CPL Ltd v CPLl Opco (Trinidad) Ltd & Anor, Court of Appeal - Chancery Division, December 21, 2017, [2017] EWHC 3399 (Ch)

Issuing Organization:Chancery Division
Actores:CPL Ltd v CPLl Opco (Trinidad) Ltd & Anor
Resolution Date:December 21, 2017
 
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Neutral Citation Number: [2017] EWHC 3399 (Ch)

Case No: HC-2015-001153

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice, Rolls Building

Fetter Lane, London, EC4A 1NL

Date: 21/12/2017

Before:

MASTER CLARK

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Between:

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Andrew George QC (instructed by Muckle LLP) for the Claimant

Tom Richards (instructed by Signature Litigation LLP) for the Defendants

Hearing date: 28 November 2017

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Judgment ApprovedMaster Clark:

Application

  1. This is the application dated 25 September 2017 of the second defendant, Pettigo Commercio Internacional LDA (``D2'') seeking summary judgment against the claimant, CPL Limited (``C'').

    Parties and the claim

  2. C is a company incorporated in St Lucia and the originator of the Caribbean Premier League, an annual Twenty20 cricket league staged in the West Indies (``the League''). The first defendant, CPL Opco (Trinidad) Limited (``D1'') is a company incorporated in Trinidad and Tobago, which was set up for the specific purpose of ``operating'' a cricket team representing Trinidad and Tobago (``the team'').

  3. D2 is a company incorporated in Madeira. It owns all the shares in CPL Holdco (Trinidad & Tobago) Limited (``the holding company''), which itself owns all the shares in D1. D2 bought the shares in the holding company from C pursuant to a share purchase agreement executed on 20 July 2013 (``the SPA''), which as will be seen, gives rise to the principal basis on which D2 now says that the claim against it has no real prospect of success.

  4. The claim against D1 is based on an agreement dated 22 July 2013 between it and C described as a participation agreement (``the Agreement''). Under the Agreement

    (1) D1 became the ``operator'' of the team;

    (2) C was responsible for the costs of operating the League;

    (3) D1 was responsible for the costs of operating the team.

  5. The Agreement also provided, at clause 22:

    ``22. Guarantee

    If [C] reasonably believes that at any time a parent company (or companies) is (or are) required to guarantee the obligations of [D1] under this Agreement, then as soon as practicable and in any event with ten days following a request from [C] [D1] shall ensure that a company or companies of financial standing which is (or are) acceptable to [C] (each a ``Guarantor'') duly and properly executes as a deed of guarantee in the form set out at Schedule 4 and delivers such deed to [C] ...``

  6. C's case against D1 is that it failed to comply with its obligations under the Agreement and, accordingly, is liable under it in debt, and in damages for its breach. The total sum claimed is US$1,155,886, which at current exchange rates is about £866,000, plus interest.

  7. The claim against D2 is set out at paragraphs 25 to 32 of the Re-Amended Particulars of Claim dated 7 July 2016 (``the PoC''). Its commercial significance is that D1 is a shell company with no assets, so any victory against it will be pyrrhic.

  8. Paragraphs 25 to 27 set out an oral warranty that C alleges was provided by Mr Malique of D2:

    ``25. The Second Defendant expressly warranted to the Claimant that it would share primary liability for all and any debt incurred by the First Defendant pursuant to the Agreement.

  9. The said warranty comprised an oral promise made by Mr Mohammed Malique of Lycatel Services Limited, with the authority of the Second Defendant, to Kieran Foley of the Claimant, on 22 July 2013 in the boardroom of Lycamobile UK Limited (``Lycamobile'') in London. Mr Malique assured Mr Foley that, although the Claimant was entering into an Agreement with the First Defendant, the Second Defendant was the parent company of Lycamobile, that the Second Defendant sat behind both Lycamobile and the First Defendant, and that the Second Defendant would be responsible for all the sums due under the Trinidad and Tobago Franchise and the opex (i.e. operating expenses) incurred by the First Defendant.

  10. On a true construction of that warranty, alternatively as a matter of obvious implication, the Second Defendant's warranty was an offer to so share primary liability in the event that, as the Second Defendant wished the Claimant to do, the Claimant entered into the Agreement.''

  11. Paragraphs 28 to 29 set out that, in consequence, C and D2 entered into a collateral contract (consideration for which was provided by entering into the Agreement):

    ``28. As a consequence thereof, a contract collateral to the Agreement was entered into between the Claimant and the Second Defendant upon the Claimant accepting that offer by entering into the Agreement (``the Collateral Contract'').

  12. In the premises, consideration for the Collateral Contract was provided by the Claimant entering into the Agreement.''

  13. Paragraph 30 sets out an alternative basis pursuant to which consideration is said to have been given for the Collateral Contract:

    ``Further or alternatively, pursuant to clause 22 of the Agreement, the Claimant was entitled to require a `parent company' to `guarantee the obligations of the Company under this Agreement'. The Claimant's decision not to exercise its right under this clause was, as the Second Defendant would have well known and intended, influenced by, and therefore taken in consideration for, the oral promise referred to in paragraphs 25 and 26 above.''

  14. Paragraph 31 contains the basis on which the Collateral Contract is alleged to be evidenced:

    ``Furthermore, the Collateral Contract is evidenced by the Second Defendant's conduct in requesting the Claimant to send to it invoices in respect of the First Defendant and then paying those invoices pursuant to the Collateral Contract. ...''

  15. D2's Defence dated 14 September 2016 sets out that no meeting occurred on 22 July 2013. It denies that any oral promise was given, and asserts that in any event Mr Malique had no authority to bind D2.

  16. The Reply accepts that the relevant meeting occurred on 20 July 2013, the date when the SPA was executed.

  17. There have been two contested interim applications. The first was C's successful application to join D2 to the claim. The second was Ds' unsuccessful attempt to obtain the trial of a preliminary issue of whether D2 was liable under the Collateral Contract.

  18. The trial is listed to commence in a 5 day window from 8 May 2018. Disclosure and the exchange of witness statements for trial have taken place, and the parties agreed that this application should be heard after exchange of the trial witness statements.

    Legal principles

  19. The principles to be applied on applications for summary judgment are well established. They were summarised by Lewison J, as he then was, in Easyair Ltd v Opal Telecom Limited [2009] EWHC 339 (Ch), in a formulation approved in a number of subsequent cases at appellate level, including AC Ward & Sons v Catlin (Five) Limited [2009] EWCA Civ 1098 and Mellor v Partridge [2013] EWCA Civ 477. It is unnecessary to set them out here.

  20. In Doncaster Pharmaceuticals Group Ltd and others v Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661, Mummery LJ said at [5]:

    ``Although the test can be stated simply, its application in practice can be difficult. In my experience there can be more difficulties in applying the ``no real prospect of success'' test on an application for summary judgment (or on an application for permission to appeal, where a similar test is applicable) than in trying the case in its entirety (or, in the case of an appeal, hearing the substantive appeal). The decision-maker at trial will usually have a better grasp of the case as a whole, because of the added benefits of hearing the evidence tested, of receiving more developed submissions and of having more time in which to digest and reflect on the materials.''

    Grounds of D2's application

  21. I turn now to D2's counsel's submissions that the test for summary judgment is met. In deciding whether D2 should be joined to the claim, I have already held that the claim against it has a real prospect of success. However, D2 submits that since its joinder the case against it has materially worsened and is now unsustainable. The three developments D2 relies upon are:

    (1) The change in C's case as to the date on which the alleged warranty was given from 22 July 2013 to 20 July 2013;...

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