Cartus Corporation v Atlantic Mobility Ltd

The only issue on this application is costs, but the facts are a disproportionately tangled morass. The application arises out of a claim for delivery up of two containers, numbered 2217839 and 2289046. The claim form was issued on 11 April 2014, and on the same day an application notice was issued seeking an order for delivery up of the containers by making them available to the claimant’s agents for collection.

The claimant, Cartus, is a Delaware corporation. It is in the business of what is called ‘employee mobility’. It offers services to businesses and government agencies to enable them to move their employees.

On 24 January 2003 Cartus (then known as Cendant Mobility Services Corporation) entered into a service agreement with Atlantic Worldwide Movers (which became Atlantic Corporate Relocation Ltd (‘ACRL’), now in liquidation). The essence of the agreement, which was to be interpreted and enforced according to the laws of the state of Connecticut, was that ACRL agreed to transport and store shipments of household goods for the clients of Cartus. Clause 27 of the agreement provided that in the event of imminent business failure by bankruptcy, insolvency or foreclosure, ACRL would immediately arrange transfer of all Cartus’ shipments to another facility and report the fact to Cartus. Clause 34 prevented assignment by ACTL without Cartus’ prior written consent.

In accordance with that agreement, Cartus placed lot number 2217839 (the Lambert lot) in ACRL’s custody in about June 2012, and lot number 2289046 (the Woolston lot) in about September 2012.

There is a background of allegations by Cartus against ACRL concerning inflated or unsubstantiated invoices, and of complaints of defamation. (An order of Supperstone J dated 20 March 2014, granting Cartus and a related company an interim injunction in defamation against Mr Wayne Sidell and Mr Paul Williamson, was included in the bundle. I note that the injunction was discharged by Nicol J on 16 July 2014 after a contested hearing: see [2014] EWHC 2266 (QB)). No doubt those matters contributed to a climate of distrust. According to Mr Sidell, the relationship broke down irretrievably in late January 2014.

ACRL went into creditors’ voluntary liquidation on 16 January 2014. Its liquidator is Mark Reynolds. Paul Williamson and Wayne Sidell were directors at that date. The current defendant, Atlantic Mobility Ltd (AML), was incorporated on 29 October 2013. Mr Sidell became a director of AML from 20 January 2014, the day on which Richard Pickering stood down. It seems that Mr Williamson may also have been a director. There is a suggestion in evidence by Mr Wingfield (for Cartus) that AML might be a phoenix company, in the sense of re-using a company name similar to that of ACRL, but I do not need to decide that. According to Mr Sidell, AML was assigned the benefit of the service agreement between Cartus and ACRL. According to Mr Wingfield, that is incorrect, because the non-assignment clause (clause 34) requires the prior written consent of Cartus, which was not given. Mr Sidell says that the arrangement to transfer the business to AML was explained to Cartus in New York in December 2013 and that no issue was raised about it. That is an issue which cannot be decided on this application.

AML itself has been in creditors’ voluntary liquidation since 10 June 2014, but the liquidator has not applied to stay these proceedings.

On 17 January 2014 Cartus’ solicitors, Howard Kennedy, wrote to Mr Reynolds requesting his written authority for Cartus’ agents to take control of 61 shipments listed in a schedule to the letter and asking for the whereabouts of 6 of the shipments. Mr Reynolds replied by email on 20 January, forwarding an email from Richard Pickering, who resigned as a director of AML that very day. Mr Pickering gave information as to the whereabouts of the six shipments. He said that two of the shipments (one of which he identified as the Lambert lot, which was container 2217839, and the other of which appears to have been Woolston), were at what he called “Atlantic’s London warehouse” at 36 Central Avenue, West Molesey, Surrey KT12 1BT. Both lots, he said, had been invoiced and consigned to ACRL. Mr Pickering suggested that any contact should be made via Mr Reynolds’ office and that he (Pickering) could arrange for access as required. Mr Wingfield, in his witness statement, complains that Mr Reynolds did not reply to the request for Cartus’ agent to be enabled to take control of the shipments, which is correct, but perhaps not a point of great significance given Mr Pickering’s suggestion.

