BL-2021-002293 - [2025] EWHC 678 (Ch)

I will consider next the case on the position of FCGPL in the period between its winding up and its restoration. In the present case, the court is asked to approach this question as one of reverse summary judgment. The issue therefore is whether there is any realistic prospect of the claimant establishing at trial that it, acting by FCGPL, could not with reasonable diligence have discovered the facts relied on by the claimant. I reiterate that I am considering at this point whether the claimant could have discovered the facts pleaded in the particulars of claim as they currently stand.

The case on behalf of the defendant that was set out in the first witness statement of his solicitor, Mr Daniel Astaire, is that the claimant was aware of what is said to be the parallel Comprendium structure by 2013, by way of attribution to Mr Horlick (see paragraph 40). That statement refers back to the lengthy paragraph 27, which recited the reference to documents up to 2003, with the Toth-Feher correspondence mentioned in subsequent paragraphs. That was followed in Mr Astaire’s second witness statement with the statement (at paragraph 11(c)) that, ‘on the Claimant’s own case, Mr Horlick knew all that he needed to know to bring the present claim more than six years prior to its issue. That knowledge is properly attributable to FCGP and FCILP’. The claimant’s evidence in response, in the form of the fourth witness statement of Ms Vials dated 27 March 2023, responds in detail to much of what was said by Mr Astaire about the pre-2010 period, but does not respond directly to what was said about attribution.

Because I consider that it is determinative of the defendant’s application, I will set out first my decision in relation to the 2013 correspondence. I bear in mind that the defendant seeks summary judgment on limitation issues, i.e. he must establish that the claimant has no real prospect of succeeding on limitation at trial and that there is no other compelling reason why the issue should be disposed of at a trial: see CPR r 24.3.

The test to be applied by the court when a party applies for summary judgment under CPR r 24.3 was set out in the following terms by Lewison J in Easyair (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 at [15]:

The starting point for the analysis of the position regarding the 2013 correspondence is what is said in that correspondence itself. I agree with Mr Cohen that all of the key elements pleaded in the particulars of claim are set out in the letters sent by Dr Toth-Feher on behalf of Mr Horlick. They allege that Mr Flohr promised to devote substantially all his time to the business of Comprendium UK and that the Fund made substantial investments as a result. The letters also refer to the (what is said to be) secret acquisition of Comdisco Switzerland and the acquisition of Comdisco Germany. It is said that the intertwining of the businesses by Mr Flohr was a breach of fiduciary duty, and that this led to a total loss of investment in the amount of €7.5m, which would include investment by the claimant. There is also reference to dealings with others mentioned in the particulars of claim, which are said to evince ‘a repeated pattern of deliberately deceptive behaviour’. The alleged breach of the Munich agreement is also mentioned.

I consider that Mr Horlick demonstrably knew in 2013 all of the key facts relevant to the claims pleaded in the particulars of claim. When considering his knowledge, therefore, it does not matter whether any of the relevant facts relied on had previously been deliberately concealed by Mr Flohr (see Sheldon v Outhwaite [1996] 1 AC 102 at 144A, Lord Browne-Wilkinson). Even though he may not have known all the details, he ‘knew with sufficient confidence to justify embarking on the preliminaries to the issue of a writ’, being the formulation of the worthwhile claim test approved by the Master of the Rolls in Gemalto. Given that the key details in fact pleaded were known in 2013, it must follow that Mr Horlick at least cannot be heard to say that a claim pleaded on the basis of the facts then known to him could not have been made without being susceptible to strike out.

I do not consider that it avails the claimant to contend, as far as Mr Horlick’s knowledge is concerned, that the responses sent to Dr Toth-Feher on behalf of Mr Flohr were further acts of concealment by Mr Flohr. Where all the relevant facts are known to a person, the fact that the defendant continues to seek to conceal them cannot prevent time running. That is because the claimant ‘has discovered’ the concealment by discovering the underlying facts.

