“1. The Defendant shall file and serve a final draft Amended Defence and Counterclaim by 10am,9 November 2020 to replace the draft Amended Defence and Counterclaim provided with the Defendant’s Application Notice dated4 November 2020 to amend the Defence and Counterclaim. There is no need for any amendment to the Application Notice. 1 The evidence relied on in support of the Defendant’s application to amend shall be the evidence served in response to the Claimants’ application for Summary Judgment and strike out filed and served on26 October 2020 (the witness statements of Bernardus Van Schriek and Stuart Nevin and their exhibits). 2 Any evidence in response to the Defendant’s application shall be filed and served by the Claimants on or before 4pm,16 November 2020 . 3 Any evidence in reply to the Claimants’ evidence shall be filed and served by the Defendant on or before 4pm,20 November 2020 . 4 A hearing to consider the Defendant’s application to amend and consequential considerations arising out of the Court’s Judgment on the Claimants’ application for Summary Judgment and Strike Out Applications and shall be listed together when the Judgment is handed down. The time estimate for both matters is 1 day. 5 Costs reserved.”
“As you are aware, Cordic Ltd is a booking and data despatch service provider who provide fleet management solutions targeted at the taxi, private hire and courier service sectors. Cordic Ltd makes use of so called PAF data from Royal Mail in its systems and services. It has come to the Purchaser’s attention that there is no commercial licence to do this, in breach of numerous warranties provided to the Purchaser by the Vendors under the SPA, including but not necessarily limited to the following:”
“Next Steps The Purchaser will obviously not be in a position to release any escrow funds to the vendors until such times as this matter may be resolved. We reserve all of the Purchaser’s rights and remedies, whether arising under the SPA or otherwise, including the right to commence legal proceedings against the Vendors without further notice. In the event that any proceedings are issued this notice will be relied upon on the issue of costs.”
“(5) It is admitted that a Claim, as defined by paragraph 5 of Schedule 5 would have to be notified in accordance with the provisions of Clause 6 of the SPA prior to the Release Date. Such a claim would therefore have to have been notified on or before1 March 2019 . (6) Although the notices referred to above were a day late for the purposes of a Claim under paragraph 5 of the SPA…”
“... the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman[2001] 1 All ER 91 ; ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8]; iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman; 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: ED & F Man Liquid Products v Patel at [10]; 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: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 ; 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: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 ; 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. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“The commercial purpose includes ensuring that sellers know in sufficiently formal terms that a claim for breach of warranty is to be made so that financial provision can be made for it.”
“Subject as otherwise provided by this Schedule, the amount (ifany) standing to the credit of the Retention Account (including any accrued interest but less any applicable charges or fees levied by the Escrow Bank) on the Release Date shall bereleased to the Vendors’ Solicitors within five Business Daysof the Release Date […].”
“If a Claim has been notified by the Purchaser to the Vendors in accordance with the provisions of clause 6 of the Agreement prior to the Release Date, no amount shall be released to the Vendors’ Solicitors from the Retention Account otherwise than in accordance with the provision of the remainder of the Schedule. […].”
“Deductions and Withholdings: All sums payable by any party under this Agreement shall be paid free and clear of all deductions or withholdings unless such deduction or withholding is required by law.”
“5.8 Save as provided by cl. 5.7 [which related to a limited setoff in relation to retention notes] the purchaser shall not be entitled to set off against any amount otherwise payable to the vendors under this agreement (whether pursuant to the terms of the retention loan notes or otherwise) or any other agreements or documents to be entered into by the vendors or any of them in connection therewith, any amount which the purchaser claims is due from the vendors or any of them to the purchaser … under or by reason of any breach of any amount which the purchaser claims is due from the vendors or any of them to the purchaser … under or by reason of any breach of the terms of this agreement…” … under or by reason of any breach of the terms of this agreement…”
“An allegation that the defendant ‘knew or ought to have known’ is not a clear and unequivocal allegation of actual knowledge and will not support a finding of fraud even if the court is satisfied that there was actual knowledge.”
