans succeeded in obtaining as guests of the Show the band U2 (whom Mr Pearson described in a press release as "the biggest rock band in the world"). No doubt at least in part as an expression of appreciation for their appearance Mr Evans played nine of their records. In so doing he departed from the production schedule.
  102. In November 2000 Mr Revell bought a new home and decided to rebuild it with his own hands and have a television series made about this project. The concentration of effort on this project had a bad effect on his performance on air. He was tired and not so spontaneous. In January 2001 Mr Evans became annoyed on this score and on the grounds of Mr Revell's lack of commitment and reported his concerns to Mr McGrath. Mr McGrath spoke to Mr Revell, but this led to no improvement. Mr Evans did not speak to Mr Revell direct in respect of his concerns. He could not face confronting Mr Revell. On 1 December 2000 at a meeting with Mr Pearson, Mr Grace and Mr Revell, Mr Evans complained about the change of music policy effected in February 2000, and Mr Grace responded promising to refocus the music and that Virgin Radio would be dedicated to playing the right tracks. But Mr Evans did not disclose his concerns about Mr Revell or Mr McGrath's conversation with Mr Revell.
  103. During December 2000 the Show ran a "Christmas Album" feature playing music which was completely off the station's play list. No complaint or action was taken by management specifically in respect of this feature.
  104. During the latter part of 2000 and the early part of 2001, Mr Evans recognised that the Show had fallen into something of a lull and became anxious to initiate the necessary remedial action. With his decision shortly before to relinquish his role as presenter, writer and producer of TFI Friday with Ginger Television, he decided to concentrate on the Show. His efforts were reflected in an improvement in the Show during the first quarter of 2001.
  105. Owing to the lack of communications between Mr Evans and Mr Owens, in February 2001 Mr Pearson instituted weekly Wednesday meetings attended by Mr Pearson, Mr Hain and Mr Evans. The discussions primarily focussed on the Show. Mr Evans was not involved in management in any real sense. The meeting focused, not on managing the business, but on managing Mr Evans's talent and the Show. At these meetings (almost as an aside) Mr Evans criticised the Team and complained of tensions in the Team and the lack of support from it. But Mr Evans did not look for or request any assistance from management or indicate that any dramatic action was called for or impending. He complained that Mr Owen was not doing a good enough job, and Mr Pearson agreed and decided to replace him. Also during these meetings Mr Pearson and Mr Hain repeatedly requested Mr Evans to stick to the production schedule on the Show and in particular to play more music than he did and to play the music selected by management. Mr Grace had likewise been making such requests. Having regard to Mr Evans's sensitivities, no reference was or could be made to any breach of contract or any possible sanctions. The impact of the requests was very limited, for whatever Mr Evans's response at the time, his improvements in these regards were always temporary only.
  106. In February 2001 Virgin Radio ran a week-long promotion for Amazon.com which related to the British music awards of 2001. The mechanic which Virgin Radio agreed with Amazon for this promotion involved Mr Revell singing certain of the Brit Award songs in different styles so as to disguise them. Listeners were to telephone in to guess which song he was singing. Mr Evans unilaterally changed the mechanic. From the first day of the promotion Mr Revell did not sing any songs in a disguised style, which effectively gave the answers away. Virgin Radio was neither warned nor consulted about this change in mechanic. Mr Evans says the artistic and creative integrity of the Show required the change, but that did not justify his so acting without prior consent.
  107. Mr Flanagan in his Chief Executive's report to the SMG Board on 16 February 2001 (based on Mr Pearson's draft report) recorded that trading in January 2001 was poor. This was mostly accounted for by a reduced level of sponsorship for the Show reflecting the ratings fall and less demand for Chris Evans. But the report went on to say that the Show had performed well with gains in London.
  108. In March 2001 Virgin Radio ran a week-long promotion for Guinness. The mechanic agreed with Guinness involved a competition for listeners each day from Monday to Thursday of the week with the winners being entitled on the Friday to take three friends to the Guinness brewery in Dublin from where the Show was broadcast. On the Monday without any prior warning or agreement Mr Evans announced that the winners on Monday to Wednesday should compete on Thursday and the winner on Thursday could take 11 friends the following day to Dublin. Mr Evans seeks to justify the change in mechanic as called for to achieve or preserve the artistic and creative integrity of the Show, but again this afforded no justification for acting without prior consent.
  109. On 28 February 2001, in response to a speculative inquiry for a job by Mr Jackson, Mr Pearson and Mr Hain met him in the coffee shop of Waterstones Piccadilly. All dealings with Mr Jackson had to be discreet since he was still employed by another radio station, Capital Radio. Mr Pearson and Mr Hain were impressed and were minded to appoint him Virgin Radio's new Programme Director. Respectful of Mr Evans and to ensure that Mr Evans would be happy with this appointment, before deciding on his appointment Mr Pearson arranged for Mr Jackson to meet Mr Evans on 6 March 2001. At that meeting at Mr Evans's flat, Mr Jackson and Mr Evans discussed the station and radio in general terms. They did not, however, discuss the Show in any detail or the Team. In particular, Mr Jackson was in no position to express any views about changing the Show as he was new to it. The result of the meeting was that Mr Evans enthusiastically endorsed Mr Jackson's appointment. After a further meeting with Mr Jackson on 13 March to agree his remuneration, on 15 March 2001 Virgin Radio made a public announcement of his appointment. Mr Jackson could not however take up his new appointment until he had given notice to Capital Radio and completed the period of gardening leave on which Capital Radio insisted. This expired on 11 June 2001. With the appointment of Mr Jackson there was no need for Mr Evans to attend weekly meetings with Mr Pearson and Mr Hain and he ceased to do so. Pending Mr Jackson completing his gardening leave and joining Virgin Radio, Mr Hain took over as acting Programme Director.
