Acquisition 395445638 Ltd v Sicovs & Anor

On 14 November 2018 the Appellant filed Notice of its application for permission to appeal. The Appellant filed an appeal bundle, but it did not contain a copy of the sealed Order of the lower court, nor a transcript of the judgment of HHJ Boucher. Sir Alistair MacDuff’s Order of 8 January 2019 (above) required the Appellant to provide both within 28 days.

On 12 February 2019 the Appellant filed and served a new appeal bundle (albeit that, according to the QB Appeals Office, it did not contain a copy of the sealed Order – which was later remedied). The index indicated that, at Tab 6, the file contained the “Application of Claimant to amend Particulars of Claim”. Ms Rachel Barber, the solicitor at Keystone Law acting for the Respondent, agreed the index to the bundle but did not otherwise consider the content of the bundle.

In fact, there were significant differences between the version of the proposed Amended Particulars of Claim (dated 6 August 2018 and unsigned) which was behind Tab 6 in the Appellant’s appeal bundle (“the third APOC”) and both the first and second APOCs. There were also significant differences between the third APOC and the proposed Amended Particulars of Claim in the UKSG litigation - not least because, in the third APOC, all references to the written Referral and Introducer Agreements had been removed and instead there was reliance on an alleged oral

In the Grounds of Appeal, which were clearly, and wrongly, based on the third APOC, it was variously asserted that:

Consequent on that, in the Appellant’s skeleton argument (which was drafted before the transcript of the proceedings below became available) Mr Simms variously argued, amongst other things, that:

The skeleton argument went on to underline authorities to the effect that a strike out claim should be considered very carefully and that if oral evidence was required to test the contentions of the Claimant then a strike out would be inappropriate as oral evidence cannot be given at a strike out stage. As to the criteria for allowing an amendment to a pleading, reliance was placed on the judgment of Hamblen J (as he then was) in Brown v Innovatorone PLC [2011] EWHC 3221 (Comm) to the effect that:

“As the authorities make clear, it is a question of striking a fair balance. The factors relevant to doing so cannot be exhaustively listed since much will depend on the facts of each case. However, they are likely to include:

(1)

the history as regards the amendment and the explanation as to why it is being made late;

(2)

the prejudice which will be caused to the applicant if the amendment is refused;

(3)

the prejudice which will be caused to the residing party if the amendment is allowed:

(4)

whether the text of the amendment is satisfactory in terms of clarity and particularity”.

Against that background it was submitted that the proposed amendments were not late, as the case had not even reached the Case Management Conference stage, and that the need for the Respondent to amend its Defence could be compensated in costs. It was underlined that the Judge had refused the amendment on the basis that there was no realistic prospect of success at trial on the basis of the amended pleading, and that it was difficult to understand how she had reached that conclusion as she had not addressed the detail of the (oral) Referral Agreement pleaded in paragraph 8 of the Amended Particulars. If the Judge had considered that pleading an oral agreement was not convincing to her (which she did not state) she should have allowed the amendment because it would be unfair to shut out the Appellant on the basis of a conclusion reached by the Judge on an alleged oral agreement without allowing the issue to be tested at trial on oral evidence.

In the Appellant’s supplemental skeleton argument, which was drafted after the provision of transcripts in relation to the hearing on 26 October 2018, reliance continued to be placed on the third APOC and it was asserted (amongst other things) that, without the contractual structure for which the Appellant contended SM and its sister companies would not have been prepared to provide services without payment from the client. Further, it was submitted that the fact that the arrangements contended for by the Appellant were operative was demonstrated in documents that had been put before the court, and that the court could not resolve any contest about the oral Referral Agreement without hearing the oral evidence of the parties.

When Ms Barber later came to consider the document behind Tab 6 in the appeal bundle, she realised that it was significantly different to the version which had been before HHJ Baucher at the hearing on 26 October 2018. Thus, on 25 March 2019, she wrote to Mr Simms requiring a full explanation.

