Lictor Anstalt (a company registered in Liechtenstein) v Mir Steel UK Ltd (Proposed Part 20 Claimant/First Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice David Richard |
| Judgment Date | 13 December 2012 |
| Neutral Citation | [2012] EWHC 3310 (Ch) |
| Docket Number | Case No: HC10C02124 |
| Court | Chancery Division |
| Date | 13 December 2012 |
[2011] EWHC 3310 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Royal Courts of Justice
Fetter Lane,
London EC4A 1NL
Mr Justice David Richards
Case No: HC10C02124
Mr Alan Boyle QC & Mr Thomas Braithwaite (instructed by Fox Williams LLP, 10 Dominion Street, London EC2M 2EE) for the Claimant
Mr Paul Downes QC & Mr Stewart Chirnside (instructed by Clyde & Co LLP, 51 Eastcheap, London EC3M 1JP) for the 1 st Defendant
Mr Lloyd Tamlyn (instructed by Withers LLP, 16 Old Bailey, London EC4M 7EG) for the proposed Part 20 Defendants
Hearing dates: 22, 23 and 24 November 2011
Introduction
This judgment concerns two applications in an action relating to the allegedly unlawful sale of steel-making equipment by a company in administration. The claimant Lictor Anstalt (the claimant) supplied the equipment under the terms of an agreement dated 3 April 2000 to Alphasteel Limited (Alphasteel). Following the making of the administration order, the joint administrators of Alphasteel marketed and then negotiated the sale of the equipment together with the bulk of the other assets of the business to a company called Libala Limited (Libala). Alphasteel, acting by its administrators, and Libala agreed that the sale should be effected by means of a hive down of the assets and business to a company formed by the administrators called Mir Steel UK Limited (Mir Steel), followed by a sale of that company to Libala.
In these proceedings the claimant alleges that it retained title to the equipment at the time of the sale and that the sale therefore constituted a conversion of its property. Alternatively, if it no longer retained title to the equipment, it alleges that Alphasteel acted in breach of the agreement dated 3 April 2000 (the April 2000 agreement) by selling the equipment to Mir Steel and that Mir Steel and Libala Limited are liable for the tort of inducing a breach of contract by Alphasteel Limited. It alleges also that the same facts give rise to a claim for an unlawful means conspiracy involving Alphasteel, Mir Steel and Libala.
Joint administrators of Alphasteel were appointed on 20 December 2007. One of the joint administrators was replaced by two others on 6 May 2008, so that from that date the administrators were Christopher Morris, Mark Fry and David Hudson. I will refer to the administrators to cover the joint administrators before and after 6 May 2008, save that it is the latter joint administrators whom Mir Steel seeks to join as Part 20 defendants in one of the applications before the court. Alphasteel went into creditors' voluntary liquidation on 18 December 2008, with the joint administrators as joint liquidators. Mr Morris and Mr Fry remain as liquidators.
The claimant released any possible claim against Alphasteel and its administrators by a deed of release executed in January 2010. The claims in these proceedings are made against Mir Steel and Libala. The claim form was issued on 26 June 2010 and particulars of claim were served on 30 June 2010. Mir Steel is defending the proceedings. It served a defence in September 2010 and a trial of the action has been fixed for July 2012 with an estimate of eight days. Libala has not defended the proceedings and judgment in default was entered against it on 10 March 2011.
The first of the present applications was issued on 8 July 2011 by Mir Steel and seeks permission to join Alphasteel and the administrators as Part 20 defendants, under CPR 20.7(3)(b). Draft Part 20 particulars of claim are annexed to the application notice. The claims which Mir proposes to make in its Part 20 claim fall under three headings: damages for breach of warranty under the hive down agreement, repayment of sums said to have been paid by mistake of fact and/or law and contribution pursuant to the Civil Liability (Contribution) Act 1978. The application is opposed by Alphasteel and the administrators.
