There are a number of Business and Property Court judges who sit in Liverpool. The judges include: His Honour Judge Cadwallader, His Honour Judge Davies, His Honour Judge Eyre QC, His Honour Judge Hodge QC, His Honour Judge Wood QC, District Judge Baldwin, District Judge Deane, District Judge Johnson, and, District Judge Lampkin. Full details of the Liverpool Business and Property Court judges can be seen here.
Summaries of recent judgments are set out below. These summaries are drafted by Ms, Mollie Hammerton and Mr. Adam Moore, both Bar students and LL.B. graduates of the University of Liverpool.
Recent judgments from the LBPC judges have included:
2024
A number of recent LBPC judgment summaries are being drafted for the website. These include the following cases:
Malin Industrial Concrete Floors Limited (in administration) v Volkerfitzpatrick Limited [2024] EWHC 2890 (TCC) (District Judge Baldwin)
The Claimant sought to enforce an adjudication decision dated 11th April 2024, which required the Defendant to pay £59,950 plus interest and VAT along with the adjudicator’s fee.
The contract in question was a sub-contract between the Defendant and the Claimant for concrete flooring works. After completion and agreement on the final account, the Defendant withheld the final retention, disputing its payment after the Claimant entered administration. The dispute was referred to adjudication.
The Claimant’s Case
The Claimant contended that it would be an appropriate exercise of the Court’s discretion to grant enforcement by way of summary judgment, despite its insolvency, with a three month stay to allow the Defendant to bring a Part 7 claim for any potential offsetting cross-claims.
It was further argued that the Defendant had engaged in tactics to subvert the purpose of the adjudication by lightly trailing a cross claim, without properly engaging in the issues with the adjudication in order to be able to prevent enforcement in an insolvency situation by reviving such issues as remaining unresolved.
The Defendant’s Case
It was submitted on behalf of the Defendant that there was clear evidence of a cross-claim for defective flooring, upon which £66,000 had already been spent, thus clearly over-topping the claim. Mr Wygas relied on the decision in Swissport (UK) Ltd (in liq) v Aer Lingus Ltd [2009] BCC 113 to argue that the cross-claim did not need to be proven, and instead must be more than shadowy or barely arguable.
Further, Mr Wygas argued that any security provided by the Claimant must cover not only the sum claimed but also the Defendant’s costs of pursuing its cross-claim, citing Meadowside Building Developments Ltd v 12-18 Hill Street Management Company Ltd [2019] EWHC 2651 (TCC) as precedent. In addressing the lack of security for the Defendant’s cross-claim costs, it was suggested that the Claimant should initiate a Part 7 claim, allowing the Defendant to formally request cost security. However, this was recognised as being a problematic proposition, given the procedural limits under r.25.12.
It was further argued that any attempt to decide the net balance would have been beyond the adjudicator’s jurisdiction.
The Judgment
The court was satisfied there was a sufficient level of insolvency, such that there was a real risk that unfettered summary enforcement would deprive the Defendant of recourse to the retention monies as security for any cross-claim.
On the facts, there was no offer of security for either the cross-claim or its costs. Given the extent of the Claimant’s insolvency, the court found there was a significant risk that the Defendant could lose its security without further safeguards being put in place.
The court concluded that the enforcement of the adjudication award should be stayed, not entirely barred. The Claimant’s argument for a limited six-month stay, as inferred from HHJ Kramer’s judgment, was rejected. Instead, the court agreed with the Defendant’s interpretation that HHJ Kramer emphasised the need for sufficient guarantees to cover the cross claim and its costs before a stay could be imposed.
It was held that there was no conclusive evidence that the Claimant’s alleged failings caused the damages underpinning the Defendant’s cross-claim. The Defendant’s counterclaim was found to have a real prospect, but lacked sufficient, prima facie, evidence to establish likely liability on the Claimant’s part.
As a result, the court granted summary judgment but imposed a stay. The Defendant was permitted three months to provide evidence suggesting a reasonable likelihood of proving a cross-claim that could extinguish the awarded sum. If the evidence supported only partial liability, the parties were expected to negotiate a proportional enforcement amount.
Miller v Irwin Mitchell LLP (Rev1) [2024] EWCA Civ 53 (01 February 2024) (HHJ Cadwallader)
A Court of Appeal decision upholding HHJ Cadwallader on a solicitor’s duty of care. Summary forthcoming.
Mohammed (Claimants / Respondents) v Daji (Defendants / Appellants) [2024] EWCA Civ 1247 (HHJ Cadwallader)
The London Tablighi Jamaat community looked for another site and found Abbey Mills in 1994. The appeal concerns the ownership of ‘Abbey Mills’ – the site that was purchased in the mid-1990s with the view to be used as a mosque and community centre. The purchase money was “provided by the London community through loans and, to a lesser extent, donations.”
The Appellants contended that Abbey Mills was “held on the trusts governing a charity registered under the name The Anjuman-E-Islah-Al-Muslimeen (Madrasa Taleem ul Islam)” (‘the Dewsbury Trust’).”
The Respondents argued that Abbey Mills was “held on the trusts declared in a declaration of trust bearing the date 5 November 1996 in respect of Anjuman-e-Islahul-Muslimeen of (London) UK (‘the London Trust’).”
At first instance, HHJ Cadwallader held in favour of the Respondents and found that the money raised for the purchase of Abbey Mills was not held on the trusts of the Dewsbury Trust. Rather HHJ Cadwallader concluded that the Land was held upon the trusts of the 1996 Declaration of Trust.
The Appellants acknowledged that the Appeal involved “challenges to findings of fact” but also argued that the first instance decision was wrong with reference to “three strands of evidence in particular.”
The treatment of the receipts given to lenders was unsupported by evidence. The analysis on “holding out” was “illogical, inconsistent or lacking in proper reasoning.”
The findings regarding the November 1994 meeting were unsustainable because they relied upon implausibly detailed evidence “which a committed and unrepentant liar (viz. Mr Mohammed) had given about events many years earlier of which he could have little or no reliable recollection.”
Further, that the trusts “declared in the London Trust Deed do not differ significantly from those of the Dewsbury Trust” and the dispute was therefore regarding “leadership rather than the substance of the trusts.”
The relevant legal principles regarding gifts to a charity were discussed and at first instance, HHJ Cadwallader found that “Mr Mohammed, Mr Shaikh and Mr Ali had implied authority to declare the trusts in respect of Abbey Mills.”
This falls into the third class of gift to a charity as noted in Tudor on Charities (11th Edition): “A gift to an individual or committee for indefinite charitable purposes which gives the individual or the committee entrusted with the money implied authority for and on behalf of the donor to declare the trusts to which the sums contributed are to be subject.”
The Court of Appeal considered each of the above issues in turn before unanimously dismissing the Appeal. The Court of Appeal concluded that HHJ Cadwallader summarised his reasons for finding that the money raised to buy Abbey Mills was “not held on the trusts of the Dewsbury Trust” and the matters HHJ Cadwallader referred to provided “an entirely adequate basis” for the conclusion.
Brendon International Limited v (1) Water Plus Limited & (2) United Utilities Water Limited [2024] EWCA Civ 220 (A Court of Appeal decision on the burden of proving whether a sewer is public or private, and remitting the matter to HHJ Cadwallader for redetermination)
The appeal concerned a restitutionary claim by the Respondent, Brendon, for the repayment of over £150,000 in fees that were paid for sewerage services to the First Appellant, Water Plus, and the Second Appellant, United Utilities.
United Utilities has been, at all material times, the ‘sewerage undertaker,’ with responsibility for the system of public sewers. In June 2016, United Utilities transferred non-household business to Water Plus. Water Plus therefore became the ‘sewerage licensee’ and was entitled to charge for the provision of sewerage services to commercial entities. Fees were charged to Brendon on the basis that the surface water from Brendon’s commercial premises flowed into a ‘public sewer.’
