Bioconstruct GmbH v Steven Winspear
| Jurisdiction | England & Wales |
| Judge | Naomi Ellenbogen |
| Judgment Date | 11 September 2020 |
| Neutral Citation | [2020] EWHC 2390 (QB) |
| Docket Number | Case No: HQ17X02903 |
| Court | Queen's Bench Division |
| Date | 11 September 2020 |
[2020] EWHC 2390 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Naomi Ellenbogen QC
(Sitting as a Deputy Judge of the High Court)
Case No: HQ17X02903
Mr Rory Brown (instructed by Brandsmiths) for the Claimant
Mr Seth Kitson (instructed by Kingswalk Law) for the First Defendant
Mr Stephen Fletcher (instructed by Kingswalk Law) for the Second Defendant
Hearing dates: 17 January and 11 February 2020
Approved Judgment
Naomi Ellenbogen QC
TABLE OF CONTENTS
| Introduction and procedural chronology | Error! Bookmark not defined. |
| The hearing on 17 January 2020 | 8 |
| The hearing on 11 February 2020 | 9 |
| The Application | 9 |
| Bioconstruct's submissions | 9 |
| Delay | 10 |
| Bioconstruct's conduct | 110 |
| Prospects of success | 111 |
| Prejudice | 111 |
| Steven Winspear's submissions | Error! Bookmark not defined.2 |
| Subsequent developments | 2 Error! Bookmark not defined. |
| Discussion and conclusion | Error! Bookmark not defined. 4 |
| The legal principles | 24 |
| The principles applied to the facts | Error! Bookmark not defined. |
| The timing of the Application | Error! Bookmark not defined. |
| The strength of the proposed claim in deceit | 36 |
| The pleaded false representations | 35 |
| The true position/Steven Winspear's knowledge of falsity or recklessness as to truth | 38 |
| ‘Inducement’/intention that Bioconstruct should rely upon the representations | Error! Bookmark not defined.8 |
| Consequential loss and damage | 39 |
| Prejudice | 41 |
| Prejudice to Steven Winspear | 41 |
| Prejudice to other court users | 44 |
| Prejudice to Bioconstruct | 45 |
| Striking the balance | 45 |
| Costs | 46 |
| The parties' submissions | 46 |
| Bioconstruct | 486 |
| Steven Winspear | 49 |
| Offers to settle | 49 |
| Success in part | 49 |
| The parties' conduct | Error! Bookmark not defined. |
| SRL | 51 |
| Discussion and conclusions | 55 |
| General principles | 55 |
| The principles applied to the facts | Error! Bookmark not defined.57 |
| The costs of the claim | 57 |
| Has Bioconstruct succeeded on part of its case? | 57 |
| The conduct of the parties | 60 |
| My assessment of the Defendants as witnesses | 61 |
| Breach of the standard direction | 61 |
| Advancing a dishonest case/dishonest conduct | 62 |
| Inadequate disclosure by Steven Winspear | 62 |
| Bioconstruct's conduct | Error! Bookmark not defined.63 |
| Admissible offers to settle | 64 |
| The appropriate costs order | 64 |
| The preliminary applications | 64 |
| The Defendants' application | 65 |
| Bioconstruct's application | Error! Bookmark not defined.65 |
| Payments on account of costs | 66 |
| Steven Winspear | 66 |
| SRL | 67 |
| The costs of the Application | 68 |
| Minute of Order | Error! Bookmark not defined. |
| APPENDIX | 70 |
| BIOCONSTRUCT'S DRAFT AMENDED PARTICULARS OF CLAIM | 70 |
The Deputy Judge:
Introduction and procedural chronology
On 17 January 2020, I handed down judgment following the trial of this matter [2020] EWHC 7 (QB), from which the background to this further judgment appears. I continue to adopt the definitions then used.
On 2 January 2020, the parties had been sent my draft judgment, embargoed until hand down. The draft judgment made clear that Bioconstruct's claim against both Defendants, under an alleged deed dated 19 July 2016, would be dismissed because that alleged deed was invalid, and an alternative argument of estoppel by convention could not be advanced, in each case as a matter of law. In the usual way, the notice of embargo directed that each party's written list of typing corrections and other obvious errors should be submitted to my clerk by midday on Friday, 10 January 2020. I further directed as follows:
2.1 By 16:00 on 10 January 2020, the parties are to submit an agreed draft minute of Order arising from my judgment;
2.2 In the event that the above agreed draft minute of order does not include provision for (1) the costs of and associated with (a) the parties' respective preliminary applications and/or (b) the outcome of trial; and (2) any additional consequential matters arising, by 16:00 on 10 January 2020 each party should submit written outline submissions on all disputed issues relating to costs and any additional matters consequential upon my judgment;
2.3 Each party will be permitted to make oral submissions on costs and any other consequential matters arising (limited to 30 minutes per party) on 17 January 2020.