The second application also made by Mir Steel was issued on 3 November 2011 and seeks summary judgment against the claimant dismissing the claims for damages for procuring breach of contract and for the tort of conspiracy. This application appears to have been prepared and issued in something of a rush. It was issued without warning, returnable for the date previously fixed for the hearing of the first application. No evidence was served in support of the application and, contrary to CPR 23.6 and 24PD, no grounds for the application are identified in the application notice or anywhere else and there was no identification of any point of law or provision in any document on which Mir Steel relied. Further, there was no compliance with the important mandatory requirement of CPR 24PD paragraph 2(3)(b) which was only rectified in the course of the hearing.
The grounds on which the application for summary judgment was made became known to the claimant only with the service of the skeleton argument of counsel for Mir Steel on Friday 19 November 2011 for a hearing fixed for Wednesday 23 rd November. Even then, as will become clear, not all the grounds on which in the end Mir Steel relied for its application were contained in the skeleton argument. The lack of a proper opportunity to prepare fully for at least one of the issues relied on, is a factor of some relevance to the final disposal of the present application. As regards those matters canvassed in the skeleton argument of Mir Steel's counsel, Mr Boyle QC on behalf of the claimant, while drawing attention to the unjustified shortness of notice of the points, was nonetheless content to deal with the application at the hearing.
Facts
Alphasteel was a steel manufacturer operating from premises in Newport, South Wales. The equipment to which the present claim relates was a hot strip mill used for the production of hot rolled steel products. It was a very large piece of equipment, approximately 300 metres long and comprising a number of different work stations at which the steel was processed. It was bolted to concrete plinths by means of cast-in holding-down bolts and was connected to the gas, water and electricity supplies.
In about 1991 Alphasteel engaged the claimant to purchase the parts required to assemble the hot strip mill. The claimant sourced these parts from various manufacturers and shipped them to the site at Newport in about 1997. In the following two to three years the equipment was assembled and installed at the site and joined with other plant machinery and equipment. By April 2000 the hot strip mill had been completely installed and commissioned, and was ready to start production.
It is common ground that terms were agreed between Alphasteel and the claimant and set out in a letter dated 3 April 2000, signed on behalf of Alphasteel and countersigned on behalf of the claimant. The terms contained in the letter proceed on the basis that the equipment is movable and had not become a fixture. In the proceedings it is part of Mir Steel's defence that the equipment was and remained a fixture and that accordingly the April 2000 agreement was void on grounds of mistake or alternatively on grounds of a total failure of consideration. However, for the purposes of the present application only, Mir Steel accepts that the letter constituted a contract between Alphasteel and the claimant which was enforceable between them.
The letter expressly records the parties' agreement that the equipment was moveable and that it remained and would continue to remain the property of the claimant. It contained an acknowledgement by Alphasteel that it did not own all or any part of the equipment and that it had no rights over or in respect of the equipment, apart from a right to use it. It further expressly provided that, "You [Alphasteel] may at any time, after giving us reasonable notice, enter our premises in Newport with your engineers and workmen for the purpose of dismantling and removing from our premises all or any part of the equipment at your expense" and that, "We [Alphasteel] will not sell or purport to sell, mortgage, hypothecate or charge your interest as owners in the equipment or create or knowingly suffer to exist any lien over all or any of the equipment".
In its particulars of claim the claimant alleges that if, which it denies, the equipment became a fixture then nonetheless under the terms of the April 2000 agreement the claimant remained entitled to enter upon the site and dismantle and remove the equipment, whereupon title would be vested or re-vested in the claimant. It alleges further that either on a proper construction of the express terms of the April 2000 agreement or alternatively as terms implied into the agreement, the parties agreed as follows. First, Alphasteel would not put it out of its power to allow the claimant to enter the site to remove the equipment. Secondly, Alphasteel would not do anything which extinguished the claimant's right to enter upon the site to remove the equipment. Thirdly, Alphasteel would not sell or purport to sell the equipment nor sell the site if so doing would involve the sale of the equipment. Fourthly, Alphasteel would not deal with the equipment in a way which had the effect of transferring or extinguishing the claimant's interest in the equipment. In its defence, these terms are...
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