Jean Constance Blundell & Anor v Lucian Davies & Ors

1. This is my judgment on the three principal issues raised by the Defendants’ application for summary judgment on, or to strike out, the Claimants’ claim. Background

2. The claim concerns the affairs of Centec International Limited ( Centec ).

3. Centec was incorporated on 29 September 1994. It was owned by John Blundell and his wife Jean Blundell (the First Claimant) in equal shares. John Blundell died in 2017. Jean Blundell then became sole shareholder, until she sold her shares to BIP Chemical Holdings Ltd ( BIP ) on 5 March 2019.

4. Centec’s core business was in the mixed fuel market. It would buy mixed fuels (for example, petrol and diesel which had been accidentally combined). It would separate and purify those fuels, and sell them on for a profit. At the material time, Centec would regularly purchase tanker-loads of mixed fuel from Refuels Limited, the Fourth Defendant.

5. Before the sale to BIP, Centec’s directors were (i) Jean Blundell, (ii) her son Christopher Blundell (the Second Claimant), (iii) Christopher’s wife Svetlana Blundell, (iv) Graham Williams, and (v) Lucian Davies (the First Defendant).

6. The management of Centec was predominantly by Mr Williams, Mr Davies, and a management consultant David McGreal.

7. In October 2018, Mr McGreal led a proposed management buy-out. He was granted an option to purchase Centec. The price was agreed in principle at £500,000. By the end of January 2019, Mr McGreal and the management team became aware of financial shortcomings: in particular, a reduction of revenue brought EBITDA down from £146,000 to £-203,000. The management team reduced their offer to £250,000, some of which would be deferred.

8. At the same time, another potential purchaser was interested: BIP, owned and managed by Mr Michael Bennett. BIP had premises adjoining Centec’s, and was in the business of chemical manufacturing and chemical waste disposal. BIP had been interested in acquiring Centec for some years.

9. When the management team reduced their offer from £500,000 to £250,000, the Blundells approached Mr Bennett to discuss selling Centec to BIP. There was a meeting on 26 February 2019 at which the Blundells’ solicitor Mr Ali told Mr Bennett that Centec was predicted to make a profit of £200,000 in the following financial year. Mr Bennett was shown management accounts up to date as at May 2018. Those management accounts did not include the revised profit forecasts which reduced EBITDA to £-203,000.

10. BIP completed the purchase of shares in Centec on 5 March 2019. It had not been provided with up-to-date financial information, and relied on the accounts prepared in May 2018. BIP paid £1.4m for the shares in Centec.

11. The Share Purchase Agreement dated 5 March 2019 ( the SPA ) contained a warranty by Mrs Blundell that there had been no material adverse change to the financial position of the business since the May 2018 accounts ( the Accounts Warranty ). It also contained a warranty that Centec was not engaged in any arrangement of an unusual, onerous or abnormal nature ( the Abnormal Arrangement Warranty ).

12. Following completion of the SPA, BIP became aware of Centec’s true financial position. It issued proceedings against Mrs Blundell, alleging breach of warranty and fraud ( the BIP Litigation ). There was a trial in Manchester before HHJ Cadwallader, sitting as a judge of the High Court. In a judgment given on 9 September 2021 ( the Judgment ) with neutral citation number [2021] EWHC 2590 (Ch) , the Judge found: a. There had been no misrepresentation. b. There had been a breach of the Accounts Warranty, because there had been undisclosed material adverse developments in Centec’s business since the May 2018 accounts. c. There had been a breach of the Abnormal Arrangement Warranty. The Judge found that Centec had (on the balance of probability) been defrauded by Refuels Ltd, in conspiracy with Mr Lucian Davies (director of Centec). He found that Refuels Ltd had for many years systematically overcharged Centec for mixed and contaminated fuel, and Mr Davies and Refuels Ltd had an agreement to split the excess. I will refer to this herein as the Alleged Arrangement . The Alleged Arrangement is denied by the Defendants in the present proceedings, who were not party to the BIP Litigation.

13. The Judge entered judgment in favour of BIP against Mrs Blundell in the sum of £875,000. Mrs Blundell says that her total loss in the BIP Litigation was £1,655,237.39 (including damages, interest, BIP’s costs, and her own costs).