On 23 January 2014, Patrick Keery of Cartus notified one Tom Drew, apparently of AML, that Cartus had informed Mr Reynolds that Cartus’ agents, Paramount Transportation Systems (PTS), would be taking over all Cartus’ storage lots from the liquidator. Mr Sidell replied the same day (purporting to acting as ‘President’ of ACRL, notwithstanding its liquidation), complaining that Mr Keery should not have emailed Drew, and stating that ‘we’ would have to talk to attorneys, because only ACRL was in liquidation, not the US company, through which (so he said) most of the storage was invoiced, billed and ‘operated’. (Contrast Mr Pickering’s 20 January email, in which he stated that the lots with which this case is concerned had been invoiced and consigned to ACRL). I note that in his first witness statement (§11) Mr Sidell says that after 10 years of doing business together, Cartus would have known that it could only have been ‘us’ (by which, in context, he can only mean AML) which could have released the goods. That is muddled. It was ACRL which had the long-term business relationship with Cartus, not AML; and in his own 23 January email, in the claimed capacity of ‘president’ of a company in liquidation, he suggested that the US Atlantic company might have some function. He was himself responsible for muddying the waters.

The next day, 24 January, Mr Keery replied to Mr Sidell. He informed Mr Sidell that the only contract that Cartus had with any Atlantic entity was with ACRL, which was in liquidation, and he reminded Mr Sidell of the effect of clause 27 of the service agreement, told him that Mr Reynolds, on behalf of ACRL, had said that he would co-operate with the handover of all 61 lots, and asked him to tell all staff and others to do the same. By that date, therefore, Mr Sidell was well aware that Cartus was anxious to recover its storage lots.

There seems to have been no reply to that email, and Mr Sidell does not deal with it in his 28 April witness statement, although in a second witness statement, served on 17 June, he says that he never understood Keery’s email to be a formal demand for AML to deliver up the goods. In his first witness statement (§§14-15) he asserts that AML was not approached by Cartus or its agents for the return of the goods until 27 March 2014: ‘Before that date, we simply had not received any request for the return of these goods or any items we were storing or transporting for [Cartus]. In actual fact, we believed that [Cartus] still required us to complete all the transactions in our pipeline and continue to keep all the storage held…’. He maintains that it was only on 17 March that he became aware of Cartus’ request for the goods. In the light of the emails of 23 and 24 January 2014 (and of an email apparently copied to him on 4 March: see below), those assertions are difficult to accept.

There were email exchanges in February and March between Cartus’ agents, PTS, and Lock and Leave, the proprietors of the West Molesey warehouse. On 19 February Mr Doulton of Lock and Leave told Mr Dance of PTS that the lease had been disclaimed by the liquidator, the warehouse was back in his control and the locks had been changed, but that the goods stored in the warehouse (as opposed to the lease) had not been disclaimed, so that Mr Doulton could only grant access on written instructions from the liquidator.

On 21 February the liquidator disclaimed any interest in the goods at West Molesey, and informed Mr Doulton of Lock and Leave, and Mr Sidell and Mr Pickering, by email. His email said that he could see no reason why AML should not continue to operate the business of ACRL, ‘on the basis that AML … holds authority from the individual customers authorising that party to deal with the respective customers’ goods’. Subject to the efficacy of any assignment of the service agreement, AML did not have any such authority from Cartus. It is not clear that Cartus was informed of the disclaimer.

On 28 February 2014, Howard Kennedy wrote again to Mr Reynolds. By now the process of releasing stored goods was complete except for three storage lots, of which two were Woolston and Lambert. The letter asked for Mr Reynolds’ confirmation that his interests and those of ACRL were released, so that the goods could be collected from the warehousemen.

Cartus sought the release of the containers to their agents, PTS Transportation Systems. Enclosed with Howard Kennedy’s letter to Mr Reynolds of 28 February was a formal request from Cartus for release of the lots, which alleged that AML had denied Cartus possession of the lots. (That may have been prompted by a letter from AML’s US counsel, Jeffrey Bernstein, who disclosed that all ACRL’s rights had been assigned to AML, and that some of its storage had been performed by a US affiliate, ACRL Relocation (Storage) Inc. However, it is not at all clear to me that Mr Bernstein was signalling a refusal by AML to deliver up Cartus’ goods, and in any event any refusal related only to goods in storage in the US.) The request from Cartus stated ‘upon information and belief’ that the lots were at ‘Lock and Leave’, 36 Central Avenue, West Molesey in Surrey. That corresponded with the information supplied by Mr Pickering through the medium of the liquidator, Mr Reynolds.