Sir Geoffrey contends that Mr Horlick remained in a state of doubt until 2017, and that this is the only plausible explanation why he did not in 2013 take any action to bring forward any claims. Ms Vials says in her second witness statement at paragraphs 185 to 189 that Mr Horlick received information in 2017, following enquiries by a debt recovery agent instructed to recover the personal loan to Mr Flohr, that the Comdisco Germany transaction had been financially successful. She says at paragraph 189:

It is thus the claimant’s position that Mr Horlick did not know of the ability of Mr Flohr, through the acquisition of Comdisco Germany to place business with Comprendium UK. For four connected reasons, I do not consider that this avails the claimant, and that it does not demonstrate that Mr Horlick did not satisfy the worthwhile claim test in 2013:

The points I have made above do not depend on an assessment of what more could have been discovered with reasonable diligence. But there is a further point which does. The information which Ms Vials says that Mr Horlick became aware of in 2017 was an extract from the Comdisco Germany due diligence prepared in 2002, which showed extensive existing debt owing to the company from its customers, which led to a heavy discount to value based on the anticipated purchase price for the company. Even if, contrary to my view as stated above, this was information which Mr Horlick needed to know, I consider that he could have discovered it with reasonable diligence. To the extent that Mr Horlick’s own position is relevant (a point to which I will turn next), the claimant must establish ‘that [he] could not have discovered the [facts] without exceptional measures which [he] could not reasonably have been expected to take’: Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 at 418, Millett LJ. There must also be a ‘trigger’ which puts the claimant on notice of the need to investigate: OT Computers Ltd (in liq) v Infineon Technologies AG [2021] QB 1183 at [35], Males LJ. As far as Mr Horlick is concerned, I consider that it is fanciful to suggest that he was not on notice of the need to investigate the profitability of the acquisition of Comdisco Germany (if, contrary to my view, it was material). As the 5 November 2013 letter states, Mr Horlick had in fact already made enquiries and been given information which appears from the due diligence document referred to by Ms Vials to be far from inaccurate, even if Mr Horlick regarded the source of the information (Mr Stern) as questionable.

That leaves the separate question of whether Mr Horlick’s knowledge as at 2013 should be attributed to the claimant. As Lewison LJ said in Bilta at [150]–[151], it is a question of fact whether the claimant could not with reasonable diligence have discovered the relevant facts, and the burden of showing that is on the claimant. That, of course, entails an assessment of what would have happened if FCGPL had continued in existence throughout the relevant period rather than being dissolved and then later restored to the Guernsey register of companies.

The claimant’s argument as far as the hypothetical ability of FCGPL to discover the facts relevant to the pleaded claim and thus (on the assumption there was concealment), any deliberate concealment in the period after its dissolution is as follows:

In response, Mr Cohen submitted that FCGPL should be treated as having had Mr Horlick as its sole director during the relevant period. Mr Horlick had ceased to be a director of FCGPL before 2010, and instigated the restoration of FCGPL at or after the end of 2018. It is obvious from the correspondence and from the evidence that Mr Horlick is the sole driving force behind the restoration of FCGPL and the pursuit of this claim. I have already indicated that I consider that Mr Horlick knew by November 2013 everything he needed to know in order to bring the claim. Mr Cohen submitted that this knowledge should be attributed to FCGPL.

Applying the test as summarised by Lewison LJ in Bilta at [150]–[151], the question for the court at trial, in the event that it was held that Mr Flohr had deliberately concealed any facts relevant to the claimant’s causes of action, would be whether the claimant could not with reasonable diligence have discovered those facts. The assessment would take place on the assumption that the claimant had continued in existence at all material times since 2010, and the burden of proof on that question would lie with the claimant.

As Lewison LJ said, what would have happened if the company had remained in existence is a question of fact. The Court of Appeal in Bilta did not approach that question as a matter of the attribution of knowledge by an individual to the company. The question posed was simply that of, what would have happened if the company had continued in existence?

Mr Cohen submitted with some force that it is incumbent on the claimant to put forward some evidential response on this point, in light of the 2013 correspondence and the degree of knowledge clearly held by Mr Horlick shown at the time of the Toth-Feher correspondence. I agree with this submission. It is not sufficient for the respondent to a summary judgment application to rely on the fact that a question of fact is involved and to submit that it is appropriate only for trial. The respondent must put forward sufficient evidence to satisfy the court that it has a real prospect of succeeding at trial: Korea National Insurance Corp v Allianz Global Corporate & Specialty AG [2007] EWCA Civ 1066 at [14], Moore-Bick LJ.

I agree that the claimant has put forward no basis in evidence as to what would have happened during the interregnum. Sir Geoffrey submitted that I find that evidence in the first witness statement of Mr Spray, but Mr Spray does not expressly address the question under consideration. Ms Vials says in her second witness statement that, ‘As a matter of common sense if the Fund did not know and could not with reasonable diligence have discovered the concealment before its dissolution in April 2010 (or of its General Partner in July 2010), it certainly could not have discovered the concealment with reasonable diligence thereafter.’ As I have indicated, what Sir Geoffrey said as a matter of submission was that the most likely state of affairs during the period from 2010 onwards is that it would have continued with no active board or directors and under the supervision of an insolvency practitioner acting as liquidator.