14. On 15 December 2023 (nearly two years after the Judgment) Refuels Limited sought permission to appeal from the Court of Appeal, in respect of the findings of fact concerning the Alleged Arrangement. As I noted above, Refuels had not been a party to the BIP Litigation. On 10 December 2024, the Court of Appeal refused to grant permission to appeal, for the reasons set out in the judgment at [2024] EWCA Civ 1563 .

15. On 27 June 2023, Centec assigned to Jean Blundell and Christopher Blundell (the present Claimants) any causes of action it may have had against the present Defendants. The effect of the deed of assignment is in issue at the present hearing. The present proceedings

16. These proceedings were issued on 4 September 2023.

17. The Claimants are Mrs Jean Blundell and Mr Christopher Blundell. They sue both as assignees of Centec’s causes of action, and (in Mrs Blundell’s case) on her own account.

18. The Defendants are: a. Mr Lucian Davies, a former director of Centec and allegedly party to the Alleged Arrangement; b. Mrs Mary Davies, the wife of Mr Davies and allegedly party to the Alleged Arrangement; c. Prosolve Distillates Limited, a company of which Mr and Mrs Davies are directors and which allegedly received money from Refuels Limited as part of the Alleged Arrangement; d. Refuels Limited; and e. Mr Michael Taylor, a director of Refuels Limited.

19. Mrs Blundell’s own cause of action is recovery of the £1,655,237.39 which she says she lost in the BIP Litigation. She says that this loss was caused by the Alleged Arrangement.

20. The causes of action apparently assigned by Centec to the Claimants include: a. A claim against Mr Davies for breach of his duties as a director and employee of Centec by participating in the Alleged Arrangement; b. Claims against Mrs Davies and Mr Taylor for participating in the Alleged Arrangement; c. A claim against Refuels Limited and Prosolve Distillates Limited for unjust enrichment, conspiracy, and other causes of action; and d. Separate claims against Refuels Limited for losses caused by the alleged misuse of Centec’s waste licence, and its alleged use of dominance in the market.

21. The Claim Form and Particulars of Claim were served on 3 January 2024. After a request under Part 18 CPR, Further Information was provided on 20 March 2024. The Defence was filed and served on 2 May 2024.

22. There was a CCMC before Master Pester on 15 October 2024. The Claimants were ordered to make enquiries with Centec and use best endeavours to obtain all potentially relevant documents from Centec for the purposes of disclosure. See further paragraphs 33ff below.

23. On 4 February 2025, the present application for strike out/summary judgment was issued by the Defendants. On 25 July 2025, Master Pester made a consent order giving directions for evidence for this application.

24. I have read and considered the three witness statements served in accordance with Master Pester’s directions: two from Jonathan Sherlock for the Defendants, and one from Supriya Murthy for the Claimants. I have read Ms Murthy’s earlier witness statements described in paragraphs 36-38 below. I have also read and considered a further witness statement from Mr Christopher Blundell. This statement was served late, but I granted relief from sanctions for the reasons given orally at the hearing on 15 December 2025.

25. On 15 December 2025, I heard Mr Hackett for the Defendants/Applicants, and Mr Berkley KC for the Claimants/Respondents. I have considered their skeleton arguments, their oral submissions, and the documents to which they referred at the hearing.

26. It was clear from the start that the hearing would not be long enough to deal with all of the matters relied on by the parties. I therefore asked Mr Hackett to choose his best points, which could be dispositive of the entire application, and to make submissions on those. I heard Mr Berkley KC in reply on those points. The remaining grounds on which Mr Hackett relies can be dealt with at a future hearing, if necessary.

27. In the course of submissions, Mr Berkley KC made an oral application for permission to amend the Particulars of Claim (as to which see below). The amendment consists of a very few words. I dispensed with the need for an application notice or evidence, but directed brief written submissions on that application to be filed after the hearing. I have read and considered those also.

28. The three grounds relied on by Mr Hackett were, in summary: a. The Claimants have not complied with the disclosure obligations concerning Centec’s documents, and/or the absence of documents from Centec makes a fair trial impossible; b. Mrs Blundell’s personal claim must fail, inter alia because the BIP Litigation Losses would have been incurred in any event because of her losing on the Accounts Warranty; and c. The assignment from Centec is void for maintenance or champerty, and the claims brought by the Claimants as assignees must therefore fail.

