‘(d) In preparing the Claimant’s and FSL’s draft accounts, DJP took instructions from Mr Marcinko and/ or Mr Cohen in relation to the identification and treatment of debts and liabilities met by each of the companies on behalf of the other and the necessary adjustments were made in the course of preparing the companies’ draft accounts. (e) For the avoidance of doubt, both Mr Marcinko and Mr Cohen knew that DJP were preparing both the Claimant’s and FSL’s accounts and that debits and credits appearing (or forming the basis for entries) in the relevant year end’s accounts for the Claimant would be reflected in the relevant year end’s accounts for FSL (and vice versa). (f) The Claimant’s accounts for the years ending 2016, 2017, 2018 and 2019 were prepared by DJP and approved by Mr Marcinko. (g) When Mr Cohen approved FSL’s accounts for the years ending 2016, 2017, 2018 and 2019 he was satisfied that they gave a true and fair view of the assets, liabilities, financial position and profit or loss of FSL. FSL assumes that Mr Marcinko will say that he was similarly satisfied in relation to the Claimant’s accounts for those years (as he was required to be in order to comply with his duty as director of the Claimant under inter alia sections 393 and 414 of theCompanies Act 2006 ).’
‘An account in relation to each of the years ending 2016, 2017, 2018 and 2019 has already been carried out on behalf of the Claimant (and FSL) and agreed by Mr Marcinko and Mr Cohen on behalf of the Claimant and FSL, with the assistance of the companies’ accountants, and which accounting process resulted in the preparing, approval by Mr Marcinko and Mr Cohen and filing at Companies House of the Claimant’s and FSL’s respective company accounts.’
‘By Mr Marcinko agreeing the accounts for the Claimant in each of the years 2016, 2017, 2018 and 2019 in the circumstances set out herein (and, in particular, in paragraph 3 and 4 above) and by approving and filing at Companies House, the Claimant (and/or Mr Marcinko on behalf of the Claimant) represented to FSL that the accounts for those years and treatment of the liabilities met by each company on behalf of the other was finally agreed.’
‘FSL (and Mr Cohen on its behalf) relied on those representations in (i) preparing, approving and filing its own accounts at Companies House for each of the years 2016, 2017, 2018 and 2019 (ii) carrying on its business (including with the Claimant) in the period(s) that followed (iii) dealing with third parties in the period(s) that followed (including on behalf of the Claimant) and on the understanding that the Claimant’s and FSL’s respective accounts for the years ending in 2016, 2017, 2018 and 2019 represented a true and fair view of the assets, liabilities, financial position and profit or loss of each of the companies and (iv) continuing in those ways without taking alternative or any other (more formal) steps finally to determine the accounting position as between the Claimant and FSL.’
‘AND UPON the Defendants having indicated by counsel that the Defendants’ case as to whether there had been an account of inter-company liabilities agreed between the Claimant and the First Defendant in each of the years 2016, 2017, 2018 and 2019 is limited to an allegation that each company’s director agreed and approved that company’s formal accounts which were then filed with Companies House, and that the Defendants do not rely upon any other agreement or representation by words or by conduct in relation to the same.’
‘i) ‘The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success. ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable. iii) In reaching its conclusion the court must not conduct a “mini-trial”. iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents. v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial. vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case. vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better….’
‘The pleading must be supported by evidence which establishes a factual basis which meets the merits test; it is not sufficient simply to plead allegations which if true would establish a claim; there must be evidential material which establishes a sufficiently arguable case that the allegations are correct.’
