Tactus Holdings Limited v Philip Mark Jordan & Ors
[2024] EWHC 399 (Comm)
Capital Green Recycling Limited & Anor v Steven Nicholas Bird & Anor
3 April 2023
[2023] EWHC 760 (Comm)
High Court
Two companies fought over a deal gone wrong. One company claimed the other lied and broke promises. The judge didn't believe them, and so the claims failed. One small part of the counterclaim succeeded.
Key Facts
- •OSR, a scrap metal merchant, sold a majority stake to CGR in 2019.
- •CGR alleged breach of warranties and misrepresentation by the Birds (OSR's previous owners).
- •OSR claimed equitable compensation for wrongful dividend payments by the Birds.
- •The Birds denied the claims and made counterclaims.
- •A central issue was the operation of OSR's invoice discounting facility with Bibby.
- •Allegations included Fresh Air Invoicing (fabricating invoices) and Advance Invoicing (invoicing before delivery).
- •The Completion Accounts process led to a significant price reduction for the shares.
- •The Birds' dismissal from OSR led to further disputes.
Legal Principles
Creditor duty of directors under section 172 of the Companies Act 2006.
Sequana SA and others [2022] UKSC 25
Breach of warranty claims under a share purchase agreement (SPA).
SPA clauses 6 and Schedule 3
Misrepresentation claims, including fraudulent misrepresentation.
Common law principles
Estoppel.
Common law principles
Outcomes
CGR's breach of warranty claim dismissed.
Insufficient evidence to prove significant Fresh Air Invoicing; allegation regarding Purchase Reserve Ledger failed due to pleading issues.
CGR's misrepresentation claim dismissed.
Insufficient evidence to support alleged misrepresentations; CGR did not rely on the representations in entering the SPA.
OSR's breach of duty claim dismissed.
Insufficient evidence to show OSR was insolvent when dividends were paid; even if there was a breach, it caused no actual loss to OSR.
Birds' counterclaim allowed in part.
CGR ordered to procure release from remaining personal guarantees; estoppel claim dismissed due to insufficient evidence of assurance.