On 4 March Mr Reynolds replied on behalf of ACRL. He enclosed signed forms of release for the Woolston and Lambert lots, said to be at Lock and Leave, 36 West Moseley (sic), Surrey, UK, and an undated deed of assignment by which ACRL assigned any claims against Cartus to AML. One might have expected that would have resolved matters, but it did not.

On the same day (4 March) Mr Dance of PTS again emailed Mr Doulton of Lock and Leave, informing him that the liquidator had released the two lots and asking if arrangements could now be made to retrieve the goods. Mr Doulton replied that the warehouse was now under the new management of AML, to whose managing director, Wayne Sidell, he copied his email. ‘I am sure’, he said, ‘he will be in contact to sort this out with you’. On the face of it, therefore, Mr Sidell was again informed that Cartus’ agents were anxious to take possession of the lots. Yet Mr Sidell does not appear to have responded to PTS.

There followed further exchanges, in the course of which Howard Kennedy wrote a letter before action dated 12 March to Lock and Leave Ltd and Lock and Leave (Molesey) Ltd, requiring their confirmation that they would work with Cartus’ agents to arrange for the goods to be picked up, in default of which proceedings would be issued. The solicitors for Lock and Leave replied on 17 March that its clients could not access the West Molesey facility since it was in the control of AML, who had exclusive possession under a licence, but would assist Cartus in so far as it could. Curiously, given that solicitors were instructed, Mr Doulton of Lock and Leave explained to Mr Wingfield by email of the same date that the liquidator had disclaimed any interest in the goods in favour of AML. (That was not correct: he had not disclaimed any interest ‘in favour’ of AML: he had simply disclaimed any interest, full stop. He had observed that if AML were authorised by their customers to continue to deal with the goods, he saw no reason why they should not do so.) However, Mr Doulton maintained that the goods were in the possession of AML, so any request for the goods should be made to them. Ten days later, on 27 March, Howard Kennedy wrote to Lock and Leave making the point that AML had no right to hold the goods and threatening proceedings unless an immediate undertaking to deliver up the goods was provided.

Meanwhile, on 17 March Wayne Sidell became aware for the first time, he says, that Cartus had requested the delivery up of goods. He does not say how he learned this. His claim to have become of the request for delivery up only on 17 March is not easy to reconcile with the emails from Mr Keery of 23 and 24 January, nor with the fact that on 4 March he was copied into the email exchange between Mr Doulton of Lock and Leave and David Dance of PTS, Cartus’ agents, who were seeking access to the goods. On behalf of AML, he emailed Pat DeDonato of Cartus. His words were ‘The Cartus storage is under our (ie AML’s) control. There is no merit in contacting the liquidator or any third party agent. Contact us directly’. He says that there was no response from Cartus to that email, and he claims to have felt that he was being ‘ignored’. But the letter to AML from Howard Kennedy (see [20] below) was that response. And even had this been the first he had heard of Cartus’ demand, it is far from obvious why he did not simply tell Cartus that the lots could be picked up by PTS whenever they wished. That was plainly what Cartus needed to know.

Howard Kennedy wrote to AML on Thursday 27 March by post and email, demanding confirmation by 4pm the following day that delivery up would be given. The letter informed AML that Cartus would not tolerate being ‘held to ransom’ by them.

Wayne Sidell replied on 28 March denying that the goods were being held to ransom. He informed Howard Kennedy that they had been misinformed by Cartus, but offered no positive news to correct that misinformation and gave no indication that AML would deliver up the goods. Notwithstanding that on 17 March he had asked to be contacted directly, he now suggested that Howard Kennedy should contact his solicitor, Peter Felton, for further information. It is wholly unclear to me why Mr Sidell, faced with an urgent solicitors’ letter, could not make it clear to the solicitors that the goods were available for delivery up to Cartus at their convenience. He now takes the view that ‘on any sensible analysis, (his) email in response was in fact a tacit acceptance to deliver up the goods’. I do not think that view is sustainable. His email was not in itself an express refusal to deliver up the goods, but his failure to respond to the clear demands of the solicitors for assurances of delivery up (not even for actual delivery up) was bound to exacerbate the climate of suspicion which already existed. It was not a sensible or helpful response.