“At the time of SPA the Company used a database of address files (the “Address Data”) within its dispatch system in breachof the limited licence the Company had for its use. This was abreach of several of the warranties provided by the Claimantsunder the SPA. The First, Second and Third Claimants knew atthe time that the Company was in breach of licence and wereactively concerned of “the serious cost to us if we are foundout.”
“Licensor represents and warrants to Licensee as follows … That Licensor has not entered into any agreement which conflicts with the right granted herein to Licensee. Licensee has exclusive first exploitation right in the licensed territory.”
“… It is a representation of fact which was bargained for in the letters … which Pulse agreed to give … by saying it accepted the amendment and which was duly set out in the amended draft contract proffered for signature together with that letter and also in the complete form of contract re-sent in the following January.”
“5.1 Accuracy of warranties The Vendor warrants to the Purchase (sic) that, as fairly disclosed by the Disclosure Letter, the Warranties are true and accurate in all material respects.”
“9.10 The Buyer acknowledges and agrees that its sole remedy against Sellers for any breach of the Sellers’ Warranties is set out in this Clause 9 and that, except to the extent that the Buyer has asserted a claim for indemnification prior to the relevant Liability Termination Date, the Buyer shall have no remedy against the Sellers for any breach of the Sellers’ Warranties.”
“I am doubtful that a representation which only appears in a contract can fall within the terms ofs.2(1) of the Misrepresentation Act 1967 in the light of the wording of the statute, however it is unnecessary to decide the point; and I proceed on the basis that the misrepresentation claims are properly arguable subject to the contractual issues.”
“5. Seller Warranties 5.1 The Sellers severally warrant to the Buyer in the terms set out in Part B of Schedule 4, and the Warrantors severally warrant to the Buyer in the terms set out in Part C of Schedule 4, subject to the provisions of clause 8. 5.2 Each Warranty is to be construed as a separate and independent warranty and, save as expressly provided otherwise in this agreement, will not be limited by reference to or inference from any other Warranty or by any other provision of this agreement and subject to clause 8, the Buyer will have a separate claim for every breach of Warranty ...”
“… (iii) The words of the warranting provision (clause 5) are words of warranty not representation. There is a legal distinction between the two and (subject to a point made about a later reference to representations, as to which see below) there is no reason to extend the words beyond their natural meaning. In order to make the relevant material a representation one has to find something in the SPA which is capable of doing that. It is not enough that the subject matter of the warranty is capable of being a representation. One has to find out why those words are there. One finds that in clause 5; and what one finds is words of warranty, not words of representation. … (v) Clause 8 of the SPA contains significant limitations on the liability under the “Warranties”
“For the reasons given above, I think that there is no satisfactory answer to be given by those claiming representations to have been made, to the question which has to be asked: Why have the warranty provisions been inserted in the contract? The answer is to be found in clause 5 in each case – they are there because they are warranted. There is nothing more to make them into representations. I do not think it affects the position that in the present case, as in Arnold J’s, the parties (and in particular the warrantors) knew what was coming because drafts have been exchanged and the terms of the contract negotiated. What the warrantors knew to be coming, or more precisely knew they were going to be providing, were expressed to be warranties, not representations.”
“…if a contractual provision states only that a party gives a warranty, that party does not by concluding the contract make any statement to the counterparty that might found a misrepresentation claim.”
“The Defendant will rely on the following representations as set out in the Transaction Documents in particular the disclosure bundle as pre contractual representations: …”
“The provisions of this Agreement and the rights and remedies of the parties are independent, cumulative and are without prejudice and in addition to any other rights or remedies which a party may have whether arising under statute, at common law, in equity, under contract, by virtue of custom or otherwise. …” (5) A similar provision is incorporated at Paragraph 6 of Schedule 5, which states: “Nothing in this Schedule shall prejudice, limit, restrict or otherwise affect any right, including the right to make a claim under this Agreement, or any other remedy the Purchaser may have from time to time against the Vendors either under this Agreement, the Tax Deed or under any other document executed pursuant to this Agreement or at common law.”