‘21 … For many years, until the final couple of years before Spalé and I separated, we, as the directors of FSL and MSF, would both attend a year-end accounts meetings with Tony Cohen of DJP. At those meetings, we would go through a set of draft accounts and the financial information, so that the year-end accounts could be finalised. This happened twice a year (once for MSF and once for FSL) and Spalé and I would attend both meetings…. 23 Neither company maintained the necessary records to show which of them actually sold a particular consignment of flowers. The same was true for staff costs and vehicle costs given the high level of crossover between the companies. When it came to the preparation of the accounts, it was necessary to find a reasonable and sensible way to apportion those costs and inevitably that involved an element of judgment and estimation…. 25 Perhaps most importantly, the starting point for all the figures would be both the previous year-end figures for the company in question and also the year-end figures for the other company. If we were working on the year-end figures for FSL as at 31 August then the year-end figures for MSF as at 31 January would be highly relevant. To put it another way, it would have been impossible to apportion costs between the two companies by looking at only one company in isolation. If anything, the accounts of the other company would be more relevant as they would always have been prepared more recently. All these matters were discussed at the year-end meetings that Spalé and I attended with Tony. 28 The almost inevitable result of this apportioning process was that one of the two companies always owed money to the other…Given that the companies were so closely connected this was inevitable and the final balance (sum due from one to the other) would be included in the “other debtors / creditors” section of the accounts. The figure in the 31 January year-end accounts for MSF would then be used as the reference point for the preparation of FSL next 31 August year-end accounts (and vice versa), and on it would go. 29 … My understanding has always been that by signing a set of company accounts, the director is confirming that the information contained is true to the best of their knowledge and belief. That is always how I approached the accounts and I assumed the same was true for Spalé, not least because they were the result of a detailed process of working out which company had paid for what in each relevant period that he and I had carried out with the companies’ accountant, Tony Cohen, and where each set of company accounts necessarily informed the next set of accounts for the periods ending 31 January, 31 August, then 31 January again and so on…. 30 … Spalé knew very well that one of the most important items of business at each of these meetings was to apportion costs between MSF and FSL. In addition to the accounts meetings themselves, Spalé had unrestricted access to the Sage ledgers for both companies and to both John and Sami. He would frequently raise queries with them about all sorts of accounting issues, perhaps a particular customers owing money to one or other of the companies or about payment for a particularly large flower delivery…Finally, and most importantly, it was Spalé who, as a director of MSF, signed the MSF accounts in the full knowledge that they had been prepared in reliance on how FSL had prepared its accounts and on the basis that they would necessarily inform how FSL would prepare its accounts…’
‘As I understand the theory of a settled account, it is to such a case as that (ie a case of mutual debits and credits) that the theory is applicable. Where A owes, or may owe, B money, and B owes, or may owe, A money, and in their accounts they strike a balance and agree that balance, that truly represents the financial result of their transactions. There is mutuality in it, and whereas A may be giving up something or B may be giving up something, for the purpose of settling the matter between them, they expressly or by implication agree to a conventional position which is established by striking a balance, and that results in what is called a settled account.’
‘65 In my judgment, the principles applicable to the assertion of an estoppel by convention arising out of non-contractual dealings . . . are as follows. (i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them. (ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it. (iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.’
‘(1) the making of a representation of fact (2) that is clear and unambiguous (3) that was liable to induce the party to whom it was made to alter their position or rely on it and (4) did induce that party to alter their position or rely on it (5) to the detriment of that party (6) which is materially inconsistent with the later position being taken by the party who made the representation.’
‘10 The legal framework is not in dispute and can be stated succinctly here. The starting point isCPR 17.3 which confers on the Court a broad discretionary power to grant permission to amend. The case-law is replete with guidance as to how that discretionary power should be exercised in different contexts. I need cite only two cases which taken together provide a helpful list of factors to be borne in mind when considering an application such as this: CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd[2015] EWHC 1345 (TCC) and Quah Su-Ling v Goldman Sachs International[2015] EWHC 759 (Comm) . From those cases, I draw together the following points. a) In exercising the discretion underCPR 17.3 , the overriding objective is of central importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted. b) A strict view must be taken to non-compliance with the CPR and directions of the Court. The Court must take into account the fair and efficient distribution of resources, not just between the parties but amongst litigants as a group. It follows that parties can no longer expect indulgence if they fail to comply with their procedural obligations: those obligations serve the purpose of ensuring that litigation is conducted proportionately as between the parties and that the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately is satisfied. c) The timing of the application should be considered and weighed in the balance. An amendment can be regarded as “very late” if permission to amend threatens the trial date, even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason. Where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. A heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The timing of the amendment, its history and an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise: there must be a good reason for the delay. d) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being 'mucked around' to the disruption of and additional pressure on their lawyers in the run-up to trial and the duplication of cost and effort at the other. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission. If allowing the amendments would necessitate the adjournment of the trial, this may be an overwhelming reason to refuse the amendments. e) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered. Moreover, if that prejudice has come about by the amending party's own conduct, then it is a much less important element of the balancing exercise.’
‘As to prospects of success, if there are no real prospects then that is determinative. Apparent lack of prospects, even when not so low as to meet theCPR Part 24 threshold, is also a factor against the granting of permission….’
‘9 It is relevant to have regard to the degree to which the case sought to be advanced by the amendment is one that the parties have in fact already been addressing…. 10 On the other hand, the mere fact that an issue has received some attention in the preparation of the case and the experts’ reports is not necessarily sufficient to make permission to amend appropriate….’