  110. From January 2001 until 19 June 2001, negotiations proceeded between Mr Evans and SMG Jersey for the amendment of the terms of the contracts for his services under the Presenter's Agreement. This was required in particular because the TFI Agreement had come to an end and he was in future to concentrate on radio. No final contract was ever concluded, but on 9 March 2001 the principal term was agreed that Mr Evans should receive in respect of his services as presenter of the Show a fee of £1.7 million from 1 January 2001 and a bonus of £200,000. In the expectation that a contract would be concluded the management accounts of Virgin Radio thereafter reflected these figures as the sums payable for his services.
  111. The means by which Mr Evans decided to address the problems with the Show were to shake up and unsettle the Team and without notice to or the consent of management he implemented this decision using the imminent arrival of Mr Jackson as the catalyst. To this end in early March 2001, after his first meeting with Mr Jackson, Mr Evans had a long meeting with Mr McGrath. At this meeting (without any reference to management) he informed Mr McGrath that Mr Jackson would be joining Virgin Radio as the new Programme Director and he made up a fictitious account of his earlier meeting with Mr Jackson. He told Mr McGrath that Mr Jackson was really scary, that he wanted to sort out the station, that he was not taking any prisoners, that he was firing on all cylinders, and that he (Mr Evans) had never been so scared in all his life. Mr Evans and Mr McGrath both agreed that Mr Revell was "not very good at the moment" and a discussion followed about all or some of the Team leaving the Show. As intended, Mr McGrath was unsettled. They agreed to talk again later and to keep secret what had been said. A second meeting took place later in March at Mr McGrath's home when Mr Evans told him that he needed to assert himself as producer of the Show. This second meeting left him even more unsettled and insecure. Later in the month Mr Evans had a meeting with the whole Team, at which he told them that Mr Jackson was coming, he was scary and they had to buck up their ideas.
  112. In his Chief Executive's report to the Board on 30 March 2001, based on Mr Pearson's draft, Mr Flanagan stated that the Show had gained audience figures for the first time in a year and expressed the view that the Show was performing well.
  113. On 19 April 2001 Mr Pearson arranged a further meeting at Mr Evans's flat between Mr Jackson and Mr Evans. At this meeting Mr Evans did 75 per cent to 80 per cent of the talking. He criticised Mr McGrath and Mr Revell in particular. He stated that he was not getting the support of the Team which he needed, that the Team was no longer committed to the Show, that it was a handbrake slowing him down, that Mr Revell and Ms Samos were superfluous and that Mr John Webster ("Webbo") the sports reader was the only character. Mr Jackson had yet to assume the post of Programme Director and did not feel competent to express a view. He was (tactfully) sympathetic but non-committal. He did not suggest or agree to any change in the Team. The moving force in this direction was Mr Evans and Mr Evans alone. (Mr Jackson's later letter dated 18 June 2001 placed a tactful gloss on the course of the meeting. I do not think that the letter impels or justifies a different reading of what occurred from that given by Mr Jackson in his evidence.)
  114. On Friday 20 April 2001 at the instigation of Mr Pearson, Mr Jackson met another presenter Mr Steve Penk ("Mr Penk"). The purpose was to consider the use of Mr Penk on programmes other than the Show and (when Mr Evans was absent, eg on holiday) on the Show. There was no question of considering him as a replacement on the Show for Mr Evans.
  115. On 24 April 2001, the sixth anniversary of the Team being together, on air Mr Evans without any warning asked Mr Revell what was special about the day. Though it was plain that Mr Revell did not know the answer, Mr Evans repeatedly asked him the same question. By so doing Mr Evans humiliated Mr Revell who became flustered on air and dried up. This was not a case of normal banter. Mr Evans's conduct plainly reflected the antagonism he felt towards Mr Revell and it was cruel and unsettling for Mr Revell as well as being bad radio. After the Show Mr Evans met Mr McGrath and Mr Revell. Mr Evans showed that he was unhappy with Mr Revell and his performance and (speaking for Mr Evans) Mr McGrath told Mr Revell that he was not "up to it" and asked him what he was doing. He said that Mr Evans was disappointed with him and questioned his commitment.
  116. On 25 April a breakfast meeting was arranged for McDonalds after the Show which was to be attended by Mr Evans. McDonalds were in negotiations with Virgin Radio for a contract to sponsor the Show. For no good or sufficient reason Mr Evans did not attend and this was very embarrassing for Virgin Radio. Nonetheless the McDonald's sponsorship of the Show went ahead for the agreed period.
  117. On 26 April; 2001 Mr Evans had a meeting with Mr Revell at which he told Mr Revell that he was the one person whom either everyone or Mr Jackson was telling him should go. This was not true: it was Mr Evans and Mr Evans alone who thought that he should go, but Mr Evans falsely attributed this view to others. As intended, this action further destabilised Mr Revell. Mr Revell responded that he would leave the Show if Mr Evans wanted him to do so and agreed to go away and think about what Mr Evans said. Mr Revell saw the writing on the wall and immediately instructed Ms Marian Derham of Harbottle & Lewis to act for him in respect of his contractual position with Virgin Radio. (She later spoke to Mr Pearson who confirmed that Virgin Radio recognised and would honour all the rights which it was understood that he should have whether or not formally included in his contract.) The following day, Mr Revell declined to discuss the matter further with Mr Evans saying that he was busy, but arranged to speak with him again on Monday 30 April 2001. On that day after the Show Mr Revell again met Mr Evans. Mr Evans again falsely stated that Mr Jackson wanted Mr Revell to go. Mr Revell said that he wanted to stay, but would go if he got all the money due in respect of the full term of his contract (some £385,000).