Mr Simms replied to the effect that, at the hearing on 26 October 2018, he had been anticipating working from the Appellant’s bundle, only to find that the lodged version had been lost. He had not seen the Respondent’s bundles prior to the hearing and, in using them at the hearing, he had been trying to find relevant documents and had not focused on any differences between what had been in the Respondent’s bundle and what had been in the Appellant’s bundle. He had believed that the version of the proposed Amended Particulars in the appeal bundle was the version that had been filed for the hearing below but had yet to hear from someone on the Appellant’s side who could explain what had happened. If the proposed Amended Particulars served on 7 August 2018 was the document before the Court, he would paginate a new Tab 6 and include the application and exhibits from the Respondent’s bundle that was used at that hearing.

On 26 March 2019 the Respondent filed and served Ms Barber’s first witness statement, in which she explained that the third APOC was different to the first APOC (which had been served on 7 August 2018 and which she exhibited). She also produced, amongst other things, an accurate schedule of all the differences between the first and third APOCs, and continued that she had also reviewed the second APOC (which had been served on 22 August 2018) and had noted that whilst it had a number of differences when compared to the first APOC, it had retained reference to the written Referral and Introducer Agreements and had exhibited them.

In the afternoon of 27 March 2019, a fourth version of the Amended Particulars of Claim (“the fourth APOC”) was emailed to the Respondent by the Appellant. It was unsigned and was dated 6 August 2018. In this version it was asserted, amongst other things, that:

“8.

…it was orally agreed, and a Referral Agreement was signed between the parties in March 2012 (“the Referral Agreement”) that on the referral of a client by St Martin’s or [the Appellant] or other company controlled by MKA directly, or by the client instructing the [Appellant] directly, or by the client instructing the [Appellant] direct on the recommendation of St Martin’s, the [Appellant] or other company controlled by KMA,(sic) to the [Respondent]:

(i)

the [Respondent] would pay the referring party a referral fee of £750 plus VAT.

(ii)

the [Respondent] would pay to the [Appellant] a final payment of £250 plus VAT per client to St Martin’s, the [Appellant] or other referring company of MKA;

(iii)

The [Appellant] would comply with the instructions of the client contained in his form of authority and with the client instructions contained in paragraph 28 of the Hire Agreement and account to the Claimant for any liability of the client to the [Appellant] for hire charges and to St Martin’s for any liability of the client to St Martin’s for recovery and storage charges. 9. After the introduction of the Jackson Reforms of 2013, the [Respondent] requested and St Martin’s and the [Appellant] agreed that the initial referral fee would be reduced from £750 plus VAT per referral to £500 plus VAT per referral.

10.

Pursuant to the Referral Agreement approximately 300 clients were referred to the [Respondent].

……………………..

21.

Accordingly in the premises:

………………………

(ii)

The [Respondent] is liable to the [Appellant] for the said sum of £10,000 paid by the Third Party Insurers and in respect of which the [Respondent] was liable to account to the [Appellant] pursuant to the Referral Agreement and its knowledge and acceptance of paragraph 28 of the Hire Agreement, and the notification by the Claimant of the incurring of such hire charges and the daily rate thereof.

Thereafter, a witness statement by Mr Simms dated 27 March 2019 was forwarded to the Court and the Respondent “to clarify the position of the actual proposed Amended

In response, in a second witness statement (which was dated 27 March 2019) Ms Barber explained that there now appeared to be four different versions of the proposed Amended Particulars of Claim – namely the first APOC (her “Version 1”) which had been attached to the Appellant’s application to amend dated 6 August 2018; the second APOC (her “Version 4”) which was filed and purportedly served by email on 22 August 2018; the third APOC (her “Version 2”) which was behind Tab 6 in the Appellant’s appeal bundle; and the fourth APOC (her “Version 3”) which had been forwarded to the Respondent by email on 27 March 2019.

Ms Barber continued that it was now anticipated (given that it had been produced in the Appellant’s Supplemental Bundle) that the Appellant would seek to rely on the second APOC and observed, amongst other things, that:

Mr Simms submitted that, when directions were given, as they had been in relation to the instant Claim, litigants were entitled to expect that they would be followed. At all events, he argued, directions should not be changed without allowing argument, but nothing of that sort had happened at the hearing on 26 October 2018. Procedural irregularity had occurred in two ways, namely:

Mr Simms then summarised the procedural history in the instant claim, the UKSG litigation and the Kopec case, and submitted that the Order made by DJ Beckley on 10 August 2018 in the UKSG litigation had superseded the Order made by DJ Manners in the instant Claim on 8 August 2018), and that the Order made (by consent) by DJ Stone on 23/30 August 2018 in the Kopec case had been ignored in the listing of this Claim, along with the Appellant’s Application Notice and the accompanying explanatory witness statement by Mr Ahmed which had been filed on 16 October 2018 in the UKSG litigation, and which had stated that it should be listed before HHJ Baucher on 26 October 2018. In addition, the Order which had been made in the instant Claim by HHJ Luba QC on 29 August 2018 without a hearing, had apparently been made in ignorance of DJ Beckley’s Order.