29. This judgment will analyse each of those grounds in turn. First, though, I will set out the law (which is not in dispute) concerning strike out and summary judgment. Strike out and summary judgment - principles

30. CPR rule 3.4 provides, so far as relevant: 3.4. Power to strike out a statement of case (1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case. (2) The court may strike out a statement of case if it appears to the court – (a) that the statement of case discloses no reasonable grounds for bringing or defending the claim; (b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; (c) that there has been a failure to comply with a rule, practice direction or court order;

31. CPR rule 24.3 provides: 24.3. Grounds for summary judgment The court may give summary judgment against a claimant or defendant on the whole of a claim or on an issue if— (a) it considers that the party has no real prospect of succeeding on the claim, defence or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.

32. The following principles derived from the authorities were formulated by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] and approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 ; [2010] Lloyd's Rep. I.R. 301 at [24]: i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 1 All E.R. 91 ; ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8]; iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman ; iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]; v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No.5) [2001] EWCA Civ 550 ; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] F.S.R. 3 ; vii) On the other hand it is not uncommon for an application under Pt 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725 . Issue 1 - the disclosure obligations concerning Centec

33. On 15 October 2024, there was a CCMC before Master Pester. The Defendants raised an issue concerning disclosure of Centec’s documents.

34. The deed of assignment relied on by the Claimants did not provide for Centec to give disclosure of such documents as would have been disclosable if Centec had itself brought a claim. Centec is not a party to the present litigation, but has custody of documents that may be very important. The Defendants are concerned that the effect of the assignment would be to deprive them of the documents held by Centec which would be necessary for a fair trial. The Defendants set out the categories of relevant documents which may be under Centec’s control in paragraphs 29.1-29.6 of Mr Sherlock’s second witness statement (dated 29 August 2025). Such documents might, for example, show that Mr Davies was not the only person at Centec approving the price Centec paid Refuels for mixed fuel. Such documents could also show whether there was a divergence in costs of acquisition of mixed fuel supplies by comparing Centec’s purchases from other suppliers with purchases from Refuel. These (and other) categories of documents might fatally undermine the Alleged Arrangement central to the Claimants’ claim.

35. To address this, Master Pester made the following orders at the CCMC:

10. The Claimants (or a senior member of their solicitors) shall: a) urgently, and by no later than 29 October 2024, make all reasonable enquiries of Centec International Limited (“Centec”) regarding the extent to which any documents which are or were once held by Centec are irretrievable due to, for example, their destruction or loss or the destruction of loss of devices upon which they were stored, and b) by 10 December 2024 file and serve a witness statement confirming (i) the extent and outcome of all such enquiries with Centec and (ii) the extent to which any documents which are or were once within their own possession or control have become irretrievable.

11. The Claimants shall use best endeavours to obtain the potentially relevant documents from Centec for the purposes of disclosure. They (or a senior member of their solicitors) shall file and serve a witness statement by 4pm on 21 February 2025 setting out the steps they have taken to obtain such documents and the extent (if any) to which they have been unable to collect any such documents.

36. In compliance with paragraph 10(b) of Master Pester’s order, on 10 December 2024 the Defendants filed and served a witness statement by Ms Murthy. She explains that the Claimants sought documents from three parties. a. First, the Claimants sought documents from Centec’s new parent company, Indaver Limited. Its lawyers, Brodies, indicated willingness to cooperate in part. As at 10 December 2024, Brodies had not yet provided any documents. b. Secondly, the Claimants sought documents from Glaisyers, which Ms Murthy suggests acted for Centec at the relevant time. (The Defendants do not believe that to be the case.) In the event, Glaisyers provided some documents, which the Defendants say relate only to Mrs Blundell’s retainer. c. Thirdly, the Claimants sought documents from Centec via its solicitor, JMW. Some heavily redacted documents were provided. The Claimants sought additional documents and asked why there had been redactions. Centec then refused to cooperate further, and JMW broke off correspondence.

37. Ms Murthy also said that the Claimants were considering making a non-party disclosure application. This has not yet occurred.

38. Paragraph 11 of Master Pester’s order required the Defendants to use best endeavours to obtain the potentially relevant documents from Centec, and to file and serve a witness statement setting out what steps had been taken and the extent to which they had been unsuccessful. Ms Murthy provided a further witness statement dated 13 March 2025.Ms Murthy gave evidence that a letter would be sent to Brodies with search terms still to be agreed by the Defendants, and that the Claimants were preparing an urgent application for non-party disclosure against JMW under r31.17. This was to be issued in the week of 14 March 2025.