  118. The meeting with Mr Revell ended with Mr Evans thinking that Mr Revell had got the message and would leave and, when Mr McGrath came in to see Mr Evans immediately after the meeting with Mr Revell had ended, Mr Evans told him that Mr Revell was going to leave. Mr McGrath was upset and, thinking that Mr Evans wanted to break up the Team, said that he was leaving also and that he had been thinking of doing so since Christmas. At the end of the meeting, however, after a further talk with Mr Evans Mr McGrath said that he intended to stay. But Mr Evans must have realised at the end of the meeting that his actions taken to destabilise the Team were likely to mean the disintegration of the Team unless he took immediate and effective action to counter them, but he was not minded to take such action.
  119. After these two meetings Mr Evans attended a lunch meeting which Virgin Radio had arranged between Mr Pearson, Ms Caroline Reik ("Ms Reik"), Virgin Radio's Head of Sponsorship, and a representative of a client, Umbro. Mr Pearson, Ms Reik and Mr Evans were together some 20 minutes before the client arrived and some 15 minutes after the client left. But at no time did Mr Evans give any sign that anything was wrong with him, that he was upset or ill nor did he mention any problem or development with the Team or request an opportunity for a private discussion. In particular he gave no indication that he would not be turning up for the Show the next day.
  120. After the lunch Mr Evans went to a party at a pub to celebrate Virgin Radio's birthday. He was the life and soul of the party. He then went on a drinking binge at a number of public houses ending up at a lap-dancing club where he could expect to be spotted and was spotted by the press.
  121. The same evening (30 April 2001) Mr McGrath and Mr Revell met together and agreed that they should go back to Mr Evans to reassure him as to their firm commitment to the Show and to make a list of suggestions for its improvement. Mr Evans, however, never gave them the opportunity to have such a meeting or management an opportunity to mediate and find a solution to the problems that had arisen.
  122. On Tuesday 1 May 2001 Mr Evans did not attend to present the Show. He gave Virgin Radio no previous notice. The reasons were that he was hung over and he could not face the problems he had created with the Team. He decided to "look after himself'. He acted in this way though he knew that (as he put it in his evidence) it was "very unhelpful for a radio station indeed" for a presenter not to turn up without warning or give the listeners an explanation. Again as he said in his evidence, it was important not to disenfranchise listeners in this way. Instead of discussing with management his problems with the Team, without any warning he ran away from them flying with Billie to the USA.
  123. The Team accordingly had to present the Show on its own; there was no time to substitute another presenter which was (as Mr Evans knew) Mr Pearson's more favoured alternative in any case of Mr Evans's absence. After the Show Mr Pearson learnt from Mr McGrath and Mr Revell of their recent conversations with Mr Evans and their consequent uncertainty as to their futures. Mr Pearson spent much of the day trying in vain to contact Mr Evans, making inquiries of his personal assistant Ms Barringer ("Ms Barringer") and Mr Foster. Mr Evans telephoned Mr Foster between 10 and 11 am and asked Mr Foster to visit Mr Evans at his flat which he did. Mr Evans told Mr Foster his concern about the format of the Show with the impending departures of Mr Revell and Mr McGrath and that he had decided to fly with Billie to the USA at or about 3 pm that day. He was not ill and both he and Mr Foster knew that this was so. He was running away from the problems he had created which in his alcoholic state he did not want to have to face. But nonetheless Mr Evans and Mr Foster agreed that Mr Foster should tell Virgin Radio that Mr Evans was ill and on account of illness needed to take the rest of the week off. It was also agreed that, if Mr Foster should tell Virgin Radio that Mr Evans was going abroad, he should not do so before his plane had left. They so agreed though they knew that Mr Evans was duty bound to tell Virgin Radio the full truth immediately. Mr Foster accordingly thereupon telephoned Mr Hain to say that Mr Evans was ill and was unlikely to be coming in the next day. No reference was made to the flight to the USA. Mr Foster telephoned Mr Pearson at about 5.30 pm and told him that Mr Evans was ill and needed the rest of the week off but concealed that fact that he had already left the country. Misled as to Mr Evans's health, Mr Pearson had no option but to agree to the request for the rest of the week off. A stand-in presenter was then obtained for the Show.
  124. On 2 May 2001 the Mirror published an article saying that Mr Evans had missed the Show "again" because he had been out boozing with chums and was last seen going into a lap dancing joint. Ms Blenkinsop was then inundated with calls from journalists asking about Mr Evans's whereabouts. Since Ms Blenkinsop did not know what was going on and accordingly how to counter the bad publicity being engendered, she decided merely to say that Mr Evans was "taking a break".
  125. The same day Ms Blenkinsop received a telephone call from a Daily Star journalist to the effect that Mr Evans had been seen in Palm Springs. She informed Mr Pearson, and Mr Pearson then spoke to Mr Foster who confirmed that Mr Evans was abroad. Mr Foster then relayed an offer by Mr Evans to present the Show without the Team from either the USA or Portugal. (The making of this offer confirmed that Mr Evans was perfectly well and fit to present the Show.) Mr Pearson declined the offer, but made it clear (as was the fact) that his priority was to get Mr Evans back at Virgin Radio's station. Nothing was said or agreed in the course of this conversation about getting rid of the Team.
