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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Bing Holdings Inc & Anor v Hue-Williams [2017] EWHC 3149 (QB) (05 December 2017) URL: http://www.bailii.org/ew/cases/EWHC/QB/2017/3149.html Cite as: [2017] EWHC 3149 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		05/12/2017

1. This is an application to amend the claim made in this action by Mr Michael Hue-Williams (the Defendant) against Mrs Christina Chandris (the Fourth Party). All the other claims have been settled. The remaining live claim is set down for trial for 5 days commencing on Monday 11 December 2017. The application to amend was issued on 23 November 2017 and came before me on 30 November, on the pre-trial review, leaving just 6 clear working days between the application and the start of the trial. Mr Hue-Williams' solicitors had sought consent for the amendments by letter dated 13 September, but Mrs Chandris' solicitors had said on 2 October that they would not consent to it.
2. Mr Hue-Williams is an art dealer. Mr John Chandris and Mrs Christina Chandris are wealthy individuals with significant interest in the shipping and hotel industries. They separated in or about 2012 and are now divorced.
3. Mr and/or Mrs Chandris, and/or corporate vehicles controlled by them, had an art collection. I will call it the Chandris collection. There is some dispute, unimportant for present purposes, about who exactly owned the artwork.
4. According to Mr Hue-Williams, before their separation Mr and Mrs Chandris planned a project which was to involve locating, cataloguing, valuing, and selling, the bulk of the collection, with the proceeds being used to commission a new collection of modern art.
5. Mr Hue-Williams says that his services were retained for that project, and that it was agreed that he would be remunerated by way of commission of 5% of the total net sale price of the Chandris collection (less any commission paid by the auction houses) and 10% of the total retail price in respect of the purchase of the new collection.
6. Mr Hue-Williams contends that from November 2010 onward he expended considerable time skill and resources on the project.
7. Two pieces were sold at Christie's in October 2011. The auction house Christie's paid Mr Hue-Williams commission of 2% in February 2012, and in March 2012 Mr Hue Williams received a payment of £54,000 representing the balance due of 3%. (There is a dispute, irrelevant for present purposes, about who exactly made that payment to him).
8. Mr Hue-Williams contends that in November 2011 Mr and Mrs Chandris instructed him to commission two pieces of art for a property in Greece, namely "Bench" by Mr Newson and "Stone Path" by Xu Bing. Mr Hue-Williams did so. On 14 November 2012 Mr Hue-Williams issued invoices to Mrs Chandris in the sums of £90,000 and $245,000 for Bench and Stone Path respectively. Mrs Chandris declined to make payment but said that Mr Chandris would do so.
9. In late 2012 Mrs Chandris informed Mr Hue-Williams that she and Mr Chandris were divorcing.
10. Mr Hue-Williams says that he and Mr Chandris agreed in February 2013 that Mr Chandris would pay to Mr Hue-Williams the sums of £90,000 and $245,000 and that Mr Hue-Williams would release these two works to Mr Chandris.
11. On 4 March Mr Chandris sent an email suggesting that it would be sensible to set up a new company to buy these two works of art. Mr Hue-Williams says that he agreed to reissue the invoices to a company called Bing Holdings, and did so.
12. On or about 8 March 2013 the invoiced sum was paid by "ISIS Holdings IN".
13. Mr Hue-Williams contends that the project came to a halt in or about 2013 and was never revived.
14. In February 2016 proceedings were commenced by Bing Holdings Inc against Mr Hue-Williams. Bing Holdings alleged that it had been incorporated on the instruction of Mr John Chandris for the purpose of purchasing the two works of art, that it had made payment for them, but had not received them. Bing claimed that the contract between it and Mr Hue-Williams had been terminated, and sought repayment of the sums paid on the basis that the consideration or basis for the Contract had wholly failed, alternatively for damages in the amount of the artworks.
15. On 4 April 2016 Mr Hue-Williams filed a Defence which raised Part 20 claims against Mr Chandris as Third Party and Mrs Chandris as Fourth Party.
16. On 15 September 2016 an Amended Claim Form was issued adding Mr Chandris as second Claimant. It alleged that if the contract with Mr Hue-Williams was not made by Bing, then it was made between Mr Chandris and Mr Hue-Williams.
17. There have been various other amendments which are not relevant for present purposes.
18. As I noted above, on or about 31 July 2017 a settlement was reached between Mr Hue-Williams, Mr Chandris, and Bing Holdings.
19. Accordingly the only remaining claim is the claim by Mr Hue-Williams, now in effect the Claimant, against Mrs Chandris, who is the Fourth Party on the pleadings and now the only Defendant to Mr Hue-Williams' claim.