Lock and Leave’s solicitors disclosed by letter dated 28 March that its client was currently an involuntary bailee of the goods in storage, and on 31 March that their clients had granted AML an exclusive licence to occupy the warehouse at 36 Central Avenue, West Molesey, so that they did not have physical control of the warehouse and could not grant Cartus access to the goods, but had no objection to access being granted and would provide all necessary assistance, subject to proof of Cartus’ title.

The apparent position as at 31 March 2014, therefore, was that the Woolston and Lambert lots (which were the personal property of clients of Cartus and had been bailed by Cartus to ACRL), were at the Lock and Leave warehouse in West Molesey, where AML had physical possession of them, and were either sub-bailees (if there was an effective assignment, despite clause 34) or unauthorised holders of the goods.

A further demand was sent by Howard Kennedy to Feltons Law, AML’s then solicitors, on 31 March, as Wayne Sidell had suggested three days earlier. The letter (sent by post and email) sought confirmation within 24 hours that the goods would be released, or proceedings for delivery up would be commenced. Inexplicably, no reply was received to that demand. Mr Sidell says that he ‘chased’ his solicitors for advice on what to do next. He maintains that he was not clear what Cartus sought from him. I find it difficult to understand what was unclear about the demands made in the 27 March letter. It was perfectly obvious that Cartus wanted assurances that their clients’ goods would be delivered up. Mr Sidell has not explained why that demand could not have been complied with.

A yet further letter was sent by Howard Kennedy on 10 April. It was sent to the directors of AML at the address of Feltons Law at 49 High Street, Cranbrook, which until 11 April was the company’s registered address (from that date it changed to 36 Central Avenue, West Molesey), and it was copied to Feltons Law. The letter sought AML’s undertaking, to be supplied by 1630 on Friday 11 April, not to deliver up the goods but simply to preserve them and to disclose their precise whereabouts and in whose possession or control they were. AML were told that in the absence of an undertaking an application would be made on short notice for an order to secure the preservation of the goods, in effect to hold the ring until an inter partes application could be made for delivery up. Mr Sidell received that letter. He decided to instruct further solicitors, since he had heard nothing from Mr Felton. Given the terms of the 27 March letter, it is inexplicable that he waited until 11 April before making that decision.

On Friday 11 April, no such undertaking having been received, proceedings were issued against AML, together with an application notice seeking delivery up, returnable on 30 April. What had been received was an email from Peter Felton timed 1538 in response to service of papers, saying that his firm was no longer instructed by AML; an email from Mr Sidell at 1558 on Friday 11 April (expressed to be in his capacity as ‘president’ of ACRL, notwithstanding that it was in liquidation and was not the object of the threatened proceedings) saying that he needed more time to ‘review and discuss with counsel’ and would respond no later than Wednesday 16 April at 1630; and a further email from Mr Felton timed 1649 saying that his firm was no longer instructed by ACRL, and that he believed Rajat Sharma of Metis Law had been instructed.

Mr Sidell complains that proceedings had in fact been issued before the 1630 deadline on 11 April. That point might have had more force had he met the deadline and then faced an application for costs.

At 1932, James Wingfield of Howard Kennedy informed Mr Sidell (and Mr Sharma) that Cartus would be applying to this court on Monday morning for an interim preservation order. He gave his mobile number.

Over the course of the weekend, Cartus’ legal team prepared an application for a preservation order, to be heard on Monday 14 April in the Interim Applications List.

At 1709 on Sunday 13 April, a signed undertaking was received from Mr Sidell on behalf of AML in the terms sought. He thereby undertook to state in whose possession the goods were if not in that of AML. He did not state that they were in anyone else’s possession. He therefore implied that the goods were still in the possession of AML. Mr Sharma, of Metis Law, emailed Mr Wingfield asking for the application to be put off for at least 48 hours to enable him to respond. There was no reply to his email. At 1736 on Sunday 13 April Mr Sharma contended that the application had been unnecessary because AML had never expressly refused to give an undertaking. It was true that there had been no express refusal; but equally no undertaking had been offered, despite several requests over a period of time. That evening, Mr Wingfield confirmed that no application would now be made on Monday, but warned that costs would be sought.

On 14 April, after a little spat about an obvious typographical error in the undertaking, Mr Sharma confirmed that the goods were in his client’s control.

On 24 April AML declared in its Acknowledgement of Service that it would not be contesting the proceedings.

Mr Sidell explains in his first witness statement that between 14 and 24 April he carried out a full reconciliation of the goods in AML’s possession.

