The Huntsworth Wine Company Ltd v London City Bond Ltd
| Jurisdiction | England & Wales |
| Judge | Pearce |
| Judgment Date | 22 October 2021 |
| Neutral Citation | [2021] EWHC 2831 (Comm) |
| Docket Number | Case No: LM-2019-000175 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 2831 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
THE LONDON CIRCUIT COMMERCIAL COURT (QBD)
SHORTER TRIALS SCHEME
HIS HONOUR JUDGE Pearce SITTING AS A JUDGE OF THE HIGH COURT
Case No: LM-2019-000175
Mr Daniel Benedyk (instructed by KEYSTONE LAW) for the Claimant
Mr Mark Stiggelbout (instructed by AARON & PARTNERS LLP) for the Defendant
Hearing dates: 19, 20, 21 July 2021
Written Submissions from the Claimant: 6 and 20 August 2021
Written Submissions from the Defendant: 30 July 2021 and 20 August 2021
This judgment was handed down in private at 10.00 on 22 October 2021. I direct that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
INDEX
| SECTION | Paragraph Number |
| A. Introduction | 1 |
| B. The trial | |
| B1. The conduct of the litigation | 10 |
| B2. The Witness Evidence in Broad Terms | 16 |
| B3. The Issues | 21 |
| C. The Evidence | |
| C1. The Parties' Relationship | 22 |
| C2. The Defendant's Website | 42 |
| C3. Security at the Linton Warehouse | 46 |
| C4. Shipment of the Subject Wine | 61 |
| C5. The Events of 9/10 February 2012 | 66 |
| C6. The Value of the Wine | 81 |
| C7. Excise Duty | 93 |
| D. The Relevant Law | |
| D1. Bailment | 94 |
| D2. Standard of proof on the allegation of complicity | 102 |
| D3. Vicarious Liability | 106 |
| D4. Fraudulent Misrepresentation/Deceit | 111 |
| D5. Exclusion/limitation clauses | 114 |
| E. Discussion | |
| Issue 10 – Valuation of the Wine | 121 |
| Issue 1 – Contractual Terms | 130 |
| Issue 2 – Reasonable Care | 136 |
| Issue 3 – Employee Complicity | 147 |
| Issue 4 – Vicarious Liability | 172 |
| Issue 5 – The Exclusion Clause | 177 |
| Issue 6 – Deviation/The Four Corners Rule | 184 |
| Issue 7 – Fraudulent Misrepresentation/Deceit | 189 |
| Issue 8 – Time Bar in respect of Fraudulent Misrepresentation/Deceit | 210 |
| Issue 9 – Limitation of Liability | 215 |
| Issue 11 – VAT | 225 |
| Issue 12 – Excise Duty | 229 |
| F. Conclusion | 233 |
| Appendix 1 – Aerial View of the Warehouse | |
| Appendix 2 – Plan of the Warehouse |
Note: Within this judgment, I use the electronic pagination from the trial bundle, not the typed pagination in the bottom right hand corner of the pages. As I indicated during the trial, it is inconvenient to have two separate numbering systems for the same pages in the bundle. For the sake of clarity, the electronic pages are preceded by the letter E.
A. INTRODUCTION
This claim relates to the theft of high quality wine owned by the Claimant and stored by the Defendant.
The Claimant is a wine dealership operating from a shop on Kensington Church Street. Mr Anthony (“Tuggy”) Meyer owns 97.5% of the shares and is its sole director. Its business includes purchasing wine en primeur, that is to say buying the right to receive a certain number of bottles of a vintage wine once the wine is bottled, both on its own behalf and on behalf of customers. The wine will typically be stored in a bonded warehouse facility until it is required. This may be many years later. Duty and VAT only become payable when the wine is taken out of the bonded warehouse, an attractive feature of bonded warehousing.
The Defendant operates a series of bonded warehouses for the storage of alcoholic drinks in bond. For a fee, it stores alcoholic beverages in a series of warehouses. As at the time of the events with which this case is concerned, 2018, the Defendant operated warehouses at Barking, Tilbury, Glasgow, Wiltshire, Cambridgeshire (one at Linton and one at Sawston) and Burton-upon-Trent.
From October 2018, the Claimant stored wine at the Defendant's warehouse in Linton, Cambridgeshire (“the Warehouse”, or, where it is necessary to distinguish it from other warehouses, “the Linton Warehouse”). The first consignment of the Claimant's wine that were stored there was delivered by a delivery company called Wineflow Freight Forwarding in three batches on 5 October 2018, 18 October 2018 and 2 November 2018. This wine, which included en primeur wine, was less valuable than other en primeur wine that the Claimant had stored already with EHD, another bonded warehousekeeper, at its premises in Sunbury-on-Thames. The wine delivered in October/November 2018 has been called the “Wineflow Wine” and I shall adopt that name. It was not the subject of the theft referred to below.
