Geo-Minerals GT Ltd v Geo-Minerals (Holdings) Ltd
| Jurisdiction | England & Wales |
| Judge | Bird |
| Judgment Date | 16 August 2022 |
| Neutral Citation | [2022] EWHC 2151 (QB) |
| Docket Number | Case No: E90MA099 |
| Court | Queen's Bench Division |
[2022] EWHC 2151 (QB)
HIS HONOUR JUDGE Bird SITTING AS A JUDGE OF THIS COURT
Case No: E90MA099
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
The Civil Justice Centre,
Manchester
Andrew Burns QC and Anna Greenley (instructed by Muldoon Britton) for the Claimants
Roger Stewart QC and Ben Smiley (instructed by Clyde & Co) for the Fourth to Seventh Defendants
Robin Howard (instructed by Tolhurst Fisher LLP) for the Second, third and ninth Defendants
Hearing dates: 6 and 7 June 2022
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.
Introduction
This is the adjourned CMC of a claim brought by Geo Minerals GT Ltd (“GT”), a company registered in Northern Ireland and Mr Tennyson a shareholder in that company and its “main director”, against GT's professional advisers and against persons said to have conspired together to injure the interests of GT.
There are three applications to deal with:
a. The Claimant's application for permission to re-amend the Amended Particulars of Claim (“APOC”) and so to rely on the draft re-amended Particulars of Claim (“DRAPOC”). The Defendants resist the application. The professional advisers submit that the proposed amendments fall foul of section 35 of the Limitation Act 1980.
b. The application of Kevin Downing (“KD”), Colin Downing (“CD”) and Roger Baines (“RJB”) (together the “conspiracy Defendants” or “CDs”) supported by the evidence of KD for:
i. An order striking out the claim or for summary judgment on the ground that there are no reasonable grounds for bringing the claims or that there are no reasonable prospects of success.
ii. An order striking out the claim on the ground that it is an abuse of process because proceedings dealing with the same issues have been concluded in Northern Ireland, because the proceedings have been “warehoused”, because there is no adequate pleading of loss and because the pleading of conspiracy is inadequate.
iii. An order striking out or dismissing the claim against Mr Baines.
c. The application of the Rouse Defendants, supported by the evidence of Richard Harrison:
i. To strike out the claim against it because the DRAPOC discloses no reasonable cause of action or is an abuse of process or fails to comply with requirements of the CPR. The particular grounds are that the claim fails to plead a case in respect of causation and that the Claimants have “warehoused” the claim.
ii. In the alternative for summary judgment, on the ground that there is no proper claim in causation.
Subject to the relevant claims continuing, the following aspects of the applications have been agreed:
a. That the claims against the professional advisers, Rouse & Co. International Holdings LLP, Rouse IP Limited, Rouse & Co. International (UK) Limited should not proceed. Rouse & Co. International Limited (“Rouse”) remains as a Defendant.
b. The first Defendant has been wound up and dissolved. The claim against it should be stayed.
c. Where the DRAPOC provides an apparently non-exhaustive list of examples of (for example) breach, the “examples” provided are to be taken as the full extent of the pleaded case so that references to phrases such as “including but not limited to” and “for example” should be removed.
d. It is accepted that permission should not be given to allow new paragraphs 111 (h) and (i)
e. It is agreed that the conspiracy Defendants can withdraw an admission that certain certifications were required before the relevant product could be exported to the USA.
The claims
The DRAPOC are 36 pages long. CPR PD 16 at paragraph 1.4 makes it plain that pleadings of more than 25 pages are the exception rather than the rule. Where the pleading is, exceptionally, over 25 pages an appropriate short summary is to be filed and served.
The Claimants summarise the claims in this way:
a. The CDs conspired together to transfer GT's valuable intellectual property rights and/or the sale and distribution rights to a now dissolved company Geo Minerals (Holdings) Limited (“Holdings”) without the knowledge or authority of the Claimants. The transfer of the intellectual property rights and/or sale and distribution rights involved the forgery of the signature of Martin Gormley (“MG”), a former director of the First Defendant, and false representations to third parties.
b. Rouse (a Trademark agency) acted in breach of contract and/or duty to their client GT, causing loss to both Claimants. It acted in breach of its contractual retainer with GT, beyond the scope of its instructions and without reasonable skill and care by arranging the transfer of GT's rights to Holdings, in circumstances where no authority or instruction had been provided by the Claimants.
