Daniel Maurice Wagner v Bright Station Ventures Management Limited [2025] EWHC 669 (KB)

[2025] EWHC 669 (KB)

Case No QB-2020-004616

IN THE HIGH COURT OF JUSTICE

KING'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 19/03/2025

Before

THE HONOURABLE MR JUSTICE SWEETING

Between

DANIEL MAURICE WAGNERClaimant

BRIGHT STATION VENTURES MANAGEMENT LIMITEDDefendant

Fraser Campbell

(instructed by Mishcon de Reya LLP) for Claimant

Thomas Plewman KC and William Hooper

(instructed by Squire Patton Boggs (UK) LLP) for Defendant

Hearing Hearing dates: 2, 3, 4, 9, 10 and 12 May 2023 and 26 July 2024

Approved Judgment

This judgment was handed down remotely at 12:00 noon on 19 March 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

.............................

THE HONOURABLE MR JUSTICE SWEETING

[1]This judgment addresses the outstanding consequential issues arising from the substantive judgment handed down on 25 June 2024. They are, in summary, the final sums due as between the parties and the appropriate order as to costs. I had been invited to, and did, set out my findings in relation to each of the disputed heads within the claim and counterclaim leaving it to the parties to agree what the outcome was in money terms. In the event, the parties have been unable to agree; each party contending that the net result is that it is owed money by the other and that there should be a costs award in its favour.

Background

[2]The claimant, Mr. Wagner, brought a claim against the defendant, Bright Station Ventures Management Limited ("BSVM"), seeking repayment of sums that he contended had been advanced to or for the benefit of BSVM. His claim was brought in debt and, in the alternative, unjust enrichment.

[3]BSVM counterclaimed for sums that Mr. Wagner allegedly caused to be paid improperly from its accounts, as well as damages for breach of duty in relation to financial management and record-keeping.

[4]I found that Mr. Wagner was entitled to recover certain cash advances made to BSVM on the basis of an implied debt. However, his claim for reimbursement of substantial legal expenses was largely unsuccessful, with only three invoices found to be properly chargeable to BSVM. Mr Wagner’s primary case was in debt, because he said he met legal expenses and costs “on the basis of an agreement, between him in his personal capacity, and him as sole director of BSVM, that they would be reimbursed by BSVM as the service company of BSVL, or by BSVL as ultimate beneficiary. I concluded that there was no such agreement, which was the case advanced by BSVM. I rejected the contention that the legal expenses were incurred for the benefit of BSVL (and so recoverable from BSVM as a service company). It followed that Mr Wagner was entitled to reimbursement in relation to:a. Personal cash advances made to BSVM

b. Cash advances made by Vertical Commerce 247 (“VC247”) which were assigned to him. The VC247 advances were part of the funding introduced by Mr. Wagner (albeit via VC247) and were received by BSVM in its role as a services company for the group.

c. Legal expenses related to one Winckworth Sherwood invoice of 30 June 2017 and two invoices from the Isle of Man firm, Cains.

[5]I rejected Mr. Wagner’s claim for reimbursement of:a. His own and adverse costs in relation to the Administrative Proceedings.

b. Costs met by him in relation to the IOM and Bothy Proceedings.

c. The corporate advances from Bright Station Limited and Rezolve Limited (as being claims by way of implied loan, which belonged to the companies themselves and not to Mr. Wagner).

[6]I found that BSVM’s counterclaim, which initially sought over £1.15 million, largely failed. The only sum successfully counterclaimed was £2,000, which Mr. Wagner had improperly caused to be paid to a third party, Mr Caplin.

Consequential Issues

[7]The key issue is whether payments made by BSVM’s parent company, Bright Station Ventures Limited ("BSVL"), to or on behalf of Mr. Wagner should be credited against his claim. Mr. Wagner contends that these payments are irrelevant to the current proceedings as BSVL is not a party and has initiated separate proceedings against him for recovery of these sums.

Mr Wagner’s Argument

[8]Mr. Wagner argues that there was no agreement requiring payments made by BSVL to be treated as reducing the amounts due to him from BSVM. He submits that the court’s findings did not establish that such payments should be offset and that any sums due from him to BSVL are recoverable, if at all, in the separate litigation. He argues that the court rejected the submission that BSVM was liable to him in debt for legal expenses and costs based on a direct agreement between him and BSVM or BSVL. He asserts that his alternative claim in restitution only applies to cash advances directly to BSVM. He argues that BSVM and BSVL have separate corporate identities and that BSVM cannot now rely on payments made by its parent company to escape its own liabilities. Mr. Wagner also draws attention to the fact that that BSVM did not counterclaim for the sums paid by BSVL and did not seek an order in the substantive trial to have those sums credited. It was the choice of those who now stand behind BSVM and BSVL to bifurcate the two sets of proceedings. As such, introducing an argument that they should be taken into account at this stage should not be permitted.

