VVB M&E Group Ltd v Optilan (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Russen |
| Judgment Date | 07 January 2020 |
| Neutral Citation | [2020] EWHC 4 (TCC) |
| Date | 07 January 2020 |
| Docket Number | Case No: HT-2019-BRS-000016 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2020] EWHC 4 (TCC)
IN THE HIGH COURT OF JUSTICE
THE BUSINESS & PROPERTY COURTS AT BRISTOL
TECHNOLOGY & CONSTRUCTION COURT (QBD)
2 Redcliff Street
Bristol BS1 6GR
HH JUDGE Russen QC
(Sitting as a Judge of the High Court)
Case No: HT-2019-BRS-000016
Justin Mort QC (instructed by Lewis Silkin LLP) for the Claimants
Marc Lixenberg (instructed by Freeths LLP) for the Defendant
Hearing date: 11 December 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HH JUDGE Russen QC
His Honour Judge Russen QC:
Introduction
This is my judgment on the Claimants' application for delivery up of goods which came on for a one-day hearing on 11 December 2019 and was argued before me by Mr Justin Mort QC for the Claimants (together “ VVB”) and Mr Marc Lixenberg for the Defendant (“ Optilan”).
For reasons I summarise below, the outcome of the application turns upon the true meaning and effect of two documents, described as Vesting Certificates, which are in materially identical terms and which made provision for a transfer of ownership of the goods or materials in question (“ the Vesting Certificates”).
The Vesting Certificates are in materially the same form. In the Appendix to this judgment I have set out the terms of the document relating to the materials now said by VVB to be vested in Network Rail. The other one was also between the same parties but related to materials to be vested in a company then known as VVB Engineering Limited whose position I explain below. It related to £784,066.17 worth of materials (compared with the £636,655.25 in the one I have replicated in the Appendix).
Save where I highlight below any point of detail on the figures, what I say about that one certificate holds good for the other. Each was dated 20 September 2018 but was delivered by Optilan the following day, 21 September. The essential question I have to decide is whether the Vesting Certificates have operated to vest in the relevant transferee the ownership of the materials identified by the schedules to them.
I am grateful to counsel for their clear written and oral submissions upon the effect of the documents. The latter occupied a full court day and left no time for me to give an oral judgment. Although I had started the hearing in the hope that it might be possible to deliver one, the intricacy of counsel's submissions on the detail of the other contractual documentation, together with their joint position as to the hoped-for finality of any judgment (subject of course to any viable appeal), indicated that the proper course was to reserve judgment having reflected further upon the arguments. However, there is a degree of urgency behind the application, which I outline below, and I indicated to the parties that my reserved judgment would focus upon the key issues between the parties – as they came to be further narrowed by the time of the hearing – and would not attempt to explain fully the background to the litigation as that emerged from the 5 witness statements filed on the application. In fact, the parties were agreed that the outcome of the application turned upon issues of construction which were entirely a matter for legal submissions.
Indeed, it is on that basis that the parties further agreed that I should decide the application on the basis that my decision would dispose of the entire Claim, either in favour of VVB or in favour of Optilan. As issued, VVB's Application Notice dated 10 October 2019 sought a “ final or interim order for delivery up of goods or alternatively damages pursuant to Sections 3 and 4 of the Torts (Interference with Goods Act) 1977 as set out more fully in the attached Draft Order.” The draft Order contemplated both that there would be a trial, if no further interim order in the meantime, and that VVB would provide a cross-undertaking in damages as the price of it. It therefore clearly contemplated the grant of interim relief (compare CPR 25.1(1)(e)) even if the effect of that would be that the value presently attached to Optilan's current possession of the materials in question was to be replaced, once and for all, by the value of the said undertaking. But at the hearing each side subscribed to the view that I should go further and decide, once and for all, the question of VVB's alleged unconditional entitlement to the materials.
At this point it is appropriate for me to mention one slight wrinkle in that position adopted by the parties.