  126. Over 2 and 3 May 2001, Mr Foster had a number of telephone conversations with Mr Pearson. During these conversations Mr Foster told Mr Pearson that Mr Evans would no longer broadcast with the Team (and in particular Mr Revell and Mr McGrath) and that Mr Evans required two weeks off. These two requirements were non-negotiable. To save the Show from the threat by Mr Evans to walk away from it, Mr Pearson had no alternative to agreeing to Mr Evans's stipulations and in particular to give Mr Evans the next two weeks off (ie until Monday 14 May) and to remove Mr McGrath and Mr Revell from the Team. Mr Pearson agreed that he would tell Mr Revell and Mr McGrath that they should leave the Team, but Mr Foster subsequently told Mr Pearson that Mr Evans wished to give the news to Mr Revell and Mr McGrath because of their long association.
  127. On Friday 4 May 2001, Mr Evans telephoned Mr McGrath and Mr Revell to tell them that they could no longer work together. The inevitable result of this was the termination of the employment of Mr Revell and Mr McGrath at a substantial cost to Virgin Radio.
  128. During the period Tuesday 1 May 2001 to Friday 11 May 2002, in his many conversations with Mr Foster, Mr Pearson repeatedly asked to speak with Mr Evans to discuss what was going to happen to the Show. Mr Evans however persisted in refusing to speak to him and effectively excluded management from any opportunity to participate in or give any approval to any new format of the Show or the choice of members of a new team.
  129. On Sunday 6 May 2001, Mr Evans married Billie in Las Vegas. The day before, Mr Foster had told Mr Pearson that Mr Evans was going to marry her, but he said that the wedding would be in New York and on Monday 7 May 2001. This was a case of deliberate misinformation. Mr Evans in the ordinary course of events had no duty to inform Virgin Radio of private events such as his wedding or to enable Virgin Radio to exploit the consequent publicity for its benefit. But the situation was far from ordinary. In flagrant breach of contract Mr Evans had taken unilateral leave of absence, thereby creating both bad publicity and media speculation about his intentions. To mitigate the consequent risk of appearing out of control, he did need to keep Virgin Radio informed, and most certainly he owed a duty not to mislead. Late in the afternoon of Monday 7 May 2001, Mr Gillett telephoned Ms Blenkinsop and left a message for her about the wedding, and Mr Foster called Mr Pearson to confirm that the wedding had taken place. Virgin Radio broadcast an announcement of the wedding and issued a press release offering the station's congratulations and stating that the station had given Mr Evans a honeymoon week off. During the day Virgin Radio was inundated with inquiries from journalists about Mr Evans's wedding. Because of Mr Foster's misinformation the previous day and Mr Evans's failure to ensure that accurate information reached Virgin Radio in a timely fashion, Virgin Radio was unable to deal satisfactorily with these inquiries. Fortunately the steps taken by Virgin Radio prevented the misinformation occasioning any real damage to Virgin Radio.
  130. Virgin Radio was due to run a promotion for Umbro in the week 7 May to 11 May 2001. On 4 May 2001 Ms Reik had to inform Umbro that Mr Evans and the Team would be away that week and unable to present this promotion. Umbro had no choice but to accept this, but required compensation for this disappointment.
  131. In his board report to Mr Flanagan of 4 May 2001 Mr Pearson reported improved listening figures for the Show of 3 per cent, but he made no mention of Mr Evans's absences from the Show or his decision to disband the Team. He hoped that Mr Evans's talent and the arrival of Mr Jackson would enable these matters to be overcome. Mr Flanagan was however fully informed and he was concerned about Mr Evans reliability and the possibility that he might walk away.
  132. On Thursday 10 May 2001, Mr Pearson wrote a letter to Mr Foster expressing anxiety at not having been able to speak to Mr Evans, indicating his understanding that Mr Evans would return to the Show on Monday 14 May 2001 and stating that a three week break (which Mr Evans was then requesting) was too long. Mr Evans returned to the UK on the afternoon of Thursday 11 May 2001. The same day Mr Foster told Mr Pearson that the Show would involve a completely new team ("the New Team") but did not tell him who would constitute the New Team. Leaving aside his express contractual obligation in this regard, Mr Evans accepted in his evidence that it would have been the responsible conduct of a first class presenter to talk to Mr Pearson about the new format. No criticism is justified of management for failure to contribute ideas or otherwise to the Show, for Mr Evans did not want any and precluded management from having any voice or hand.
  133. By Sunday 13 May 2001, Mr Evans had decided that Ms Samos and Mr Broadbent should not appear on air on the Show but that they could have production roles. (He only informed them of this at 9 am on 14 May 2001). On the afternoon of 13 May 2001 he made last minute arrangement for the New Team to appear with him. Amongst other things without first consulting anyone at Virgin Radio he telephoned Webbo, a Mr Pritchard ("Mr Pritchard") and Ms Louise Pepper ("Ms Pepper") and told them to go into that station the next morning to do something on the Show.
  134. At 6 am on Monday 14 May 2001, Mr Evans commenced the Show with the New Team (Webbo as co-presenter and Mr Pritchard and Ms Pepper as supporting members). When he did so, Virgin Radio did not know who was going to be in the New Team (other than that the team would not include Mr McGrath and Mr Revell) and this occasioned the need, as the full facts filtered through, for three consecutive press releases relating to Mr McGrath and Mr Revell leaving, Mr McGrath, Mr Revell and Ms Samos leaving and Mr McGrath, Mr Revell, Ms Samos and Mr Broadbent leaving. The embarrassing need for three such releases gave a damaging (if true) impression of the relationship between Mr Evans and Virgin Radio.
