Robert Lawrence & Anor v Jonathan Cowell & Ors
[2023] EWHC 2644 (Ch)
Tactus Holdings Limited v Philip Mark Jordan & Ors
1 March 2024
[2024] EWHC 399 (Comm)
High Court
A buyer sued the sellers of a company after discovering problems with the company's accounts. The judge said the buyer didn't prove the sellers intentionally lied, but there were still valid questions about whether the sellers met their promises in the sale agreement. The judge gave the buyer a chance to improve their arguments related to some of the accounting issues.
Key Facts
- •Tactus Holdings Limited (Claimant) acquired Box Holdings (BHAM) Ltd from Philip Mark Jordan et al (Defendants).
- •The acquisition was based on a minimum adjusted EBITDA of £5 million for the 12 months to 31 October 2021.
- •Tactus alleged breach of warranty and deceit against the Defendants.
- •The claims centered on the stock provision in the Management Accounts, with allegations of misrepresentation concerning its calculation and sufficiency.
- •Defendants applied for reverse summary judgment and/or strike out of the Claimant's claims.
Legal Principles
Summary judgment principles as established in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339, ArcelorMittal v Ravi Ruia [2022] EWHC 1378 (Comm), and King v Stiefel [2021] EWHC 1045 (Comm).
Paragraphs 11-12
Construction of disclosure clauses in warranty claims as summarised in Triumph Controls UK Ltd v Primus International Holding Company [2019] EWHC 565 (TCC).
Paragraph 26
Principles for determining the effect of representations in deceit claims as summarised in Loreley Financing (Jersey) No.30 Ltd v Credit Suisse Securities (Europe) Ltd [2023] EWHC 2759 (Comm).
Paragraph 32
Implied representations in statements of opinion, as discussed in Barings plc (in liquidation) v Coopers & Lybrand [2002] EWHC 461 (Ch) and Rosser v Pacifico [2023] EWHC 1018 (Ch).
Paragraph 45
Outcomes
Reverse summary judgment granted for the deceit, unlawful means conspiracy, procuring breach of contract, and unlawful interference claims.
The court found no arguable case that the Defendants made deceitful representations. The other claims were dependent on the deceit claim.
Application refused for the breach of warranty claim relating to the stock provision.
The court found the warranty claim arguable, despite the disclosure letter, because the SPA prevented the use of the buyer's knowledge as a defence.
Adjournment of the application regarding the residual allegations.
The residual allegations were inadequately pleaded. The Claimant was given an opportunity to amend.
Similar Cases
Tariq Hamoodi v Lombard Odier Asset Management (Europe) Ltd
[2024] EWHC 1314 (Comm)
Finsbury Food Group Plc v Axis Corporate Capital UK Limited & Ors
[2023] EWHC 1559 (Comm)
OneCom Group Limited v James Palmer
[2024] EWHC 867 (Comm)
Decision Inc Holdings Proprietary Limited & Anor Stephen Garbett & Anor
[2023] EWHC 588 (Ch)