The two options posited by the parties, therefore, are (a) that there would have been no directors and the company would have been subject to the supervision of an office holder, or (b) that Mr Horlick would have been the sole director. As the Court of Appeal made clear in Bilta, on the point on which they disagreed with the trial judge, there is no presumption that a company remains in existence with a functioning board of directors. As Mr Cohen said, those who remained involved in the last stages of the claimant’s existence after Mr Horlick’s departure in 2008 had no particular interest in or experience of the investment in Comprendium UK. There is no reason to suppose that they would have continued as directors of the general partner if it had not been wound up (and, importantly, the claimant did not suggest that they would have done).

The claimant does not suggest that the company would have been left with no directors and under no supervision at all. This must be correct. The evidence given by Mr Spray in the witness statements I considered at the hearing in July 2023 was at pains to explain how all steps were properly carried out on the basis of the advice of experienced professional advisers. A suggestion that in those circumstances the company would have been left with no directors and under no supervision would be fanciful.

I proceed to consider the position on the basis that what would have happened if FCGPL had remained in existence after 2010 would have been one of the states of affairs put forward by the parties. If the claim were to go to trial on this point, they would be the options available to the court, it being unrealistic to suppose that the court may make a finding of fact on this point not contended for by either party.

There are sound reasons for supposing that Mr Horlick may have been the sole director. In practice, an office-holder’s role may well not have lasted years, and it is far from clear to me that the deemed continuation in existence of the company provided for in s.1032(1) is consistent with it having been placed into winding up (even if into voluntary liquidation). As subsequent events have borne out, Mr Horlick had an economic interest in the Fund, which was not shared by those who were involved in the management of the claimant and associated vehicles in the final months before it was dissolved. He has a carried interest right in respect of the claimant partnership. Mr Spray’s first witness statement explains that it was Mr Horlick who contacted Mr Spray at the end of 2018, requesting his assistance in the restoration of the general partner. Mr Horlick first sought in September 2019 (and just within six years from the 2013 correspondence) to bring a claim on behalf of both himself personally and the claimant. FCGPL had, however, not yet been restored to the Guernsey register at that point.

I have explained above why I consider that Mr Horlick knew the relevant facts pleaded in the particulars of claim as at November 2013. Clearly, if he had been a director of FCGPL in the period after 2010 in its hypothetical continuation in existence, his knowledge would be attributed to the company.

What if the position had been as if the claimant now contends, with there being no directors in office, but with FCGPL under the supervision of an office holder in the form of a liquidator? This should be treated as a realistic possibility as the point is being considered on an application for summary judgment. Would the company in those circumstances have had a trigger to discover the facts which constitute the pleaded cause of action, and the means of discovering them with reasonable diligence? I consider that I can be satisfied on a summary judgment basis that it would. The 2013 correspondence sent on behalf of Mr Horlick expressly contemplated claims by both him and by the claimant. For the reasons I have just mentioned, the evidence clearly demonstrates that Mr Horlick had an interest in the claims pursued by FCGPL on behalf of the Fund and the evidence of neither side suggests that any other person might have had any continuing interest whatsoever in FCGPL’s assets or its affairs more generally. Mr Horlick was also plainly aware in 2013 that he was the person who would have to take the running to enable the claimant’s claim to be pursued. I do not consider it to be a realistic proposition that in the event of the company continuing in existence under the supervision of a liquidator, Mr Horlick would have refrained from communicating his concerns to such an office holder. This would have been not least because he would not have wanted the claim intimated in 2013 to have been prejudiced by the company ceasing to have any existence through the conclusion of the winding up which he contends would have commenced. Such communication from Mr Horlick would have been a trigger to investigate and, in practice, Mr Horlick would have communicated the very points made by Dr Toth-Feher in his correspondence.

In those circumstances, and whether or not Mr Horlick himself would have been a director of FCGPL in November 2013, I consider that there is no realistic prospect of the claimant establishing at a trial that FCGPL could not then with reasonable diligence have discovered the facts pleaded in the particulars of claim. This is all on the assumption that there had until November 2013 been a deliberate concealment by Mr Flohr of one or more facts crucial to the causes of action pleaded. Accordingly, and with reference to Bilta at [151], the company’s dissolution is not the real cause of it being unable to pursue its claim in time. Furthermore, I consider that the court can be satisfied now that if the claimant were permitted to pursue the claim, it would be in a better position than it would have been if FCGPL had not been dissolved.