[9]Mr. Wagner maintains that only payments made directly by BSVM should be credited against what is due to him. He asserts that approximately £387,000 plus interest is owed to him by BSVM, calculated by totalling his cash advances and recoverable legal expenses, then deducting payments received directly from BSVM and the separate £2,000 payment made at his direction.

[10]Mr. Wagner contends that this is in keeping with his pleaded case which focused on BSVM's obligations. Furthermore, he argues he was the prevailing party in the proceedings and should be awarded costs, given the substantial success of his claim, the near-total failure of BSVM's counterclaim, and a reasonable pre-trial settlement offer, which was rejected.

[11]He also emphasises BSVM's aggressive conduct, including unfounded allegations of dishonesty and forgery, inflammatory correspondence, the unproven accusation of theft, and improper pressure to settle through threats of negative publicity, all of which he believes should be factored into the costs’ decision. Finally, Mr. Wagner seeks a substantial payment on account of his costs, calculated as a percentage of his actual and budgeted costs, reflecting his success and the conduct of BSVM as the opposing party. He suggests a payment on account of £461,402, based on 60% of actual pre-budget costs and 90% of budgeted or actual costs (whichever is lower) for post-budget phases.

BSVM’s Argument

[12]BSVM submits that, in calculating the final amount due, the court should take into account all relevant credits, including payments made by BSVL at Mr. Wagner’s direction.

[13]BSVM argues that Mr. Wagner’s own pleadings originally acknowledged that payments made by BSVL were intended to reduce the amounts owed to him by BSVM. Mr. Wagner had stated in terms that such payments were made to reduce amounts he had advanced. RRAPOC Paragraph 11 states:

“It was agreed and understood between [Mr Wagner] and the directors of BSVL […] that such sums would be treated as being in partial diminution of the amounts outstanding to [Mr Wagner] from time to time as particularised in Annex 1.”

[14]BSVM argues that not including BSVL payments is inconsistent with Mr. Wagner’s pleaded case and his factual evidence that he saw BSVM and BSVL as one and the same, so that payment by one would satisfy a debt owed by the other. When asked about BSVM’s funds in June 2016, Mr Wagner responded that it depended on when Attraqt stock was sold, even though that money went to BSVL, not BSVM. His explanation: was “We see it as the same entity.”

[15]The payments to VC247, set out in Annex 2, include £50,000 paid by BSVL. BSVM argues that if this sum is to be credited, it is because BSVL discharged a debt owed by BSVM to VC247 (and assigned to Mr Wagner) on its behalf. The payments by BSVL to Mr Wagner himself similarly discharged debts owed by BSVM on its behalf.

[16]Mr Wagner argued at trial, and I accepted, that BSVM operated as a service company, and that its parent, or operating companies within the group, would either put it in funds to discharge liabilities incurred by it as part of that role, or discharge such liabilities on its behalf. BSVM says that this would include debts incurred by BSVM to Mr Wagner and that if BSVL discharged BSVM’s debts to Mr Wagner, that is consistent with its role as a service company.

[17]BSVM argues that Mr. Wagner's present position is inconsistent across the two related proceedings. In the BSVL case, he maintains that legal expenses he paid are owed to him by BSVM, not BSVL and that payments made by BSVL (Annex 2 sums) were intended to reduce the debt owed to him by BSVM. This means that even in the BSVL proceedings, his argument reinforces the contention that BSVL's payments were meant to offset BSVM's debt and contradicts any suggestion that those payments were independent of the financial relationship between the companies.

[18]BSVM asserts that the court did not find that the BSVL payments should be excluded from the final calculation. It argues that Mr. Wagner has changed his position late in the proceedings, seeking to exclude these sums to increase his recovery. BSVM contends that when the BSVL payments are properly taken into account Mr. Wagner is not owed any money by BSVM. Instead, the correct net position is that Mr. Wagner owes BSVM approximately £90,000.

[19]BSVM contends that Mr. Wagner was only partially successful, as his primary case for repayment of legal expenses was significantly reduced. Furthermore, BSVM maintains that its counterclaim was reasonably brought and that its costs should be substantially recovered. BSVM contends that it should be awarded its costs as the successful party, given that Mr. Wagner has a net liability to BSVM, relying on dicta in in Multiplex Constructions v Cleveland Bridge

[2008] EWHC 2280 (TCC)

; [2009] 1 Costs LR 55 at [72(i)]: "In commercial litigation where each party has claims and asserts that a balance is owing in its own favour, the party which ends up receiving payment should generally be characterised as the overall winner of the entire action.”

