Ultraframe (UK) Ltd v Fielding
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Lewison |
| Judgment Date | 27 July 2005 |
| Neutral Citation | [2005] EWHC 1638 (Ch) |
| Docket Number | Case No: HC03C03199 Case No: HC03C0992 |
| Court | Chancery Division |
| Date | 27 July 2005 |
[2005] EWHC 1638 (Ch)
Mr. Justice Lewison
Case No: HC03C03199
Case No: HC02C03545
Case No: HC03C0992
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
MR. ANDREW HOCHHAUSER QC, MR. CHRISTOPHER PARKER, MR. MARTIN GRIFFITHS, MR. ADRIAN SPECK, and MR. HENRY WARD (instructed by Messrs. Eversheds LLP) for the Claimant
MR. RICHARD SNOWDEN QC, MR. IAIN PURVIS, MR. NIGEL DOUGHERTY, and Miss KATHRYN PICKARD (instructed by Messrs. Addleshaw Goddard) for the Defendants in actions 1,2,3, and The Burnden Group PLC in action 4.
MR. GILES MAYNARD-CONNOR (instructed by Robinsons) appeared on behalf of the Defendant Mr. Jeffrey Naden.
MRS. LISA WALMISLEY (instructed by Peter Greenhalgh) appeared on behalf of the Defendant Mr. Alan Clayton.
Hearing dates: November 2004 – 11 th,12 th,15 th,17 th,18 th,19 th,22 nd,23 rd,24 th,25 th,26 th,29 th,30 th, December 2004 – 1 st, 2 nd,3 rd,6 th,7 th,8 th,9 th,10 th,13 th,14 th,15 th,16 th,17 th,20 th, January 2005 – 11 th,12 th,13 th,14 th,17 th,18 th,19 th,20 th,21 st,24 th,25 th,26 th,27 th,28 th,31 st, February 2005 – 1 st,2 nd,3 rd,4 th,7 th,8 th,9 th,10 th,11 th,14 th,15 th,16 th,17 th,18 th, March 2005 – 8 th,9 th,10 th.11 th,14 th,15 th,16 th,17 th,18 th,21 st,22 nd,23 rd, April 2005 – 5 th,6 th,7 th,8 th,11 th,20 th,25 th,26 th,27 th,28 th,29 th, May 2005 – 3 rd,4 th,5 th,6 th,9 th,10 th,11 th,12 th,13 th,16 th,17 th,18 th,19 th,20 th.
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.
MR JUSTICE LEWISON:
| INTRODUCTION | 20 |
| Preamble | 20 |
| Burden and standard of proof | 23 |
| General | 24 |
| The Sherlock Holmes fallacy | 24 |
| Approach to the evidence | 26 |
| Use of documents | 26 |
| The Lucas direction | 28 |
| Occam's razor | 28 |
| The witnesses | 28 |
| Witness training | 29 |
| Demeanour of the witnesses | 33 |
| The main players | 34 |
| Northstar and Seaquest | 34 |
| Kesterwood/Burnden | 36 |
| Others | 37 |
| Experts | 38 |
| Hamlet without the prince | 38 |
| BACKGROUND | 39 |
| Conservatory roof manufacture | 39 |
| Mr Davies and the early years | 41 |
| THE LITIGATION SO FAR | 42 |
| The patent action | 42 |
| The Leeds actions | 42 |
| The first Leeds action. | 42 |
| The second Leeds action. | 43 |
| The Leeds Consolidated action | 43 |
| HH Judge Behrens' judgment | 44 |
| The significance of HH Judge Behrens' judgment | 45 |
| The London action | 46 |
| The preliminary issues | 47 |
| The New Action | 51 |
| The New IP Action | 52 |
| The Burnden action | 52 |
| More preliminary issues | 53 |
| The QCL assignments | 53 |
| THE PLEADED CASES | 53 |
| The New Action | 53 |
| Introductory | 54 |
| The case against Mr Naden | 54 |
| The case against Mr Clayton | 55 |
| The case against Mr Fielding | 55 |
| The case against Mrs Fielding | 57 |
| The case against the corporate defendants | 57 |
| The New IP action and intellectual property rights issues | 59 |
| The role of the pleadings | 59 |
| THE MAIN ISSUES I HAVE TO DECIDE | 61 |
| MR FIELDING: HIS BUSINESSES AND PROPERTY INTERESTS | 62 |
| Early business life | 62 |
| Quantity surveying | 62 |
| Kilohurst | 62 |
| The formation of Dearward | 63 |
| Kilohurst: a summary | 64 |
| Dearward | 64 |
| Kesterwood | 64 |
| ASM | 65 |
| Acquisition of the Burnden Works | 66 |
| Mrs Fielding | 66 |
| NORTHSTAR AND SEAQUEST: EVENTS TO NOVEMBER 1998 | 66 |
| Introductory | 66 |
| Northstar's business at the beginning of 1997 | 67 |
| FROM MR FIELDING's FIRST ENCOUNTER WITH NORTHSTAR TO THE SUPPLY AGREEMENT | 68 |
| Mr Fielding's case | 68 |
| First contact with Northstar | 68 |
| Collection of tooling | 72 |
| The run up to the Northstar supply agreement | 73 |
| The Northstar supply agreement | 74 |
| Mr Naden's evidence | 76 |
| New tools and machines | 76 |
| Ultraframe's attack on Mr Fielding's case | 76 |
| Kesterwood's financial position. | 77 |
| Commercial terms | 78 |
| Personnel | 79 |
| Subsequent events | 79 |
| Mr Fielding's explanations | 80 |
| Mr Birkett's evidence | 80 |
| Mr Ivison's evidence | 80 |
| The Alumax supply agreement | 81 |
| FROM THE NORTHSTAR SUPPLY AGREEMENT TO THE INCORPORATION OF SEAQUEST | 81 |
| Kesterwood supplies Northstar | 81 |
