Re ForceSun Ltd; Re Tidesdale Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE NEUBERGER |
| Judgment Date | 22 February 2002 |
| Neutral Citation | [2002] EWHC 443 (Ch) |
| Court | Chancery Division |
| Date | 22 February 2002 |
[2002] EWHC 443 (Ch)
IN THE HIGH COURT OF JUSTICE 4887-01/4888-01
CHANCERY DIVISION
The Royal Courts of Justice
The Strand
LONDON WC2A
Mr Justice Neuberger
In the Matter Of
MR S MOVERLEY-SMITH (instructed by the Treasury Solicitor) appeared on behalf of the Secretary of State, the Petitioner.
MR H GROVES (instructed by Halliwell Landau, Manchester) appeared on behalf of Mr S Quinn, voluntary liquidator.
MR M ROBERTS appeared on behalf of Tidesdale Limited.
nd February 2002
On 10th August 2001 the Secretary of State for Trade and Industry (the petitioner) presented two petitions; one for winding up ForceSun Limited ("ForceSun"), and the other for winding up Tidesdale Limited ("Tidesdale") each on grounds of public interest. It was alleged that the business of each company had been conducted in an unreasonable and dishonest way. The business was that initially of ForceSun but that business was taken over by Tidesdale.
Each of the two companies were owned by a Canadian company called 153595 (Canada) Inc ("the Canadian company") which in turn was effectively owned by a Mr. The nature of the business carried on by the two companies ("the two companies") was that of selling business to business fax and telephone directories and specialised material for debit and credit card machines.
The specific allegations which gave rise to the petitions are set out in each of the two petitions, and in summary terms they are these. First, overcharging. As an example, one customer was charged £119 for a copy of a directory in which it had not been entered, and the producer of the directory advised them that the entry was free, and that the charge for supplying the directory of £25.50 plus £6 for handling. There was other evidence which suggested overcharging by the companies, i.e. Tidesdale or ForceSun, to the extent of a 1000 per cent.
Secondly, many complainants stated that goods had been despatched to them that they had not ordered. Thirdly, customers of the two companies complained that they had made numerous attempts to have unsolicited goods collected and/or to have their names removed from lists, but those requests had been ignored. Fourthly, there had been threatening demands for payment for goods sent by one or other of the companies, notwithstanding that the goods had not been ordered, and, indeed, that the recipients had tried to cancel or return their order or goods. Fifthly, unacceptable sales techniques: pressurising junior staff of potential customers, ignoring refusals, providing misleading information and even using deception, such as selling directories on the basis that the potential customer would be in the directory whereas the customer was not in the directory. Finally impersonating suppliers of machines called PDQ machines. Employees of Barclays Bank, The Royal Bank of Scotland and Card Safe stated that staff from the two companies deliberately gave customers the impression that they were calling on behalf of their suppliers of such machines in order to lure such customers into making orders which they thought were from their regular suppliers.
Those allegations are set out in the two petitions and are supported by an affidavit ("the affidavit") sworn by a civil servant in the DTI. They were discovered following an investigation of the two companies authorised pursuant to section 447 of the Company's Act 1985, and the allegations are not only expanded in that affidavit, but are supported by some 200 pages of exhibit.
The Secretary of State applied for the appointment of a provisional liquidator of Tidesdale on the basis that it was still trading, whereas ForceSun was not. Blackburn J refused to make such an order on 23rd August 2001 if Tidesdale was placed into members voluntary liquidation. That duly happened, and Mr Steven Quinn of Baker Tilley is the liquidator.
The Secretary of State, nonetheless, persists with his two petitions, and directions were given by Mr Registrar Jaques on 19th September 2001 which required ForceSun and Tidesdale to file evidence by 17th October 2001 and, thereafter, the parties were to attend on the listing office to fix a trial date.
The trial was then fixed to come on today, 22nd February. Until yesterday no evidence whatever had been put on behalf of either company. This morning the Secretary of State, the petitioner, was served with a ten line witness statement from Mr Robert Webster a solicitor apparently acting for the Canadian company exhibiting a copy of an email and an attachment thereto. The email concerned is dated yesterday, 21 st February and seeks to explain why there is no evidence in proper form even now, and why such evidence as there is has only been served today.
There then follows a three page and two line answer from a former Chief Financial Officer of the Canadian company, dealing with many of the allegations in the affidavit, albeit in fairly short form, and exhibiting a more considered but shorter document, apparently not signed but I will assume it is and treat it as signed, by someone called Silvan…described as Director of Operations, together with four pages of attachments.
In these circumstances Mr Steven Moverley-Smith, who appears for the petitioner, says there is no satisfactory evidence to answer the concerns of the petitioner, which justify the making of a winding up order, and, therefore, I should make a winding order in respect of each of the two companies. Mr Michael Roberts, who appears on behalf of the Canadian company, accepts that if I proceed today with the substantive petitions then, on the face of the evidence, I would have no real alternative but to make the winding up orders sought by the petitioner, mainly on the basis of the public interest. However he says that it would be wrong to take that course and that I should grant an adjournment, which he accepts should be on fairly stringent terms, to enable the Canadian company to get its act together and to justify its proposition at least to the winding up of Tidesdale Limited.
The then...
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