Edf Energy Customers Ltd (formerly Edf Energy Customers Plc) Petitioning v Re-Energized Ltd
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 28 March 2018 |
| Neutral Citation | [2018] EWHC 652 (Ch) |
| Docket Number | Case No: 29 of 2017 |
| Court | Chancery Division |
| Date | 28 March 2018 |
[2018] EWHC 652 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
On appeal from District Judge Watkins
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(Sitting as a Judge of the High Court)
Case No: 29 of 2017
Martin Budworth (instructed by Direct Access) for the Appellant
Daisy Brown (instructed by VWV) for the Respondent
Hearing dates: 25 January, 26 February 2018
Introduction
This is my judgment on an appeal brought by the debtor company, Re-Energized Ltd, against an order made by District Judge Watkins in the Bristol District Registry of the High Court Chancery Division on 18 July 2017 for the company to be compulsorily wound up. The appellant's notice is undated, but was filed in the District Registry on 24 July 2017. I gave permission to appeal on 13 November 2017 on the papers.
The order was made on a petition presented on 23 February 2017, following service of a statutory demand on the company on 1 December 2016. Prior to that, on 27 March 2017, the company had applied for an injunction to restrain the advertisement of the winding up petition. I heard the application for an injunction on 7 April 2017, when Mr Luke Watson, director of the company appeared on its behalf. I dismissed the application for reasons given at the time. I shall have to refer to some of these shortly. It was Mr Watson also who appeared on behalf of the company before District Judge Watkins at the hearing of the petition to wind it up.
The alleged debt
The company carries on business by supplying energy saving measures to electricity providers who have obligations to deliver such measures to domestic premises in the UK. The respondent is one such provider. The petition is based on a debt claimed to arise out of a standard form government contract entered into between the parties known as an ECO brokerage auction platform contract. It is common ground that the company breached the terms of three of these contracts by failing to provide the agreed number of measures and because a number of other measures which it submitted and for which the respondent paid were later rejected by the industry regulator.
On 9 March 2015, the respondent served notices on the company claiming payment of “Buyer's Liquidated Damages” (as defined by the contract) in the sum of £145,049.35 in respect of measures contracted to be supplied but never delivered. At the same time the respondent sought “Buyer's Replacement Costs” (also as defined by the contract) totalling £24,054.10 in respect of measures contracted to be supplied, and actually delivered and paid for but which were later rejected by the regulator. By completing a spreadsheet sent to it by the respondent, the company confirmed that it accepted that the measures rejected by the regulator had been rejected except in respect of one measure worth £153.02. On 12 April 2016, the respondent sent a letter of demand for payment of Buyer's Liquidated Damages, Buyer's Replacement Costs, interest and contractual costs. On 1 December 2016 the respondent served the statutory demand referred to above.
The solicitors' emails
One other important factual matter to make clear at this stage is this. After Mr Watson had applied to me for an injunction to restrain advertisement of the petition, and failed to obtain that injunction, he had an email conversation with the solicitors for the respondent, Veale Wasbrough Vizards (“VWV”). Some of that conversation is subject to without prejudice privilege, and I have not seen it. But the appellant relies on two of those emails to Mr Watson, which (for the most part) are not so subject. I set out the texts of these two emails below.
First, on 18 May 2017, Ed Husband, a partner in VWV, wrote as follows:
“Dear Mr Watson
I have been passed a copy of your email below as my colleague Nick Roberts is on annual leave. Although I note your comments below, I am afraid that it reflects a misunderstanding of the position that your company now finds itself in. As you know, you have already sought to challenge the validity of the monies owed by your company under the terms of its contract with EDF Energy. That challenge was unsuccessful and HHJ Matthews held that EDF Energy was entitled to proceed with its petition. As a result, EDF is confident that any future challenge to the petition is also bound to fail. There is also no onus on our client to provide the information that you seek below as the debt due to EDF is contractual.