On 1 February 2019, the Defendant collected a number of wooden cases of the Claimant's higher value en primeur wine from EHD in Sunbury. The wine was taken first to a warehouse in Barking, known as the Olympus site, where it was stored over the weekend before being sent to the Linton Warehouse. It arrived at the Warehouse and was stacked on shelving in a mezzanine area. This wine has been called the “Subject Wine” and again I shall adopt that name.
A quantity of the Subject Wine was then stolen from the Linton Warehouse, in a burglary that occurred over a period of some 6 hours and 15 minutes between 6.30pm on (Saturday) 9 February 2019 and 12.45am on (Sunday) 10 February 2019. This part of the Subject Wine has been called “the Stolen Wine”, a phrase I shall yet again adopt.
It is the Claimant's case that the Defendant is liable for losses caused by the theft on one or more of several grounds:
a) That the Defendant is liable as bailee since it is unable to discharge the bailee's duty to show that the loss was not caused by a failure on its part to take reasonable care of the Stolen Wine;
b) That the Defendant is vicariously liable for the torts of one or more of its employees who were involved in assisting the theft;
c) That the Defendant was guilty of deviation in the bailment, the result of which is to make it strictly liable for the Claimant's loss;
d) That the Claimant entered into the contract of bailment in reliance upon fraudulent misrepresentation and/or deceit on the part of the Defendant's employees, which misrepresentation/deceit is causative of the Claimant's loss.
The Defendant denies liability on a series of grounds:
a) That the theft took place notwithstanding that it took reasonable care of the Stolen Wine;
b) That the evidence does not support the assertion that one or more of its employees were involved in the theft;
c) That, even if the court finds that one or more of its employees were involved in the theft, the Defendant is not vicariously liable for their actions;
d) That in any event, even if the Defendant would without more be liable, either through the want of exercise of reasonable care or vicarious liability for its employees, such liability is excluded by the terms of the contract of bailment;
e) That even if the Defendant is liable on the grounds of want of reasonable care and /or vicarious liability for the acts of its employee(s) and the exclusion clause is not effective to exclude such liability, its liability is limited pursuant to the terms of the contract between the parties;
f) That the Defendant cannot prove fraudulent misrepresentation and/or deceit;
g) That even if fraudulent misrepresentation and/or deceit were proved, the Claimant did not enter into the contract in reliance on them and therefore they were not causative of the Claimant's loss;
h) That even if the Claimant otherwise were able to make out actionable claims in fraudulent misrepresentation and/or deceit, such claims are time barred;
i) That the Defendant is entitled to counterclaim for duty that it has had to pay on the stolen goods.
There are also issues as the quantum of the Claimant's case, the value of the Stolen Wine not being admitted and the incidence of VAT being disputed.
B THE TRIAL
B1. The Conduct of the Litigation
The case was issued in the London Circuit Commercial Court on 5 September 2019. By order of His Honour Judge Pelling QC dated 16 July 2020, the case was transferred to the Shorter Trials Scheme.
The trial was listed for three days starting on 19 July 2021.
The Claimant called Mr Tuggy Meyer as its sole witness of fact. During the course of the trial, I was invited to rule certain passages in Mr Meyer's evidence to be inadmissible as expert opinion. For reasons given at the time, I ruled the following passages to be inadmissible on this ground:
a) Paragraph 23: the words “ including generic security information.”
b) Paragraph 24, first sentence: the words “ I know it is the absolute norm” on the basis that, if Mr Meyer confirmed the alternative wording “ it is normal” in evidence, I would admit the sentence as modified. He duly did so and that sentence is admitted in evidence as varied.
c) Paragraph 24, second sentence: the words “ standard known features.”
d) Paragraph 48: the words “and from which I knew (from the things described above) to be adhering to minimum generic standards of security procedures.”
The Defendant relied on the following witnesses of fact, of whom all save Mr Ward gave oral evidence.
a) Mr Alfred Allington, Managing Director of the Defendant;
b) Mr Colin Harmer, Warehouse Operator for the Defendant;
c) Mr David Hogg, Sales Director of the Defendant;
d) Mr Thomas Hole, Web Designer and Developer at Stirtingale Ltd;
e) Mr John Lambourne, Cambridge Operations Manager for the Defendant;
f) Mr Steven Pattison, Security Manager for the Defendant;
g) Mr Michael Stone, Director of the Defendant;
h) Mr Peter Ward, Chief Executive of UKWA Ltd.
During the course of the trial, it became apparent that there was insufficient time to accommodate oral submissions in the trial estimate. I was conscious that it is important that the benefits of efficiency and economy that the shorter trials scheme can bring must not lead to corners being cut in a way that...
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