England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER DISTRICT REGISTRY
(HIS HONOUR JUDGE WAKSMAN QC)

		Royal Courts of Justice Strand London WC2A 2LL
		11 June 2013

Lord Justice Longmore:

1. This is Mr Gill's appeal, with the permission of Rix J, on points arising from two judgments of HHJ Waksman QC in the Manchester District Registry. Mr Gill has been operating for a large period of his life in the petrol station business buying his supplies of petrol from various oil companies, but ending up with the current claimant in these proceedings, GB Oils Limited, trading as Owen Fuels. In effect the supply goes back a number of years with the major oil company behind such supply being Chevron.
2. From about 2002 Mr Gill was operating through a company called JetForge. When JetForge was in operation he had six garages. JetForge failed in about 2007 as a result of a company, according to Mr Gill, being defrauded by its employees. When it failed, Mr Gill set up a new business under the name of South Wales Service Stations ("SWSS") and another company called Maesteg Service Stations ("Maesteg"). SWSS started in October 2007 and then GB Oils took over the supply from Chevron, or perhaps another company in the Chevron operation in 2008. At that time Mr Gill guaranteed SWSS's liabilities and debts past and future under a guarantee dated 1 December 2008, and SWSS itself later guaranteed Maesteg's liabilities and debts past and future in a guarantee given on 30 April 2009.
3. In due course, later in 2009 SWSS failed and Mr Gill was called upon to meet its liabilities and the liabilities of Maesteg as guaranteed by SWSS under his own guarantee. That is what has led to the current litigation under which GB Oils claims against Mr Gill as guarantor.
4. GB Oils' claim was for some £600,000 or so, including interest, and it sought summary judgment on that claim, albeit it limited its summary judgment claim to £450,000. The question for the judge was whether he should give summary judgment for that amount.
5. In his first judgment of 13 March 2012 he dealt with the point that GB Oils had been overcharging SBSS and Maesteg, and concluded that any cross-claim in that regard could not be more than about £65,000. He was also prepared to accept that this overcharging point could be taken by SWSS back to the beginning of its relationship with Chevron in 2007. He then adjourned to deal with the point left over which he could not deal with on that day which was called the rebates point. He dealt with the rebates point in a further judgment on 15 May 2012. In the end, he considered that the rebates point, although it might give rise to an issue of a kind, was not such an issue as would, even with the overcharging point, take the amount for which SWSS was liable below the figure of £450,000, which is all that GB Oils was claiming at that time. He therefore gave summary judgment for £450,000. It is against that summary judgment that Mr Gill appeals.
6. When it came to GB Oils' takeover from Chevron in September 2008 the judge was, as I say, prepared to go back to SWSS's start up in business when it was obtaining supplies from Chevron from October 2007, and to accept that there was a dispute which ought to go to trial about overcharging from that date. For those purposes, he was prepared to accept some calculations which were made by the parties as to the quantum of such overcharging.
7. The judge summarised the figures at paragraph 34 of his first judgment as being £58,000 in respect of GB Oils' supply to SWSS, £7,000 in respect of GB Oils supply to Maesteg, and £50,000 in respect of Chevron's supply to SWSS in the year before GB Oils came on the scene. Therefore the judge allowed a total sum of £115,000 in respect of the overcharging argument. That involved a calculation of .6p per litre over an estimate of the millions of litres which had been supplied to Maesteg and SWSS in the two years from the autumn of 2007 to the autumn of 2009.
8. It is now said that when SWSS was set up in October 2007 to take over after JetForge had failed, its very first transaction in October 2007 was to pay off the indebtedness of JetForge to Chevron in the sum of £359,000. It is not in dispute that about ten such payments totalling that sum were made by SWSS in discharge of JetForge's outstanding liability. Mr Gill's point is this: that liability of £359,000 was greater than it properly ought to have been when account is taken of the overcharging of JetForge by Chevron; that is to say GB Oils' predecessor in the relationship.
9. Mr Gill says that just as some allowance must be made for the purposes of trial about overcharging to SWSS and Maesteg by Chevron/GB Oils, so an allowance has to be made by overcharging to SWSS's predecessor, JetForge, in the years in which JetForge had been doing business with Chevron before the autumn of 2007. The judge did not deal with this point in terms. This is the first of the three points on which Rix LJ has given permission to appeal.
10. Mr Gill's calculation, with the aid of the evidence of Mr Leighton Thomas, was that the sum could be calculated at the .6p rate over the supplies to JetForge over a period from 2002 to 2007 when JetForge was operating six garages against the three garages operated by Maesteg and/or SWSS at £345,000-odd.
11. Rix LJ on the oral application for renewal was willing to accept Mr Gill's statement that there was material before the judge which would support that figure of £345,000-odd. Rix LJ considered that although there might be difficulties in SWSS, and therefore Mr Gill, being able to take credit for any overcharging for which Chevron was responsible to JetForge, nevertheless it might be said that there should be permission to defend the claim because the judge was prepared to take into account overcharging by Chevron to SWSS and because SWSS had to discharge the liability of JetForge in order to continue in business buying supplies from Chevron.
12. Rix LJ then considered two further figures of £67,763 for shop stock and fuel stock, and £43,431, which are figures within the sum of £167,000-odd which was Maesteg's liability for which SWSS was responsible under its guarantee of Maesteg's liabilities and for which Mr Gill was in turn responsible under his guarantee of SWSS's liabilities.
13. The judge did not deal with those two sums as separate items in his judgments, but Mr Gill submits, by reference to the claim of GB Oils to invoices in support of the claims to those amounts (see paragraphs 36 and 38 respectively of Miss Hamilton's witness statement dated 17 October 2011 in support of GB Oils' summary judgment application), that those invoices discussed in those paragraphs are disputed and not accepted because there is no relevant paperwork available to SWSS to support the items charged in the relevant invoices. So Rix LJ gave permission to appeal on these two matters also.
14. This court is most grateful to Mr Josh Lewison, who now appears pro bono for Mr Gill. He submits that the judge failed to consider what evidence might reasonably be available after disclosure at trial. Insofar as this is a separate point from the three points on which he has permission to appeal, that is not a point which is open to him on Rix LJ's order, but he uses that point to bolster the points on which Mr Gill has permission to appeal.

