[2025] EWHC 2316 (Ch)

Fecha: 10-Sep-2025

BACKGROUND

BACKGROUND

Given the narrow nature of the matters to be determined, there is no need to describe in detail the matters that are the subject of the wider litigation. It is sufficient to note that the Begbies Defendants are subject to various claims arising out of the conduct of a Members Voluntary Liquidation, and that they aver that any liability that any of them may have is limited under the terms of signed Letters of Engagement (each an “LoE”).

In a little more detail, but still in overview, the Assumed Facts and Matters are:

Begbies LLP provided final LoEs to the directors of the Claimant Companies in early March 2015;

ii)

the Former Liquidators owed relevant fiduciary, tortious, and contractual duties to the Claimant Companies and assumed all decision taking responsibilitiesin relation to the Claimant Companies including a duty “to ensure the transaction[a sale of the principal assets of the Claimant Companies] is conducted at fair value, without prejudice to any shareholder” ;

iii)

representations were made to the meeting of shareholders on 10 August 2016 by Mr Fry that “a valuation report was completed by his firm” and “considerable consideration was given to the sale process, valuations, control and realising the best value in a realistic timescale”, and statements were made by the Former Liquidators to members that they had applied a significant level of scrutiny to the transfer of assets and were satisfied it was in the best interests of the shareholders;

iv)

Begbies LLP owed a contractual duty to the Companies under clause 13.1 of the terms of business attached to the LoEs (the “Terms”) to exercise reasonable skill and care in the provision of services by it to the Companies, further or alternatively a like tortious or equitable duty;

BTG Advisory owed a tortious, contractual and equitable duty to exercise reasonable skill and care in the course of its retainer;

vi)

that in various specific respects the Former Liquidators acted in breach of their fiduciary, tortious and contractual duties;

vii)

that Begbies LLP and BTG Advisory are vicariously liable for those breaches;

viii)

that Begbies LLP and BTG Advisory breached their own duties to exercise reasonable care and skill by reason of the actions of the Former Liquidators; and

ix)

that the Claimant Companies have sustained loss and damage by reason of such breaches of duties.

Again, I emphasise that these Assumed Facts and Matters are assumed, rather than admitted or determined by this court.

It is common ground between the parties that an LoE was written in identical form between each of the Claimant Companies and Begbies LLP, and in each case attaching the Terms. I will deal in more detail with the provisions of the LoEs and of the Terms later in this judgment, but meanwhile it is enough to note that they purported to restrict the liability of Begbies LLP and persons associated with them to £1 million (per Claimant Company).

10.

The Begbies Defendants argue that they are all protected by this limitation. The Claimants argue, on various grounds, that no such protection applies. In summary, they argue that:

it is impossible for a liquidator to enjoy limited liability;

ii)

even if that were possible, no such limitation could be agreed by the directors of the relevant company;

iii)

in any case, on a true construction of the LoEs, the LoEs do not provide for the limitations of liabilities to extend to the Former Liquidators, or to any other of the Begbies Defendants who might be liable for anything done by the Former Liquidators; and finally

iv)

in any case even if a limitation could be and had been validly agreed, the Limitation Clause is rendered invalid by the Unfair Contract Terms Act 1977 (“UCTA”).

11.

As regards this last point, the parties agreed, and I also agreed, that the trial of the Preliminary Issue (which has been ordered on the basis that no oral evidence is to be heard) was not a suitable forum for determining the effect that UCTA might have in the circumstances, as this may depend on evidence that may need to be tested. Accordingly, this point is left outstanding. Nothing in this judgment should be seen as making any determination in relation to that point.

12.

I will take the arguments raised on behalf of the Claimants individually.