The Appellant had lodged its bundle (which had contained the relevant Orders, the Application Notice filed on 16 October 2018, and Mr Ahmed’s witness statement in connection with it) in good time prior to the hearing on 26 October 2018, and it was not its fault that its bundle had thereafter been lost. Nor was it the Appellant’s fault that its skeleton argument, which had been lodged with the Court nine days prior to the hearing, and which (at pp.1-5) had set out the procedural history making clear that the procedural situation was a muddle, had been unavailable to HHJ Baucher until just before the hearing, and could not have been fully absorbed by her. Nor did the bundles provided by the Respondent for the hearing on 26 October 2018 contain the Orders relied upon by the Appellant, or the Application Notices and witness statements filed on 22 August 2018 and 16 October 2018. Further, as was made clear to the judge, it would only have taken 20 minutes to provide her with another copy of the Appellant’s bundle. In the result, the judge had only considered the first APOC.

In any event, there were good reasons (particularly in relation to the overall scheme of working between the two sides, as set out in Mr Ahmed’s witness statement) for the consolidation of all the Claims via the proposed Amended Particulars of Claim in the UKSG litigation. Instead the judge had been persuaded by the Respondent’s counsel to ignore the Beckley Order and to proceed solely with the applications in the instant Claim. The judge should have adjourned for 20 minutes to allow the Appellant to obtain another copy of its bundle so as to ensure that she was able to be fully apprised

Mr Simms also referred to five authorities, as follows: - Frey v Labrouche [2012] EWCA Civ at [21], [24] & [43] (it is a fundamental feature that a party should be able to bring his application to court, and that he should be able to make out his case orally); Dunbar Assets PLC v Dorcass Holdings Ltd [2013] EWCA Civ 864 at [12] & [14] (a procedural irregularity as the judge had decided that the claim for possession could be dealt with summarily without a trial); Alpha Rocks Solicitors v Alade [2015] EWCA Civ at [25] & [31} (not appropriate to make findings of fraud on a strike out application); Richards v Vivendi [2017] EWHC 1581 (Ch) at [32] & [52-53] (judge gave no real opportunity to the Appellant to explain himself); and Clarke v Abertawe Bro Morgannwg University Health Board UKEAT/0312/15/RN – May 2017 (which left open the possibility of there being cases where the irregularity or want of natural justice was such as to compel, without more, a remission and re-hearing).

Against that background, Mr Simms submitted that if HHJ Baucher had been aware of the full picture, including the detail in relation to the Application Notice filed on 16 October 2018 then, rather than proceeding as she did, she would have brought everything together via directions at the hearing on 26 October 2018.

In the combination of the Respondent’s skeleton argument and his oral submissions, Mr Randle argued that this Ground was utterly misconceived - as it rested on the assumption that the judge was required to hear the instant Claim alongside the consolidated UKSG Claims (and the Kopec Claim). He underlined that the Beckley Order did not make it compulsory for the instant Claim to be heard alongside the other Claims, only that it should be “if possible”. The assertion that the Luba Order was made in ignorance of the Beckley Order appeared to be based on assumption, and only the applications in the instant Claim had been listed on 26 October 2018. HHJ Baucher had been “fully aware” of that procedural background as the transcript showed that it had been explained by Mr Simms. In the result it had been fully within the judge’s case management powers to decide to hear only the applications in the instant Claim. In particular, CPR 3.1 provided the power to decide the order in which the issues were to be tried (3.1 (2)(j)); the power to exclude an issue from consideration (3.1 (2)(k)); and the power to take any other step or make any other order for the purpose of managing the case and furthering the overriding objective (3.1 (2)(m)). Further, the Appellant had decided to file Application Notice dated 16 October in the different UKSG litigation, not in the instant Claim. In addition, documentation from Companies House suggested that the various companies were not under the control of Mr Ahmed. Rather, although not a test case as such, there was obvious sense in hearing the applications in the instant Claim in order to decide whether, based on the case then advanced, there was a contractual relationship between the Appellant and the Respondent in relation to vehicle recovery, storage, and credit hire.

