Robert Lawrence & Anor v Jonathan Cowell & Ors
[2023] EWHC 2644 (Ch)
ClearCourse Partnership Acqireco Limited & Anor. v Jethwa & Ors.
11 May 2023
[2023] EWHC 1122 (Ch)
High Court
Two companies argued about a deal. One company (ClearCourse) said the other (Jethwas) lied about who owned some software, and didn't pay back some money. The judge mostly sided with ClearCourse, saying the Jethwas didn't have good enough arguments to win. They still have a chance to appeal.
Key Facts
- •ENL sold its share capital to CPA under a Share Purchase Agreement (SPA).
- •A dispute arose concerning the ownership of intellectual property (IP) in Emperium Software.
- •Claimants (CPA and ENL) alleged that the IP belonged to ENL, while Defendants (Jethwas, Palmyra, EDE) claimed it belonged to EDE.
- •The SPA included earn-out provisions based on ENL's performance.
- •The Defendants counterclaimed for unpaid earn-out consideration, alleging wrongdoing by CPA directors.
Legal Principles
Summary judgment standard: 'real prospect' of success; not a 'mini-trial'; consider reasonably available evidence.
CPR 24.2, Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
Strike-out standard: no reasonable grounds for bringing/defending claim.
CPR 3.4(2)(a)
Amendment principles: overriding objective; balance injustice; timing crucial; real prospect of success.
CPR 17.1(2)(b), Pearce v East and North Hertfordshire NHS Trust [2020] EWHC 1504 (QB), Front Door (UK) Ltd v Lower Mill Estate Ltd [2021] EWHC 2324 (TCC)
Agency: Principal liable for fraudulent misrepresentations by agent within scope of actual or ostensible authority.
The Ocean Frost [1986] AC 717, Hockley Mint v Ramsden [2018] EWCA Civ 2480, Ivy Technology Ltd v Martin & Bell [2022] EWHC 1218 (Comm)
Contract interpretation: objective meaning to a reasonable observer with knowledge of admissible background facts.
N/A
Deceit: false representation of fact, made with intention to be relied upon, relied upon, causing loss; knowledge or recklessness as to falsity.
Bell v Singh [2022] EWHC 3272 (Ch)
Outcomes
Palmyra's application for strike-out and summary judgment dismissed; CPA granted permission to amend.
CPA has a real prospect of showing Palmyra authorized Jethwa to negotiate, and his misrepresentations were within the scope of that authority.
Jethwa's counterclaim struck out; application to amend dismissed.
Counterclaims lacked merit due to flawed interpretation of the SPA's earn-out provisions and lack of evidence supporting allegations against Gualtieri and Rowe.
Claim to recover the £200,000 directors' loan dismissed.
Insufficient evidence to support a compromise agreement; the claim was not waived or settled.
Defence to breach of warranty claim struck out.
If ENL did not own the IP, the warranties were breached; Jethwas' defense lacked merit.
Defence to deceit claim struck out.
If ENL did not own the IP, Jethwa's representations were false, and he likely knew or was reckless about their falsity.
Similar Cases
Clearcourse Partnership Acquirecco Limited & Anor v Manoj Jethwa & Ors
[2024] EWHC 1964 (Ch)
Tactus Holdings Limited v Philip Mark Jordan & Ors
[2024] EWHC 399 (Comm)
Sean Richard Ormsby Lindsay v Penny O’Loughnane & Anor (Re FX Solutions Ltd (in liquidation))
[2023] EWHC 2247 (Ch)
OneCom Group Limited v James Palmer
[2024] EWHC 867 (Comm)