Daniel Wagner v Bright Station Ventures Management Limited

The claimant, Mr Wagner, sought repayment in debt, alternatively restitution, of sums he advanced to or for the benefit of the defendant company BSVM. The defendant counterclaimed for sums said to have been improperly paid out by BSVM and for losses arising from poor books and records. The court concluded that BSVM had, in practice, operated as a group "service company" which legitimately met a variety of group overheads and some third party liabilities, but that there was no general, express agreement by BSVL or BSVM to underwrite or reimburse Mr Wagner for contentious litigation costs.

Key legal principles applied included the distinction between debt and restitution claims; the role and limits of a director's fiduciary duties (including the reference to section 172 Companies Act 2006); and the legal effect of settlement agreements and corporate separateness. The court found that (i) certain personal cash advances and the sums assigned by VC247 to Mr Wagner were recoverable, (ii) claims based on advances said to have been made by BSL and Rezolve were rejected because any implied claims belonged to those companies, and (iii) the bulk of Mr Wagner's claimed legal costs in the Administration, Bothy and Isle of Man proceedings were not recoverable as BSVM/BSVL liabilities because there was no adequate authorising agreement or established practice covering contentious litigation funding.

This was a first instance commercial trial concerning money allegedly advanced to Bright Station Ventures Management Limited (BSVM) by or for the benefit of the claimant, Mr Daniel Wagner. The principal factual background was the collapse of the Powa group, the administration of Powa/Powa PLC in 2016, and the contested governance and funding decisions of BSVL and its subsidiaries in 2016–2018.

• Nature of the claim: Mr Wagner sued in debt, alternatively restitution, for sums he said he had advanced to BSVM or paid to third parties on its behalf on the basis that those payments gave rise to obligations to repay him. The defendant counterclaimed for repayments and damages for alleged breaches of duty and for the costs of rectifying inadequate books and records.
• Issues framed: Whether the relevant payments created enforceable debts or gave rise to restitutionary liability; whether BSVM in practice operated as a group services company so as to justify its meeting of third‑party liabilities; whether any payments were authorised or amounted to breaches of fiduciary duty (including under section 172 of the Companies Act 2006); whether the settlement agreement compromised liabilities for costs; the legal effect of an assignment from VC247 to Mr Wagner; and the quantum and recoverability of accountancy and forensic fees.
• Court's reasoning and conclusions: The court accepted that BSVM had, in practice, operated as a services company for the BSV group and that it was reasonable for BSVM to meet many group overheads and some liabilities where this was within that practice. The court rejected an assertion that there was any express agreement by BSVL or BSVM to reimburse Mr Wagner for his contentious litigation costs; the board minutes and the Settlement Agreement demonstrated that BSVL had specifically disavowed broad liability for such costs and had limited any contribution. The Administration, Bothy and Isle of Man litigation costs claimed by Mr Wagner were, therefore, largely not recoverable. The court held that (a) personal cash advances made by Mr Wagner and certain advances originally made by VC247 (after assignment) were recoverable; (b) claims said to derive from advances by BSL and Rezolve failed because any implied claims belonged to those companies and not to Mr Wagner personally; (c) the VC247 assignment was effective and the indebtedness shown in BSVM's accounts and annexes was accepted for the purposes of recovery; and (d) the defendant's counterclaim largely failed on the evidence, save that a small number of accountancy invoices remained in dispute but were not proved as damages caused by mismanagement.

The judge made factual findings on credibility, accepting that Mr Wagner was not dishonest but had been casual about corporate formalities, and accepting the honesty and utility of the bookkeeper's evidence. The court directed the parties to agree the money figure and an order to give effect to the judgment.

The claim was allowed in part and the counterclaim was largely dismissed. The court held that BSVM had, in practice, operated as a group service company and that certain personal cash advances and the amounts assigned by VC247 to Mr Wagner were recoverable. Conversely, most of Mr Wagner's claimed legal costs (notably those arising from the Administration, Bothy and Isle of Man proceedings) were not recoverable because there was no express agreement or established practice to fund contentious litigation and, in some cases, the board had resolved not to incur such costs; claims said to arise from advances by BSL and Rezolve were rejected as belonging to those companies. The defendant's counterclaim for improper payments and poor books and records failed save for limited invoices which were not shown to be caused by breach and therefore were not established as damages.