The only real argument that has been made against this conclusion is that there was a continuing act of concealment by Mr Flohr in 2013 such that Mr Horlick remained in doubt until 2017. In circumstances where I have concluded that Mr Horlick had the requisite knowledge to bring the claim in 2013 and/or had in fact then made the enquiries reasonable diligence would require him to make, I do not consider that this could assist in showing that the company would not have known nor been able with reasonable diligence to discover the facts necessary to plead the claim. What it might mean is that FCGPL might not have brought the claim in any event, which would not assist the claimant, or might have left it right until nearly six years from the November 2013 correspondence, as occurred with the claim prematurely issued in September 2019. If that were so, the company’s dissolution would not be the real cause of it being unable to pursue its claim – the real cause would be Mr Horlick’s delay in causing it to pursue matters despite having the knowledge to do so.

Furthermore, I am of the view that the court can be satisfied without a trial on the matters that I have set out above. I do so on the footing that the factual premise put forward by the claimant on what would have happened if FCGPL had continued in existence after 2010 is accepted. The evidence does not raise any other factual dispute which can only properly be determined at trial after disclosure and with the benefit of cross-examination. I consider that the 2013 correspondence is telling in the detail which it conveys of matters pleaded in the particulars of claim, and that Mr Horlick had made the very enquiries of a third party which he says (through his solicitor) he did not believe. It is perhaps unusual to have such a detailed record of the state of a person’s knowledge at a certain date and I do not consider that the assessment I have carried out has required any sort of mini-trial.

As I have said, the Court of Appeal did not decide the appeal in Bilta on the basis of the attribution of knowledge to the companies in that case. Mr Cohen submitted that this is another way in which the issue can be addressed, i.e. by asking whether Mr Horlick’s knowledge should be attributed to FCGPL during the period when it is now deemed to have continued in existence. I have explained above why I consider that Mr Horlick had the requisite knowledge to enable the claimant’s claim (in addition to his own personal claim) to be brought, more than six years before the claim form was issued. I consider that the question is best addressed by being approached in the manner explained by Lewison LJ, rather than by asking whether a special rule of attribution should be fashioned in order to take account of the policy of the Limitation Act (i.e. as suggested by Lord Hoffman in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 507). Such an exercise would run the risk of diverting attention from the key question, which is whether the claimant can prove that it could not, if it had continued in existence, with reasonable diligence have discovered the relevant facts (Bilta at [150]).

Accordingly, I consider that reverse summary judgment should be granted to the defendant on the question of limitation, on the footing that as from November 2013 onwards the claimant should be considered either to have sufficient knowledge to pursue the claim pleaded in the particulars of claim, or to have been able with reasonable diligence to have discovered any relevant fact which had been concealed from it. The claimant is of course acting by its former general partner, FCGPL. The Court of Appeal has confirmed in these proceedings that the general partner is the correct legal person to pursue any claim on behalf of the claimant. It was not suggested to me that the knowledge or means of knowledge of any person other than FCGPL was the determining factor when reaching conclusions about the claimant’s ability to pursue the claim after 2010. Mr Horlick’s knowledge is indirectly relevant to that question for the reasons I have explained.

I would not have granted summary judgment in relation to the period before 2013. In light of my decision above concerning the period post-2013, I will state my reasons concisely.

Mr Cohen submitted that the matters set out in paragraphs 79 to 83 above show that Mr Horlick knew that Mr Flohr was operating a leasing business in Germany and Switzerland, using the name Comprendium. Mr Horlick, it is said, therefore knew by 2005 everything that was necessary to bring the claim based on breaches of duty said to have been committed through acts of wrongful competition with Comprendium UK. There is no suggestion that, in this period, there was any impediment to the attribution of Mr Horlick’s knowledge to the claimant.

The key facts which it is said the documents to which Mr Cohen took me go are that Mr Flohr had acquired Comdisco Switzerland and, particularly, Comdisco Germany and was operating them. Sir Geoffrey accepted that it is plain from the particulars of claim that, by 2010, Mr Horlick knew that the German business had been acquired, but not that it had been profitable to Mr Flohr. What needs to be assessed, if there was arguably any deliberate concealment on his part, is whether Mr Horlick had a trigger to investigate the breaches of duty which are now pleaded.