Mr Hue-Williams' claim against Mrs Chandris, and her defence to it

20. On the pleadings as they stand, Mr Hue-Williams alleges a contract between him and Mr and Mrs Chandris, with (so far as relevant for the present application) the following terms:

i) Mr Hue-Williams would provide his services, to include (inter alia) cataloguing and arranging for the sale of the Chandris collection, and considering and selecting artists apt for inclusion in the new collection.

ii) In consideration for the provision of those services, Mr and Mrs Chandris would pay him, for every item sold from the old collection, either 5% of the net sale price, less any commission received from the auction house; and a 10% commission on the retail price of any piece purchased for the New Collection

iii) Mr and Mrs Chandris would carry out the project to completion and/or would not prevent or inhibit the completion of the project.

This last term is said to be an express, alternatively implied term.

21. Finally, Mr Hue-Williams says that if there was no such term as set out at (iii) above, it was an implied term that Mr Hue-Williams would at least be paid a reasonable sum for all the work that he did in fact perform at the request of Mr and Mrs Chandris.
22. The claim against Mrs Chandris is pleaded in various ways in the Re-Amended Defence. First it is said that the breach in not completing the project caused loss calculated by reference to the remuneration Mr Hue-Williams would have received had the project been completed.
23. In the alternative there is a claim under the contract for a reasonable sum for the services in fact performed by Mr Hue-Williams, before the project was abandoned. He contends that he performed 120 days' worth of work, and that a reasonable rate for that work is $10,000 a day, so he claims that the sums he has already received by way of remuneration fall well short of the sums to which he is entitled on this limb of his case
24. At paragraph 43 the existing pleading says this:

Claim in restitution to a quantum meruit

43. In the alternative, Mr and Mrs Chandris did, jointly and severally, knowingly receive the benefit of the Services provided by Mr Hue-Williams. The Services were at all times (i) performed pursuant to the requests of Mrs and/or Mrs Chandris; and (ii) freely accepted by them in the knowledge that Mr Hue-Williams expected to be paid.

44. Further or alternatively, Mr Hue-Williams has been prevented form completing his performance of his obligations pursuant to the Agreement, and thereby prevented from earning his commission.

45. Further or alternatively, there has been a failure of basis in that the Project has been terminated without having been completed,

46. By reason of each and any of the matters pleaded at paragraphs 43 to 45 above, Mr Hue-Williams is entitled [to] a reasonable sum in respect of the work that he performed.

47. A reasonable sum for the services provided would be £1,837,500 by reason of the matters pleaded at paragraph 41 above, that sum being a proper guide as to the value the parties placed in Mr Hue-Williams' services.

25. In the existing pleading there is no mention of "unjust enrichment" of Mr and Mrs Chandris, nor any suggestion that the quantum of any award might be linked to the value of any benefit conferred on them, as opposed to being based on the value of the work done by Mr Hue-Williams.
26. Mrs Chandris' defence to the claim against her admits that there was a contract between Mr Hue-Williams and Mr and Mrs Chandris. It contends (at paragraphs 10.2 and 11.6) that the terms of that contract were "that it was understood that" if Mr Hue-Williams facilitated a sale or purchase a commission would be paid to him at a level which was reflective of his involvement with that particular sale. Mrs Chandris expressly denies any express or implied term to the effect that the Project would take place.
27. The parties therefore agree that they were in a contractual relationship, and they agree that if the project proceeded to completion remuneration would be provided through commission payments, though they disagree about the details of those payments. But the central dispute seems to boil down to who took the risk that the project would not proceed to completion, and how (if at all) remuneration for work done ought to be dealt with in that scenario.
28. Permission has been given for expert evidence by the Order of Master Kay QC dated 16 January 2017. That order provides that

"The experts' reports will be confined to the issue of the payment and rates of commission reasonably and typically chargeable by a consultant in the art industry, of similar calibre and experience to Mr Hue-Williams."