39. The Defendants argue that the evidence shows that the Claimants have not used “best endeavours” to obtain potentially relevant documents from Centec, as required by paragraph 11 of Master Pester’s order. They say that the Claimants have made no progress whatsoever since March 2025, even in response to the present application. In particular, the Claimants have not issued an application for non-party disclosure.

40. The Defendants, at the hearing before me (but not in their application notice), rely on rule 3.4(2)(c), by which a statement of case can be struck out when “there has been a failure to comply with a rule, practice direction or court order”. Mr Hackett argued that strike-out is justified in the present case. He submitted (in paragraph 47 of his skeleton argument) that Master Pester’s order was specifically to address a grave risk of injustice – that because the Claimants bring this claim in part as assignees, the Defendants will lose the benefit of the disclosure regime that they would have received if there had been no assignment. That risk of injustice has eventuated: the Defendants are having to defend the claim without sight of Centec documents which could be critical on the question of the Alleged Arrangement. He argues that the Claimants’ alleged breach of Master Pester’s order is so serious that strike out is warranted.

41. In oral argument, Mr Hackett expanded on this theme. He described the Claimants’ correspondence with Brodies and JMW. He referred to correspondence stating that an urgent application under r31.17 would be filed and served by the Claimants in the week commencing 17 March 2025, but said that no such application had been made. He submitted that Master Pester’s order had been breached in two ways: the failure to use best endeavours, and the failure to set out the extent to which the Claimants had been unable to retrieve Centec documents. He argued that the seriousness of the consequences of these potentially vitally important documents being unavailable justifies striking out the Claimants’ claim, or alternatively some form of order to bring those documents to light. He said that the claims assigned to the Claimants were incapable of being tried fairly, because the sole custodian of documents was not producing evidence.

42. These grounds for strike-out were not addressed by Mr Berkley KC in his skeleton argument. In oral submissions, he argued that the issue concerning disclosure failings was not the basis on which the application was advanced. He correctly noted that the application notice relies on r3.2(4)(a) (and Part 24) only. The evidence served with the application notice (Mr Sherlock’s first witness statement) also did not advance this disclosure point. It was only raised in reply, in Mr Sherlock’s second statement, which was dated 29 August 2025. He says this prejudiced the Claimants, because the evidence (in Ms Murthy’s witness statement for the purpose of this application) did not cover the grounds now relied on by the Defendants.

43. Mr Berkley KC argued also that from March 2025, there was a pause in the disclosure process for the purpose of dealing with the present application: that is why the application for non-party disclosure was not made. He said that there was no direct evidence of non-compliance, and argued that strike-out would be disproportionate to any failure to use best endeavours that might be found.

44. I have considered Master Pester’s consent order dated 25 July 2025. Paragraph 4 provided: “ Pending the determination of the Strike-Out Application, the parties shall not be obliged to take any further steps to comply with the Directions. ” (The defined term “Directions” included Master Pester’s order made on 15 October 2024.) Paragraph 6(c) provided that “ all matters relating to the Directions ” were adjourned to a second CCMC, yet to be listed. Analysis

45. From what I have seen, and without having seen any evidence from the Claimants in response to Mr Sherlock’s second witness statement, it is highly possible that the Claimants are in breach of paragraph 11 of Master Pester’s order dated 15 October 2024. In the circumstances of the present case, I do not think it likely that the Claimants’ efforts to obtain documents from Centec can be called “best endeavours” without pursuing an application for non-party disclosure with proper diligence. Correspondence between the Claimants and Indaver, Brodies, Glaisyers and JMW show that some efforts were made. Ms Murthy’s evidence is that the next step was a non-party disclosure application. However, that has not yet happened.

46. Mr Berkley KC says that the reason why a non-party disclosure application was not made by the Claimants is this very application by the Defendants. I am not convinced that this is a good reason. Until 25 July 2025, there was no order extending time for compliance. That leaves a period of approximately four months between the Claimants being poised to issue an application for non-party disclosure, and the consent order dated 25 July 2025. It seems to me that an application for non-party disclosure could and should have been issued during that period.

