COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
(Her Honour Judge Kirkham)
Strand London WC2 Friday, 22nd March 2002 |
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B e f o r e :
LORD JUSTICE CLARKE
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BUTLERGROVE LIMITED | Claimant/Respondent | |
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CICELY COMMERCIALS LIMITED | Defendant/Appellant |
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of Smith Bernal Reporting Limited
190 Fleet Street, London EC4A 2AG
Telephone No: 0207-421 4040
Fax No: 0207-831 8838
Official Shorthand Writers to the Court)
MR. M. JOHNSON (instructed by Messrs George Green, Cradley Heath) appeared on behalf of the Respondent.
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Crown Copyright ©
"In my judgment, it would not be right, carrying out the balance I have indicated, to order the moneys to be repaid to the appellant. The question is whether I should make some order securing the position pending the hearing of the appeal. Mr de Waal says that I should not because of the absence of evidence. There is undoubted force in that submission, but Mr de Waal, in the course of his submissions, mentioned this was a case in which there is a risk or at least a hint of insolvency on both sides. Mr Johnson, in his skeleton argument, observes that the respondent puts forward no evidence as to its financial position or as to how easy or difficult it might be in practice for the respondent to repay the money. It would have been very easy for the respondent to produce evidence to show that there were no risks at all if it were permitted to retain the money, the subject matter of the appeal, pending the hearing of the appeal.
Doing the best I can, looking at the matter in what I hope is a realistic way, it seems to me that the matter can most fairly be met by an order that does secure the position between now and the appeal. There are various ways in which that could be achieved."
"In those circumstances it appears that the most sensible course is for me to order the moneys to be paid into court within 7 days, provided that if the parties agree to one or other of the methods then one or other of those methods can take its place."
"As far as the payment into court is concerned, we are instructed by our client that Butlergrove Limited, formerly Otis Vehicle Rentals Limited, is not able to make such payment. This is due to the fact that prior to the date of the appeal and due to trading difficulties and heavy losses during and throughout 2001 the company decided upon a rationalisation involving the transfer of its remaining business and assets to a fellow subsidiary, Brown Vehicle Rentals Limited. The rationalisation would be advantageous commercially and result in a saving of costs and expenses, such as auditors fees. This was effective at the company's year end, 31st December 2001. There was then a change of name whereby Brown Vehicle Rentals Limited changed its name to Otis Vehicle Rentals Limited and Otis Vehicle Rentals Limited changed its name to Butlergrove Limited. Our understanding is that Butlergrove Limited, formerly Otis Vehicle Rentals Limited, is a shell company without assets and is simply unable to make the payment ordered."
"During the latter part of 2001 the Brandrick Group was involved in a process of rationalisation for the purpose of saving costs. The respondent company suffered heavy losses during 2001 which effectively wiped out the value of the respondent company. On advice, we decided upon a hive-off agreement between the respondent company and Brown Vehicle Rental Limited (now renamed Otis Vehicle Rental Limited)... That agreement was completed at the end of December 2001. I am satisfied, and have subsequently taken independent advice from an insolvency practitioner upon this, that the hive-off agreement was an entirely proper and sensible way to proceed.
The respondent company is now in effect a shell company without assets. It is for that reason that it was unable to comply with the order of Lord Justice Clarke made on 30th January."