It seems tolerably clear that Mr Horlick was informed in the period up to 2004 that Comdisco Germany had been, or was in the process of being, obtained. It was Mr Cohen’s submission that this was the trigger for further enquiries to be carried out. If they had been, it is said that Mr Horlick would have discovered, before the claimant had been wound up in 2010, the matters which are now pleaded. I accept that Mr Cohen has presented strong arguments in favour of this proposition.

Nonetheless, I would not have granted summary judgment on this issue, based only on the documents I have been shown in relation to that earlier period. I have, as Sir Geoffrey pointed out, been shown only a small number of what are plainly a vast number of documents. There is also the realistic prospect of full disclosure, which Mr Flohr has not been required yet to give, casting a different complexion on matters as, of course, cross-examination might well do. Sir Geoffrey has raised an arguable (i.e. pleadable) case that Mr Flohr acted dishonestly in relation to several individuals concerning his acquisition of the Comdisco European business after Comdisco’s insolvency. I explain below why that case cannot now be pursued in the present proceedings. However, the credibility and honesty of both parties (upon which each openly wishes to attack the other) would be a key factor in determining both whether Mr Flohr had deliberately concealed material facts and whether Mr Horlick became aware of such matters so as to trigger the reasonable requirement of carrying out investigations into whether the claimant may have a worthwhile claim. In that context, it is particularly relevant that the evidence suggests that Mr Horlick and Mr Flohr were at the time close friends and that Mr Horlick therefore implicitly trusted him, not least in making a substantial unsecured loan to him. The question when that trust dissipated or ought to have dissipated is not something that can sensibly be determined on the basis of the evidence as it stands. I see the force in Sir Geoffrey’s submission that, so long as Mr Flohr denied that the acquisitions had been profitable, Mr Horlick may not have had cause to investigate the possibility that Mr Flohr was profiting at the expense of Comprendium UK. I have explained above why this consideration does not apply in relation to the period from November 2013 – Mr Horlick had by then in fact carried out enquiries into the profitability of the acquisitions, thus showing that the trigger for such enquiries must by then have existed.

Even though I accept that it is quite unsatisfactory that the evidence on behalf of the claimant has been given by a solicitor with no contemporaneous knowledge of the facts to which she speaks, on this point I consider it sufficient, read together with the particulars of claim, to show that there is a real issue as to whether the friendship between the two men affected the questions raised on the issue of limitation. For instance, the issue may not be so much whether Mr Horlick now recalls whether he opened the attachment to an email two decades ago but whether, even if he might have done, would it have put him on notice of the pleaded claims. That would in my assessment likely require a more nuanced assessment than is possible with only the small number of landmarks in the parties’ relationship which have been identified on the present application. I also agree with Sir Geoffrey that I should be cautious about finding at this stage that Mr Horlick saw or ought reasonably to have seen the Comdisco filings and media statements about the acquisition of Comdisco Germany.

Finally, and as I have noted in relation to the pleading of what has been called the competition claim, the breaches identified are not merely in allegedly operating the German and Swiss companies in competition with Comprendium UK, but also in misusing or misappropriating (to use that word in a broad sense) its resources. Mere knowledge of the acquisition of Comdisco Germany would not necessarily have been a sufficient trigger for enquiry about those other matters.

In light of what I have said above, I will comment briefly about the proposed paragraph 63A to the particulars of claim, where the claimant seeks to allege that Mr Flohr represented on 30 November 2005 that the Comdisco Germany transaction never got off the ground. It may have been anticipated that this allegation might have been determinative, if time had otherwise stopped running for limitation purposes in 2010 with the claimant’s demise. That, however, is not so. Because of my decision on other grounds, the issue does not arise. I would, however, have permitted this amendment if I had not been prepared to give summary judgment on other grounds. Mr Cohen’s criticisms of this lateness of the recollection, and of the way it has been evidenced, are well made. However, my reasons as to why I would not have granted summary judgment on the basis of Mr Horlick’s knowledge up to 2010 would have militated in favour of my not precluding this argument from being made. In particular, I agree with Sir Geoffrey that I cannot speculate as to why the 2019 claim was withdrawn; it seems to me it likely suffered from quite a number of flaws (some of which have been identified by the defendant on this application) and would not necessarily have been saved by what is alleged to have been said by Mr Flohr at a meeting on 30 November 2005.