Refuels Ltd v BIP Chemical Holdings Ltd & Anor [2024] EWCA Civ 1563

Stephen Hackett (instructed by Furley Page LLP) for the Appellant

Lord Justice Lewison:

• This application for permission to appeal has at least two unusual features. First, it is made by a person who was not a party to the judgment under challenge. Second, the Appellant’s Notice was filed more than two years after the judgment was given and entered the public domain. For those reasons it has been adjourned into court by Andrews LJ for hearing by a panel of three judges of this court.

• The application arises out of a judgment given by HHJ Cadwaller sitting in the Circuit Commercial Court in the Business and Property Courts in Manchester on 9 September 2021.

• The underlying claim was a claim for damages for breach of warranties contained in a share purchase agreement by which Mrs Blundell sold the whole of the issued share capital in Centec International Ltd to BIP Chemical Holdings Ltd. Centec’s business was the refinement and treatment of chemicals, and in particular the recycling of mixed fuels, for example where a driver puts diesel into a petrol driven vehicle or vice versa.

• The action was begun by a claim form, accompanied by Particulars of Claim, issued on 7 January 2020. Mrs Blundell was the only defendant. BIP alleged a number of breaches of warranty, but by the time of trial there were two main contentions. First, it was alleged that there had been material adverse changes to the business since the accounts date which had not been disclosed. Second, it was alleged that Centec carried on business other than in the normal and ordinary course. It is this second allegation with which we are concerned. The allegation, as pleaded in paragraph 3 (d) of the Particulars of Claim, was that:

“Centec had been subject to a prolonged and systematic fraud perpetrated by a former director, Lucien Davies, in conspiracy with a customer Refuels Limited (“Refuels”). Refuels were in the practice of collecting mixed and contaminated fuels… It sold approximately 2 tankers worth a week to Centec… for c.£27,000 each by agreement by agreement with Mr Davies despite he and Refuels knowing the contents were worth no more than £20,000. Mr Davies and Refuels had an agreement to split the excess.”

• The Defence served in February 2020 did not admit paragraph 3 (d); denied that the facts alleged amounted to a breach of warranty; and complained that BIP had not provided any particulars of the alleged fraud or conspiracy between Mr Davies and Refuels.

• Neither Mr Davies nor Refuels were a party to the action. Neither Mr Davies nor any witness from Refuels gave evidence at trial. Evidence in support of the allegation was given by Mr Bennett of BIP, which the judge set out at [90]. That evidence included an account of his meeting with Mr Taylor, the managing director of Refuels, who was accompanied by its commercial manager Mr Burke. Mr Bennett was barely cross-examined, if at all, about that evidence. The judge concluded at [92] that BIP had proved on the balance of probability that Refuels did defraud Centec in conspiracy with Mr Davies. He described Mr Bennett’s evidence as detailed, plausible and supported by documentation. He said that he placed no reliance on Refuels’ denials in correspondence, which lacked details and had not been tested in cross-examination. He added that it was telling that Refuels had apparently decided to let sleeping dogs lie and had not themselves pursued outstanding invoices.

• In the result, the judge awarded damages for breach of warranties, but because the agreement also contained a cap on liability, the judgment sum was less than it would have been absent the cap.

• Refuels now seeks to challenge the judge’s finding of fact that it defrauded Centec in conspiracy with Mr Davies. Its Appellant’s Notice was filed on 15 December 2023 and issued on 8 January 2024, some two years and three months after the judge gave judgment. It is emphasised on behalf of Refuels that success in the appeal will not alter the judge’s order or the judgment sum, because of the cap.

• This court held in George Wimpey UK Ltd v Tewkesbury Borough Council [2008] EWCA Civ 12, [2008] 1 WLR 1649 that we have a discretion to permit a person who was not a party to the action below to bring an appeal. There is, therefore, no jurisdictional bar to the appeal. Nevertheless, CPR 52.12 (2) (b) provides that an appellant’s notice must be filed at the appeal court within 21 days after the date of the decision of the lower court which the appellant wishes to appeal. Clearly, therefore, Refuels cannot appeal without an extension of time. At the conclusion of the hearing we announced that we would refuse the extension of time for reasons to be given in writing. These are my reasons for joining in that decision.

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