Certainly the emphasis of Mr Mort's submissions on behalf of VVB was that the Vesting Certificates provided for a future vesting of ownership of the materials covered by it, some time after the date of the certificates. During counsel's submissions I referred to some of its terms which (subject to ambiguity created by other wording) perhaps supported the notion of an immediate vesting of ownership. Mr Lixenberg then courteously indicated that the court would be going too far in finally deciding the claim against his client on the basis that they did provide for an up-front transfer of ownership when that had not been the thrust of VVB's argument. That prompted me to say two things and Mr Mort QC to say two more.
My observations in response were to the effect that the parties were inviting me to reach a final conclusion upon the meaning of the Vesting Certificates, a question of mixed fact and law, and that exercise necessarily involved the court considering (in the light of the clearly established approach to interpreting commercial documents) all potential meanings that a textual and contextual approach to its interpretation might reasonably support. And that whereas Mr Lixenberg's objection might perhaps steer the court back on to the safer course of concluding only that VVB had established the existence of a triable issue that the goods had by now vested under the terms of the Vesting Certificate, so that interim relief might be granted in their favour, I had noted that there was no evidence before me as to the value of the cross-undertaking in damages which had been proffered by VVB as the price of such relief. As the giving of a cross-undertaking is the default position in any order for interim injunctive relief (see CPR PD25A para. 5.1) such evidence would obviously have been relevant to the exercise of the court's discretion, if it came to that stage of things, in determining where the balance of convenience came to rest.
Mr Mort QC made two observations on the point. The first was to say that his client had been in the process of preparing evidence in relation to the value of the cross-undertaking in damages, with a view to serving it early in the week of the hearing, but had been dissuaded from doing so by Optilan's indication that the Claim should be finally determined for or against them. Secondly, and with more impact in my view given that the need for such evidence at an earlier stage should perhaps have been prompted by the terms of the Application Notice, Mr Mort pointed out that the parties were inviting the court to determine his client's pleaded case which (as appears from paragraphs 19 and 27 of the Particulars of Claim) was to the effect that ownership of the materials either “ had vested or were to be vested” under the terms of the Vesting Certificates.
By the conclusion of the hearing before me the parties were both still of the view that I should dispose of the Claim by either granting or refusing the (final) remedy of delivery-up. As I observed at the hearing, it appeared to me that the most obvious way forward was to treat VVB's interim application as if it sought summary judgment on the Claim. Mr Mort QC suggested that the better approach might be to treat this Part 7 Claim as akin to a Part 8 Claim suitable for determination on the first return date. The TCC is of course amenable to granting declaratory relief on Part 8 Claims on an expedited basis where the circumstances justify it. Mr Mort briefly raised a concern about the threshold to be satisfied by an applicant for summary judgment but, the point being one over the true construction of the Vesting Certificates and Optilan in effect (and in the absence of any formal application of their own) inviting the court to dismiss the Claim, my view was and remains that nothing really turns on the burden of proof. I have therefore proceeded as if each party was respectively applying for summary judgment for and against the Part 7 Claim.
Counsel's submissions were directed to points of construction. It is apparent from what I say below that the issue as to whether the materials in question belong “to VVB” (expressing the point loosely) or belong to Optilan is important because of the insolvency of a company now called Value Realisations Limited (“ VRL”, formerly incorporated under the name VVB Engineering Limited and therefore having a name very similar to the second claimant's). VRL, by that former name, was a subcontractor of the contractor Costain Limited on the Crossrail project, on which Network Rail is the ultimate employer. Optilan contracted with VRL as a sub-subcontractor under a Sub-subcontract dated 10 September 2015 (“ the Sub-subcontract”). The materials which are the subject matter of the Vesting Certificates were obtained for the purpose of performing the Sub-subcontract. Within just over a month from the issue of those certificates VRL had gone into administration.
Although the first claimant then acquired the business and assets of VRL, in administration, it did not take over the company's liabilities (if and to the extent undischarged) under the Sub-subcontract with Optilan. Establishing...
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