“The Transaction Documents (including the documents and instruments referred to therein) supersede all prior representations, arrangements, understandings and agreements between the parties relating to the subject-matter thereof, and set forth the entire, complete and exclusive agreement and understanding between the parties relating to the subject-matter thereof. No party has relied on any representation, arrangement, understanding or agreement (whether written or oral) not expressly set out or referred to in the Transaction documents.” (7) The Defendant’s case is founded upon representations in the Transaction Documents (see the definition recited at paragraph 12(1) above and paragraph 22C of the draft amended Defence, which in particular relies upon the Disclosure Bundle) and does not conflict with clause 8.6 of the SPA: (a) The Defendant relies on the warranties that are representations. Although it accepts that it must prove that those representations were the result of pre-contractual negotiations if it is to succeed in its claims for misrepresentation or negligent misstatement, the language of clause 8.6 acknowledges that there are representations within the Transaction Documents that were relied on by the parties on entering the contract; (b) That conclusion is supported by the general principles set out above, and by clause 1.5 which states: “The Warranties, and all other obligations, covenants and representations arising under this Agreement, given or entered into by the Vendors are given or entered into jointly and severally.”
“Although the notices referred to above were given a day late for the purposes of a Claim under paragraph 5 of Schedule 5 of the SPA, the letters did give adequate notice, if notice was needed, of the material facts which form the basis of claims which were not excluded by clause 6.3.1(i) or any other express term of the SPA. In particular: (i) The common law causes of action for negligent misstatement and/or fraudulent misrepresentation and/or the claim under theMisrepresentation Act 1967 are unaffected by clause 6.3.1(i) or any other express term of the SPA; alternatively (ii) Each of the causes of action identified in the previous subparagraph and the claim for breach of warranty under the SPA arise out of a “fraudulent act, omission or misrepresentation or … wilful misconduct, wilful concealment, or wilful misstatement…” by the Claimants. By operation of Clause 6.4 of the SPA, the limitation at clause 6.3.1(i) does not apply. The notices were given within the 5-day period for issuing an instruction to release the sums held in the Retention Account and, to the extent necessary, provide the basis for withholding that instruction and exercising a right of set off.”
“Nothing in this Schedule shall prejudice, limit, restrict or otherwise affect any right, including the right to make a claim under this Agreement, or any other remedy the Purchaser may have from time to time against the Vendors either under this Agreement, the Tax Deed or under any other document executed pursuant to this Agreement or at common law.”
“No allegation of fraud is made against the Fourth or Fifth Claimants.”
“As part of the due diligence process, there were due diligence inquiries and replies to those, which became part of the Disclosure letter, and which itself formed part of the Transaction Documents.”
“The disclosure of any matter or document shall not imply any representation, warranty, assurance or undertaking by the Vendors not expressly given in the SPA, nor will such disclosure be taken as extending the scope of any of the Warranties.”
“I recognise that a claim for negligent misrepresentation involves an allegation of fault and involves a different measure of damages, but it seems to me that a court should at least have in mind the contractual allocation of risk and reward when deciding whether the parties are to be taken to have intended that claims for misrepresentation based on the same facts as give rise to the claim for breach of warranty are to fall entirely outside the confined liability prescribed by the SPA.” (2) Where there are conflicting decisions at first instance, the Court should apply the principles laid down by Nourse J (as he then was) in Colchester Estates (Cardiff) Ltd v Carlton Industries Ltd[1986] Ch 80 and Re Cromptons Leisure Machines Ltd[2006] EWHC 3583 (Ch) where at [5], having approved the approach in the Colchester Estates case, Lewison J (as he then was) said as follows: “In my judgment, the time has come when the law ought to be taken as settled at first instance without the need for argument. It is all the more important in cases like this in which the need for detailed legal research and argument drives up the cost of administration to the ultimate detriment of the creditors. I hold that the approach of the latest cases, that is to say the decisions of His Honour Judge Norris QC and Pumfrey J in which the relevant earlier decisions were considered, must be taken to be the law at first instance. If that is wrong it must be put right by the Court of Appeal.”
“The disclosure of any matter or document shall not imply any representation, warranty, assurance or undertaking by the Vendors not expressly given in the SPA, nor will such disclosure be taken as extending the scope of any of the Warranties.”