[ Redaction] our client would be willing to seek a final adjournment for 28 days from 22nd May.
Yours sincerely
Ed Husband.”
Second, Mr Husband wrote again on 18 May 2017 about 2.5 hours later, as follows:
“Thanks for the response Mr Watson.
You have not completely misunderstood the situation – the application to restrain advertisement is different to your right to contest the petition at the hearing. However, the considerations for the court on both applications are, in my experience, largely the same. You will of course need to seek your own advice on this.
We have requested a copy of the transcript of the hearing but are yet to receive this.
Regards
Ed Husband.”
Mr Watson has not filed any witness evidence (which raises questions not only of procedure but also fairness to the respondent), but he says that he would have appealed my decision to refuse an injunction, had it not been for the assurance which he says he received from VWV that he could run exactly the same arguments again at the winding up hearing. Yet, as appears below, at the winding up hearing on 18 July 2017 District Judge Watkins declined to allow Mr Watson to argue any points which had already been decided during the course of the injunction hearing, and Mr Watson did not raise any other matters. Mr Watson says that this is unfair.
The transcript of the hearing before the district judge shows that he referred to the earlier hearing before me and said to Mr Watson (p 4, line11):
“That was the purpose of the hearing but the point you want to raise again it seems has already been decided and decided against you. Is there anything new you wish to raise? Having read your statement, I am not sure that there is but I may have misunderstood it so please correct me if you think I have got that wrong.”
In answer to this invitation, Mr Watson said the company would have appealed against my decision on the injunction application, but the district judge simply said that the point had been decided against the company and that was that. The district judge went on (p 5 line 12):
“Mr Watson, I have read the document you have submitted and I note the points that have been made. Is there anything else you want to say?”
Mr Watson's reply was “No.”
The district judge then heard from counsel on behalf of the creditor (Ms Daisy Brown) and proceeded to give judgment. During the course of that judgment (of which I have seen an approved transcript), after setting out the history of the matter and referring to the company's written arguments opposing the petition to wind up, which he had read, he said this:
“5. In summary, what is being sought by the respondent company today is an opportunity to reargue all of the points that were argued before Judge Matthews when he considered the application for an injunction. Judge Matthews has already decided all of those points against the respondent. I could do no more than, firstly, identify that the issues had been resolved but, in any event, I am satisfied, having looked at the documents I do have (I have the court file; I have got the documents provided today) that the conclusion that has been reached by Judge Matthews on the last occasion is unassailable. It has certainly not been the subject of any challenge and would have been, in any event, conclusions to which I would have come also. The ‘issue’ is simply a matter of construction and insofar as construction is concerned, Judge Matthews identified the salient points before coming to the conclusion that there was no substance in what was being said by the respondent debtor, before refusing an application for the injunction.
6. Nothing has changed. The arguments have not changed. The financial position has not changed. There is a significant debt that was subject to the statutory demand. The petition based on that failure to comply with the statutory demand, which was in a sum a little over £190,000. That of course exceeds the £750.00 that the petitioning creditor needs to satisfy me.
7. I understand from the documents that have been filed that there is no supporting creditor. The matter has been properly advertised.
8. In the circumstances of this case, the petitioning creditor is entitled to the order that is being sought. Turning that on its head, there is no basis upon which I could properly refuse to make the order that is sought today…”
The appeal
The grounds of appeal as filed were that:
“The hearing on 18 July was procedurally and substantively unfair such that the debtor was not given a fair hearing or any proper opportunity to advance its opposition to the petition;
The District Judge fell into error by:
(i) concluding that the earlier determinations made by the Court on the debtor's unsuccessful application for an injunction restraining the advertisement of the petition rendered further consideration of the debtor's opposition to the petition unnecessary,
(ii) adopting the decision of the Court in relation to the advertisement without sight of the key documents (essentially the petitioner's pre-action letter and the contract between the parties) and without consideration of the debtor's contentions that its case in relation to its opposition to the petition had not...
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