Winter v Hockley Mint Ltd, Court of Appeal - Civil Division, November 15, 2018, [2018] EWCA Civ 2480

Resolution Date:November 15, 2018
Issuing Organization:Civil Division
Actores:Winter v Hockley Mint Ltd
 
FREE EXCERPT

Case No: A3/2018/0449

Neutral Citation Number: [2018] EWCA Civ 2480

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

BIRMINGHAM DISTRICT REGISTRY

HHJ Purle QC (sitting as a Judge of the High Court)

[2017] EWHC 3748 (Ch)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 15/11/2018

Before:

THE MASTER OF THE ROLLS

LORD JUSTICE FLAUX

and

MRS JUSTICE CARR

- - - - - - - - - - - - - - - - - - - - -

Between:

- - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - -

Kevin Pettican (instructed by Crimson Phoenix Solicitors) for the Appellant

Mohammed Zaman QC (instructed by Tenet Compliance & Litigation Ltd) for the Respondent

Hearing dates: 24 and 25 October 2018

- - - - - - - - - - - - - - - - - - - - -

Judgment

Sir Terence Etherton MR, Lord Justice Flaux and Mrs Justice Carr:

Introduction

  1. This is an appeal from the order dated 7 February 2018 of HHJ Purle QC awarding damages of £531,803.98 against the appellant, Mr James Winter, for vicarious liability for fraudulent misrepresentations made to the respondent, Hockley Mint, by Mr Brian Ramsden.

    Factual background

  2. The factual background is set out in detail in two judgments of the Judge handed down on 30 November 2017 ([2017] EWHC 3748 (Ch)) and 11 January 2018 ([2018] EWHC 846 (Ch)) respectively. The following summary, which we gratefully take from the two judgments, is sufficient to understand the context of the appeal.

  3. Hockley Mint operated a business that dealt in gold and silver jewellery. Its postage costs were substantial, amounting to some £200,000 for 2015. Hockley Mint was keen to reduce its postage costs where possible. It had previously leased postal equipment through a Mr Smith in an effort to make its postal processes faster and cheaper.

  4. In April 2015 Mr Smith introduced Mr Ramsden to two of Hockley Mint's representatives, Mr Wroe, who was the Managing Director, and Mrs Campbell, the Accounts Manager.

  5. At a meeting in April 2015 Mr Ramsden presented Mr Wroe and Mrs Campbell with a proposal under which Hockley Mint would make substantial savings on postage by entering into agreements to lease further postal and office equipment from a third party supplier. The net saving was to be achieved by Hockley Mint receiving ``postage credit'' that would exceed the cost of leasing the equipment. Hockley Mint was under the impression that those credits were ultimately to be paid by Royal Mail to a consortium of companies under the control of Mr Ramsden, and the savings passed on to Hockley Mint.

  6. Hockley Mint entered into five lease agreements on this basis. Three of them were with Bank Paribas. The tri-partite transactions, of which the three lease agreements with BNP Paribas form part, have been referred to below and before us as BNP 1, BNP 2 and BNP 3. The equipment was supplied by Mr Winter trading as Erskine Hathaway. The equipment was sold by Erskine Hathaway to BNP Paribas, which then leased it to Hockley Mint. Erskine Hathaway paid rebates to Hockley Mint out of the profit from the sale to BNP Paribas. Mr Ramsden negotiated the terms of the tri-partite transactions on behalf of Erskine Hathaway. Mr Ramsden dishonestly represented to Hockley Mint that the rebates were postage credits ultimately paid by Royal Mail and would be paid during the entire period of the lease.

  7. Mr Ramsden procured Hockley Mint to enter into two subsequent lease transactions with Tower Leasing Limited and GRENKE Leasing Limited, but they are not the subject of this appeal.

  8. As to BNP 1, the lease agreement committed Hockley Mint to paying £8,750 per quarter (£35,000 per year) for 39 months to lease equipment. Mr Ramsden represented this as producing a saving for Hockley Mint, as it would receive £50,000 of postage credit in the first 12 months, a net saving of £15,000. The understanding of Hockley Mint was, therefore, that it was paying £35,000 for £50,000 worth of postage. Moreover, the belief of Mr Wroe and Mrs Campbell was that the agreement was an annual one, because it included an annual review of the savings generated (and a promise by Mr Ramsden of further savings to be made), and any unused savings were said by Mr Ramsden to be able to be rolled over into the next year.

  9. In fact, no such postage credits existed. Further, under the terms of the tri-partite transaction, Hockley Mint was only guaranteed rebates for the first year of hire but the obligation to make the payments under the lease would continue for a further 27 months.