A claim was made in September 2018 on behalf of Brendon for the charges that had been paid to be refunded on the basis that the surface water was drained into a private sewer and as such no charges were applicable. The Appellants rejected this claim. On 16th September 2019 Brendon stopped paying the charges.
A claim was issued by Brendon, claiming restitution on the basis of mistake and unjust enrichment, together with a declaration that it was not liable to the Defendants for surface water and highway drainage services. The main issue was therefore whether the sewer was public or not.
Liability was denied by the Defendants who argued that the surface water drained into a public sewer. In the alternative, the Defendants argued that the claim was limitation barred.
At first instance, it was held:
United Utilities and Water Plus had not discharged the burden of showing the sewer into which the surface water drained into was a public sewer.
They had not been entitled to charge fees for surface water drainage services. Therefore, payment of fees by Brendon were made under a mistake, giving rise to a restitutionary remedy.
Brendon’s claim was not barred by limitation.
The appeal was against parts 1 and 3 of the judgment. The Appellants argued that it was incorrect to put the burden of proving the sewer was a public sewer on them and that the wrong test for limitation was applied. Further, that it was wrong to exclude some witness evidence.
Permission was given to appeal on the following three grounds:
The Judge erred in relation to the burden of proof when holding that the Defendants had the burden of proving that the sewer in question was vested in United Utilities.
The Judge erred in excluding opinion evidence of Mr Griffiths.
The Judge wrongly applied the findings that he had made as to Mrs. James’s subjective state of mind when deciding that Brendon had not deliberately waived making an inquiry for the purposes of the arguments on mistake, to the different question under section 32 of the Limitation Act 1980 of whether Brendon could, with reasonable diligence, have discovered its mistake.
Burden of Proof
The Court of Appeal determined HHJ Cadwallader was correct in that the burden of proving a claim in restitution lay upon the Claimant. The issue was whether the Defendants had provided the sewerage services, and this required proof that the sewage was not a public sewer. The Court did not agree that there was a legal presumption that the sewer was private until proven otherwise. The appeal was allowed on the first ground.
Evidence of Mr Griffiths
At first instance, the Judge held that there was “nothing upon the basis of which he could conclude Mr Griffiths was qualified to give expert evidence, evidence on the point being entirely self-serving for the defendants, and not itself demonstrating expertise.” The Court of Appeal concluded that the Judge’s decision to exclude Mr. Griffith’s evidence on the basis that he was not adequately qualified to give expert opinion evidence within section 3(1) of the Civil Evidence Act 1972 could not stand.
Limitation
The Court of Appeal agreed with the Appellants contentions that the Judge did not appear to have asked himself the right question regarding limitation.
The Court of Appeal held that the appeal was allowed, and the matter was remitted to HHJ Cadwallader for redetermination.
Abdul Rahman Hayel v (1) Abdul Aziz Hayel (a protected party, by Tarek Hayel, his litigation friend) and (2) Nageeb Hayel [2024] EWHC 885 (Ch) (HHJ Cadwallader)
The main issue in this case was whether partnership accounts dating back to 2008 should be reopened as contended by the First Defendant in his counterclaim or whether the First Defendant should have been given leave to raise certain objections to specific figures in them (to surcharge or falsify them) on the ground of certain errors he sought to establish.
The partnership concerns A. A. Hayel & Company – a family business which was a dairy and property business. The partnership was governed by a partnership deed dated 21st October 1971.
The Claimant, Abdul Rahman Hayel, brought proceedings against the Defendants for an order that the partnership be dissolved, its affairs be wound up and necessary accounts and enquiries be taken and made. However, the query about if and when the partnership was dissolved was no longer a matter in issue as the partnership was dissolved by agreement on 31st May 2018.
The Claimant argued that a binding resolution agreement was reached but this was denied by the First Defendant. The First Defendant contended that the partnership had been dissolved in May 2018 by agreement and contract, claimed an order that the affairs of the partnership be wound up, and an order to reopen, alternatively to surcharge and falsify, the partnership accounts for the periods ended 31st March 2008, 2011, 2016, 2017 and 2018 on the basis that they contained serious and significant errors. The Second Defendant chose not to take part in the proceedings.
The Defendant’s counterclaim concerning the errors in the accounts was by way of an action for an account. The Claimant defended this allegation by contending that the account had already been agreed between the partners on the basis that the accounts sought to be impugned were received by the other partners and either positively agreed to by them or acquiesced in by them. The First Defendant accepted that the accounts were settled accounts. The accounts of 2016 and 2018 were signed and later settled accounts implicitly settles earlier accounts which were not so signed. HHJ Cadwallader agreed that this must be so in this case as the accounts ran from year to year.
HHJ Cadwallader rejected the contention that the accounts were settled ‘on their face.’ The First Defendant’s signature was to be taken to have indicated that the First Defendant approved the accounts irrespective of whether they were understood or not meaning that the accounts were settled accounts.
A settled account is binding upon parties who agree it. The account will not usually be reopened without a specific direction. A direction to reopen a settled account may be made if there is fraud, misrepresentation or errors. The First Defendant argued that there were errors. The burden fell upon the First Defendant to outline and prove such errors. The issue for the Court was whether the errors the First Defendant had identified were so proved.
With regard to the 2008 partnership accounts, HHJ Cadwallader determined that there was a serious and significant error which required correction through the offending entry being deleted and the capital account of the First Defendant being increased accordingly in 2008 and every subsequent year.
In relation to the error alleged in the 2011 partnership accounts, HHJ Cadwallader declined to give leave to surcharge and falsify or to make any alteration to the accounts in relation to the figure.
It was found that the errors that HHJ Cadwallader accepted existed in the 2016 accounts were substantial and arose due to instructions given or not given by the Claimant. The errors therefore required correction by being recalculated and accounts of subsequent years similarly adjusted. Further, the 2018 accounts were found to contain a serious and significant error requiring them to also be corrected.
In May 2018, the partners signed a document which appeared to record an agreement or proposed agreement regarding the partial winding up of the partnership by distribution in specie and the undertaking of various obligations. The documentation was prepared but not signed, including a deed of dissolution, various transfer forms and leases. HHJ Cadwallader held that they were not legally binding and that the winding up of the partnership was not governed by the terms set out in such documents. Instead, it was governed by the partnership agreement itself and the law.
In conclusion, HHJ Cadwallader granted a declaration that the partnership was dissolved on 31st May 2018 and made an order that the affairs of the partnership be wound up. HHJ Cadwallader ordered that the errors in accounts for the years ended 31st March 2008 and 31st March 2011 be corrected with the corrections to be carried forward to subsequent years’ accounts.
SG Retail Ltd v FK Construction Ltd [2024] EWHC 1713 (TCC) (HHJ Hodge KC)
The Claimant, ISG Retail Ltd, made an application for summary judgment of an adjudicator’s decision. The dispute concerns the works carried out by the Defendant, FK Construction Ltd, when working as a sub-contractor for the Claimant under a construction contract.
The adjudication decision relates to two categories of work.
Firstly, ‘pallet store defects.’ There was no issue with the sums that the adjudicator ordered the Defendant to pay the Claimant for the ‘pallet store defects.’ HHJ Hodge KC gave summary judgment for the sums as ordered by the adjudicator plus interest.
Secondly, ‘rooflight works.’ These sums as ordered by the adjudicator were also payable to the Claimant.
However, no payment pursuant to the adjudication decision was made to the Claimant. The Claimant argued that it fell to be enforced in the usual way. The Defendant raised a limited natural justice objection, but the Claimant argued that this objection could be dismissed.
The Claimant argued that the Defendant’s contention that there was a breach of natural justice because the adjudicator did not deal with the Defendant’s defence of set-off was misconceived. The Claimant argued that the defence of set-off was dealt with and that the Defendant’s challenge was on the basis that they were unhappy with how the adjudicator addressed set-off.