[20]If costs are not awarded to it as the "overall winner," BSVM argues it is still entitled to its costs because the claim has failed and the counterclaim has succeeded to at least some degree (following the principle in Medway Oil and Storage Co v Continental Contractors Ltd

[1929] AC 88

). If the court apportions costs, BSVM argues it should be entitled to at least 70% of its costs.

[21]As far as the pretrial offer is concerned BSVM submitted that it was plainly inadequate, because it took no account of substantial legal costs, which have now reached approximately £788,500 plus VAT. Accepting the offer would have resulted in a worse financial outcome than BSVM’s current position. BSVM argues in effect that it has "beaten" the offer given the outcome, as it characterises it, at trial. Further it was a Calderbank offer and so lacks the automatic cost consequences of a Part 36 offer.

[22]BSVM seeks an interim payment of £589,129.21 (including VAT), or £412,390.44 (including VAT) if the Court apportions the cost. This is based on 90% of its budgeted costs and 60% of the non-budgeted costs element of its approved Precedent H form.

Discussion & Conclusions

[23]On the issue of whether payments made by BSVL to or on behalf of Mr. Wagner should be taken into account in determining the net sum due, the starting point is Mr. Wagner’s own pleaded case. In his Re-Amended Particulars of Claim at, paragraph 11, Mr. Wagner expressly stated that payments made by BSVL were to be treated as reducing the amount owed to him by BSVM. This was a clear and unequivocal statement that the BSVL payments were integral to the overall accounting as between Mr. Wagner’s advances and BSVM’s liabilities. This was reflected in the agreed list of issues formulated at the outset of the trial.

[24]In his replacement opening skeleton argument, Mr Wagner stated that he sought repayment or restitution of various amounts advanced, "giving credit for lesser sums that he received back from BSVM over time, and (subject to the Court’s view of the basis on which he is entitled to recover sums) also various sums received from BSVL" . This was further elaborated on later in the skeleton:a. Mr Wagner argued that there were amounts paid out to him or on his direction, for which he was prepared to give credit, as detailed in PoC Annex 2, which included sums paid out by both BSVL and BSVM .

b. He explained that if his primary legal case (that the advances and payments were made under an agreement for reimbursement by BSVM and/or BSVL) was accepted, then the natural consequence would be to set off all sums received back from either company.

c. However, if his alternative legal case (that BSVM was unjustly enriched by the cash advances directly to it) was accepted, then the logical course would be to set off only sums paid to and received from BSVM.

d. In this alternative scenario, the matter of obligations between Mr Wagner and BSVL, including the setting off of amounts received from BSVL against any entitlement for third-party legal costs, could be addressed in separate proceedings. He noted that such separate proceedings had been initiated by BSVL but were currently stayed pending the trial.

[25]Mr Campbell acknowledged, in his closing submissions, that Mr Wagner’s case had evolved in relation to BSVL payments from the case initially pleaded:

“He is right to say that our case, until the recent amendment, was that all the sums paid out from both BSVL and BSVM to Mr Wagner or his associates and companies ought to be credits but, of course, that was the pleading on the basis that Mr Wagner, as part of the same agreement, would have the right to get all payments, including the legal expenses, that were for the benefit of BSVL because everything was to be treated as going through BSVM. That remains our primary case but if you, my Lord, consider that actually , no, no, that’s too far removed, BSVL must deal with its own obligations as regards Mr Wagner and we are really just concerned with cash in and cash out, then we will take that, we will have the argument on costs as to whether that succeeds, taking into account also whatever is done with the counterclaim, and we will apply to amend the extant early stage BSVL proceedings.”

[26]This was, on any view, a very late change of course. As Mr Plewman put it in his skeleton for the consequential issues hearing:

“On 1 May 2023, i.e. the day before trial (and after exchange of skeletons, albeit having been trailed in para 37.2 of Mr Wagner’s skeleton10), he served the RRAPOC, providing various updates to the figures. In addition, without amending paragraph 11, in paragraph 18 he added to the alternative case in unjust enrichment (quantified in the same way as the claim in debt) an additional alternative, pleaded as “or such different amount as may be found by the Court to reflect the Defendant’s unjust enrichment, in particular the difference between the cash advances made to [BSVM] in the first and second tables of Annex 1 hereto and the payments made by [BSVM] in the third and fourth tables of Annex 2 hereto.”