47. However, I am not going to order strike-out of the Claimants’ claim under r3.4(2)(a), for the following reasons: a. The consent order of 25 July 2025 provided that “ the parties shall not be obliged to take any further steps to comply with the Directions ”. There does appear to have been a period of non-compliance, but limited to around four months. b. Strike-out is the most severe possible sanction for non-compliance with a court order. In my judgment, it would be disproportionate to strike-out the Claimants’ claim for this period of non-compliance. A more proportionate sanction would be an order providing for the Defendants to make the application for non-party disclosure at the Claimants’ cost; or an order concerning the costs of the disclosure exercise generally; or even an unless order, giving the Claimants a final opportunity to comply. c. I have considered whether it would be appropriate to impose one of these lesser sanctions. I have decided that this is not the right occasion on which to do so. The consent order of 25 July 2025 reserved to the second CCMC “all matters relating to the Directions”. Moreover, the application notice before me did not seek relief concerning the apparent breach of paragraph 11 of Master Pester’s order of 15 October 2024. Relief under rule 3.4(2)(a) was not included in the Defendants’ application form or in the evidence served with it. It was first mentioned in Mr Sherlock’s second witness statement. If the Defendants want to enforce paragraph 11, they can and should do so by application notice to be heard at the second CCMC, giving the Claimants a proper chance to respond to the application. By then, of course, the Claimants may have taken further steps to comply, and the application may not be necessary at all.

48. The Defendants also sought to rely at the hearing on r3.4(2)(b), by which a statement of case can be struck out when “the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings”. Again, this was not stated on the Application Notice. The Defendants argue that (i) the Defendants do not have access to documents to which they should be entitled in order to defend the claim properly, and (ii) that this is the Claimants’ fault, because they took an assignment without a requirement for Centec to disclose documents. They then argue (at paragraph 47 of Mr Hackett’s skeleton argument) that (iii) “the problem is compounded because the claim is so poorly pleaded in terms of provision of particulars of wrongdoing relied on”. That seems to me to be an entirely different point. The main conduct alleged (taking an assignment without a supporting disclosure provision) has nothing to do with the statement of case being an abuse of process or obstructing the just disposal of the proceedings. Rule 3.4(2)(b) is only relevant to what Mr Hackett called the “compounding” problem, that the statement of case is insufficiently particularised. That was not developed at all at the hearing, and is not connected to the primary cause of the alleged unfairness (the assignment without disclosure provision). The alleged lack of particularisation can be remedied by an application under Part 18: it is not so grave as to render the statement of case an abuse of process. In any event, r3.4(2)(b) was not relied on in the application notice or evidence served with it. I will therefore dismiss the application insofar as it relies on r3.4(2)(b).

49. For these reasons, I dismiss the first ground on which the Defendants rely on for the purpose of their application. Issue 2 – Mrs Blundell’s personal claim

50. In the Particulars of Claim, Mrs Blundell pleads a “personal” (i.e. not assigned) claim as follows:

69. By the SPA the First Claimant sold her entire shareholding in Centec to BIP for £1,400,000.

70. By reason of the matters and in particular the advancement by the Defendants of the Fraudulent Profit Share Arrangement as aforesaid the consideration realised for sale of the shares was significantly diminished whereby the First Claimant suffered loss. The First Claimant seeks to recover from the Defendants the £1,164,956.89 paid to BIP, the £100,000 unpaid to her by BIP and her own costs totalling £390,280.50 which in total equals £1,655,237.39, plus interest.

71. Further or in the alternative, the First Claimant seeks an indemnity from each of the Defendants and/or a contribution under the Civil Liability (Contribution) Act 1978 .

51. In the Defence, the Defendants plead:

39. Paragraph 69 is admitted.

40. The first sentence of Paragraph 70 is hard to understand, but the Defendants interpret Paragraph 70 as a contention that Mrs Blundell is entitled to recover as damages the damages she had to pay in her unsuccessful litigation against BIP, together with the legal costs of that litigation. If that is Mrs Blundell's contention the Defendants deny that she has any such entitlement. In addition to what is pleaded above (and in particular the denial of the existence of the Alleged Fraudulent Profit Share Arrangement) the Defendants plead as follows: 40.1. Even on the hypothesis that the Alleged Fraudulent Profit Share Arrangement existed, the litigation against BIP would have been lost in any event because of Mrs Blundell's breach of the Accounts Warranty. Accordingly, even if the Alleged Fraudulent Profit Share Arrangement existed, it caused Mrs Blundell no loss. 40.2. The Claimants do not identify any cause of action against the Defendants, or any of them, justifying the remedy claimed at Paragraph 70, and none is apparent. 40.3. Further, the Claimants do not particularise how the Defendants, or any of them, are liable in respect of damage suffered by BIP (as is required to bring one or more of them within the scope of s.1 Civil Liability (Contribution) Act 1978 ) and the Defendants contend there was no such liability to BIP. 40.4. Mrs Blundell's asserted claim is accordingly apt to be struck out.