| The approved fabricators scheme | 82 |
| The scheme is launched | 82 |
| The patent action begins | 84 |
| Mr Ivison and Mr Whitby join Northstar | 84 |
| Mr Read joins Northstar | 86 |
| Mr Davies' bankruptcy and its immediate aftermath | 86 |
| The DTI investigation begins | 88 |
| KESTERWOOD's FINANCIAL POSITION IN 1997 | 88 |
| Introductory | 88 |
| Mr Fielding's management role | 88 |
| Kesterwood Extrusions is incorporated | 89 |
| Kesterwood goes into liquidation | 90 |
| Kesterwood Extrusions takes over | 91 |
| Kesterwood: a summary | 92 |
| THE INCORPORATION OF SEAQUEST | 93 |
| Introductory | 93 |
| Mr Fielding is informed | 94 |
| The assignment of the intellectual property rights | 96 |
| Seaquest's business | 99 |
| Northstar's business after the incorporation of Seaquest | 100 |
| NORTHSTAR's FINANCIAL POSITION IN 1998 | 101 |
| Introductory | 101 |
| The Ultraframe litigation | 101 |
| Poor administration | 101 |
| Stock levels | 103 |
| Too much business | 103 |
| Cash-flow | 104 |
| Credit | 104 |
| Missing cash | 105 |
| Mr Roche | 105 |
| MR CLAYTON's LOAN | 105 |
| Introductory | 105 |
| Mr Clayton and Mr Davies | 106 |
| Mr Clayton's trading | 106 |
| Mr Clayton's case | 106 |
| Ultraframe's attack on Mr Clayton's case | 108 |
| Introductory | 108 |
| Variations in Mr Clayton's account | 108 |
| Northstar's accounting records | 108 |
| The draft stock transfer and the share certificate | 109 |
| HH Judge Behrens' decision | 109 |
| Mr Birkett's evidence | 109 |
| Other witnesses | 111 |
| MR FIELDING's LOAN | 111 |
| Introductory | 111 |
| Mr Fielding's case | 112 |
| The return of stock and the offer for Mr Naden's shares | 112 |
| The meeting of 16 January 1998 | 115 |
| The Seaquest supply agreement | 116 |
| The cash is paid | 118 |
| Dealings between Mr Fielding and Mr Clayton | 119 |
| Mr Fielding learns of Mr Clayton's loan | 119 |
| The signing and dating of the agreement between Mr Fielding and Mr Clayton | 121 |
| Mr Fielding pays £30,000 to Mr Davies | 123 |
| Ultraframe's attack on Mr Fielding's case | 123 |
| Other cash payments by Mr Fielding | 123 |
| The accounting records | 123 |
| Mr Birkett's evidence | 123 |
| Mr Ivison's evidence | 124 |
| Mr Gray's evidence | 124 |
| Mr Shaw's evidence | 124 |
| Mr Hindley's evidence | 124 |
| DEARWARD AND DEARWARD PROFILES | 124 |
| Introductory | 124 |
| Dearward | 124 |
| Dearward Profiles | 124 |
| The meeting of 16 January 1998 | 125 |
| MR FIELDING TAKES DEBENTURES OVER NORTHSTAR AND SEAQUEST | 125 |
| The laminating machines | 125 |
| The Northstar order | 125 |
| Mr Fielding's negotiations and the eventual deal | 126 |
| Tooling | 126 |
| Mr Roche and the new investors | 128 |
| Mr Roche's business plan | 128 |
| The state of the account between Northstar and Kesterwood | 129 |
| The "circular" transactions | 134 |
| Execution of the Seaquest debenture | 138 |
| Trouble with Alumax | 138 |
| The administration charge | 142 |
| Execution of the Northstar debenture | 142 |
| Subsequent orders of aluminium | 142 |
| THE CONSPIRACY | 142 |
| The October/November pub meetings | 142 |
| Introductory | 142 |
| The Nag's Head, Altrincham | 143 |
| The Riverhead Brewery Tap, Marsden | 144 |
| Mr Roche's report | 146 |
| What Northstar told Mr Hacking | 149 |
| Introductory | 149 |
| 21 January 1998 | 149 |
| 30 June 1998 | 149 |
| 2 October 1998 | 150 |
| 12 November 1998 | 150 |
| 20 November 1998 | 150 |
| 10 December 1998 | 151 |
| Was Mr Hacking told the truth? | 151 |
| What Mr Fielding told Alumax | 152 |
| Events after the debentures were executed | 153 |
| The allotment of additional shares | 153 |
| The visit to Mr Clayton | 154 |
| RESPONSES TO THE LITIGATION | 154 |
| Introductory | 154 |
| Efforts to obtain documents and information | 154 |
| Introductory | 154 |
| The DTI | 154 |
| Mr Davies' trustee in bankruptcy | 155 |
| Falsification of documents | 158 |
| Mr Fielding's paper management | 158 |
| Mr Fielding's filing system | 159 |
| The stock transfers | 159 |
| Falsification of documents by Mr Sheffield | 160 |
| The Northstar supply agreement | 161 |
| The plastic wallet: Mr Birkett's evidence | 161 |
| The contents of the plastic wallet | 162 |
| Mr Birkett's green folder | 164 |
| Mr Fielding's evidence | 164 |
| Mr Read's evidence | 164 |
| Mr Cooper's evidence | 164 |
| Mr Roche's evidence | 164 |
| Expert evidence |
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