  135. The new format of the Show ("the New Format") adopted by Mr Evans on 14 May 2001 included the following changes:
  136. i) Mr Evans no longer used any of the Team;

    ii) he ceased to be the sole presenter and co-presented the Show with the previous show's sports announcer Webbo, who was not up to the job;

    iii) he engaged the services of Ms Pepper and Mr Pritchard in connection with the Show;

    iv) there was an increased emphasis on sport (making the Show less attractive to female listeners);
    v) the show was "blokey"; and

    vi) he used poor quality sound recordings.

  137. Of these changes, only the loss of Mr McGrath and Mr Revell was specifically discussed or agreed in advance by Virgin Radio's management. Management had no choice but to allow these changes to be made if they were to retain Mr Evans.
  138. During the Show on 14 May 2001, Mr Evans made no mention of the changes to the Show or its personnel. His decision not to do so had not been discussed with Virgin Radio in advance. This decision was a serious mistake, unprofessional and bad radio and provoked an unprecedented number of listener e-mails. It made it difficult for Mr Pritchard to deal with callers enquiring about the changes, which meant that the Show could not answer callers with confidence.
  139. After the Show on Monday 14 May 2001, Mr Evans, Mr Pearson and Mr Hain had a discussion about the New Format. Mr Pearson agreed to give Webbo, Mr Pritchard and Ms Pepper monthly rolling contracts for the Show. He had no practical alternative. Mr Pearson and Mr Hain thought the Show was poor and Mr Pearson expressed strong reservations about the New Format. Mr Evans did not think it was very good and acknowledged that it had had a rocky start and asked for a little time to get the New Team established, to which Mr Pearson had no choice but to agree. The poor quality of the New Format was reflected in the highly critical, if not damning, press response. In the period between 14May 2001 and 3 July 2001, Virgin Radio received around 330 e-mails from listeners complaining about the changes to the Show. In the same period, Virgin Radio received over 200 e-mails from listeners expressing positive views about the Show. The imbalance of positive to negative e-mails is greater than these figures suggest, because of the many requests from listeners for information as to what had happened to the Team. The Show was panned in the newspapers.
  140. The poor quality of the New Format was the direct result of the change of format which Mr Evans engineered and thrust on management and his refusal to allow management any part in decision-making regarding the New Format which he adopted. The poor quality gravely concerned advertisers and (most particularly) McDonalds which had only recently agreed to sponsor the Show for three months on the basis of the audience and impacts they would get. With the decline in audience and impacts below this level, McDonalds had grounds for complaint and Virgin Radio needed to take action to appease McDonalds and retain their goodwill, and to this end had need to concede free promotions to them.
  141. Also after the Show on 14 May 2001, Mr Evans met Ms Samos and offered her a role producing and post-producing on the Show, which she declined; Mr Evans then met Mr Broadbent and offered him the same role, which he initially accepted but then later that day rejected. These offers were made without prior discussion with Mr Pearson or anyone else at Virgin Radio, As they were rejected, the inevitable result of Mr Evans's decision to remove them from the Team was that their employments were terminated at significant cost to Virgin Radio. The termination costs incurred by Virgin Radio in relation to Mr Revell, Mr McGrath, Ms Samos and Mr Broadbent amounted in total to £392,000.
  142. On 14 May 2001 Mr Evans agreed with Virgin Radio the dates for his holidays for the following six or seven months, none of which fell within June 2001. Having discussed the matter with Mr Pearson, on Tuesday 15 May 2001, Mr Evans engaged Mr Gillett as the day producer on the Show. On 16 May 2001 Mr Pearson, Mr Hain and Mr Jackson met with Mr Grace at the Arts Club. I have already referred to this meeting in Part III of this judgment. The purpose of this meeting was to enable Mr Grace to make a lengthy sales pitch to Mr Jackson in an attempt to persuade him to continue to use the services of Mr Grace as a consultant when he took up the position of Programme Director. Mr Jackson was reluctant to use his services before the meeting took place and his attitude remained unchanged. In the course of a telephone conversation with Mr Hain made during the trial, Mr Grace alleged that during this meeting Mr Jackson stated that he did not want to work with Mr Evans. I totally reject this allegation. It is clear that the substantial reason why Mr Jackson wanted a job with Virgin Radio was to work with Mr Evans. Mr Pearson, Mr Hain and Mr Jackson deny that any such statement was made and I believe them. The only person with whom Mr Jackson did not want to work was Mr Grace.
  143. In the week commencing Tuesday 29 May 2001, Virgin Radio had agreed to run a Boddingtons promotion. This was due to take place in the week leading up to an Amnesty International Concert on Sunday 3 June 2001. Virgin Radio hoped that the promotion would be part of a wider campaign that Boddingtons might place with it. Mr Evans had agreed to produce a mechanic for the Boddingtons promotion. Mr Evans initially suggested a "Whirlwind Webbo" mechanic for the promotion. Boddingtons approved it, but Mr Evans had second thoughts and rejected it as not good enough and Boddingtons accepted Mr Evans's decision. By the afternoon of Friday 25 May 2001, there was still no mechanic for the next week's Boddingtons' promotion. The matter was therefore left on the basis that Mr Evans would inform Mr Gillett of the proposed new mechanic and that Mr Gillett then would telephone Boddingtons over the bank holiday weekend to pass on this information and obtain their approval. Mr Evans did not so inform Mr Gillett and accordingly Mr Gillett did not telephone Boddingtons. When the promotion started on Tuesday 29 May 2001, Virgin Radio and Boddingtons discovered that Mr Evans had decided to use the "Whirlwind Webbo" mechanic after all without the approval of either of them.