  10. The Judge found that the terms of BNP 1 were agreed in principle at a meeting between Mr Wroe and Mr Ramsden on 29 April 2015. At that stage the agreement in principle was with SJ Sales & Marketing Services, trading as Business Mail, a company ostensibly owned and controlled by Mr Ramsden. On 21 May 2015 Mr Wroe signed the hire agreement with BNP Paribas. By that stage Erskine Hathaway had replaced Business Mail as the supplier. BNP Paribas countersigned the lease agreement on 29 May 2015. Correspondence from Erskine Hathaway to Hockley Mint was sent under the name of Karl Hansen from an Erskine Hathaway email address. This was a pseudonym for Mr Ramsden, on which Mr Winter had insisted in order to distance himself from Mr Ramsden because of a belief that Mr Ramsden had something of an unsavoury reputation.

  11. Hockley Mint entered into BNP 2 on similar terms in early June 2015. Erskine Hathaway was again the supplier. It committed Hockley Mint to paying BNP Paribas under the lease agreement £26,250 per quarter (£105,000 per year) for 39 months for further equipment. The deceitful representations of Mr Ramsden as to postal rebates and the belief of Hockley Mint both as to the source of those rebates and the annual renewal were the same as in the case of BNP 1.

  12. Hockley Mint entered into BNP 3 in February 2016. BNP Paribas countersigned the lease agreement on 24 February 2016. It committed Hockley Mint to lease payments of £42,343 per quarter (£169,372 per year) for 60 months for further equipment and the redemption of BNP 2. Both Erskine Hathaway and Develop Systems Ltd (``Develop Systems'') were named as suppliers. Once again, Hockley Mint believed, as a result of Mr Ramsden's deceitful representations, that the rebates paid to it were from postal credits and that they would exceed what it had to pay under the lease agreement with BNP Paribas.

    The proceedings

  13. These proceedings were issued on 13 January 2017 by Hockley Mint against several defendants, including Mr Ramsden. Mr Winter was subsequently added as a defendant. The claims against Mr Ramsden and Mr Winter were for damages for deceit and for conspiracy to injure by unlawful means. It was alleged in the particulars of claim that Mr Winter was liable as Mr Ramsden's principal as the representations of Mr Ramsden in connection with BNP 1, BNP 2 and BNP 3 were made within the scope of Mr Ramsden's authority.

  14. Mr Winter's defence denied that Mr Ramsden made any false representations to Hockley Mint; and, if he did make any false representations, it was denied that they were made on behalf of Mr Winter or within the scope of Mr Ramsden's authority from Mr Winter. The alleged conspiracy to injure by unlawful means was also denied.

  15. Mr Wroe was in due course added as a third party.

    The trial

  16. The trial was conducted by the Judge in two parts.

  17. Mr Ramsden did not give evidence. He was living in Thailand and claimed to be too ill to attend.

  18. Two of the defendants who were involved in the Tower Leasing and GRENKE agreements, namely Mr Christopher Bailey and Develop Systems, made a submission of no case to answer.

  19. The Judge delivered his judgment of 30 November 2017 in respect of them, and found them liable for deceit and conspiracy.

  20. The Judge found that Mr Ramsden's representations as to the existence of fictitious postal savings were intended to create the impression that there would be no net cost to Hockley Mint. For that reason, he held that there was ample evidence on which to conclude that Mr Ramsden had committed a fraud.

  21. The Judge held (at [28]) that Mr Wroe and Mrs Campbell had entered into the transactions on behalf of Hockley Mint in reliance on Mr Ramsden's representations.

  22. The Judge's subsequent judgment of 11 January 2018 was delivered in respect of the remaining defendants, including Mr Winter, and focused on BNP 1, BNP 2 and BNP 3.

  23. The Judge said (at [8]) that, for the reasons that he gave in his earlier judgment, he had no doubt that Mr Ramsden deliberately created the impression that the postal rebates or savings would be ongoing and that the equipment came at no cost whatsoever to Hockley Mint. He said (at [11]) that, for the reasons he gave in his earlier judgment, he found that Mr Ramsden was guilty of fraudulent misrepresentations and that Hockley Mint was taken in by the deceit that was practised upon them, namely that the goods in question would be at no cost to them because of the postal savings that Mr Ramsden could achieve; whereas, in fact, the rebates, which were not properly documented anywhere, were only short-term - for the first year of the agreement - and exposed Hockley Mint to liability running into hundreds of thousands of pounds. He added (at [12]) that, moreover, a large part of the equipment that Hockley Mint was acquiring through the lease agreements was not needed.

  24. The Judge held (at [26]) that Mr Winter was not a party to Mr Ramsden's fraud but was merely an innocent supplier who had entered into a good deal with Mr Ramsden. In coming to this conclusion, the Judge (at [31]) placed emphasis on the fact that Mr Winter did in fact acquire and deliver equipment to Hockley Mint, fulfilling his end of the bargain, by contrast with the failure of Mr Bailey and Develop Systems to deliver any equipment.

  25. The Judge stated (at [39]) that Mr Ramsden was an agent, and (at [40]) that Mr Winter had put Mr Ramsden in the position of doing what Mr...

To continue reading

REQUEST YOUR TRIAL