Mr Randle further submitted that the authorities that Mr Simms had cited were different to the instant case and did not assist the Appellant – e.g. there was no mini trial in this case; Mr Simms had had the opportunity to make all the submissions that

In reply, Mr Simms submitted that it could not be said that his attempt to explain the Orders in the other Claims to the judge was the equivalent of having the Orders available in hard copy. Verbal explanation alone had not been enough. It was nonsense to suggest that the Application Notice of 26 October 2018 had been filed in the wrong Claim – rather, it had been filed in the designated lead Claim. It would have been inappropriate to make it in the instant Claim.

In [54] – [68] above, I have summarised the history of the Appellant’s inappropriate reliance on the third APOC in its Grounds and skeleton arguments, how that was eventually realised by the Respondent, and how it was acknowledged by Mr Simms in his witness statement dated 27 March 2019.

In oral argument, Mr Simms indicated that he did not contest the principles set out in the cases cited by the Judge. This was not, he submitted, a late amendment – the case had just started, there had been no CMC and no disclosure. The question was whether it was a case in which the Appellant was advancing more than fanciful contentions. It was now clear, he submitted, that the Judge had considered the first APOC when she should have considered the second APOC, which had been served on 22 August 2018 - in compliance with the agreed Manners Order of 8 August 2018. The Judge had therefore ruled on the wrong APOC.

Mr Simms continued that in [5] of the second APOC it was asserted that the Appellant had failed to comply with the instructions of the 1^st Defendant contained in his Form of Authority and with the instructions contained in paragraph 28 of the Hire Agreement to account to the Appellant for any liability of the 1^st Defendant to the Appellant for hire charges and to SM for recovery and storage charges. In [7] & [8] of the second APOC there was reference to an approach by the Respondent in or about March 2012, and to discussions thereafter between named representatives of the Respondent, on the one hand, and of the Appellant and SM on the other hand. In [9] there was reference to both an oral agreement and a written Referral Agreement, and in [10] to both a written Introducer Agreement and an additional verbal agreement (in relation to Final Admin fees). Mr Simms further submitted that if the Judge had considered the second APOC and greater details about the working arrangements involved (as demonstrated on the face of the papers), including the fact that all relevant working communications by SM and the Appellant were with the Respondent, not Excel, she would necessarily have concluded that the Appellant’s case should not be struck out.

Mr Randle submitted that the first APOC, which had been before HHJ Baucher, was (as demonstrated by the transcript of that hearing and the differences in the alleged schemes of working) more favourable to the Appellant than the second APOC, which was not before the Judge. No relevant working / contractual relationship was pleaded in the second APOC. In particular, [8] - [12] said nothing about irrevocable instructions; the Client Questionnaire relied upon was only a unilateral statement by

In reply Mr Simms asserted, amongst other things, that it was astonishing to submit that the Client Questionnaire was anything other than a scheme of working.

In accordance with CPR Part 52.21(3):

It is, to say the least, unfortunate that, in seeking to advance its proposed appeal, the Appellant sought, until eventually challenged by the Respondent, to rely upon the third APOC and (based upon it) to advance strong criticism of the judge - when it had never sought, by any route, to rely upon that version of the APOC before the Judge. It is the more unfortunate that reliance was placed on the third APOC even after the transcripts were to hand and it was, or should have been, obvious that the first APOC was the only version about which both sides had advanced argument at the hearing on 26 October 2018. To state the obvious, reliance should never have been placed on the third APOC in this appeal. Nor, for that matter, was the fourth APOC relevant either.

As set out in detail above, the Appellant and its associate companies chose to start the litigation outlined above in piecemeal fashion. In the instant Claim, begun on 29 March 2018, the Appellant accepts that its original Particulars (which alleged negligence) failed to disclose a viable case. On 30 April 2018 the Respondent filed an Application Notice seeking, amongst other things, and unsurprisingly, to strike out the Claim. The hearing was fixed for 8 August 2018. Just a day or two before the hearing, the Appellant filed an Application Notice to amend its Particulars to those in the first APOC (which alleged that, pursuant to the Referral Agreement, and to its knowledge of paragraph 28 of the Hire Agreement, the Respondent was under a contractual obligation to pay the Appellant the full sum of £10,000). At the hearing before DJ Manners on 8 August 2018 it was ordered, by agreement, that the hearing be vacated, and the case transferred for hearing in the Central London County on the first available date after 3 October – with the Appellant to serve any additional pleadings by 4pm on 22 August 2018.