The Defendant submitted that the calculation was erroneous; when calculating the damages payable for the rooflight works, the adjudicator failed to undertake the task required to put the innocent party in the position they would have been in had there been no breach of contract.
The Defendant contended that there was a breach of natural justice due to the way the adjudicator calculated the sum meaning the whole part of the adjudication decision was unenforceable as the good could not be severed from the bad part of the calculation.
HHJ Hodge KC found that there was no breach of natural justice although there was a miscalculation of the amount owed to the Claimant for the Defendant’s breach of contract. HHJ Hodge KC held that the adjudicator took an incorrect approach to the calculation of damages. The Hutton principles were applied. The Court enforced the adjudicator’s decision and corrected the error in the amount that the adjudicator had awarded.
The Court therefore upheld the Defendant’s limited defence to the enforcement of the decision regarding the rooflight works and granted summary judgment.
2023
IMG Data Ltd v Perform Content Services Ltd [2023] EWHC 3244 (Ch) (19 December 2023) (HHJ Cadwallader)
A decision of HHJ Cadwallader on a strike summary judgment application in London dealing whether in the tort of inducing breach of contract the claimant must have been a party to the contract; and in unlawful means conspiracy, whether the unlawful means need to be the ‘instrumentality’ by which the loss has been caused. Summary to follow.
Microsoft Corp v JJH Enterprises Ltd (t/a Valuelicensing.com) [2023] 12 WLUK 95. (HHJ Cadwallader)
A decision of HHJ Cadwallader (in London), granting specific performance of a claimant’s contractual right under a settlement agreement to audit the defendant’s relevant records for the purpose of verifying compliance with the agreement in the context of the place of that information in disclosure in wider litigation. Summary to follow.
Pharmapac UK Ltd v. Elev8 Global Ltd Ajay Patel [2023] EWHC 2449 (Comm) (HH Judge Cadwallader)
In December 2020, two contracts were concluded between Pharmapac UK Ltd and Elev8 Global Ltd, represented by Ajay Patel, for the supply of 100,000 and 300,000 3M 8833 face masks. The Claimant intended to resell these face masks. Upon resale to an NHS trust, namely NHS Wales, suspicions arose regarding the genuineness of the face masks, and they were subsequently determined by 3M to be counterfeit.
A claim was brought against the First Defendant, Elev8 Global Ltd, for a breach of contract on the basis that the contract had been for the supply of genuine 3M 8833 face masks, and the face masks supplied had not been genuine.
There was also a claim brought against the Second Defendant, Mr Patel, for fraudulent misrepresentation as Mr Patel, during a telephone call on 10 December 2020 and a meeting on 18 December, represented that the First Defendant could provide supplies of genuine face masks. During the telephone call, Mr Patel was also alleged to have stated that the First Defendant, Elev8 Global Ltd, had previously supplied genuine face masks to various NHS trusts.
The Claimant argued that the face masks supplied by the First Defendant were counterfeit, and that Mr Patel either knew that the face masks were counterfeit, or alternatively, was reckless as to whether they were. The Claimant’s also alleged that Mr Patel had supplied fake documents, including a TÜV report, to support this claim.
The First Defendants accepted that if the masks were not genuine it would have to repay the purchase price and that it would also be liable for the warehousing costs claimed.
The Second Defendant, Mr Patel, accepted making the representations alleged, however denied having represented that the First Defendant has previously supplied NHS trusts with genuine face masks. Mr Patel did not accept that the masks were not genuine.
The burden lay on the Claimant to establish that the representations were false, and that they had been made fraudulently with the intention that the Claimant rely upon them and suffer loss in consequence.
In the judgment of HHJ Cadwallader, it was concluded that it was apparent that the face masks were counterfeit. This conclusion was reached on the basis that 3M had conducted an adequate examination and reached the conclusion that the face masks were counterfeit.
HHJ Cadwallader was not satisfied that the allegation of fraudulent misrepresentation against the Second Defendant had been proven. Whilst the court ruled that Mr Patel had not taken
substantial steps to verify the genuineness of the 3M face masks which the First Defendant was to supply, Mr Patel was not held personally liable.
The Defendant Company was held liable for the total consideration of £1,596,000 and liable for the warehousing costs incurred by the Claimant in the sum of £21,141.12.
Henry Construction Projects Limited v Alu-fix (UK) Limited (District Judge Baldwin)
In this case the Claimant, Henry Construction Projects Limited, applied by way of a summary judgment application within Part 7 proceedings to ‘enforce the “true value” adjudication decision (TVA) of Mr M.T. Molloy.’ The true value adjudication decision was that the Defendant, Alu-fix (UK) Limited is indebted to the Claimant in the total of £191,753.88 plus interest. The Defendant opposes the application, arguing that ‘the commencement by the Claimant of the TVA before payment by the Claimant of a notified sum pursuant to s.111 of the Housing Grants, Construction and Regeneration Act 1996 as amended’ means that Mr Molloy had no jurisdiction to reach his decision.
The Claimant argued that the ‘factual basis’ for jurisdiction is a novel point which is not currently addressed by authority. It is the Claimant’s case that the Claimant can rely on the decision in the TVA as the Claimant paid the immediate payment obligation consequent upon the decision of the first adjudicator, Mr F Rayner, in the previous “smash and grab adjudication (SGA) “which followed the raising by the Claimant of a “genuine dispute”, namely asserting the validity of two pay less notices (“PLN”) following the Defendant’s payment application (“PA”).”
Background to the Case
The contract at the centre of the case is a “JCT Standard Building Sub-Contract” whereby the Claimant is the Contractor who employed the Defendant as a sub-contractor. Due to a dispute between the parties, the sub-contract was terminated by the Defendant which required the Defendant to submit an application for payment and therefore the Claimant would pay the amount owed within 28 days of the PA.
A PA was submitted by the Defendant which was not paid by the required deadline and the Defendant did not ‘recognise any justification’ for the payment not being made. As a result, the Defendant referred the matter for the SGA.
Following the referral, the Claimant stated that it submitted ‘two potentially valid PLNs.’ The Claimant then commenced the TVA arguing that an over-payment had been made and therefore the Defendant was ‘indebted’ to the Claimant’ for a total of ‘£235,302.73 plus VAT.’
The Defendant had raised the point of jurisdiction and asked Mr Molloy to resign. The decision taken by Mr Rayner in the SGA was to award the Defendant the sum as claimed. The TVA pending payment was then stayed by Mr Molloy who confirmed that he would resign if the decision was not complied with. However, full payment was made by the Claimant and the stay was lifted.
The Claimant’s Case
It is the Claimant’s case that at the time of TVA commencement there was an ongoing ‘genuine dispute’ regarding the ‘validity of the PLN of 25th November 2022.’ The Claimant argued that: ‘unless and until there was an adjudication that there was no valid PLN, no “immediate payment obligation” arose or subsisted.’ As a result, ‘the embargo upon launching a TVA prior to the payment of any immediate payment obligation is not engaged’ and therefore jurisdiction is not in question. When Mr Raynor found that the PLN was invalid and discharged in time the obligation became immediate. Therefore, the Claimant contended that this should not be a jurisdictional issue. The Claimant argued that there would be a ‘curtailment on “employers” rights’ if the Court found in the Defendant’s favour.
The Defendant’s Case
It is the Defendant’s case that a ‘TVA cannot be started whilst there remains an unsatisfied immediate payment obligation’ and that ‘even without being able to start before the outcome of any SGA and that the policy is clear, that any immediate payment obligation must be paid to assist with cashflow.’ The Defendant argued that the burden fell on the Claimant to make an upfront payment ‘before commencing the TVA or alternatively, on choosing to raise a dispute, to accept that the TVA will inevitably be delayed.’