41. Paragraph 71 is accordingly denied.

52. Mr Hackett argued persuasively that no complete cause of action was pleaded here. Mr Berkley KC responded by seeking to amend paragraph 27 of the Particulars of Claim. His proposed amendment inserts the following underlined words: “Further the First Defendant owed a fiduciary duty to Centec and/or Mrs Blundell (“the Fiduciary Duty”)”. This amendment introduces a claim that Mr Davies (the director of Centec) owed a fiduciary duty to Mrs Blundell (the shareholder of Centec) personally. The Defendants have consented to this amendment (on the usual terms as to costs).

53. Nevertheless, Mr Hackett asks me to strike out paragraphs 69-71 of the Particulars of Claim, arguing: a. Mrs Blundell suffered the BIP Litigation losses because BIP won on its primary case that the Accounts Warranty was breached. Accordingly, even if Mrs Blundell were to establish the existence of the Alleged Arrangement, she was not caused any loss by it; b. Mrs Blundell’s claim is a claim for reflective loss; c. No cause of action is pleaded against the Second to Fifth Defendants; d. If the claim is to proceed, the Court should impose conditions, as the claim is exceptionally weak (because fiduciary duties owed to shareholders are so rare). He did not specify what those conditions should be.

54. Mr Berkley KC’s principal submissions were as follows: a. Quoting from his skeleton argument: “Since we are concerned with the counterfactual this is not a matter that can be determined without a trial.” b. He argued that “In his Report Mr Hayman [an expert witness]… considered the impact of the cessation of trading with Refuels which was of an onerous and abnormal nature. It is submitted that this is precisely the sort of issue which is for determination at the trial and is not capable of summary determination.” c. On reflective loss, Mr Berkley KC referred to Sevilleja v Marex Financial Ltd [2020] UKSC 31 , and argued that there was a real prospect of Mrs Blundell coming within an exception to the reflective loss principle. d. In his supplemental skeleton, Mr Berkley KC argued that accessory liability is actionable by Mrs Blundell against the Fourth and Fifth Defendants. However, he did not advance such an argument in respect of the Second and Third Defendant. e. He further asked me not to impose conditions, as success was not so improbable as to warrant conditions being imposed. He also argued that a conditional order had not been sought in the application notice, and that Mrs Blundell had not had the opportunity to give evidence of her means. Analysis

55. I have considered the judgment of HHJ Cadwallader carefully. I consider myself in a good position to analyse the role played by the Abnormal Arrangements Warranty in his overall analysis. It is quite clear that breach of the Accounts Warranty was the primary part of BIP’s case, and breach of the Abnormal Arrangement Warranty was secondary. (The Judge makes this plain in paragraphs 87 and 99 of the Judgment.) It is also clear that the finding of a breach of the Accounts Warranty did not require the Alleged Arrangement to be proved. However, when it comes to quantum, things become more complex. Damages were assessed by comparing the “as warranted” or “warranty true” value of the Centec shares with the “as was” value. When determining the “as was” value, the Judge took into account the termination of the Refuels agreement (paragraphs 109-116 of the Judgment). By suppressing the “as was” value, the Alleged Arrangement may well have increased the damages payable. There was no expert evidence for the purpose of this application, but on the evidence before me I consider there to be at least a real prospect of the Alleged Arrangement being found to have contributed to the damages paid by Mrs Blundell.

56. I did not hear developed oral submissions on reflective loss, and the matter was only touched on in written argument. The Alleged Arrangement appears to have suppressed the “as was” valuation of the shares at trial leading to increased damages. Clearly there is an argument that is reflective loss. However, I consider an argument to the contrary to have a real prospect of success. The relevant issue in the BIP Litigation was quantification of damages payable by Mrs Blundell to BIP after her shares were sold, and not a direct valuation of the shares in her hands. This is not a typical “reflective loss” scenario: there is a real prospect of a distinction being found at trial. Moreover, there were significant elements of the BIP Litigation losses (and therefore elements of Mrs Blundell’s claim) that are not associated with a valuation of the Centec shares: for example, the costs and interest elements of the claim. It is hard to see how those elements of damage can be properly described as reflective loss.

