Brett John Butler Darren Trueman v Richard Pike
| Jurisdiction | England & Wales |
| Judge | Morrison,Charles Morrison |
| Judgment Date | 07 December 2020 |
| Neutral Citation | [2020] EWHC 3362 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2019-03240 |
| Date | 07 December 2020 |
[2020] EWHC 3362 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Charles Morrison
Sitting as a Deputy Judge of the High Court)
Case No: QB-2019-03240
Daniel Goodkin (instructed by Flinty Bishop LLP) for the Claimant
Kyle Lawson (instructed by Eversheds Sutherland (International) LLP)) for the Defendants
Hearing dates: 26 November 2020
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.
HIS HONOUR JUDGE Morrison
Charles Morrison (sitting as a Deputy Judge of the High Court):
Introduction
The Claimants ( Cs) in this matter have brought before me an application for Summary Judgment. The application is made in respect of two issues only. Before I turn to those issues I will give a short account of the background facts in this dispute.
These proceedings arise out of a contract dated 20 February 2017 (the SPA), pursuant to which the Defendants ( Ds) agreed to purchase, and the Cs agreed to sell, the entire issued share capital of a company called BPG (UK) Limited (the Company). The Company is a commercial lettings agency which was marketed by the Cs as being in the business of providing various services to residential landlords, primarily through its website.
The services provided by the Company include a facility which enables private landlords to advertise their properties for rent on various well-known online property platforms such as ‘Rightmove’ and ‘Zoopla’. The Company is able to provide this service because it holds a “Residential Lettings Membership” with Rightmove and Zoopla (I will refer to these businesses together as the Platforms) for which it pays membership fees.
The dispute before the court turns on the simple fact that the Ds say that the Platforms do not allow their members, such as the Company, to advertise lettings on behalf of other commercial operators. This might be described in the vernacular of the commercial world as the Company acting as a “sleeve” through which other commercial landlords would gain access to the advertising profile of the Platforms without the inconvenience of paying their annual membership fees: I will refer to this prohibition as the Restriction.
The principal (though not the only) reason for the Ds' complaint is that whilst they accept that they were informed of the existence of the Restriction by the Claimants during the course of due diligence, they were not told that the Company was operating its business in breach of the Restriction; nor were they informed of the extent of that breach. This is the dispute that gives rise to the issues before me. They also say that the Platforms are now strictly enforcing their rights in respect of the Restriction and that this is having a material impact on the financial health of the business that they have bought. In short they say that had they been told the true position in respect of non-compliance with the Restriction, they would not have entered into the SPA. Moreover, they say that they have the benefit of a Warranty from the Cs in the following terms:
“8.3 The Company has not defaulted under any agreement or arrangement to which it is a party and to the best of the Vendors' knowledge, there are no circumstances likely to give rise to such a default.”
This warranty the Ds say is untrue. Thus the Ds are resisting the Cs' suit for the unpaid deferred consideration due under the terms of the SPA and they have counterclaimed for damages for breach of warranty and/or misrepresentation.
This matter has some procedural history but for the purposes of this judgment, little of it is relevant. I need only record that the issues now before me were recently placed before Master Brown on an application to direct the hearing of preliminary issues. The Master declined to make such an order however in expressing some sympathy as to the case made to him foresaw that the very application that has now been ventilated before me might in due course be made.
The Two Issues
The application before me is for Summary Judgment by way of a Declaration that the Ds have no real prospect of establishing at trial that:
a) when the parties entered into the Contract, the Company was prohibited from placing adverts on behalf of other commercial lettings agents on Rightmove or Zoopla under the terms and conditions of its contracts with either of those platforms (“Issue 1”); or that
b) when considering whether there has been “fraud or negligent non-disclosure” within the meaning of Clause 6.2 of the SPA, the assessment of what disclosure has been given is assessed based on what was disclosed in the “Disclosure Letter” (“Issue 2”).
The approach to be adopted by the court in respect of a CPR 24.2 summary judgment application of this type, is set out in the 2020 White Book at [24.2.3]. Reference is made to the principles formulated by Lewison J (as he then was) in Easyair Ltd (Trading As Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] which were approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098; [2010] Lloyd's Rep. I.R. 301 at 24. The matter with which Lewison J was concerned involved an application for summary judgment by a defendant. A number of the principles which he set out are relevant to the matter before me. It is certainly the case that in seeking to arrive at a conclusion I must not attempt to conduct a “mini-trial” (see Swain v Hillman [2001] 1 All E.R. 91); and in seeking to reach a conclusion I must take into account not only the evidence actually placed before me on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial (see Royal Brompton Hospital NHS Trust v Hammond (No.5) [2001] EWCA Civ 550).
Of perhaps particular relevance to the instant matter is the uneasy conflict that emerges from the related principles which on the one hand allow that whilst a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment, and on the other, that it is not uncommon for an application under Pt 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.
It is plain that the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case (see Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] F.S.R. 3), but the second formulation that I have outlined above is grounded in the sensible approach that is in the interests of everyone (including other court users) that the sooner the matter is determined the better. At all events it seems to me that the simple principle is that if the court is satisfied that it is in a position to decide the matter and do justice to the parties, then it should do so; if there is good reason for saying that it cannot fairly and properly conclude upon the controversy (because for example, further relevant evidence or documents are likely to emerge), the matter should be left for trial.
The Principles of Construction
In order to decide the issues in this application, I am asked to construe contracts: for the purposes of the first issue the contracts are those of the relevant Platforms; in respect of the second issue, it is the SPA. In order to guide me in this task, my attention has been invited by counsel to two of the well-known authorities in this area. The first case is Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 W.L.R. 896, where at 912 Lord Hoffman said:
“Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.”
The more recent decision pointed to by counsel is Arnold v Britton [2015] Ac 1619 at [15], where Lord Neuberger said:
“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances...
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