The Judgment
District Judge Baldwin stated that the ‘resolution of the issue before the Court lies in the Court’s determination of the commencement date of the immediate payment obligation.’ District Judge Baldwin concluded that ‘the Claimant was prohibited from embarking upon / not entitled to commence the TVA on 18th January 2023 without first having discharged its immediate payment obligation and Mr Molloy lacked jurisdiction as a result.’ Therefore, the application for summary judgment was dismissed. District Judge Baldwin concluded that: ‘the outcome in this case, whilst not closing the door on commencing a TVA prior to the outcome of an SGA and later relying upon the outcome, ought to discourage such a course in areas of spurious SGA dispute, but not deter those who have a sufficient level of confidence that any dispute raised should result in a finding of no immediate payment obligation having been established.’
Mark Julian O’Brien v. Simon Phipps (HHJ Cadwallader)
The Claimant, Mr O’Brien, and the Defendant, Mr Phipps, are businesspeople who worked in the insurance industry together, particularly the motor insurance industry. In 2010 or 2011 a business opportunity arose in the USA. Mr Phipps put significant effort into a company, ‘Shortfall Cover LLC.’ A third person, Mr Coll, was also involved. It is the extent of Mr O’Brien’s involvement that is disputed.
In May 2020 Mr Phipps’ sold his shareholding in Shortfall and by this time Mr Phipps and Mr O’Brien had fell out. The Claimant’s letter of claim was in September 2020 and the Court proceedings followed a year later. The case concerns the Claimant’s claim that the Defendant held the Claimant’s shareholding in Shortfall ‘upon an express oral trust as to half for the Claimant, such trust having been declared by the Defendant at a meeting in August 2013 at a restaurant.’ The Claimant therefore claims, ‘half the next proceeds of the sale of the shares.’
It is the Defendant’s case that this did not occur. Instead, the Defendant argues that around 2010 or 2011, a bare and non-binding promise was made to the Claimant with regard to the Shortfall project. This bare and non-binding promise was along the lines of “Don’t worry, if we make any money, I will look after you” or words to the same effect. The Defendant also argues that there was a binding ‘Profit and Loss Sharing Agreement’ with himself and the Claimant. It followed that any profits or losses made would be equally shared. The Defendant counterclaims for alleged breaches of this binding agreement. However, the Claimant denies any such agreement being made and argues that if there is such an agreement the Defendant himself breached it.
The Claimant’s Case
It is the Claimant’s case that he and the Defendant acted on the understanding that they were ‘equal business partners’ although, not within the meaning of the Partnership Act 1890.
The Claimant, the Defendant and Mr Coll agreed orally to set up a business in the USA. Mr Hill and Mr Hawkins, two US business, would be given a 20% shareholding. The Defendant and Mr Coll would run the company day-to-day while the Claimant would be involved in major decisions but would stay in the UK and run the UK businesses. The balance of the shareholding would be ‘held in equal shares between the three of them.’ This was the ‘initial understanding’ but not an allegation of a declaration of trust.
In 2011, Shortfall was incorporated. The Defendant advised the Claimant that the Claimant and Mr Coll were ‘equal shareholders’ subject to the 20% shareholding of the US businessmen. The Defendant later advised the Claimant that the Claimant held no shares and instead, the balance of shares was held by the Defendant and Mr Coll equally. During a meeting following this, the Defendant agreed that the balance of the shareholding should be split equally between the three men. Yet Mr Coll argued that he was entitled to half.
The Defendant expressly stated that due to the business relationship that had always existed between the Defendant and the Claimant, the Claimant was entitled to at least half of his shareholding. Placing reliance on this, the Claimant then agreed with the Defendant that the work with Mr Coll would continue, ‘reserving their rights as to any additional shares held by Mr Coll.’
It is this meeting and the Defendant’s express statement that the Claimant relies upon ‘as a declaration of trust of Mr Phipps’ shares in Shortfall in his favour.’
The Defendant’s Case
The Profit and Loss Sharing Agreement between the Claimant and the Defendant was the product of an oral agreement in 2000 and having contractual force, ‘the existence of which is to be inferred from the circumstances.’ This did not apply to Shortfall. It is the Defendant’s case that Shortfall and another US company did not involve the Claimant at all. He did inform the Claimant about Shortfall and made ‘a bare promise to distribute some of the anticipated profits to the Claimant.’ However, this was not a contract as a contract was not intended to be made, ‘was too vague, and was unsupported by consideration.’ The Defendant did not inform the Claimant that the latter ‘was an equal shareholder.’
At the meeting Shortfall or its shareholdings were not discussed. Instead, there was a discussion between the three men regarding another company. Therefore, ‘there was no trust’ of the Claimant’s shares.
The Claimant bears the burden of proof of a trust and the standard that must be met is on the balance of probability. The opposite is true with regard to the Profit and Loss Sharing Agreement. Judge Cadwallader did not accept that their ‘general business relationship’ could be described as ‘fiduciary’ or ‘as giving rise of itself to fiduciary obligations.’ While Judge Cadwallader accepted that the men were likely to have trusted each other, he did not accept that this meant that ‘there was any general obligation to be trustworthy to each other, still less to subordinate the interests of each to that of the other, whether only in relation to businesses which they conducted together, or more generally.’
Furthermore, Judge Cadwallader determined that the alleged Profit and Loss Sharing Agreement was ‘implausible’ and found that a Profit and Loss Sharing Agreement did not exist. Judge Cadwallader rejected the existence of the Initial Understanding, rejecting the contention that there was an agreement with the Claimant that he should be an equal shareholder in Shortfall.
Judge Cadwallader found that the original shareholdings intended in Shortfall upon incorporation where as follows: Mr Coll and Mr Phipps should each have 34%, Mr Hill should have 17%, and Mr Hawkins 15%. Judge Cadwallader did not accept that the Claimant thought that he was a one third shareholder with the Defendant and Mr Coll. Judge Cadwallader found that there was no bare promise in 2011 and the agreement, arrangement or promise made at the restaurant was ‘objectively intended to create a trust forthwith.’ Judge Cadwallader found that the Defendant did declare at the restaurant in 2013 that ‘half his shares in Shortfall belonged to Mr O’Brien’ and that the Defendant ‘intended’ to legally bind himself. Furthermore, Judge Cadwallader was satisfied that the ‘declaration was intended to and did cover Mr Phipps’ shareholding in Shortfall at all times’ and that due to the ‘unqualified terms of the declaration, it was a bare trust.’
Counterclaim
The counterclaim was based upon the existence of the Profit and Loss Sharing Agreement, however, Judge Cadwallader found that the Agreement did not exist. It followed that Judge Cadwallader did not think it was appropriate to attempt to find ‘detailed findings of fact as to matters which would only be relevant had it existed.’ The counterclaim was dismissed.
Relief
Judge Cadwallader determined that the parties should attempt to agree the terms of the relief following the judgment. In the event that agreement is not possible, accounts and enquiries would be ordered.
2022
Naidoo v. Barton (HHJ Cadwallader)
The Claimant, Charan-Jyothi Ramamurthie Naidoo, brought a case against his brother, David Barton, the first Defendant, and his wife, the second Defendant. Their parents, Mrs Naidoo, died on 10 February 2016, and Dr Naidoo, died on 12 January 1999. The Claimant brought a claim ‘for an order pronouncing in solemn form for the validity of Mrs Naidoo’s will dated 21 July 2015 (“the 2015 Will”) by which he was appointed sole executor and beneficiary; rescission of any mutual wills agreement affecting the disposition of her estate (together, ‘the 2015 Will Claims’); and rescission of certain transactions undertaken during her life by Mrs Naidoo, or Mrs Naidoo and her husband, during their lives.’