[27]Mr. Wagner’s own conduct in these proceedings is inconsistent with his current argument that the BSVL payments should now be disregarded. At trial, he accepted that BSVM and BSVL were functionally intertwined, and in cross-examination, he stated that they were effectively “the same entity” when asked about financial transactions. Any other approach at this stage would be radically inconsistent with Mr Wagner’s own factual evidence, which was that he treated BSVM and BSVL as interchangeable.

[28]Further, Mr. Wagner’s position in separate proceedings brought by BSVL against him (QB-2022-002263) contradicts his argument here. In that litigation, Mr. Wagner continues to assert that BSVL’s payments were made in reduction of sums owed to him by BSVM. BSVM argued that failing to account for the BSVL payments in the current proceedings would mean Mr Wagner could potentially recover the same amounts twice ; once from BSVM (without giving credit) and again by avoiding BSVL's claims in the separate proceedings.

[29]I bear in mind the commercial reality of the payments and the relationship between the two companies which was explored in detail at trial. The evidence indicates that BSVL, as the parent company, provided financial support to BSVM, particularly in circumstances where BSVM had insufficient funds to meet its obligations. The payments made by BSVL were not gifts to Mr. Wagner but were directed to him in the context of ongoing financial arrangements within the group. It is commercially illogical to suggest that BSVL would make payments on behalf of BSVM without any expectation that they would be taken into account in reducing BSVM’s obligations.

[30]Mr. Wagner argues that as BSVL is not a party to these proceedings BSVM cannot rely on the payments it made to him or on his behalf. However, this argument mischaracterises the issue. The relevant question is not whether BSVL has a direct claim against Mr. Wagner but whether these payments form part of the acknowledged financial relationship between Mr. Wagner and BSVM. Given that Mr. Wagner himself initially accepted that they did, it would be artificial and unjust to now disregard them.

[31]The judgment contains no finding that the BSVL payments should be excluded. Whilst I determined that Mr. Wagner was entitled to recover his advances to BSVM, I did not expressly determine that BSVL’s payments should be ignored in calculating the final net position. Mr Wagner’s submissions appeared to indicate he remained ready to set the Annexe 2 and 1 amounts against each other (subject to success on his case as to the existence of an agreement). The gloss on this in closing submissions was, in effect, that he was prepared to do so if his case was accepted in relation to all of the sums in Annexe 1 to the Particulars of Claim. However it was always inherent in a claim of this nature that Mr Wagner might achieve only a partial success and I can see no logical reason why the credit which he was prepared to give depended on whether the net result was to his advantage. It follows in my view that all the relevant credits, including BSVL’s payments, should be taken into account.

[32]Mr. Wagner’s alternative argument, that the BSVL payments should instead be litigated separately in the BSVL proceeding is procedurally inefficient and inconsistent with his case at trial. Since he originally treated the payments as part of this dispute, there is no compelling reason to defer their consideration to another forum.

[33]I conclude that the BSVL payments should be taken into account in determining the net sum due. Once those payments are included, the proper calculation results in a net balance of around £90,000 in favour of BSVM.

[34]The general principle is that costs should follow the event, but in cases where both parties have experienced partial success, the court may apportion costs accordingly. In this case, Mr. Wagner succeeded in recovering certain advances but failed on a significant portion of his claim, particularly in relation to legal expenses. BSVM’s counterclaim was largely unsuccessful, but it has achieved a net position which is in its favour. As far as matters of conduct are concerned, the protagonists in this case are both experienced businessmen able to deal with the robust exchanges which have at times characterised this litigation. I do however have regard to serious allegations of misconduct which were raised and not pursued.

[35]Considering the parties’ respective successes and failures, the appropriate order is that BSVM should recover 60% of its assessed (or agreed) costs from Mr. Wagner. This reflects the fact that Mr. Wagner did achieve some success but also required BSVM to defend significant aspects of his claim that were ultimately rejected.

[36]The final determination to be reflected in an order is as follows:a. Mr. Wagner shall pay BSVM the net sum due (approximately £90,000 on the figures presented to me).

b. Mr. Wagner shall pay 60% of BSVM’s assessed or agreed costs.

c. There shall be a detailed assessment of costs on the standard basis if costs are not agreed.

d. Mr Wagner shall make an interim payment on account of costs in the sum of £350,000 (reflecting in round terms the discount I have applied to costs).

[37]BSVM should now have carriage of the order and should submit a draft (to be agreed if possible). END