Bottin (International) Investments Ltd v Venson Group Plc & Ors

Contractual notice provisions must be observed according to their commercial purpose. A claim notice must give the detail then available to the claimant about the events or circumstances relied on and must estimate the loss where estimation is possible. Personal service under an agreement ordinarily requires hand delivery to the recipient or an authorised person; for a company, delivery at its registered office may suffice. An alternative dispute-resolution notice does not automatically operate as a warranty claim notice where the agreement establishes separate procedures. However, a weak proposed misrepresentation claim should not be summarily dismissed before disclosure where the factual issues require investigation and the claim has a reasonable prospect of being properly pleaded.

The claimant sought damages under a share purchase agreement containing warranties, notice requirements, service provisions and an alternative dispute-resolution procedure. The defendants applied under CPR Part 24 to strike out the contractual warranty claim and resist proposed amendments alleging misrepresentation and negligent misstatement.

The court considered whether notices had been validly served, whether they contained the detail and loss estimate required by the agreement, whether the pleadings adequately alleged knowledge and loss, and whether the proposed misrepresentation claim should be allowed to proceed before disclosure.

1. Contractual warranty claim. The contractual claim was struck out. The claimant had three years to formulate and notify its claim, but the notices did not provide the detail then available concerning the events and circumstances relied on, did not explain how the warrantors possessed the requisite knowledge, and did not give a genuine estimate of loss. A bare claim for £10 million was inadequate.
2. Service. Clause 19 required a certain method of service. Personal service on an individual meant hand delivery to that person or to someone authorised to receive the document. The claim notice was not properly served on Mr Scriven. Service on Mr Lawson-Smith failed because it was made at an address which was neither his contractual address nor changed by written notification. Service on Venson was valid because leaving the notice with the receptionist at its registered office was sufficient service on the company.
3. ADR notices. The notices expressly served under clause 25 could not also operate retrospectively as notices under clause 3(o). The informal fax-warning arrangement did not amount to a general variation of the contractual service regime. The notices were valid for the ADR procedure but not for commencing warranty proceedings.
4. Pleading and amendment. The existing contractual pleadings inadequately pleaded the warrantors’ knowledge and failed properly to quantify loss. The proposed claim based on unwarranted forecasts faced substantial factual and legal difficulties, including the contractual allocation of risk and the absence of an adequately pleaded duty of care. Nevertheless, the court declined to summarily dismiss it. Disclosure was required to investigate the circumstances in which the forecasts were supplied and the parties’ reliance on them.
5. The claimant was permitted to amend on an interim basis, subject to a strict timetable, disclosure, a properly amended pleading, supporting evidence and expert evidence. The defendants were permitted to renew their summary judgment application if the revised case remained inadequate.