The Claimant’s claim was divided into four categories of relief:
(1) the 2015 Will Claims;
(2) rescission of the transfer of 25,000 ordinary shares in Choiceclassic Ltd (‘Choiceclassic’) from Mrs Naidoo to Mr and Mrs Barton on 14 April 1992, and of the transfer of 6000 ordinary shares in the same company from Charan to Mr Barton on the same date, and consequential orders (‘the Choiceclassic Claims’);
(3) rescission of the purported agreement between Mrs Naidoo and Mr and Mrs Barton on or about 18 February 2000 (‘the 2000 Agreement’) and consequential orders (‘the 2000 Agreement claims’); and
(4) the rescission of 3 purported settlements made in or about 2000 by Mrs Naidoo (‘the Policy Trusts’) of 3 insurance policies (‘the Policies’) on the joint lives of Dr and Mrs Naidoo (‘the Policy Trusts Claims’).
The mutual wills agreement was a ‘purported agreement made between Mrs and Dr Naidoo in their purported wills dated 25 November 1998.’ The wills appointed the spouse and Mr Barton as executors and Mrs Barton as substitute executor. It was provided that the ‘residuary estate should pass to the surviving spouse absolutely, but if that party’s spouse should fail to survive for 28 days then to Mr Barton absolutely, and if he did not survive for 28 days then to Mrs Barton.’ There was a declaration contained within each will that it was ‘intended to be mutual with the other.’ The Claimant argued that the mutual wills agreement was ‘vitiated by a common mistake on the basis that Mrs and Dr Naidoo mistakenly believed that the mutual wills agreement would leave the survivor able to amend their will and to ‘make alternative testamentary provision should their intention to leave their estate to Mr Barton change.’
In addition, the Claimant also argued that the 2000 Agreement Claims were procured by fraudulent misrepresentation by the first Defendant. The Claimant argued that if the wills were otherwise found to be valid, the mutual wills agreement, the Choiceclassic transfers, the 2000 Agreement and the Policy Trusts were ‘procured by the undue influence’ of the first Defendant.
It is the Defendant’s case that the 2015 Will and the Claimant’s appointment as executor was not valid. The Defendant’s did not agree that the mutual wills agreement or the disputed transactions should be set aside on the ground of undue influence. They relied on solicitors’ advice from Pannone LLP that mutual wills should be drawn up and the involvement of Addleshaw Goddard in drafting of the wills. They also relied on the advice of Cobbetts Solicitors ‘in respect of the 1999 Agreement, which was a precursor of the 2000 Agreement, and in respect of the 2000 Agreement itself.’ The defence of laches was also raised.
It should also be noted that the first Defendant in this case is serving a 17-year prison sentence. HHJ Cadwallader rejected the submission that Mr Barton’s criminal conduct was irrelevant to the present case as ‘the facts upon which he was convicted included the use of fairly sophisticated legal devices, including wills, contracts, spurious gifts, loans of transfers of land and other property to enrich himself at the expense of vulnerable persons who placed their trust in him and were, to a degree, in his power.’ It followed that HHJ Cadwallader determined that the facts are ‘highly relevant’ to the present case because it demonstrates ‘evidence of character, propensity, and ability to behave in the way described, including the use of threats of legal proceedings.’
With regard to the mutual wills agreement, HHJ Cadwallader did not accept that the mutual wills agreement should be rescinded on the ground of common mistake. Instead, ‘the mutual wills agreement falls to be set aside’ as a result of ‘undue influence.’ In this respect, the judgment provides clarification on the test that should be used to establish whether a mutual wills agreement should be set aside for undue influence. HHJ Cadwallader held that: ‘a mutual wills agreement is a contract first, before there is any basis for equity to intervene. Such a contract may be found explicitly in the wills, or explicitly or implicitly outside it. But either way, it is not a testamentary provision, and it lies outside the wills.’ It is the Etridge test for undue influence that applies when a court determines if a mutual wills agreement should be set aside for undue influence. Therefore, the more stringent ‘probate test,’ which applies to the procuring of the execution of a will by undue influence, does not apply to the doctrine of mutual wills. HHJ Cadwallader concluded, ‘the probate test is to be distinguished from that in equity and is inapplicable to the doctrine of mutual wills.’
The claim for the rescission of the Choiceclassic transfers for undue influence was dismissed. HHJ Cadwallader did not accept that the 2000 Agreement should be set aside for fraudulent misrepresentation on the part of Mr Barton, however, found that Mrs Naidoo entered into the 2000 Agreement as the result of undue influence. It was found that the trusts were also procured by undue influence.
In summary, the Claimant’s claims succeeded on the grounds of undue influence except for the claim regarding the Choiceclassic transfers. HHJ Cadwallader held that: the mutual wills agreement should be set aside, the 2000 Agreement and the Policy Trusts were vitiated by Mr Barton’s undue influence and pronounced in favour of the validity of Mrs Naidoo’s 2015 Will in solemn form.
Brendon International Limited v (1) Water plus Limited and (2) United Utilities Water Limited. (HHJ Cadwallader)
The case concerns charges for surface water drainage and highway drainage services carried out by the second Defendant, United Utilities Water Limited, and the first Defendant, Water plus Limited, thereafter.
By way of background, the Claimant, Brendon International Limited, has premises in an area for which United Utilities was the sewerage undertaker. Water Plus provided wholesale/retail services to the customers of United Utilities after the opening of the sewage retail market. Surface water and foul water are discharged from the Claimant’s premises. The foul water discharges into a septic tank within the Claimant’s property, and the surface water discharges into a sewer.
The Claimant paid for surface water drainage and highway drainage services up until 16th September 2019. The Claimant was also paying for foul water sewage services, however, the Claimant learnt that this water was being discharged into a septic tank rather than the sewer and was subsequently refunded.
The case concerns whether the Defendants were, and the first Defendant is, allowed to charge for the services that they purport to have provided to the Claimant and whether the Claimant can recover the money paid for the purported services. The main point in issue was whether the drains were public or private.
The Claimant argued that it was entitled to ‘restitution for unjust enrichment’ or ‘damages for breach of contract and/or statutory duty and/or common law duty not to overcharge customers or to charge them outside the defendants’ statutory powers.’ Additionally, it was to be determined whether the Claimant was entitled to interest. Both Defendants defended the claim made against them.
Prior to the start of the trial, the Claimant issued an application for an order to made to strike out or redact part of four of the witness statements made on behalf of the Defendants. Relying on Practice Direction 57AC and/or CPR 32.4(b), the Claimant argued that the witness statements contained ‘content of which the witnesses had no personal knowledge, included speculation about what others did and thought, contained inadmissible opinion evidence, amounted to commentary on documents that the witnesses did not see at the time, and repeated and adopted inadmissible matter in other witness statements, and contained argument.’
In HHJ Cadwallader’s judgment, he dealt with each witness statement separately and held that there was ‘little point now in striking out the offending passages, although they ought not to have been in the witness statements to start with,’ however, HHJ Cadwallader did not have ‘regard to them’ in forming his conclusions.
HHJ Cadwallader concluded that United Utilities conclusion that ‘the sewer was public was mistaken and, the records which it was under a statutory obligation to keep, were wrong as a result from that point on.’ Therefore, the Defendants were ‘not entitled to payment for the use of the sewer, and never provided the supposed to services for which payment was levied.’
HHJ Cadwallader held that ‘on the balance of probability the Defendants were enriched by demanding and accepting payments to which they were not entitled from the Claimant, were so enriched at the claimant’s expense, and that the enrichment was unjust.’ The claim for the money paid is not statute-barred. In respect of the breach of contract argument, HHJ Cadwallader held that there was no deemed contract as this would mean that the Claimant was liable for the charges raised. Making such charges and accepting payment would ‘scarcely have been in breach of it.’ Additionally, the Claimant is entitled to simple interest. In summary, the Claimant succeeded, and the Defendants were ordered to pay £152,027.53.
Doran v County Rentals Limited t/a Hunters (HHJ Cadwallader)
The Appeal concerned the proper construction and effect of Schedule 10, Part 2 of the Corporate Insolvency and Governance Act 2020 (CIGA) in its 2020 form and the Practice Direction – Winding Up Petitions and the Corporate Insolvency and Governance Act 2020.
