Leonard Curtis & Co (a firm) v Benjamin

A claimant seeking recovery of unauthorised payments must prove the payments and the absence of authority on the evidence. Unparticularised allegations of improper conduct do not displace clear evidence from the claimant’s officers. Where invoices record the hours claimed and were not challenged when rendered, an allegation of overcharging based only on comparison with another worker’s invoices may be insufficiently certain for judgment.

Interest under section 35A of the Supreme Court Act is ordinarily simple statutory interest. Any claim for compound interest requires separate consideration. A finding of fraud does not, without more, justify costs on the indemnity basis; the court principally considers conduct of the proceedings.

Leonard Curtis & Co, a firm of chartered accountants and insolvency practitioners, employed Michael Benjamin as a self-employed book-keeper. The firm alleged three fraudulent schemes: unauthorised monthly Autopay payments, duplicate professional-fee cheques, and inflated invoices for hours not worked.

Mr Benjamin admitted receiving the payments but alleged that they had been authorised by a deceased partner and reflected additional services. He denied overcharging. The central issues were whether the payments were authorised, whether the invoices were fraudulently inflated, and what consequential relief, including interest, tracing and costs, should follow.

1. Unauthorised payments. The court accepted the evidence of the surviving partners that the Autopay payments and duplicate cheques had not been authorised. The defendant’s allegations of improper conduct by the partners were unparticularised and unsupported by evidence. The cashbook entries had deliberately concealed the payments, and the defendant’s admissions at the confrontation meeting materially reinforced the claimant’s case. The claimant therefore established personal claims for £78,000 and £29,400.
2. Overcharging. The allegation that the defendant had invoiced for more hours than he worked rested on inference from the size of his invoices compared with those of his predecessor. The invoices specified the hours claimed, no partner challenged them at the time, and the defendant expressly denied overcharging when confronted. The court was not sufficiently convinced to give judgment for the alleged £13,200.
3. Interest and tracing. The court indicated that section 35A of the Supreme Court Act provided the basic basis for simple interest. The question of compound interest was left open. The tracing claim was also reserved. Its availability might depend on whether, when the defendant received the money, it was expected to be applied towards expenditure connected with purchasing his house.
4. Costs. The claimant was entitled to its costs on the standard basis, subject to detailed assessment, with an interim payment of £25,000 within 28 days. The finding of fraud did not by itself justify indemnity costs, since the relevant focus was the defendant’s conduct of the proceedings.

The judgment recorded inconsistent figures of £107,600 and £107,400. The two established heads of claim totalled £107,400, although the subsequent discussion of the proposed order repeatedly referred to £107,600.

Not stated in the judgment.