Fraser Turner Ltd v Pricewaterhousecoopers LLP
| Jurisdiction | England & Wales |
| Judge | Mr Philip Marshall |
| Judgment Date | 12 July 2018 |
| Neutral Citation | [2018] EWHC 1743 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: HC 2017-001575 |
| Date | 12 July 2018 |
[2018] EWHC 1743 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Philip Marshall QC (sitting as a Deputy Judge of the High Court)
Claim No: HC 2017-001575
Mr David Lord QC and Richard Bowles (instructed by Collyer Bristow LLP) for the Claimant
Mr Daniel Bayfield QC and Stephen Robins (instructed by Clifford Chance LLP) for the Defendants
Hearing dates: 20 th to 21 st June 2018
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
Mr Philip Marshall QC:
Introduction
This is the hearing of an application by the Defendants made by application notice dated 21 December 2017, for an order striking out the Particulars of Claim or alternatively for summary judgment against the Claimant under Part 24 of the Civil Procedure Rules.
After that application was issued the Claimant commenced its own application to amend the Particulars of Claim on 20 February 2018 (although a further draft of the proposed amendments was provided on Friday, 15 June 2018).
It is agreed between the parties that the application to strike out or for summary judgment against the Claimant should be considered with reference to the latest version of the draft amended Particulars of Claim (“the APOC”). If that statement of case would fail to survive an application to strike out or for summary judgment then the proceedings should be dismissed. If, however, it would survive such an application there are no separate further grounds for opposing amendment so that permission ought then to be granted as a matter of course.
As is described in further detail hereafter, the Claimant advances five categories of claim in the APOC: (1) a claim for damages for procuring a breach of contract; (2) a claim for damages for conspiracy to cause loss by unlawful means; (3) damages for breach of duty as administrators; (4) damages for misfeasance; and (5) relief pursuant to paragraph 74(3)(a) of Schedule B1 of the Insolvency Act 1986. The conspiracy claim itself relies on two forms of unlawful means, namely procuring a breach of contract (the claim in category (1) above) and breach of administrators' duties (the claim in category (3) above). The misfeasance claim overlaps entirely with the claim for breach of duty in category (3).
In so far as the application to strike out or for summary judgment concerns the claims for procuring a breach of contract and conspiracy to cause injury by so doing, the sole area of focus is upon the issue of whether there was a breach of contract on the true construction of the relevant agreement. For the purposes of this hearing, in regard to these claims, there has been no attempt by the Defendants to rely on other grounds such as the lack of a maintainable case regarding the requisite knowledge or intent that would need to be established for such a claim to succeed applying decisions such as that of the House of Lords in OBG Ltd. v Allen [2008] 1 A.C. 1.
As regards the approach to be adopted in determining their applications, the Defendants relied upon the guidance of the Court of Appeal in ICI Chemicals & Polymers Ltd. v TTE Training Ltd. [2007] EWCA Civ 725, at [12] – [14], where Moore-Bick LJ (with whom Ward and Buxton LJJ agreed) stated:
“12….It is not uncommon for an application under Part 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. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better.
13 In cases where the issue is one of construction the respondent often seeks to persuade the court that the case should go to trial by arguing that in due course evidence may be called that will shed a different light on the document in question. In my view, however, any such submission should be approached with a degree of caution. It is the responsibility of the respondent to an application of this kind to place before the court, in the form of a witness statement, whatever evidence he thinks necessary to support his case. Where it is said that the circumstances in which a document came to be written are relevant to its construction, particularly if they are said to point to a construction which is not that which the document would naturally bear, the respondent must provide sufficient evidence of those circumstances to enable the court to see that if the relevant facts are established at trial they may have a bearing on the outcome.”
14 Sometimes it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial. In such a case it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction”.
(see also in this regard the more recent decision of the Court of Appeal in Global Asset Capital Inc. v Aabar Block SARL [2017] 4 WLR 163, at [27]).
I did not understand the counsel for the Claimant seriously to challenge the submission that the points arising on the application to strike out or for summary judgment were short points of law or of construction on which the court did have all the necessary evidence to determine the issue and that they had had an adequate opportunity to address them in argument. In any event, for the reasons which appear below, I do consider this to be a case in which the court should “grasp the nettle” (to use Moore-Bick LJ's words) and decide the short points of construction and law that arise. In my judgment this is not a case where the Claimant has pointed to some further evidence that has not yet come to light, which it has not had an opportunity to deploy, which would put a different light on the contract to be construed or which would affect the determination of the questions of law arising on the application.
Background
The following description of the background is largely derived from the Claimant's evidence and skeleton argument.
The Claimant provides consultancy services to the mining industry, with a particular expertise in relation to West Africa.
As part of this work, in October 2005 it was engaged by London Mining PLC (“London Mining”) to assist it, among other things, in procuring the purchase of a lease of the Marampa mine in Sierra Leone. This was subsequently formalised in a Facilitation Agreement dated 28 February 2007 (“the Facilitation Agreement”), under which, in consideration for its services the Claimant would receive certain royalties. These consisted of a royalty of US$0.10 per tonne of iron ore sold from the Marampa mine and a further royalty of 2% of gross yearly sales from that mine.
In December 2009 the wholly owned subsidiary of London Mining, London Mining Company Limited (“LMCL”), a company formed in Sierra Leone, obtained a 25 year mining lease (subsequently extended to 40 years in 2012), to exploit the Marampa Mine.
Shortly before the above lease was acquired London Mining stated publicly that it no longer considered that it owed the Claimant certain royalties that the Claimant believed that it was entitled to under the Facilitation Agreement. As a result, in December 2011, the Claimant issued proceedings in the High Court against London Mining for declaratory and other relief.
In March 2012 settlement negotiations took place which were successful. The terms of settlement were set out in three agreements between the Claimant and London Mining and LMCL dated 8 June 2012, namely, a termination deed, a services deed and a royalty deed (“the Royalty Deed”). The terms of Royalty Deed are central to the present proceedings and I address them in greater detail below. In summary, however, they provided that, in consideration for the settlement LMCL would pay a royalty to the Claimant of 0.3% of all iron ore produced at the Marampa Mine and this obligation was guaranteed by London Mining (“the Royalty”).
Between October 2012 and April 2014 LMCL maintained payments to the Claimant in respect of the Royalty. The Claimant would, pursuant to the terms of the Royalty Deed issue an invoice for payment to LMCL. The sum invoiced was calculated based on information provided by LMCL and London Mining, who would, following publication of its results on the stock exchange, provide information to enable such an invoice to be prepared.
In July 2014, the First Defendant, PricewaterhouseCoopers LLP (“PwC”) was engaged by London Mining to provide analysis and advice in relation to the short term cash flow of both London Mining and LMCL.
In September 2014 it became clear to the Claimant that London Mining was in some financial difficulty. LMCL had failed to make any payment in respect of an invoice rendered by the Claimant dated 1 September 2014 in respect of the Royalty.
On 7 October 2014, PwC was engaged once again. This time they were engaged to act for London Mining and its...
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Fraser Turner Ltd v Pricewaterhousecoopers LLP
...appeal must be dismissed. Lord Justice Males 79 I agree. Mr Justice Snowden 80 I also agree. 1 The judgment of 12 th July 2018 is at [2018] EWHC 1743 (Ch), and the order under appeal is of the same 2 Under clause 3.1 of the Royalty Deed. 3 Under clause 3.4 of the Royalty Deed. 4 Under clau......