The Appellants, the ‘Dorans,’ presented a petition for the winding up of the Respondent, County Rentals Limited (‘the Company’), on 5th October 2020. The petition was made on the basis that pursuant to Schedule 10 of CIGA, the Company was insolvent, unable to pay its debts and the Dorans had reasonable grounds for believing that coronavirus had not had a financial effect on the Company or if it had had an effect, the Company would still have been insolvent and unable to pay debts in any event.
The Dorans are the freehold owners of a number of properties for which the Company was managing agent of. The Company failed to account to the Dorans for the collection of all the rents. A demand was made for £65,442.55 for the rent but the Company failed to pay. Therefore, it was argued that the Company was unable to pay its debts and, consequently, it would be just and equitable for it to be wound up.
The Company paid some rent into a Barclays Bank account. The Company argued that it did so under the Dorans instruction, but it could not produce any documentary evidence of this. Instead, it relied upon its standard practice of verifying bank account changes orally and the use of monthly statements made to the client. Conversely, the Doran’s argued that they were unaware of the Barclays account, and they were still owed rent.
The Dorans argued that due to the failure to pay rent, the Company should be deemed unable to pay its debts as they fell due as per s.123(1)(e) Insolvency Act 1986 prior to the Pandemic and before the entry into force of CIGA. Accordingly, the ground would still be applicable if the Pandemic did not have a financial effect on the Company. However, the Company disputed such allegations and argued that there was no evidence proving that the Company was unable to pay the rent if the issue had been raised pre-Pandemic.
The District Judge concluded that the Petition should be dismissed. The appeal before HHJ Cadwallader was also dismissed. The case was appealed to the Court of Appeal. It was agreed that the Pandemic had an impact on the Company and, therefore, the onus fell upon the Dorans to satisfy the Court that the Company could not pay the debts as they fell due even if the Pandemic did not have a financial effect on it. The Court of Appeal held that the Dorans were unable to satisfy the onus upon them and the coronavirus test was not satisfied and that it was reasonable for the district judge to conclude that the Court was not likely to be able to make a winding-up order as the Court would not be likely to be satisfied that the Company would have been unable to pay its debts as they fell due even if the Pandemic had not had a financial effect. The Appeal was dismissed on all five grounds.
Carol Miller v Irwin Mitchell LLP (HHJ Cadwallader)
In 2014, the Claimant’s husband booked a holiday for himself and the Claimant through an online travel agency, Lowcosttravelgroup Limited (Lowcost). Lowcost booked the hotel through a third party, LTS. LTS acted as an intermediary between Lowcost and the hotel. The Millers had travel insurance with ‘Top Dog’ insurance. During the holiday the Claimant, Mrs Miller, fell and suffered an open fracture to her leg. The Claimant claimed that the accident was attributable to the hotel as it had breached local standards and consequently Lowcost was in breach of contract. This was not an issue for determination by HHJ Cadwallader at this stage.
During her time in hospital in the UK, the Claimant rang the Defendant’s Legal Helpline requesting a call back. The Claimant had her leg amputated above the knee and her claim was passed to the Defendant’s multi-track team. The Defendant sent the Claimant a Conditional Fee Agreement.
Lowcost sent the letter of claim to its insurer, HCC International Insurance Company (HCC). HCC reserved its position pending more information. Plexus Law then wrote to the Defendant on Lowcost’s behalf asking whether the Claimant had told Lowcost about her accident at the time. The Claimant had not. HCC wrote to Lowcost to ‘decline to indemnify it in respect of claims arising from the incident on the ground that although Lowcost had been formally notified of the claimant’s accident by LTS, Lowcost had failed to notify HCC of it for nearly 2 years.’ Accordingly, Lowcost was in breach a General Condition of its insurance policy, which was a condition precedent to its insurance. Plexus then told the Defendant about the cover being declined and that Lowcost had gone into administration. Consequently, the Defendant told the Claimant because of HCC’s decision and administration of Lowcost ‘there is no viable source of compensation for your claim and we will be unable to proceed with it.’ As the Claimant was unable to prosecute her claim against Lowcost, the Claimant sought a remedy against the Defendant.
The Claimant argues that the Defendant breached its duty to her by failing to advise her that she must notify Lowcost or the circumstances giving rise to it and the Defendant failed to notify Lowcost. Lowcost would therefore have been notified and HCC would have indemnified the Claimant. Due to the Claimants lost opportunity to recover, she claims damages. The Defendant argues that it was not a position to take steps associated with the Claimants case and owed her no duty before a retainer was entered into. In any event, even if the Claimant was advised, she would not have written to Lowcost nor instructed the Defendant to do so.
HHJ Cadwallader had to consider if and when a contract of retainer or a like duty between the Claimant and Defendant was formed and its terms and scope. Further, if a retainer or like duty was formed whether and when the Defendant had an obligation to notify Lowcost or advise the Claimant to do so. Moreover, whether the Defendant was in breach of its duties towards the Claimant and whether Lowcost would have responded to the Claimant’s claim if it had been notified.
In summary, HHJ Cadwallader determined that there was ‘no contract of retainer between the claimant and the defendant was formed, and no like duty was assumed, until 25 January 2016.’ Furthermore, ‘until there was a retainer or like duty,’ HHJ Cadwallader determined that ‘there was no duty to warn in respect of insurance.’ Moreover, HHJ Cadwallader determined that there was ‘a 100% chance that the policy would have responded immediately following the initial call between the claimant and the defendant’ but that there would have been ‘no prospect of the policy’s responding at any relevant time following the administration of Lowcost.’
Upton Rocks Healthcare Limited v. Halton Borough Council (HHJ Cadwallader)
The case concerned the recovery of £240,000 from the Defendant, Halton Borough Council, which the Claimant, Upton Rocks Healthcare Limited, had paid to the Defendant in connection with an agreement and a development site that the Claimant is the registered proprietor of. The Claimant also claimed declaratory relief.
A contract of sale was made between the Defendant as Seller, Halton Development Partnership Ltd, and Ladson Construction Ltd as Buyer (“Ladson”). The Defendant agreed to sell, and Ladson agreed to buy a certain freehold property. The Defendant claimed that, by virtue of a clause contained within Deed of Covenant and a subsequent Deed of Variation, because no development had started within the requisite period the Defendant was entitled to be paid £240,000.
HHJ Cadwallader held that the Defendant must reimburse the Claimant together with interest. The supposed obligation to pay the £240,000 was also unenforceable as a penalty.
Yashpal Batra and Geeta Kumari Batra as Trustees Of The Y & GK Trust v. Ajay Dhir and Ritu Dhir (HHJ Cadwallader)
The case concerns the Claimants application for summary judgment against the Defendants in the context of the enforcement of an Adjudicator’s award. The Adjudicator found the Defendants, Ajay Dhir and Ritu Dhir, to be liable to pay the Claimants, Yashpal Batra and Geeta Kumari Batra as Trustees Of The Y & GK Trust, the sum of £13,320. The sum remains outstanding and with VAT and the Adjudicator’s fees, the Claimants have thereby issued a claim for the total of £22,716 together with interest pursuant to s.35A of the Supreme Courts Act 1981.
The issues to be determined by District Judge Baldwin were, firstly, ‘whether the Defendants had shown a real, more than fanciful, prospect of persuading the court at trial to entertain an ongoing challenge to the jurisdiction of the Adjudicator?’ Secondly and if so, ‘have the Defendants shown a real, that is more than fanciful, prospect of persuading the court at trial to come to a different conclusion from that of the Adjudicator on jurisdiction?’
While the Defendants were successful on the first issue, District Judge Baldwin held that the Defendants were unsuccessful on the second issue and did not demonstrate ‘a real prospect of success at trial in terms of achieving a different conclusion on jurisdiction and likely contracting parties from that arrived at by the Adjudicator.’ Accordingly, the Claimants were entitled to summary judgment to enforce the Adjudicator’s award.
