Holman Fenwick Willan LLP v Wahid Samady
[2023] EWHC 125 (KB)
Blacklion Law LLP v Amira Nature Foods Ltd & Anor
15 June 2023
[2023] EWCA Civ 663
Court of Appeal
A law firm (Blacklion) did work for a company (Amira). Amira was supposed to pay, but didn't. The judge said Amira owed the money, and the company's boss also had to pay because he stopped Amira from paying Blacklion. The company tried to appeal, but the appeal court said the judge was right.
Key Facts
- •Blacklion Law LLP (Blacklion) was instructed by Amira Nature Foods Limited (Amira) under the "Avatar Retainer" to provide legal services.
- •The Avatar Retainer stipulated a fixed fee of £300,000 payable either in cash or Amira shares.
- •Amira issued shares to Blacklion as payment but these shares were subject to restrictions preventing their sale.
- •Blacklion sued Amira for the unpaid fee and Mr. Chanana (Amira's chairman and controlling mind) for procuring Amira's breach of contract.
- •The High Court judge ruled in favor of Blacklion, finding Amira liable for the debt and Mr. Chanana liable for inducing the breach.
Legal Principles
Contractual interpretation: Courts should favor constructions consistent with business common sense.
This judgment's analysis of the Avatar Retainer.
Implied terms: A term can be implied into a contract to give business efficacy to its express terms.
This judgment's analysis of the Avatar Retainer.
Inducing breach of contract: A director can be liable for inducing a breach of contract by their company if they act outside the scope of their authority and mala fide.
Said v Butt [1920] 3 KB 497; OBG Ltd v Allan [2009] 1 AC 1
Raising new points on appeal: Generally, new points cannot be raised on appeal unless the other party was not prejudiced or the point relates to jurisdiction.
Singh v Dass [2019] EWCA Civ 360; Notting Hill Finance v Sheikh [2019] EWCA Civ 1337; Hudson v Hathaway [2022] EWCA Civ 1648
Pleading requirements: All essential elements of a cause of action must be pleaded.
Prudential Assurance Co. Ltd v Revenue and Customs Commissioners [2017] 1 WRL 4031
Outcomes
Appeal dismissed.
The Court of Appeal upheld the High Court's decision, finding that Amira owed Blacklion the £300,000 fixed fee as a debt because neither cash nor freely saleable shares were provided as payment.
Amira's liability for the fixed fee as a debt upheld.
The contract allowed for payment in cash or shares; neither was provided, and the shares’ restrictions prevented sale, rendering the fixed fee a debt.
Mr. Chanana's liability for procuring Amira's breach of contract upheld.
Despite the lack of explicit pleading of 'mala fide' and acting outside his authority (elements from Said v Butt), the court found that this point was raised implicitly during closing submissions and that Mr. Chanana's actions were not in Amira's best interest, justifying his liability.