Rushbrooke UK Ltd v 4 Designs Concept Ltd
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 13 May 2022 |
| Neutral Citation | [2022] EWHC 1110 (Ch) |
| Docket Number | Case No: CR-2022-BRS-000042 |
| Court | Chancery Division |
[2022] EWHC 1110 (Ch)
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: CR-2022-BRS-000042
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
INSOLVENCY AND COMPANIES LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
Charlie Newington-Bridges (instructed by Neath Raisbeck Golding Law) for the Applicant
John Churchill (instructed by Temple Bright LLP) for the Respondent
Hearing dates: 9 May 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.
This judgment will be handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:30 am on Friday 13 May 2022.
Introduction
On 9 May 2022 I heard an application for an injunction to restrain the presentation of a petition to wind up the applicant company, following the service upon the applicant of a statutory demand by the respondent. The application was issued on 20 April 2022 and was supported by no fewer than three witness statements from a director of and 50% shareholder in the applicant, Mark Steventon-Smith, dated 19 April 2022, 4 May 2022 and ninth of May 2022, respectively, and by a further witness statement from David McAndrew dated 6 May 2022. It was opposed by a witness statement dated 4 May 2022 from Andrew Cox, a director of the respondent company, and (rather unusually) two witness statements from the only other director of and 50% shareholder in the applicant company, Lee Bryan.
On 3 May 2022 I made an order giving directions for evidence and listing the application before me on 9 May 2022. On that day, after hearing argument from both sides on three preliminary issues, but before reaching argument on whether the criteria for an injunction were met, I announced my decision that the application would be struck out, on the basis that the director of the applicant who gave instructions to the solicitors to launch these proceedings had no authority on behalf of the company to do so. I said I would give my reasons in writing as soon as possible, and in the meantime the time for any appeal would be extended to 21 days after the handing-down of those reasons. This judgment contains the reasons for my decision.
The applicant company carries on business as an architectural consultancy but also carries out property development. As I have mentioned, Mr Steventon-Smith and Mr Bryan each own 50% of the shares, and each is one of the two directors. As will become apparent, they have fallen out, and a letter before claim was sent on 15 March 2022 by solicitors acting for Mr Steventon-Smith, Neath Raisbeck Golding Law (“NRG”), to solicitors acting for Mr Bryan, GA Solicitors. I will return later on to this letter. The respondent company carries on the business of architectural services, in particular urban design and residential services, in connection with the preparation of planning applications.
I bear in mind that, on this application, all the evidence was given in the form of witness statements, and there was no cross-examination sought or ordered. In Coyne v DRC Distribution Ltd [2008] EWCA Civ 488, Rimer LJ (with whom Ward and Jacob LJJ agreed) said:
“58. As regards the need for oral evidence, Mr Ashworth reminded us that it is well-settled practice that if a court finds itself faced with conflicting statements on affidavit evidence, it is usually in no position to resolve them, and to make findings as to the disputed facts, without first having the benefit of the cross-examination of the witnesses. Nor will it ordinarily attempt to do so. The basic principle is that, until there has been such cross-examination, it is ordinarily not possible for the court to disbelieve the word of the witness in his affidavit and it will not do so. This is not an inflexible principle: it may in certain circumstances be open to the court to reject an untested piece of such evidence on the basis that it is manifestly incredible, either because it is inherently so or because it is shown to be so by other facts that are admitted or by reliable documents. Mr Ashworth referred us in support to Re Hopes (Heathrow) Ltd, Secretary of State for Trade and Industry v. Dyer and others [2001] 1 BCLC 575, at 581 to 582 (Neuberger J). He also referred us to paragraphs 17 and 18 of the judgment of Mummery LJ in Doncaster Pharmaceuticals Group Ltd and Others v. The Bolton Pharmaceutical Company 100 Ltd [2006] EWCA Civ 661, which provides a reminder of the caution the court should exercise in granting summary judgment in cases in which there are conflicts of fact which have to be resolved before judgment can be given. Mr Ashworth said that these principles apply equally to the case in which the evidence is given by witness statement rather than by affidavit, and I agree.”
