In a case described as having “two very unusual features” the High Court (Commercial Court) last week on Tuesday, 22 May refused to award damages, including loss of profits, sought by the claimant on an interim basis under CPR 25.
In EUR Service UK Limited v City 1st Limited, J Waksman QC ruled that where liability was admitted for tortious damage caused to the Claimant’s trailer fleet following the removal of certain wheels and tyres, the ability to recover losses claimed required consideration of whether the Claimant acted reasonably in its approach to obtaining repairs, and holding for a range of evidential reasons that the Court could not be satisfied that the Claimant would obtain any substantial sums at trial.
The successful Defendant was represented in response to the application by B P Collins LLP’s Simon Carroll together with counsel, Rachel Sleeman. Matthew Brandis continues to represent the Defendant in the on-going litigation.
The claim arose (the first unusual feature) after certain of the Claimant’s wheels and tyres were, wrongfully and without authorisation, removed by employees of the Defendant after an invoice dispute. The Claimant, in an unhappy financial state beforehand and blaming the Defendant for its accepted impecuniosity thereafter, did not pay the insurer’s relatively meagre excesses to facilitate repairs (the second unusual feature) said to be necessary because of damage caused by the removal and return of the wheels’ by the Defendant. Rather, the Claimant issued proceedings for just under £1m, largely comprised of lost profits, and sought an interim payment of damages, claiming, substantially, repair costs and lost profit until the wheels were returned, or lost profit until receipt of the Defendant’s expert report which confirmed that no repairs were necessary on account of no damage having been suffered.
At the date of the hearing some 7 months later, the trailers remained unused, no repairs having been undertaken, and no indication that any representation had been made to the Claimant’s insurer about the Defendant’s expert report.
In line with its expert report, the Defendant argued that no damage had been suffered and put the Claimant to proof in respect of its alleged losses. The Claimant argued that losses flowing from the deprival of use of a substantial trading asset were obvious and foreseeable consequences, and that it was likely to recover a substantial sum at trial.
Whilst noting that, had the Claimant undertaken repairs the Judge could understand how the Court might find compensation due for the period when the trailers were out of use even in the face of a report later indicating no repairs to be necessary because acting on the insurer’s advice would have been reasonable, he was unable to agree with the Claimant’s case. Despite its alleged impecuniosity, the Judge found there to be money available for at least some repairs; an acute evidential conflict as to whether damage had been caused, making it impossible for him to be satisfied that it was reasonable to continue ceasing to trade after receipt of the Defendant’s expert report; and, amongst other evidential concerns, “serious question marks” as to whether the trailers could, on the evidence before the Court, have been used before the items were returned in any event.
For these reasons the Judge held that it was not possible to say that any substantial sums would be recovered a trial, and dismissed the application with costs.