The first point

15. This point is a new point. The point made to the judge was a much more general one, namely that SWSS had paid £358,000 to discharge JetForge's liability to Chevron, but that Chevron was not entitled to charge that amount to SWSS's account, so that SWSS had paid £358,000 as a volunteer. Indeed, it was suggested that Chevron's application of the money was unauthorised and a fraud on SWSS. That point only emerged for the first time in a skeleton argument served the day before the hearing. If it was a serious point, it might support a claim that the sum was paid by mistake or by fraud, but there was no evidence of any fraud or mistake, and the judge dismissed the contentions on the basis (a) that there was no evidence to support them, and (b) that if there had been any substance to them, they would have been pleaded by SWSS in the case against it brought by the claimants when it was still trading and solicitors were representing it. That claim had of course been brought to a halt when SWSS went into liquidation shortly before the date fixed for trial of that claim.
16. The point to which Rix LJ has given permission was not therefore before the judge in any real sense. Mr  Lewison says it was apparent on the papers, but it is in any event a doubtful point because any overcharging by Chevron of JetForge would, on the face of it, only result in a claim by JetForge in respect of such overcharging. Nevertheless, for my part I would be prepared to say that it was in theory arguable that a true volunteer might be able to recover a sum paid voluntarily if he could show that there had been an element of overcharging and that the payment had been made by mistake in ignorance of such overcharging.
17. Mr Gill's insuperable difficulty, however, is that at no stage has SWSS, or even Mr Gill himself, said that the payment of £358,000 was a payment made as a result of a mistake operating on its or his mind. The word "mistake" in the context of this case was first uttered by Mr Lewison this morning, despite the wealth of evidence that the parties have put before court on this summary judgment application.
18. The matter is made even more unarguable by the fact that SWSS's accounts for the period 18 October 2006 to 31 December 2007 signed by Mr Gill, albeit unaudited, show the precise figure paid in respect of JetForge's debt to Chevron as the cost of an intangible fixed asset, presumably for the goodwill of JetForge as at 31 December 2007. It is clear that Mr Gill thought then that SWSS was paying for an asset of substantial value. If that was all a mistake, one would expect there would be some mention of that fact in his evidence in respect of the summary judgment application. It is not there. If indeed, as Mr Gill's original case also sought to say, it was a fraudulent or unauthorised application by Chevron of the money owed by JetForge to Chevron's account, it is surprising, to say the least, that there is no explanation of how the matters came to be stated in the accounts of SWSS as at 31 December 2007.
19. Mr Lewison submits that something relevant might turn up on disclosure, but unless a foundation can be laid to support a genuine cross-claim by SWSS that they can recover the sum of £358,000 as having been overcharged to JetForge, there is no point in hoping that something might turn up on disclosure. Any such cross-claim gets nowhere unless there is some evidence of mistake, and here there is none one.

The second and third points in relation to Maesteg

20. It is true that the judge does not deal expressly with the amounts of £67,763 and £43,432 paid by Maesteg in his judgment, but they were dealt with in detail in paragraphs 36 and 38 of Miss Hamilton's statement. There was never any evidential response to that, save the assertion that the same arguments in relation to the balance due from SWSS applied to the Maesteg balance. The judge did deal with it generally in paragraph 42 of the judgment when he said this:

"There is in fact a detailed analysis of the Maesteg debt, how it arose, and how all the Maesteg payments were treated by Ms Hamilton, in her witness statement, and the relevant parts of that are simply not rebutted by Mr Gill in his evidence. And here I refer to the whole section of her witness statement, starting at paragraph [24]. It deals in detail with certain payments of certain invoices, as to how they were treated, and what they were in respect of. There is no detailed challenge to it and no reason why I should not accept it at face value. Again, if there was anything in this point, it is a point which would have been made a very long time ago, not least in the original proceedings against Maesteg."

21. Again, there is no reason to suppose that disclosure of further documents will mean that a defence will emerge. In a case before the Commercial Court or the Mercantile Courts, parties to summary judgment applications must be prepared with their material and cannot take refuge in vague assertions that more documents may reveal a defence when that cannot be specified with any hope of success at the time when summary judgment is sought.
22. The judge was well aware that Mr Gill said that he wanted to bring witnesses and cross-examine the claimant's witnesses after full disclosure of documents had been given, but said, correctly, that those were not points that could be made in a vacuum. At paragraph 73 of his judgment he continued:

"They can only be made if they are relevant to what he says will show a real defence to this claim. Equally, in the circumstances of this case, and notwithstanding the serious overcharges where GB Oils in a different context has admitted liability, none of that persuades me that this is a case where there is some other compelling reason for a trial. All of that is simply speculation. The wish to look at every single document which the claimant might have and pore through them is not a good reason to avoid summary judgment if there is no defence."

23. Mr Lewison submits that there is no vacuum here, but in truth there is just that, in the absence of a properly formulated and evidenced cross-claim of mistake operating on the mind of either SWSS or Mr Gill. There is here no such formulation, nor any such evidence, and I would dismiss this appeal.

Lady Justice Black:

24. I agree.

Lady Justice Gloster:

25. I agree also.

Order: Appeal dismissed