“To my mind it makes no commercial sense for the Agreement to impose conditions as to the giving of notice of a breach of warranty and as to the commencement of proceedings for such breach and limiting the maximum liability if Bottin was intended to be left free of those conditions and those time limits and the limits on liability by treating the same warranties as representations. Mr. Glick was, in my judgment, plainly right to submit that the obvious commercial purpose in the conditions and limits was to enable the Warrantors to know that they would not be sued on the warranties if no notice was served in time and proceedings were not brought in time and that, if they were sued, there was a quantified limit to their liability. That purpose would be frustrated if the claim for breach of warranty could be regarded as a claim in misrepresentation.”
“The paramount consideration, in my opinion, is the fact that the parties could not have intended to allow one party to circumvent the carefully drawn time-bar provisions by formulating their claim as one for misrepresentation rather [than] for breach of warranty.” [than] for breach of warranty.”
“Such reprehensible conduct means that the plaintiffs came before the court “with ‘unclean hands’, a matter which the judge had a duty to take into account in coming to a conclusion in the exercise of his discretion.” conclusion in the exercise of his discretion.”
“Once the court is asked for the equitable remedy of specific performance, its discretion cannot be fettered. Once the assistance of the court is involved, by one of the parties in a discretionary matter, that party is bound by the general discretion of the court to grant or refuse the remedy sought… 136.I accept that the point clearly could and should have been taken at the First Hearing, permission should have been sought to serve the Defendant’s Supplementary Skeleton and the Claimants should have been put on notice in advance that the point was to be taken. These matters will be taken into consideration when considering costs, but that is not a reason, in my view, to shut them out. By the December Hearing the Claimants had been given a proper opportunity to address the point. Time had to be allocated to hear the Defendant’s Amendment Application in any event and dealing with this point at the same time seemed to me an appropriate way forward. I heard full argument on the matter and I will take it into account in reaching my decision.
“As you know, we are currently using the Post Office database in a way which is almost certainly in breach of their licence terms. I am working on changing over to open-source data. This would mean that we can no longer display the house numbers in a given postcode – something that was added in the 2.4 release, to try and attract a customer who never actually bought the system. I thought that it was too risky to leave this feature in the product, given the possible serious cost to us if we are found out.”
“in my judgment the remedy of specific performance is an equitable remedy which the court does not and should not grant to a plaintiff who is behaved in a reprehensible manner and whose hands are not clean or in favour of a plaintiff where thereis a prima facie case that is the situation…”
“The commercial purpose includes ensuring that sellers know in sufficiently formal terms that a claim for breach of warranty is to be made so that financial provision can be made for it.” (6) In my view, the same rationale applies here. I accept Mr Solomon’s submission that the purpose of holding the Retained Amount in an escrow account, with A&LG as escrow agent, was to provide the Claimants with secure funds, and, subject to the provisions of 6.3.1 and Clause 5 of Schedule 5 of the SPA, for the Claimants to be able obtain the funds without the requirement of obtaining and enforcing a judgment debt. (7) I accept the Defendant’s submission that clause 6.4.3 also permits a properly pleaded claim for fraudulent misrepresentation (and I will deal shortly with what that constitutes), but I do not accept that any such claim would permit the Defendant to withhold payment of the Retention Account Money. That entitlement only arises in relation to Claims, including Warranty Claims. This conclusion is reinforced by the words of clause 6.2 of the SPA, which provides: “All sums payable by any party under this Agreement shall be paid free and clear of all deductions or withholdings unless such deduction or withholding is required by law.”
“If Lotus succeeds in an application for summary judgment based on clause 29.2, it would be entitled to immediate judgement without a stay. Should Marcassus then continue with its counterclaim, it would be by way of independent proceedings, such that it would be Marcassus that was pursuing exactly the same cause of action in two sets of proceedings: at that point the court might well be obliged to stay them under Article 29. The reality, of course, is that Marcassus would have no reason to pursue its counterclaim in this jurisdiction once the rationale of attempting to avoid immediate judgement and enforcement in respect of Lotus claim had been removed.”
“The disclosure of any matter or document shall not imply any representation, warranty, assurance or undertaking by the Vendors not expressly given in the SPA, nor will such disclosure be taken as extending the scope of any of the Warranties.”