Janine May Marshall v. Stuart Marshall and Kirsten Marshall (Cadwallader, HHJ)
The case concerns a probate action. The Claimant, Janine May Marshall, requested the court to make a declaration that the purported will of her late father be declared invalid. The Claimant argued that the purported will was forged.
The will was drafted by the second Defendant, Kirsten Marshall, and she arranged for the execution of it. The first Defendant, Stuart Marshall, was appointed executor of the will and had been left his father’s entire estate. The first Defendant applied for a grant of probate, but this was prevented by a caveat lodged by the Claimant.
To be valid a will must adhere to the formal requirements as set out in s.9 Wills Act 1837. Generally, in probate cases, the burden of proof lies upon those who propound the will. HHJ Cadwallader considered that ‘the will in question appeared on its face to be regular and duly executed.’ However, the burden of proving forgery lies upon those who allege fraud. Accordingly, ‘the evidential burden fell upon the Claimant to rebut that presumption by establishing on the balance of probabilities that it was forged.’ HHJ Cadwallader was not satisfied that the Claimant had discharged this evidential burden. The claim was dismissed.
Vaillant Group UK Limited v L&M (Heating) Supplies Limited (Cadwallader, HHJ)
The case concerned a claim for £2,103,074.19 and interest for unpaid invoices for boilers, flues and associated items supplied by the Claimant, Vaillant Group UK Limited, to the Defendant, L&M (Heating) Supplies Limited.
L&M (Heating) Supplies Limited argued that ‘certain credits’ should be taken away from the amount and therefore disputed liability. Furthermore, the Defendant disputed the contractual terms that were said to be applicable to the orders, invoices, credits and rebates. It was argued that there was an implied contract of distributorship which ‘restricted the claimant’s ability to stop supplying the defendant save for good reason.’ Accordingly, the Defendant argued that the Claimant could not suspend delivery as no ‘serious breach’ had occurred by the Defendant nor could the Claimant sell directly to the Defendant’s clients.
The Defendants case was argued in various ways: that there was an implied contract, on the basis of estoppel or on the basis of an overarching ‘relational contract.’ This forms the basis of a counterclaim for damages. Additionally, the Defendant argued that the Claimant had not proved, in any event, its entitlement to the sum at all. The civil burden of proof fell on the Claimant to establish its claim.
HHJ Cadwallader held in favour of the Claimant for the sum claimed of £2,103,074.19 minus a debit note for £241, 143.60 together with a figure of interest to be calculated. The counterclaim was dismissed.
Pharmapac (UK) Ltd v. HBS Healthcare [2022] Claim No. CC-2020-LIV-000006 (Business & Property Courts in Liverpool)
Summary and link to follow.
Jaava Limited v. Nijjar Dairies Limited (Cadwallader, HHJ)
The case concerned an application for an injunction restraining the advertisement of a winding up petition. The Respondent, Nijjar Dairies Limited, presented a second wind up petition to the Applicant, Jaava Limited, on the basis that the Applicant could not pay the debts owed (pursuant to s.122(1)(f) Insolvency Act 1986) for the goods supplied to them by the Respondent. The initial petition was dismissed under the Coronavirus condition.
A winding up petition cannot be granted where a debt is ‘genuinely disputed.’ An injunction can be granted to restrain a petition which concerns a disputed debt. This holds true if the company has a ‘genuine’ and ‘serious cross claim’ which is more than the debt or ‘if successful would reduce the indebtedness below the statutory minimum.’ The burden of proof falls on the Applicant, Jaava Limited, to prove there is a ‘genuine, serious and substantial dispute.’
The Applicant argued that the debt was ‘genuinely’ disputed for three main reasons. Firstly, there was uncertainty over the validity of the invoices rendering the amount of debt uncertain. Secondly, there was an agreement that £5000 per week should be paid to the respondent pending a full reconciliation of the applicant’s account, which had not yet happened. Lastly, the Applicant had cross claims against the Respondent.
HHJ Cadwallader considered whether these grounds raised a ‘genuine’ and ‘substantial’ dispute. HHJ Cadwallader was not satisfied that the petition’s claimed debt was disputed on ‘substantial grounds.’ Neither was there ‘substantial cross-claim equalling or exceeding the debt or reducing it below the statutory threshold.’ Accordingly, the application was dismissed.
L&C Developments (Southport) Ltd v. David Naidoo and Lucinda Naidoo (Cadwallader, HHJ)
The Claimant issued a Part 7 claim requesting the court to make a declaration that the Defendants had unreasonably refused to give consent for developments to take place at the premises in question. The case concerns the Claimant’s application for summary judgment of the claim.
The Defendants, David Naidoo and Lucinda Naidoo, are the registered proprietors of the freehold of the premises. The Claimant, L&C Developments (Southport) Ltd, is the registered proprietor of the long leasehold interest equating to 999 years. The lease contains a covenant.
The Claimant successfully applied for planning permission to demolish a nursing home and develop three houses. A restraint order is imposed upon the Defendants, preventing them from ‘removing or disposing of, dealing with or diminishing the value of their assets.’ For the Claimant’s planning application to succeed, there was some variation made to the Defendants orders and to allow the Claimant to seek the Defendants consent to the proposed development. In an email, the Defendants son refused to consent.
The Claimant initiated proceedings arguing that consent was ‘unreasonably withheld.’ Demolition was still undertaken, and the Defendants requested an interim injunction. It was the Claimant’s case that the qualifying covenant against alterations contained in the lease is subject to s.19(2) Landlord and Tenant Act 1927. Further, this provision applies to a covenant against alterations provided that the alterations are ‘improvements,’ which is to be judged from the tenant’s point of view. Considering this, HHJ Cadwallader determined that there was a ‘real prospect’ of the Defendants being successful at trial. Accordingly, summary judgment was refused.
Morgan v Fundingsecure Limited (Cadwallader, HHJ)
The Applicant, Arthur Morgan, requested the court to set aside a statutory demand for money, to the sum of £7,641,050.12, made on behalf of a company in administration, FundingSecure Limited. The demand for money was a result of lending by the Respondent to three other companies that Morgan was the director of and, ‘whether actually or effectively, the owner.’
The Respondent, Fundingsecure Limited, had various short-term loan agreements, all with the same terms and conditions, to fund its own activities and those of the other companies. Morgan was not personally liable for the loans but gave personal guarantees, including indemnities in support of the agreements. The Respondent argued that the companies defaulted on the loans and the statutory demand was based upon the outstanding liability of Morgan under his personal guarantees.
Morgan applied to set aside the statutory demand under Rule 10.5 Insolvency (England and Wales) Rules 2016. ‘The court may grant such an application if the debt is disputed on grounds which appear to the court to be substantial or if the court is satisfied on other grounds that the demand ought to be set aside.’
Regarding the first limb of the application, HHJ Cadwallader was not satisfied that the debt was disputed on substantial grounds. Turning to the second limb of the application, HHJ Cadwallader found that, in any event, there was no ‘other ground’ upon which the demand could be set aside. For these reasons, the application was dismissed.
Campbell v. Tyrrell [2022] EWHC 423 (Ch) (Hodge, HHJ)
The case concerned a loan agreement between the Claimant (Ms Campbell) and her former husband, and the first defendant (Mr Tyrrell) entered into by way of facility letter with the second defendant (Goldcrest Finance Limited). The third defendant is a director of Goldcrest Finance Limited (Mr Chawla). The loan was advanced in 2014 when Ms Campbell and Mr Tyrrell granted another legal charge over their house as security for the loan.
The two main issues in the case were: firstly, whether the loan agreement constituted a regulated agreement under the Consumer Credit Act 1974. Alternatively, did the loan fall within the business exemption clause (s.16B CCA 1974). Secondly, was Ms Campbell and Mr Chawla’s relationship unfair under s.140A and s.140B CCA 1974.