He says (1^st witness statement §33) that he determined that the goods contained in the Lambert lot (2217839) were ‘already’ in Cartus’ control or Cartus had access to them because they were at its agent’s depot. He does not name the agent.

By his 25 April letter, Mr Sharma informed Cartus that AML had delivered the Woolston lot to Edwards Trade Storage (ETS) in Gloucestershire, which was said to be Cartus’ agent. He also said that the Lambert lot was ‘already’ at the ETS facility, although he did not say when it had arrived there. Mr Sharma implied that Cartus should have known that the lots had been taken to ETS.

In his second witness statement, Mr Sidell explains the basis of his case that ETS were Cartus’ agents. He maintains that the parties had always traded on the basis that the ‘Edwards depot’ acted as an agent for Cartus, a state of affairs that all Cartus’ forwarders understood. Cartus had ‘direct access’ to ETS. In addition, under the terms of the service agreement ‘we’ (I presume he means ACRL, but the point would hold good against AML if the service agreement had been assigned) were required to inform Cartus of the location of storage containers, which (he says) they did, something that he suggests is corroborated by the fact that Cartus contacted ETS in January to ask where the lots were. That is not his most persuasive point, given that he did not disclose their whereabouts to Cartus until 25 April.

The evidence of Mr Wingfield, for Cartus, is that ETS was not the agent of Cartus, but that (according to ETS’ explanation: email from Peter Young, 30 April) ETS was used as an overflow storage facility by ACRL. The question of ETS’ agency is not one that can (or, I think, need) be determined on this application.

The reason why the goods were delivered to ETS seems to have been that Mr Sidell understood that Cartus had been in contact with ETS and had other storage lots with them (email dated 25 April from Mr Sidell to Mr Sharma, forwarded by Mr Sidell to Cartus’ employee Patrick Keery for his information, thereby waiving privilege). That email attached an email to Mr Sidell from one Vlad Piskla of AML, which said that certain shipments (including the Woolston lot) would be delivered to ETS that day (ie 25 April). He said that the Lambert lot was already at ETS.

On the face of it, therefore, the Woolston lot only reached ETS on 25 April; but the Lambert lot had been there for some unspecified period. Given Mr Sidell’s implied assertion in his 13 April undertaking, and the express statement by Mr Sharma in his 14 April letter, that the goods were then in AML’s control, and given Mr Sidell’s contention that ETS were the agent of Cartus, the obvious conclusion might have been that the Lambert lot was moved to ETS between 14 and 25 April. However, Mr Wingfield (2^nd witness statement, para 6) states that enquiries of ETS show that the Lambert lot was in fact at ETS when the proceedings were commenced, that is to say on 11 April.

The explanation for the difficulty of finding out where the Lambert lot was seems (according to Peter Young of ETS) to be that the wrong name was written on the storage vault when the goods were delivered there by ACRL or AML, which might (Mr Wingfield suggests) explain the apparent failure of ETS’ parent company in January 2014 to tell Cartus that they held the Lambert lot. In that case, it may be that the information passed to Cartus on 20 January by Mr Reynolds, the liquidator of ACRL, that the lots were at West Molesey, was inaccurate; yet, given Mr Sidell’s own assertion on 17 March that ‘the Cartus storage’ was then under AML’s control (suggesting West Molesey rather than ETS), it may be that the information was accurate when it was given.

At all events, the application for delivery up, which had been due to be heard on 30 April, coupled with an application for a non-party costs order against Mr Sidell personally, was adjourned generally by consent, with costs reserved. As I have said, it is that application for costs that I must now determine.

It is clear that to sustain an action in conversion by wrongful detention, a claimant must show (1) that it had an immediate right to possession at the time of the act of conversion; (2) that it made a demand for the return of the goods; and (3) that the defendant refused after a reasonable time to comply with the demand. As the editors of Clerk and Lindsell (20th ed) make clear at §§17–25 and 17–26, “a bailee or person in possession of the goods of another must normally deliver them up forthwith on demand …. Delay in complying with the demand will not only render the defendant liable in conversion, but will normally make him an insurer of the goods in respect of all subsequent damage on the basis that he is thereafter in breach of bailment…. However, in the event of doubt as to the claimant's entitlement the defendant is entitled to a reasonable time to make enquiries. …. But once the reasonable time has elapsed, the defendant must hand over the goods. If he does not do so he will be liable in conversion, and in addition the goods will be entirely at his risk thereafter”. I do not understand those basic propositions to be in dispute.