57. I accept Mr Hackett’s argument (which was not really opposed) that no personal cause of action has been pleaded against the Second and Third Defendants. In my judgment, the statement of case discloses no reasonable grounds for Mrs Blundell personally bringing a claim against them. I do consider there to be a sufficient cause of action pleaded against the Fourth and Fifth Defendants, who are alleged (in paragraph 37 of the Particulars of Claim) to have induced the First Defendant to breach inter alia the Fiduciary Duty (as defined, and now including a duty owed to Mrs Blundell).

58. I will not impose conditions on Mrs Blundell’s pursuit of the personal cause of action against the First, Fourth and Fifth Defendants, because she has not had an opportunity to give evidence of her ability to pay money into court.

59. For all these reasons, I decline to strike out or give summary judgment on Mrs Blundell’s personal claim against the First, Fourth and Fifth Defendants, but I will strike out the personal claim insofar as it is against the Second and Third Defendants. Issue 3 – The assigned claim and maintenance/champerty

60. The third issue for decision today concerns maintenance and champerty. Mr Hackett argues that the assignment of Centec’s claim to the Claimants is tainted by champerty or maintenance and is therefore void. This, he says, would be a complete defence to the assigned claim.

61. The main legal principles are helpfully summarised in Snell’s Equity, 35th edn at 3-038 and in the parties’ skeleton arguments. Broadly speaking, an assignment of a chose in action is void if it involves unlawful maintenance or champerty. Unlawful maintenance is the wanton and officious intermeddling with the disputes of others; champerty is an aggravated form of maintenance in which it is agreed that the intermeddler receives a share of the proceeds. However, an assignment will be valid if the assignee has “ a genuine commercial interest in the enforcement of the claim of another and to that extent takes an assignment ”: Trendtex Trading Corp v Credit Suisse [1982] A.C. 679 (HL) at 703.

62. Champerty was first raised in Mr Sherlock’s first witness statement. It has not been pleaded. There is no application to amend. As things stand, it is not a defence upon which the Defendants can rely at trial. Mr Berkley KC argues, in my judgment correctly, that the question of the Claimant’s “genuine commercial interest” requires pleading, disclosure and evidence. For this reason alone, I would refuse summary judgment or strike-out.

63. Moreover, even if this matter had been in the Defendants’ defence, based on the evidence I have seen the Claimants have at least a real prospect of successfully showing they have a genuine commercial interest. Mr Berkley KC’s main point was that Mrs Blundell lost out on the consideration for her shares because of (she says) the Defendants’ wrongdoing. On my analysis, the Alleged Arrangement resulted in the termination of the Refuels contract, which impacted on the “as was” valuation of the shares carried out by HHJ Cadwallader, potentially (subject to expert evidence) increasing the amount payable by Mrs Blundell at the conclusion of the BIP Litigation. In my judgment, she has a real prospect of showing a genuine commercial interest in enforcing Centec’s claim against Refuels Limited and others, concerning the Alleged Arrangement. As for the Second Claimant, I consider him to have a real prospect of successfully arguing that his expectation interest is a genuine commercial interest. The First Claimant is in her nineties: it is at least well arguable that there are commercial (as well as practical) reasons for their decision to take a joint assignment. Conclusion

64. For these reasons, I dismiss the Defendants’ application insofar as it is made on the basis of the three issues above, save only that I will strike out Mrs Blundell’s personal claim against the Second and Third Defendants.

65. I ask the parties to draw up a minute of order and an agreed form of Amended Particulars of Claim to reflect this decision. The Amended Particulars of Claim should include the agreed amendment to paragraph 27.

66. I also ask the parties to provide a time estimate and dates of availability for the adjourned application hearing, to deal with the remainder of the Defendants’ application (if it is pursued) or the costs of the application (if not). If these matters can be dealt with by agreement, a consent order should be filed. Postscript

67. After a draft of this judgment was circulated, Mr Hackett asked me to consider imposing a maximum amount on the portion of the BIP Litigation Losses that Mrs Blundell may recover in her personal claim, and/or to consider preventing her from reopening the question of whether a breach of the Abnormal Arrangements Warranty caused her to lose the BIP Litigation on liability. I will hear submissions on this from both parties at the hearing to be listed above.