29. Experts' reports have been exchanged.

The amendments sought

30. I will set out the contentious amendments in the form in which they are sought.

Claim in restitution (and/or for Unjust Enrichment) to a quantum meruit

43. In the alternative, if and insofar as it be found that Mr Hue-Williams is not entitled in contract to be paid for his Services as set out above, Mr and Mrs Chandris did, jointly and severally, knowingly receive the benefit of the Services provided by Mr Hue-Williams (and/or were enriched at Mr hue-Williams' expense to that extent). The Services were at all times (i) performed pursuant to the requests of Mrs and/or Mrs Chandris; and (ii) freely accepted by them in the knowledge that Mr Hue-Williams expected to be paid (so that if and insofar as Mr Hue-Williams is not, in the circumstances set out above and below, contractually entitled to be paid a reasonable sum for such services, Mr and Mrs Chandris will have been enriched unjustly).

44. Further or alternatively, Mr Hue-Williams has been prevented form completing his performance of some of his obligations pursuant to the Agreement, and thereby prevented from earning his commission.

45. Further or alternatively, there has been a failure of basis in that Mr and Mrs Chandris have terminated the Project without having been completed,

46. By reason of each and any of the matters pleaded at paragraphs 43 to 45 above, Mr Hue Williams is entitled [to] a reasonable sum in respect of the work that he performed and/or in respect of the benefit received by Mr and Mrs Chandris arising from such work, which included the complete and accurate new catalogue of the Chandris Collection with accurate and up-to-date valuations and all of the matters listed in paragraph 11 above.

47. A reasonable sum for the services provided would be £1,837,500 by reason of the matters pleaded at paragraph 41 above, that sum being a proper guide as to the value the parties placed on Mr Hue-Williams' services.

31. Mr James Stuart, who appears for Mr Hue-Williams, contends that these amendments clarify the legal basis upon which the claim in restitution for a quantum meruit is put forward. He submits that the amendment is technical and clarificatory only, and if allowed will cause no relevant prejudice to Mrs Chandris, notwithstanding the proximity to trial. However, in the course of argument he indicated that if I were to be of the view that permitting the amendments would require the trial to be adjourned, he would prefer to proceed to the trial as fixed without the amendments being in play. Sensibly, he did not seek, in the alternative, a split trial so that questions raised by the amendment could be separated out and left for decision later.
32. Mr Jonathan Cohen QC, who with Mr Ashley Cukier appears for Mrs Chandris, submitted that, properly characterised, the existing pleading advances a claim for an implied contract sum, and the amendment introduces a wholly new claim in restitution requiring a valuation of the benefit to Mrs Chandris. That, he says, is a new claim which cannot fairly be adjudicated at the trial if that trial is to commence in just over a week's time from the hearing of the application to amend.

The proper approach

33. Mr Cohen submitted that I should follow the approach set out by Carr J in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) which has since been applied in a series of first instance cases. Having reviewed the authorities Mrs Justice Carr summarised the relevant principles in the following terms.

"38 Drawing these authorities together, the relevant principles can be stated simply as follows:

a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted;

b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission;

c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept;

d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done;

e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation;

f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay;

g) a much stricter view is taken nowadays of non-compliance with the CPR and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so."

34. I gratefully adopt, and propose to apply, those principles.
35. In my view the amendment introduces a distinct and new type of claim.
36. To understand why, it is helpful to bear in mind the distinction between a contract claim for payment of a reasonable sum and a true quantum meruit claim in unjust enrichment. The distinction was drawn by Lord Clarke in Benedetti v Sawiris [2013] UKSC 30 in the following terms

9. It is common ground that the correct approach to the amount to be paid by way of a quantum meruit where there is no valid and subsisting contract between the parties is to ask whether the defendant has been unjustly enriched and, if so, to what extent. The position is different if there is a contract between the parties. Thus, if A consults, say, a private doctor or a lawyer for advice there will ordinarily be a contract between them. Often the amount of his or her remuneration is not spelled out. In those circumstances, assuming there is a contract at all, the law will normally imply a term into the agreement that the remuneration will be reasonable in all the circumstances. A claim for such remuneration has sometimes been referred to as a claim for a quantum meruit. In such a case, while it is no doubt relevant to have regard to the benefit to the defendant, the focus is not on the benefit to the defendant in the way in which it is where there is no such contract. In a contractual claim the focus would in principle be on the intentions of the parties (objectively ascertained). This is not such a case. Mr Benedetti did initially argue that Mr Sawiris, Cylo and the Holding Companies were in breach of the acquisition agreement, on the basis, inter alia, that an implied variation had taken place (see para 31A of the amended particulars of claim) or that they were in breach of a collateral contract. Those claims did not, however, rely on an implied term requiring the payment of a reasonable sum. In any event, those arguments were rejected by the judge and there has been no appeal against his judgment in that respect. Mr Benedetti does not now rely upon a contractual claim, whether on the basis of a request for the services or otherwise. The focus is only on the law of unjust enrichment.