  144. Boddingtons were unhappy at this turn of events and, as a result, Mr Evans changed the mechanic for the promotion on each of Wednesday, Thursday and Friday. As part of the Boddingtons promotion, Mr Dom Joly (a comedian) had been booked to appear on the Show as a guest on 31 May 2001. At short notice, Mr Evans informed Virgin Radio that he would not accept Mr Joly as a guest and that he wanted Mr Eddie Izzard instead. But Mr Izzard was not available. Mr Evans therefore agreed to accept Mr Joly as a guest, but on Friday 1 June 2001. Mr Joly was not available at this time and so the Show did not have him as a guest. Mr Evans's unreasonable and irresponsible conduct in respect of this promotion created a degree of dissatisfaction by Boddingtons which it took great efforts by Virgin Radio and a great deal of free extra impacts and an extra promotion to allay. Only by these efforts did Virgin Radio in the face of Mr Evans's defaults manage to secure the wider campaign for Boddingtons which it had set out to obtain.
  145. On Wednesday 30 May 2001, Mr Pearson and Mr Hain spoke to Mr Evans to discuss the New Format of the Show and they criticised it. Mr Pearson and Mr Hain believed that the Show with the New Format was poor and that, in the two and a half weeks since it had started, it had shown no signs of improvement. They sought to explain their concerns about the Show clearly but diplomatically and avoiding any confrontation. Amongst other things, they stated that the Show with the New Format lacked the appeal of the old, that the New Format needed much more work, that they were concerned about the quality of the prerecorded items being used on the Show, that Webbo was not developing as a presenter, that his presentation was relentless and he had too much airtime, that his delivery and content were extremely poor, that he clearly lacked the necessary experience and that Virgin Radio had received a large amount of negative feedback. Mr Evans responded by saying that he wanted no "negativity" about the Show.
  146. During the Show on Wednesday 6 June 2001 Mr Evans and Webbo were drinking lager, and Webbo was steadily getting drunk. At about 8 a m Webbo got the idea that Mr Evans, Webbo and the New Team should continue broadcasting the Show until the World Cup qualifying match began between England and Greece which was due to be played that evening. Thereupon Mr Evans announced on air the intention to do this. Whilst with proper planning such an idea might possibly have worked (though this is highly improbable), as sprung on Virgin Radio it was hair brained. In particular in view of his drinking Webbo would not have had the stamina. Mr Evans had never done a radio show for fourteen hours on the trot or anything like what he was proposing and it is most unlikely that he could have lasted out. At Mr Evans's request Mr Gillett telephoned Mr Hain on his mobile phone to inform him of the suggestion. Mr Hain responded that it was not a good idea and he would not agree. When Mr Gillett told Mr Evans what Mr Hain had decided, Mr Evans was amazed and decided to do it anyway. Mr Gillett telephoned Mr Hain again saying that Mr Evans really wanted to stay on air until the game. Mr Hain again refused permission. After Mr Gillett reported this conversation to Mr Evans, Mr Evans accepted that they should not stay on air and with ill-grace complied with the management decision, but the decision infuriated Mr Evans. At the end of the Show that day on air Mr Evans said that he would not speak to Virgin Radio's management again (and he was true to his word) and he finished with the words "sod 'em". Mr Evans considered that management in rejecting his suggestion were showing scant respect for him. It was an affront for which he never forgave them. Any complaint on the part of Mr Evans in respect of the decision of management was totally unfair, but it was the first time that his wishes were overruled. Mr Evans told me that he knew at the time that the rejection of his idea did not entitle him to ignore or breach his existing obligations to Virgin Radio, but nonetheless his resentment was so deep and long-lasting it soured his relationship for ever with Virgin Radio and coloured everything he thereafter did: it prompted him to consider his future away from Virgin Radio and to adopt the policy of non-co-operation and indeed public hostility which led to the total breakdown of relations. Over the two weeks following 6 June 2001 (ie 7 to 20 June), Mr Evans continued to present the Show but refused to talk to Mr Pearson or Mr Hain. Mr Evans characterises this as a stand off between Virgin Radio's management and himself and says that he wanted some acknowledgement that an important mistake had been made. But it was more than this. The absolute refusal by Mr Evans to talk to Virgin Radio's management and his rejection of all conciliatory gestures were his calculated and spiteful response to a legitimate attempt by management to assert its right to manage the station.
  147. The next morning (Thursday 7 June 2001) in view of past experience it was not clear to Mr Pearson and Mr Hain how Mr Evans would feel about what had happened the previous day and they therefore sensibly decided that the best approach was to see if Mr Evans would make an issue of it. They waited for him in Mr Pearson's office when the Show ended. But Mr Evans walked past the glass walls and open door of the office avoiding making eye contact with them. Mr Evans ignored Mr Pearson when he said good morning though he could see that Mr Pearson and Mr Hain were waiting to speak to him. That afternoon, Mr Foster telephoned Mr Pearson to say how annoyed Mr Evans was about the events of 6 June 2001. During their conversation Mr Pearson asked Mr Foster whether he could meet Mr Evans to discuss the matter anywhere and anytime that suited Mr Evans. Mr Foster said that he would talk to Mr Evans and let Mr Pearson have Mr Evans's response to this proposal, but Mr Foster never did communicate with him because Mr Evans was unwilling to meet Mr Pearson.
  148. On Monday 11 June 2001, Mr Pearson waited for Mr Evans as he came from the studio to his first floor office to discuss with Mr Evans the events of 6 June 2001, but Mr Evans walked straight past him ignoring him. Mr Pearson took the view that he could not allow matters to continue in this way and so he followed him into the room, where he was just beginning a meeting with Mr Gillett and Mr Pritchard. When Mr Pearson tried to talk to him, Mr Evans was curt and dismissive: he interrupted Mr Pearson to say that he would never be talking to him again (and he never did talk to him again) and would be writing him a letter. Mr Pearson responded that he felt that this was unreasonable, particularly after an incident when he had not even been at the station. Mr Evans's actions were plainly designed to humiliate Mr Pearson.