Those further directions were set out in the e-mail under cover of which the draft judgment was sent by the court to each party's solicitors. In accordance with those directions, on 10 January 2020, counsel for each Defendant submitted proposed corrections and written submissions as to costs. For SRL, Mr Fletcher also submitted a draft minute of order, noting that there had been no agreement of any part of it at that time and that solicitors for Bioconstruct had said that they would revert ‘by the deadline’. Accordingly, all submissions had been made on the basis that everything was in dispute. For Steven Winspear, Mr Kitson indicated his agreement with the draft minute of order prepared by Mr Fletcher. On behalf of Bioconstruct, on 10 January 2020, Mr Brown submitted proposed corrections to the draft judgment, but did not provide an alternative draft minute of order, or written outline submissions.
Having received no explanation for that fact, or application for an extension of time, on 13 January 2020, I wrote to Mr Brown, noting that I had not received any written submissions on behalf of Bioconstruct and asking him to confirm whether the Defendants' proposals as to costs and draft minute of Order were agreed and, if they were not, to provide his written submissions, by 16:00 the following day. Mr Brown's reply on that date was as follows:
“…I am not in a position to agree the order. Due to other commitments, I also do not expect to be in a position to revert by the deadline you have stipulated. I am however in the process of taking instructions on costs and consequential matters. Please may I have until 0900hrs on Thursday to either agree the order or file any short submissions? That will leave a day before the hearing for the court to consider any submissions and Messrs Kitson and Fletcher to take instructions (if any are needed) and revert (if they wish to).”
I responded in the following terms:
“…I'm afraid that your proposed further extension of the deadline for confirmation of your position and provision of written submissions is too long — Messrs Kitson and Fletcher will need to travel to London for a contested hearing and everyone will need suitable time to prepare for it, consistent with other professional commitments. Should it only become clear on Thursday that a contested hearing will not be required, there is the prospect of unnecessary further costs being incurred.
In those circumstances, time for compliance with my direction is extended only until midday on Wednesday, 15 January.”
At 11:46 on Wednesday 15 January, my clerk received Mr Brown's 9-page skeleton argument for the hand down hearing on 17 January. That document, first, sought permission to amend Bioconstruct's Particulars of Claim, to plead a claim of deceit against Steven Winspear, before going on to address the issue of costs against him, should that application fail, and costs against SRL, in any event. The application to amend had not been foreshadowed, nor was it consistent with the characterisation of the nature of the submissions which had been indicated in Mr Brown's e-mail to me of 13 January 2020. That position was compounded by later developments, to which I shall refer below. The prospect that Mr Kitson might not need to take instructions or wish to revert was, self-evidently, fanciful. On Mr Brown's originally proposed extended timetable, Mr Kitson and those instructing him would have had only one day in which to do so and, as Mr Brown was aware, counsel for each Defendant would need to travel to London from Manchester.
No draft amended Particulars of Claim were provided with the skeleton argument. At paragraph 5 of that document, Mr Brown stated as follows:
“5. The nature of the amendment sought is to allege a case of deceit. Specifically, it is alleged that D1:
5.1. represented (in the last few iterations of the deed, and in emails, and in particular and most importantly by initialling the pages of the deed which contained personal obligations with which he was familiar from earlier iterations and which had been introduced in the course of negotiations) he intended personally to be bound by the Deed.
5.2. did not intend personally to be bound and told no-one that he did not in fact intend personally to be bound in circumstances in which:
5.2.1. he knew that without his providing security in the form of personal obligations the deal would not complete;
5.2.2. every other party was under the impression he intended to provide security personally; and
5.2.3. he apprehended that C might well fail to realise that he had not signed the Deed;
5.3. intended that C would be induced to complete the deal on the basis D1 manifested an intent personally to be bound;
5.4. C did act in reliance on this false representation by advancing money on loan; and
5.5. C suffered loss because the loan was not repaid and C could not call on D1's security.”
In explaining the timing of his application, Mr Brown asserted, in summary, that he had not...
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