10 It is now well established that a court must first ask itself four questions when faced with a claim for unjust enrichment as follows. (1) Has the defendant been enriched? (2) Was the enrichment at the claimant's expense? (3) Was the enrichment unjust? (4) Are there any defences available to the defendant? See Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 , 227, per Lord Steyn; Investment Trust Companies v Revenue and Customs Comrs [2012] STC 1150 , para 38, per Henderson J.

37. The existing pleading does not make any claim for the value to the recipients of the services provided by Mr Hue-Williams. The new claim does. It also introduces a new cause of action in unjust enrichment which I do not consider to have been asserted in the existing claim.
38. If I were to allow the amendment it would give rise to the four questions identified by Lord Clarke. The first two of them, and perhaps the third, could probably be answered with little difficulty and without needing any further evidence. The fourth question - are there any defences available? - might require further investigation. But there is a further question which is as to the value of the benefit conferred on Mrs Chandris. Mr Cohen's submissions focussed on this point.
39. He noted that there is no permission for expert evidence directed to the question of the value to Mrs Chandris of the work done by Mr Hue-Williams.
40. It might be said, in response to Mr Cohen, that introducing the issue of the valuation of the benefit received would not require new evidence because the best way to value the benefit received is to consider the market value of the services bestowed on the recipient.
41. But Mr Cohen submitted, and I accept, that on the authority of Benedetti v Sawiris and the speeches of Lord Clarke Lord Wilson and Lord Kerr, it would be open to Mrs Chandris to assert that the subjective value of the benefit to her was less than the objective (or market value) of the benefit bestowed. Since, Mr Cohen said, Mrs Chandris was an experienced and knowledgeable art connoisseur, the value to her of Mr Hue-Williams's preparatory work for the project might well be less than the objective market value of that work. Certainly, he said, this is a point that Mrs Chandris would wish to consider carefully so as to be able to advance her best case.
42. I am satisfied that if the amendments were allowed there would be insufficient time before trial for Mrs Chandris and her advisers to consider the new point, to plead in response to it, to adduce such evidence as Mrs Chandris might want to give, and for the parties to consider their position in relation to further expert evidence.
43. That means that I could not fairly permit these amendments without adjourning the trial. Given the position taken by Mr Stuart, that he would rather proceed without the amendment than have the trial adjourned, that disposes of the application.
44. But even without that submission I would not have allowed the amendments for the following reasons:

i) The amendment will only be relevant if the trial judge finds there is no relevant contract between the parties. Since both parties agree they were in a contractual relationship that seems to me to be an unlikely outcome. Mr Stuart submitted in argument that the Judge might conclude that although there was an agreement between the parties about what would happen on sales and acquisitions it did not extend to the preliminary work done to catalogue and curate the existing collection. I accept that that is a theoretical possibility, but that is itself not a case that is presently pleaded as an alternative by Mr Hue-Williams. Accordingly I think it unlikely that Mr Hue-Williams will in fact be prejudiced by refusing the amendment

ii) No good reason was advanced for the fact that the amendment was sought so late. Mr Hue-Williams has changed his representation, and I infer that that is the explanation for the change in approach. But that does not seem to me a good reason.

iii) The amendments would require an adjournment of the trial and is therefore a very late amendment in Mrs Justice Carr's terminology.

45. I should note that, although it was not an option urged on me by Mr Stuart, I have considered the alternative possibility of allowing the amendments but ordering that the trial proceed save for the issues raised by amendment, those new issues being reserved for determination at a later date. That option seems to me highly undesirable. There would inevitably be overlap of witnesses and evidence, there would be additional cost, the final resolution of the case would be delayed, and there would of course be adverse effects on other court users.
46. Accordingly I decline permission to make the amendments insofar as they raise a new case claiming, and requiring an assessment of, the value to Mrs Chandris of the benefit conferred on her by the work done by Mr Hue-Williams. The trial therefore can and should proceed next Monday, 11 December.