There is no real doubt that Cartus had an immediate right to possession of both of the lots, as the agent of the clients for whose goods it is responsible. Mr Jonathan Cohen, for AML, stigmatises the claim to possession as a bare assertion, unsupported by evidence, but I do not think that is fair. Clause 27 of the service agreement between Cartus and ACRL gave Cartus an immediate right to possession when ACRL went into insolvency, and even if (which is very much in dispute) the benefit of that agreement was assigned to AML, such that AML became sub-bailees under the agreement, there was no suggestion in Mr Sidell’s evidence or in argument that Cartus did not retain an immediate right to possession. On any view, its right to possession of the goods would be superior to that of AML unless (which is not asserted) AML had some contractual right or lien which entitled it to detain them. There was a suggestion by Mr Sidell that the Woolston lot had originally been bailed to a different company, Cartus Moving Services. To that, Mr Wingfield responded that Cartus Moving Services was a division of Cartus. That seems to me to be probable from the document itself (an order directed to ‘Atlantic Storage’ in Surrey dated 24 September 2012), which gives the party to be billed as Cartus Corporation, and which shows the address of Cartus Moving Services as the same address as Cartus; and ACRL’s invoice of the same date shows that they understood Cartus to be the contracting party. There is also a faint suggestion in Mr Sidell’s second witness statement that the fact that a container might have within it multiple client lots meant that a container could not be handed over without separating Cartus’ items from those stored by other clients: ‘Other people would therefore have an interest’. I do not think that follows, unless it is suggested that Cartus sought delivery up of whole containers notwithstanding that they contained goods which did not belong to their clients. I have seen no evidence to support that suggestion. Cartus sought the delivery up of the Lambert and Woolston lots, wherever they were stored. The point made by Mr Cohen is that although AML do not deny that as a sub-bailee there is a bailee with a better title than it has, the court must be satisfied that the applicant for relief is the correct applicant, and, he submits, could not have been so satisfied on the evidence had the application been effective. I disagree. I would have had no difficulty in concluding, on the basis of Mr Wingfield’s witness statement, that Cartus was the correct applicant, and that it had an immediate right to possession, and I certainly have no difficulty now.

Nor am I persuaded by Mr Cohen’s reliance on CPR r19.5A, which obliges the claimant to state in his particulars of claim the name and address of every person who (to his knowledge) has or claims an interest in the goods and is not a party to the claim (by which he means in particular Woolston and Lambert). He argues that the claim would have been struck out for the failure to identify those non-parties. I do not think that is right. Firstly, the claimant did not serve particulars of claim, and was never likely to, since proceedings were issued under CPR Pt 8. For the purposes of the application which was to be heard on 30 April, the obligation to identify such non-parties would not have arisen and would not have defeated it. Secondly, r19.5A gives effect to s8, Torts (Interference with Goods) Act 1977, by which a defendant in an action for wrongful interference is entitled to show that a third party has a better right than the claimant, and by which rules of court may require the claimant to identify any person who claims any interest in the goods. The object of the rule is, presumably, to enable the defendant to identify any person with a better right than the claimant, so that the defendant can (in accordance with s8(2)(c) of the 1977 Act) apply for directions with a view to establishing whether that person has a better title. If particulars of claim had been served which omitted the information necessary to enable the defendant to apply for such directions, I cannot see that the omission would have had any consequence other than that Pt 18 particulars would have been ordered.

Mr Jeremy Richmond, for Cartus, relies on demands made by or on behalf of Cartus for the return of both lots, on 24 January, 27 and 31 March and 10 April. He submits that AML did not comply with those demands forthwith, as it should have done. He argues, correctly in my judgment, that there was no basis for any suspicion that a third party had, or claimed, a superior right to that of Cartus. Nor, for that matter, was there any suggestion that AML had any contractual or other right (eg lien) to detain the goods.