HHJ Hodge QC held: firstly, the business purposes declaration was valid but that the presumption under s.16B(2) was rebutted. This was because Goldcrest Finance Limited knew that their loan was not “wholly” or “predominately” for business purposes. Consequently, it was not a regulated agreement under CCA. Secondly, the relationship was not unfair under s.140A and s.140B CCA 1974.
2021
The 52 Occupiers of the Ceramic Works v. Bowmer & Kirkland Ltd [2021] EWHC 17 (District Judge Baldwin)
The Claimants brought proceedings against the Defendants, Bower & Kirkland Limited under for Defective Premises Act 1972. It was submitted that the Defendants had breached their duty of care regarding the construction of 52 residential and 8 commercial units. Bower & Kirkland Limited had been incorrectly joined to the proceedings. The issue was whether the Defendant could be substituted for B & K Building Services Limited. Yet the limitation period for adding or substituting parties had expired.
While CPR rule 19.5(2)(a) was satisfied, the Court had to determine if substitution was necessary due to mistake and if the court should exercise its discretion to permit the substitution. In particular, the Court considered CPR rule 19.5, the submissions of the Parties and the fact that there had been no material delay upon realisation of the error. It was necessary to allow the substitution and for the Court to exercise its discretion. The Court held in favour of the Claimants.
Doran & Anor v County Rentals Ltd (t/a Hunters) [2021] EWHC 3478 (Ch) (20 December 2021)
This case featured an appeal on the part of petitioning creditors on a decision to dismiss a winding up petition based on the ‘coronavirus test,’ (definition at [7]). County rentals (the company) had been acting as collector of the rents for the relevant properties under an agreement to pay them to the petitioners. The company paid most of the rental amounts into a Barclays account however, the creditors informed the company in March 2020 that substantial sums dating from 2014 were due. The petitioners failed to discharge the burden on them to establish under the coronavirus test that coronavirus had not had an affect on the ability of the company to pay the relevant debts therefore, the appeal was dismissed.
Partington v Rossiter [2021] EWCA Civ 1564 (29 October 2021) (The Court of Appeal upholding a decision of HHJ Cadwallader)
The case concerned a clause in a will that stated that the will was only to have effect in relation to ‘UK assets.’ The Court had to consider whether the will extended to assets located in Jersey. HHJ Cadwallader held that the construction of the will was intended to include Jersey assets and, in any event, should be rectified to include Jersey assets. The Court of Appeal upheld the judgment; the correct interpretation of the will before the court was that the abbreviation, ‘UK,’ was intended to include Jersey.
The Office of the Bankruptcy Adjudicator & Anor v Shaw [2021] EWHC 3140 (Ch) (07 October 2021) (HHJ Hodge QC)
This case featured an appeal to the High Court concerning two novel questions. First, the potential evidential burden on the applicant for bankruptcy to adduce evidence of pension pots for the purpose of adducing whether he was unable to pay his debts. Secondly, whether the Secretary of State was liable to pay costs incurred by the applicant as a result of his successful challenge to the bankruptcy order adjudication. It was found that Mr. Shaw’s pension pots should have been considered, so whilst the District Judge had applied the correct test of cash-flow, they were not entitled on the evidence to conclude that the pension would not fall under the test due to timing, as it would have been readily realisable. Subsequently, the judge was wrong to place emphasis on the effects of cost on Mr. Shaw. The appeal was allowed, and costs discharged.
Lonsdale v Teasdale & Ors [2021] EWHC 2342 (Ch) (20 August 2021) (HHJ Cadwallader)
In the case before the Distinct Judge, the Appellant’s claim for grant of probate was originally dismissed. On appeal, HHJ Cadwallader assessed that there was ample material upon which to seriously doubt the deceased’s mental capacity. The burden of proof, where there is a real doubt regarding capacity, rests upon the propounder of a will to demonstrate capacity. The burden was not discharged by the Defendant. Therefore, he failed to satisfy the Court that the will had been executed with the required mental capacity. HHJ Cadwallader held in favour of the Appellant.
Escalate Law Ltd & Anor v Kennedy & Anor [2021] EWHC 2232 (Ch) (04 August 2021) (HHJ Cadwallader)
The Defendants advanced a professional negligence claim against a firm of solicitors and instructed the Claimants (Escalate and Bermans) to pursue the claim. The Claimants served a termination notice to the Defendants, claiming that they were entitled to payment as the Defendants had breached the Cnditional Fee Agreement (CFA). HHJ Cadwallader held that the CFA remained in place and that the Defendants had not complied with their contractual obligations. The Defendants’ counterclaim was also dismissed; HHJ Cadwallader rejected the argument that the Claimants’ work for the Defendants was worthless. The Claimants were entitled to terminate their agreement and the Defendants were ordered to pay £75,148.02.
Pennistone Holdings Ltd v Rock Ferry Waterfront Trust [2021] EWCA Civ 1029 (09 July 2021) (The Court of Appeal upholding a decision of HHJ Hodge QC)
This case was an appeal concerning the issue of whether Rockferry were entitled to possession of a former vestor oil site with Penninstone Holdings claiming to be in actual occupation. Penninstone was found not to be in actual occupation since they were not registered as owner/occupier under the land registry for technical and financial reasons and the site was not used other than for minor infrequent care taking duties, which the trial judge had found did not amount to actual occupation. Since the court could not find any error in law by the trial judge, his findings had to be respected and the appeal was accordingly dismissed.
MV Promotions Ltd & Anor v Telegraph Media Group Ltd & Anor [2020] EWHC 1357 (Ch) (29 May 2020) (HHJ Hodge QC)
This case involved a dispute over the true common intention of a renewal contract between MVG managing Mr. Vaughan and a contract for him to write articles for TMG. HMRC joined TMG in the proceedings as a result of their interest in closure notices on additional tax potentially owed by Mr. Vaughan if he was the contracting party. The court held on true construction the true contracting parties had been Mr. Vaughan and TMG since the contract conception. A subsequent rectification deed in 2018 served only to clarify purposes for the contracting parties and not HMRC therefore, the court refused to grant rectification.
Horn v Tuscola (FC105) Ltd & Ors [2021] EWHC 963 (Ch) (19 April 2021) (HHJ Cadwallader)
The claimant (Mr. Horn), acting as a litigant in person, was the prospective owner of a freehold on a student flat unit which he never received from PSBL, a company associated with the Plaintiff (Tuscola). He commenced proceedings seeking specific performance to compel completion of the purchase of the premises. Mr. Horn sought clarification on six matters that where relevant in other proceedings he intended to carry out regarding a new flat. No substantive relief was granted.
2020
Face v Cunningham & Anor [2020] EWHC 3119 (Ch) (28 October 2020) (HHJ Hodge QC)
The Claimant was seeking to put forward an alleged lost will, which she claimed to have a photocopy of. The Defendants alleged that the Will had been forged by the Claimant. It was accepted that the civil standard of proof applied in the case. However, there was a dispute over which party the burden rests upon.
HHJ Hodge QC held that the burden of proof lies on the party seeking to propound a will, in conjunction with demonstrating the formal requirements that a will must be in writing, signed by the testator and witnessed. The court held that the will had been forged and the claim was dismissed. The transcript of the judgment was also referred to the CPS to assess whether to bring criminal proceedings.
Signature Living Hotel Ltd v Sulyok & Anor [2020] EWHC 257 (Ch) (09 January 2020) (HHJ Hodge QC)
The Claimants took out loans from the Respondents. The Claimants guarantees for the loans were contained in a deed. The Respondents subsequently demanded payment when the Claimants failed to repay. The Claimants applied for injunctions to restrain the respondents from presenting a winding up petition against them because they claimed the deeds were unenforceable against them.
Where a deed does not comply with the necessary formalities rendering it invalid, the deed can nevertheless still be enforced as a contract where formalities are met and the transaction did not require a deed. HHJ Hodge QC held that the guarantees were enforceable against the claimants. The injunctions to restrain the presentation of any winding-up petitions were therefore unnecessary.