  149. Later that day, Mr Evans wrote an intemperate letter to Mr Pearson complaining about the decision on 6 June 2001. It was gratuitously copied to Mr Hain, Mr Flanagan, Mr Jackson (who had arrived to take up his post as the station's Programme Director that day) and Mr Gillett (a member of Virgin Radio staff). The letter, which was designed to cause maximum embarrassment both to Mr Pearson and Mr Hain, stated that Mr Hain had "fucked up big time", that Mr Evans had lost all confidence in Mr Hain and Mr Pearson and that Mr Hain should resign.
  150. Mr Pearson responded to this letter by writing a characteristically conciliatory handwritten note to Mr Evans, which he gave to Mr Gillett to give to Mr Evans. Mr Evans returned the letter the next morning unopened. Mr Evans says that he returned it because it was not the big gesture from management and the formal response to his formal letter which he wanted, What he was looking for was a grovelling apology. But he never even read the letter, and if he had done so he would have seen that it was written in a deliberately modest and non-confrontational way, in order to induce Mr Evans to communicate with management again. Mr Evans in his evidence accepted that his conduct was childish and unprofessional, as indeed it was.
  151. Upon his arrival at the station on Monday 11 June 2001, Mr Jackson sought to arrange a meeting with Mr Evans through Mr Evans's personal assistant Ms Barringer but Mr Evans refused to meet with or speak to Mr Jackson as well as Mr Pearson and Mr Hain.
  152. On Tuesday 12 June 2001 when he received his note returned unopened from Mr Evans and was told by Mr Jackson that Mr Evans was not agreeing to meet him, Mr Pearson telephoned Mr Foster and told him that matters were escalating as a result of Mr Evans's actions and that damage was being done to the station. Mr Pearson warned Mr Foster that he was officially logging his concerns with Mr Foster in his capacity as Mr Evans's agent. Mr Foster told Mr Pearson that he should leave the matter with him and that he would talk to Mr Evans and resolve the problem.
  153. The same day Mr Pearson submitted his contribution to the composite monthly report for the SMG Board. In this document he reported on Virgin Radio's trading and audience in May and wrote:
  154. "Following a sustained audience decline Chris Evans has decided to reformat his show using a completely new cast of characters. It is too early to gauge the success of this. Whilst this should ultimately increase the audience, it could lead to an initial fall."

    As Mr Pearson made clear in his evidence, whilst he regarded the situation arising from Mr Evans's policy of non-communication and non-co-operation as critical and the decline in audience for the Show (in contrast to the success of the rest of the station) as serious, he had every confidence that the entry on the scene the previous day of Mr Jackson would see a restoration of relations and the combination of the talents of Mr Evans and Mr Jackson would bring about a restoration of fortunes for the Show. He could not anticipate that Mr Evans would maintain a continuing policy of non-communication and non-co-operation with Mr Jackson whose appointment he had so enthusiastically supported. He informed Mr Flanagan of the full situation but considered it premature to include a reference to Mr Evans's behaviour in the report to the Board until he saw how things worked out.

  155. On Thursday 14 June 2001 in the same spirit Mr Evans wrote a spiteful letter to Ms Reik, criticising her professionalism. This was a rude and unprofessional as well as totally unjustified letter to someone who could not answer back. On the same day Mr Pearson telephoned Mr Foster to complain of the refusal of Mr Evans to talk to Mr Jackson.
  156. On Friday 15 June 2001, Ms Blenkinsop asked Mr Evans to participate in an interview and photo shoot for a feature that The Radio Times was doing on all the major radio breakfast shows. Mr Evans contends that, had he been told that a front cover was guaranteed, he could well have agreed to do the feature even though his view was that he should not be involved in an article that covered all of the breakfast shows. But a front cover picture for Mr Evans was likely if he agreed to participate. Regardless of this, however, given the difficulties being encountered with the Show, it was important for Mr Evans to participate in this major public relations opportunity and it was unreasonable for Mr Evans to refuse to do so. Ms Blenkinsop thought so and that his reason for refusal was his unhappiness with management. In my judgment the reason why he refused to do it was the same pique which caused him no longer to talk to management: it had nothing to do with the guarantee of a front cover or any other reason put forward to justify Mr Evans's position.
  157. Either on Friday 15 June 2001 (according to SMG) or on Thursday 14 June 2001 (according to Mr Evans), Mr Pearson telephoned Mr Foster to request an urgent meeting to discuss the situation with Mr Evans. They met at Starbucks for this purpose on Friday 15 June 2001. At the meeting: (1) Mr Pearson said that he was gravely concerned that Mr Evans was continuing to refuse to talk to him and was now refusing to talk to Mr Jackson; (2) Mr Pearson said that he was also gravely concerned that, though there was a need for Mr Evans to do the Radio Times feature, he was refusing to do so. Mr Foster agreed how important this form of publicity would be for the Show; (3) Mr Pearson said that Mr Evans's conduct was unacceptable and matters could not continue as they were; and (4) Mr Pearson requested that Mr Evans meet with Mr Jackson. Mr Pearson also stressed that he was having this conversation with Mr Foster in his capacity as Mr Evans's agent. Mr Foster responded that he would speak to Mr Evans and that he was sure that he could bring Mr Evans around and fix matters over the weekend.
  158. Later that same day Mr Jackson, who had been trying to meet Mr Evans all week, told Ms Barringer that he would meet Mr Evans wherever and whenever suited him, whether inside or outside business hours. On Sunday 17 June 2001, Ms Barringer on instructions from Mr Evans telephoned Mr Jackson and told him that the meeting was never going to happen.