On 10 August 2018, DJ Beckley ordered that the UKSG cases should be consolidated, all transferred to the Central London County Court and heard, if possible, with the applications in the instant case, and if possible with the Kopec case (if it had been transferred from Barnet to the Central London County Court). On 22 August 2018

On 16 October 2018, in the consolidated UKSG litigation, UKSG filed an Application

The Appellant lodged its bundle, and its skeleton argument, in good time for the hearing before HHJ Baucher on 26 October 2018. Unfortunately, however, both were thereafter mislaid – although Mr Simms must have had his own copy of each. In the end, a copy of Appellant’s skeleton argument was provided to the Judge on the day of the hearing, and bundles provided by the Respondent were used (albeit that Mr Simms had indicated that the judge could be provided with a copy of the Appellant’s bundle within 20 minutes). The submissions made during the hearing and the judgment thereafter are summarised in [42] – [52] above.

Although referred to in the combination of the Appellant’s skeleton argument and the submissions of Mr Simms and Mr Randle, it appears that the judge did not have actual sight of the Order made by DJ Beckley, the Consent Order made by DJ Stone, or the Application Notice dated 16 October 2018 and its accompanying proposed Amended Particulars of Claim.

Equally, albeit that the Court’s copy of the appellant’s bundle had been mislaid, and surprisingly if it was intended to rely upon the second APOC (given that Mr Simms must or should have had a copy of it in his own bundle or otherwise to hand , that it was signed and dated 22 August 2018 and was thus easily identifiable, and that it had been “served” on the Respondent by email) the arguments advanced on both sides in relation to the listed applications were confined to the first APOC, and thus the Judge was never asked to consider the second APOC. It is also clear from the transcript of the hearing that Mr Simms made clear that the Appellant was not intervening as a third party, and / or relying on a third party right (which, notwithstanding that, was floated in his witness statement of 27 March 2019, but not thereafter pursued).

As indicated above, the procedural irregularities ultimately relied upon by the Appellant in Ground 1 are that:

I have summarised the arguments on both sides at [70] – [77] above.

I observe that:

Further, in my view:

Against that background, and in light of the submissions of the Respondent, Ground 1 is not, in my view arguable. The impugned decisions made by the judge were within the reasonable scope of the exercise of her discretion, and notwithstanding the unfortunate loss of the Appellant’s bundle and (until the day of the hearing) the loss of the Appellant’s skeleton argument, it is not arguable that the decisions were either wrong or unjust.

As indicated above, in Ground 2 it is asserted that the Judge was wrong to determine that the Appellant’s proposed Amended Particulars of Claim had no real prospect of success. I have summarised the arguments in relation to this Ground at [79] – [82] above.

Only the first APOC was relied upon by the Appellant in argument on 26 October 2018. To state the obvious, it was incumbent on the Appellant to rely upon what it regarded as the relevant version. Notwithstanding the loss of the court copy of the

In any event, and for the reasons that she gave, in my view the judge was plainly right (rather than arguably wrong) to conclude that the first APOC had no realistic prospect of success. The essential thrust of the first APOC was that the relevant contractual relationship was to be found in documents that were before the Court. The Appellant’s procedure / scheme of working arguments did not assist it. Nor, in any event, for much the same reasons (combined with those advanced in argument by the Respondent in the hearing before me) is it arguable that there was any realistic prospect of success in the second APOC; nor (for that matter, in my view) in the proposed Amended Particulars that accompanied the Application Notice dated 16 October 2018. Finally, for the reasons explained above, it is not necessary to consider the prospects of success of the third and fourth APOCs. Hence Ground 2 is not, in my view, arguable either.

For the reasons set out above, in the particular circumstances of this Claim, I refuse permission to appeal on both Grounds. I propose (unless a hearing is requested) to deal with consequential applications on paper, with the Respondent providing (after liaison with the Appellant) a draft Order for my consideration.