Mr Cohen submits that the Lambert lot was not even in AML’s possession when the application was issued (11 April), so that there was no justifiable demand to be met, and he asserts that there is no dispute about that. Given Mr Wingfield’s concession, it seems to be correct that the Lambert lot was in the possession of ETS as at 11 April; but whether or not it was also in the possession either of AML or of Cartus seems to me to depend on the correctness of the defendant’s case that ETS is Cartus’ agent, which I cannot determine on this application. In the face of the assurance given by Mr Sidell in his undertaking of 13 April and by AML’s solicitor on 14 April that the goods then remained in AML’s possession, which appears to contradict the case that delivery up to Cartus’ agent had been given by 11 April, the submission may not be an altogether attractive one. Mr Richmond counters that since, by reason of the mis-naming of the storage vault, only ACRL or AML could have known where the goods were, and that Mr Sidell could have undertaken the inventory which led to the discovery of the Lambert lot very much sooner than he did. Uncertainty is added by Mr Sidell’s own evidence (1^st witness statement §33) that ‘both parties’ had access to the Lambert lot, which implies that AML continued to have some control over the goods.

In my judgment, AML, through Mr Sidell, not only failed for no good reason to comply within a reasonable period with Cartus’ demands in relation to the Woolston lot, but also, by failing to provide any reassurance in response to those demands, created a climate of suspicion and uncertainty which was calculated to provoke litigation. I cannot see anything to criticise in Cartus’ conduct. Leaving aside the 24 January demand, which made it perfectly clear to Mr Sidell that Cartus required the return of its containers, on 27 March Cartus asked for confirmation within 24 hours that the goods would be delivered up (not for actual delivery up), and had no response; it repeated that demand on 31 March, and had no response; and it made a similar demand on 10 April, seeking no more than an undertaking not to damage, dispose of or otherwise deal with the goods, which prompted the response from Mr Sidell that he needed more time to discuss it with his ‘counsel’, and would respond by the following Wednesday. In my judgment, AML’s behaviour fully justified Cartus in concluding that there was a refusal to comply with its demands, in issuing proceedings on 11 April and in spending the weekend preparing to make an application on Monday 14 April. There is nothing in the point that a Sunday undertaking was as good as a Friday one, since once the Friday undertaking had not been given, Howard Kennedy had to spend the weekend preparing the application which they intended to make on the Monday. Mr Sidell’s undertaking was not received until late on the Sunday, by which time the work would have been done.

The undertaking which was supplied on Sunday 13 April, and the letter from Metis Law dated 14 April, did no more than hold the ring pending the inter partes application for delivery up listed for 30 April. On 28 April, just one clear day before the hearing of the application, Mr Sidell’s first witness statement was served, with the result that the hearing was adjourned. In fact, the application had been conceded on 25 April by Metis Law’s letter of that date. However, the question of costs was still very much in issue. Mr Cohen argues that Cartus could have engaged in a sensible discussion with AML to dispose of the application without needing to ask the court for a ruling, and that is true. That is true of AML also, and it is fair to say from a reading of AML’s solicitors’ letter of 25 April, and of Mr Sidell’s first witness statement on 28 April, both of which were combative in tone, that a negotiated settlement was hardly being flagged up by AML as a realistic prospect. I do not know, of course, what without prejudice discussions may have taken place. However, if agreement could not be reached, the parties had no choice but to ask the court to decide the matter.

If the Lambert lot was in fact in the possession of Cartus and not AML when proceedings were issued, which depends in particular on the agency point, then of course Cartus had no cause of action in respect of that lot. But in my judgment proceedings were justifiably brought in respect of the Woolston lot, and it seems unlikely that any substantial further costs were incurred by the mistaken inclusion (if that is what it was) of the claim for delivery up of the Lambert lot as well. Even if the claim for delivery up of the Lambert lot was mistaken, it was a mistake which was caused or substantially contributed to by (in particular) Mr Sidell’s assertion as at 17 March that the goods as a whole were in AML’s control, and/or by the failure of ACRL or AML to label the Lambert lot properly in the ETS vault, a failure which, if it was that of ACRL, and if (as AML contend) the service agreement was properly assigned by ACRL to AML, is in any event properly visited on AML.

Doing the best I can, and making some allowance for the possibility that the claim in respect of the Lambert lot was misconceived, in my judgment Cartus are entitled to 90% of their costs of the application for delivery up, including the costs of the present application, which (failing agreement) will have to be the subject of detailed assessment.

I am also asked to direct that Wayne Sidell should be added to the proceedings for the purposes of Cartus’ application against him for a non-party costs order. Mr Cohen conceded his joinder, although not that there were good grounds for the application. I therefore make that order, and invite written submissions as to the directions which are sought.