The creditor dispute
The sole director and shareholder of the respondent company, Andrew Cox, says in his witness statement that, since 2018, the respondent has invoiced the applicant in the sum of £152,920 for services supplied, and the respondent has paid £133,040 in respect of those services, leaving £19,880 outstanding. The outstanding invoices are exhibited to his witness statement and are dated between 1 October 2021 and 12 January 2022. Each invoice gives a brief description of the development and the services provided. They were sent by email to both Mr Bryan and to Mr Steventon-Smith on 13 January 2022. (There is also an earlier email from Mr Steventon-Smith to Mr Bryan, copied to Mr Cox, dated 23 December 2021 which says that he received “the attached invoices” from Mr Cox that morning, but it is not clear which invoices are being referred to.) Mr Cox sent a further email on 2 March 2022, again addressed to both Mr Steventon-Smith and Mr Bryan complaining of the lack of payment of these invoices.
Mr Cox also exhibits an exchange of emails both dated 18 October 2021. In the earlier email, addressed to Mr Steventon-Smith copied to Mr Bryan and Mr Steventon-Smith's wife. Mr Cox asks Mr Steventon-Smith about payment of outstanding invoices from 31 May 2021 onwards. The second email of 18 October 2021 is from Mr Bryan and sent both to Mr Cox and Mr Steventon-Smith, with a copy to Mr Steventon-Smith's wife. Mr Bryan in his email simply says “I approve these for payment”.
Despite the emails of 13 January 2022 and 2 March 2022, the respondent did not receive any payment for the outstanding invoices, and decided to issue a statutory demand. Mr Cox contacted Mr Bryan before doing so. Mr Bryan apparently told him that from the information he had it was highly likely that the applicant was insolvent and that no creditors could be paid until a liquidator was appointed. The statutory demand was prepared, dated 30 March 2022 and was served on the applicant, by being sent to Mr Bryan, who received it on 5 April 2022. It appears that Mr Bryan then passed it to Mr Steventon Smith, who in turn passed it to NRG.
They wrote to the respondent by letter dated 12 April 2022, saying, not that they were instructed on behalf of the applicant, but that they were “instructed on behalf of Mark Steventon-Smith (our Client)” in relation to the statutory demand “served on Rushbrooke UK Limited (the Company)”. This letter said that Mr Steventon-Smith had not been provided with any instructions from the company to carry out the work, or seen any evidence that the work invoiced for had been completed. It asked for copies of a large number of documents including copies of letters of instruction, notes of meetings, complete and accurate timesheets, emails providing proof of completion of the work and any correspondence in relation to the work.
Mr Cox responded by letter dated 18 April 2022, stating that the statutory demand been addressed to the company and not to Mr Steventon-Smith, and had been properly served. He pointed out that NRG said they were acting for Mr Steventon-Smith and not the company, and asked that they not write to him further until instructed by the company. Nevertheless, he stated that the work gave rise to the invoices had been “confirmed by the Company as having been properly performed”. NRG replied by letter dated 19 April 2022 that they were instructed by Mr Steventon-Smith “in his capacity as director of” the company, and “he is within his rights as a director to provide any instructions he may wish in relation to the Company in order to protect its interests”. On 20 April 2022, NRG issued the present application for an injunction to restrain the presentation of a winding up petition.
On 25 April 2022 Mr Bryan wrote to the respondent on the applicant's headed notepaper, referring to the letters from NRG dated 12, 14 and 19 April 2022. In his letter he stated that the statutory demand “was properly served on the Company on 5 April 2022. I acknowledged good service to you”. He also commented on each of the invoices the subject of the statutory demand. On the same day Mr Cox wrote to NRG, stating that good service of the statutory demand had been confirmed by Mr Bryan in his letter of the same date, and this was attached. He also repeated his understanding that NRG did not act for the company, stating that Mr Bryan had confirmed that the company had not resolved to instruct NRG and that Mr Steventon-Smith had assured Mr Bryan during the last Board meeting that NRG did not act for the company.
In support of that last point, I was referred to a copy of the minutes of the directors' meeting of 4 February 2022, which was conducted on a virtual basis by video meeting. Item 3 of those minutes reads as...
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Rushbrooke UK Ltd v 4 Designs Concept Ltd
...Mark Steventon-Smith, had no authority on his own to make or give instructions to make the application on the company's behalf: see [2022] EWHC 1110 (Ch). I invited written submissions on consequential matters, and received those from both sides on 13 May 2022 (primary submissions) and 16 ......
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Rushbrooke UK Ltd v 4 Designs Concept Ltd
...Mark Steventon-Smith, had no authority on his own to make or give instructions to make the application on the company's behalf: see [2022] EWHC 1110 (Ch). I invited written submissions on consequential matters, and received those from both sides on 13 May 2022 (primary submissions) and 16 ......