The Background
The factual background to the claim (as advanced by the Claimant) can be summarised as follows:
a. Geotec Construction Limited (“GCL”) owned a quarry. Its principal directors were MG and the second Claimant. In about 2009 it was discovered that crushed rock (“the Product”) from the quarry was rich in certain minerals which, when used on agricultural land, would have beneficial effects. Realising the commercial potential of the Product, MG and the second Claimant caused GT to be incorporated. They were its directors and shareholders. GT was to deal with marketing, sales and distribution of the Product. It would also hold all relevant intellectual property rights.
b. In January 2011 CD and KD approached GT. They wanted exclusive rights to supply the Product. A memorandum of understanding was prepared and signed. CD and KD were to raise capital to enable GCL and GT to extract, produce and sell the Product.
c. In March 2011 CD, acting alone and without any reference to MG, CT or GT, instructed Rouse to apply to register “Geo Minerals” (the brand name of the Product) as a Trademark to Draven Solutions Limited, a company in CD's control.
d. Later that month CT and MG (as directors of GT and GCL), CD and KD met Rouse to discuss the registration of Trademarks in the sole name of GT. Rouse was instructed to register all relevant Trademarks in the name of GT but failed to disclose its previous instructions from CD.
e. On or about 26 October 2011 GCL, CT, MG, CD and KD entered into a “lock-out” agreement (“the LOA”) by which GCL, CT and MG granted CD and KD an option to purchase the quarry for £10 million subject to CT and MG retaining a 15% stake in the acquiring company. The agreement lapsed after 90 days. The quarry was not sold.
f. In December 2011 Holdings was incorporated. The original shareholders and directors were CD and MG. In January 2012 RJB (an associate of CD and KD) became the sole shareholder and sole director.
g. In April 2012 (see paragraph 6(d) of the Claimants' skeleton argument) “ the Claimants decided to end their association with the [CDs]” and Holdings. By then, they were in discussions with an alternative commercial partner, Ed Machado who was based in California. They explained to KD and CD that discussions with him were for the benefit of GCL and GT.
h. In response to this apparent snub, Rouse instructed US Attorneys to draw up documents, the intended effect of which was to assign all Trademark rights held by GT (and the “entire business” of GT) to Holdings. The assignments were signed by RJB on behalf of Holdings on or about 13 April 2012 and processed by Rouse in August 2012 (see Rouse letter of 17 January 2013 set out at paragraph 74 of the DRAPOC). MG's purported signature on behalf of GT is said to have been forged. The Claimants first saw those purported assignments on or about 30 November 2012 after detailed correspondence with Rouse in which GT and GCL affirmed they had not executed or authorised any assignment. On 17 January 2013 Rouse confirmed that the Trademarks were assigned “on the instruction of [CD]”.
i. KD (or KD and CD) contacted Mr Machado after the assignment documentation had been apparently completed and falsely represented to him that (see paragraph 53 of the DRAPOC) “ Holdings held the sale and distribution rights and the brand rights to [the Product] when this was not the case and knowing this to be false”. As a result, Mr Machado backed out of the deal.
j. Gulf Petroleum AG (“Gulf”) had offered to acquire the entirety of GT's and GCL's business in June 2012. KD contacted Gulf at or about the same time and (see paragraph 58 of the DRAPOC) “ impliedly and falsely [represented] that Holdings, CD and/or KD [held all relevant rights to exploit and sell the Product]. KD said that they intended [to enforce] their rights through legal action which [would] commence shortly”. This contention and the threat of legal action (see paragraph 59) “ caused Gulf to [withdraw] its offer”.
k. CD, KD and Holdings issued proceedings against GCL, CT and MG in Northern Ireland on 4 July 2012. It was asserted that a binding joint venture agreement was in place. The claim was withdrawn on the day of the hearing.
l. GCL has since gone into compulsory liquidation. The quarry has been sold. It is estimated that there are some 6m tonnes of Product to be excavated from the quarry with an overall value of around £750m.
How the claims are pleaded
The claims set out in the draft re-amended Particulars of Claim (“DRAPOC”) are put in this way:
Conspiracy
a. The conspiracy claim is put as an unlawful means conspiracy and as a lawful...
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