  159. On the morning of Monday 18 June 2001, on learning of what Ms Barringer had told Mr Jackson, Mr Pearson telephoned Mr Foster to discover that Mr Foster had not even tried to contact Mr Evans over the weekend. He then reiterated the points that he had made at his meeting with Mr Foster the previous Friday.
  160. The same morning, Mr Pearson wrote a letter to Mr Foster and Mr Jackson (at Mr Pearson's suggestion) wrote a letter to Mr Evans. Mr Pearson's letter stated that he was extremely concerned about the state of Mr Evans's relationship with Virgin Radio; that (as Mr Evans accepts was true) Mr Evans was refusing to speak at all on any matter to him; that (as Mr Evans accepts was true) Mr Evans was refusing to speak to or meet Mr Jackson; that (again as Mr Evans accepts) the situation was unacceptable and untenable; and that the refusal of the Radio Times photograph shoot was unacceptable. Mr Foster passed on the contents of the letter to Mr Evans the same day. Mr Evans's suggestion at the trial that Mr Pearson agreed to withdraw this letter is clearly unfounded: indeed Mr Foster replied to it by letter dated 26 June 2001. Mr Jackson's letter was an exercise in tact as well as being (as Mr Evans concedes) both constructive and conciliatory. He expressed the view that he and Mr Evans could work successfully together. He referred to the meetings they had had before he joined Virgin Radio and the references made (in fact by Mr Evans and Mr Evans alone) at that meeting to the need to refresh the Show and the more radical changes which Mr Evans had unilaterally effected. He requested Mr Evans to adhere to the production schedule. He emphasised that he could not be closely involved and contribute by letter alone: they must meet. Both letters were written because the situation was intolerable and Virgin Radio needed to stress how unacceptable Mr Evans's conduct was. They were restrained and non-confrontational in their wording and their tone.
  161. After seeing these two letters Mr Foster telephoned Mr Jackson to say that his letter would make Mr Evans mad and should be withdrawn. He then came round to Virgin Radio's offices to emphasise the point in person. Mr Jackson said that a decision whether to withdraw the letter was a matter for Mr Pearson. Mr Pearson stood by its contents. Mr Foster spoke to Mr Pearson over the telephone and said that, if Mr Evans saw Mr Jackson's letter, "it would all be over". Mr Pearson said that, if Mr Foster could persuade Mr Evans to have a meeting with Mr Pearson and Mr Jackson, he would not insist on the letter being shown to Mr Evans. Mr Jackson's letter was not sent to Mr Evans but Mr Foster communicated its contents to him.
  162. On Tuesday 19 June 2001, Mr Foster met Mr Evans on a bench in Golden Square and managed to convey to him how serious the situation was and to persuade him against his will to talk to management. Mr Evans's exact words were: "Okay fine, I will do it, we will play defence for 90 minutes". According to Mr Foster, this meant: "You lie back, take your punishment and get on with the game". Plainly what the words meant was that Mr Evans would go through the form of having a meeting, but it would have no effect on his attitude or the way he would behave in the future.
  163. Later that day Mr Foster told Mr Pearson that he had spoken to Mr Evans, who would now comply with Virgin Radio's requirements and would have a meeting with Mr Pearson and Mr Jackson. He also had a telephone conversation with Mr Jackson in which he said that Mr Evans would now have a meeting with them. But in neither conversation did Mr Foster give a time or place for the meeting. It was left that Ms Barringer would fix the time and place, (Mr Foster confirms this in paragraph 35 of his witness statement), but she never received the necessary instruction from Mr Evans to fix such an appointment: most certainly no appointment was fixed for 9 am the following day. Because of a prior commitment Mr Jackson could never have made or met such a commitment.
  164. On Wednesday 20 June 2001, there was no meeting between Mr Evans and Mr Pearson and Mr Jackson. Mr Evans has given a whole series of different accounts of what he did after the Show that day. The thrust of his case as initially presented (and as reported by him to the press) was that he waited three or two and a half hours at his office on the first floor at Virgin Radio's offices to meet Mr Pearson and Mr Jackson, but they did not come. The evidence however revealed that he spent one hour after the Show on the third floor in the "zoo" (the communal area outside the studio) drinking lager with three friends and spent fifteen minutes in the lavatory or elsewhere in the station and then left (as pre-arranged with Billie) on her arrival at 10.15 am. If Mr Evans was awaiting or wanting a meeting, he never gave any indication that this was so. He did not go down to the first floor where his and Mr Pearson's offices were, make any inquiry of his or Mr Pearson's personal assistant or enquire when or where the meeting was to take place. Neither Mr Pearson nor Mr Jackson had any reason to know that he was awaiting or wanting a meeting. Mr Evans made no effort to let them know that he was there or to inquire as to their whereabouts. Mr Pymont in his opening explained Mr Evans's reasons for so acting as attributable to fear that he was going to be fired and his wish not to be fired. He did not want a meeting because he feared the consequences. If he had wanted a meeting, Mr Pearson would immediately have seized the opportunity to have the meeting and Mr Jackson would have joined it as soon as he returned to the office. Mr Evans's presence in the building in my view had no connection with any proposed meeting. It was referable to his wish to drink with his friends whilst awaiting the arrival of Billie. My conclusion involves the total rejection of the evidence of Ms Blenkinsop that Mr Pearson stormed about the office that morning asking the whereabouts of Mr Jackson as he was needed for a meeting with Mr Evans. Ms Blenkinsop made no reference to this episode in her first witness statement given whilst part of the management of Virgin Radio: it is quite extraordina