Sprint Electric Ltd v Buyer's Dream Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Birss |
| Judgment Date | 17 March 2020 |
| Neutral Citation | [2020] EWHC 638 (Ch) |
| Docket Number | Case No: HC-2017-001837 |
| Court | Chancery Division |
| Date | 17 March 2020 |
[2020] EWHC 638 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST
SHORTER TRIAL SCHEME
Royal Courts of Justice
7 Rolls Buildings
Fetter lane
London EC4A 1NL
Mr Justice Birss
Case No: HC-2017-001837
Michael Hicks (instructed by Moore Blatch) for the Claimant
Jaani Riordan (instructed by Blake Morgan) for the Defendants
On paper
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.
The claimant designs, makes and sells digitally controlled industrial electric motor drives. The second defendant provided services to develop the products via his service company, the first defendant. In May 1999 the second defendant was also appointed a director of the claimant company.
The claimant brought a claim against the defendants for breach of director's duties (against the second defendant) and breach of contract against the first defendant. The breaches relate to the defendants' withholding of source code from the claimant. The trial judge (Mr Richard Spearman QC) held that the defendants had wrongly withheld the source code ( [2018] EWHC 1924 (Ch)). The first defendant's counterclaim that it owned the copyright in the source code failed.
By the order of 28 th September 2018 the judge required the source code to be delivered up to the claimant and directed an inquiry as to damages. The inquiry is ordered at paragraph 3 of the court's order. It is an inquiry as to the damages suffered by the claimant as a result of the breaches of the second defendant's directors duties and the first defendant's duties under three contracts. The contracts were successive, a 1997 contract, a 2000 contract, and a 2015 contract entered into on 10 th November 2015.
The enquiry has been proceeding under the Shorter Trial Scheme (PD 57AB).
The Points of Claim dated 22 November 2018 set out a claim for about £6 million. The defendants' Points of Defence were served dated 18 th January 2019. Various points are taken but briefly put, the entire claim is denied both in terms of causation and quantum. The CMC on the inquiry took place on 27 th March and 16 th April 2019. Directions for evidence were given and substantial evidence on the inquiry has now been exchanged. I resolved a dispute about expert evidence on 2 nd March, allowing the parties to use their existing witnesses as experts. The inquiry is listed for 5 days including 1 day pre-reading in a 2 week window from Monday 11 th May 2020 with a PTR to take place in the week of Monday 6 th April. From what I have seen so far, the matter will require careful management to keep it within the time allotted.
Just before the brief hearing on 2 nd March 2020 fixed to deal with the expert evidence, the defendants brought an application to amend the Points of Defence. There was not time to deal with it then. Since this case was in the Shorter Trial Scheme, I suggested that the matter be dealt with under paragraph 2.47 of the Practice Direction. This provides that applications, aside from the CMC and PTR, are normally dealt with without a hearing unless the court considers a hearing is necessary. Standard directions are set out in the paragraph. After the 2 nd March the parties filed written submissions on the amendment application, neither contending that it should be dealt with at a hearing. The matter came to me on paper. I agree that it did not require a hearing. This brief judgment was prepared without one.
There are tidying up amendments which are not objected to and I will make that order. The main amendments are to plead an entirely new issue, namely that terms in the 2015 contract operate to exclude or limit both defendants' liability. These are in proposed paragraphs 24A-24D of the draft Amended Points of Claim as well as paragraphs 1(3) and 28. Notably the two earlier contracts contain no such clause.
The court has a discretion whether to permit these amendments or not. The defendants contend that the discretion to be applied is simply one having regard to the overriding objective to deal with cases justly and at proportionate cost. Thus for example the defendants say that cases on “late” amendments do not apply. I will take the approach the defendants contend for as it is the most favourable to them. Approached that way, factors will include an explanation why the amendment arises now, the impact on the timetable of the issues raised by the amendments, the possible need for an adjournment, and/or whether the amendments are arguable.
In my judgment the decisive factors here are set out below.
First, no attempt has been made to explain the lateness of the application or why the point was not raised in the Points of Defence. This is an amendment which could and should have been advanced a year ago.
Second, the amendment relates to a clause which is only in the 2015 contract. The claimant contends that all the source code delivered up by the defendants in October 2018 pursuant to the court's order had been created before the 2015 contract came into force. On the face of it therefore, it is hard to see how the limitation of liability in that contract could apply at all. Contract Schedule 200815, under which important work was done, was a schedule to the 2000 contract. On its face the work was to be done before the date of the 2015 contact. It seems from the written submissions that there will be a factual dispute about what exactly was done and when. This will add to the trial.
Third, even if some work was done after the 2015 contract came into force, part of the new case involves an argument that the limitation clause has retrospective effect. I doubt that is even arguable but assuming it is, it will also add to the trial.
Fourth, an important...
To continue reading
Request your trial