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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Tokyo Industries (Live) Ltd v Orbit Tickets Ltd [2025] EWHC 2074 (Ch) (07 August 2025) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2025/2074.html Cite as: [2025] EWHC 2074 (Ch) |
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BUSINESS AND PROPERTY COURTS IN NEWCASTLE
BUSINESS LIST (ChD)
Newcastle upon Tyne NE1 1RQ |
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B e f o r e :
(SITTING AS A JUDGE OF THE CHANCERY DIVISION)
____________________
TOKYO INDUSTRIES (LIVE) LIMITED |
Claimant |
|
| - and – |
||
ORBIT TICKETS LIMITED(formerly THE TICKETLINE NETWORK LIMITED) |
Defendant |
____________________
Mr Steven McGarry (instructed by Aticus Law Ltd (up to and including 4 April 2025, thereafter by way of Direct Access)) for the Defendant
Hearing dates: 31 March (reading), 1-4 April, 10 April 2025
____________________
VERSION
OF APPROVED JUDGMENT
Crown Copyright ©
HH Judge Davis-White KC :
Introduction
The SSD companies
venues,
2 pop up events and an on-line platform.
viability
of the same and indeed of SSD Music which was responsible for organising a number of events and festivals, in addition to the Bingley Weekender.
The Defendant, Ticketline
Orbit
Tickets Limited, but for the purposes of this judgment I shall refer to it as "Ticketline".
Mr Mellor and
Tokyo
ventures
generally. Steve Davis alighted upon a Mr Aaron Mellor. Mr Mellor too was the person behind a number of companies, including the Claimant,
Tokyo
Industries (Live) Limited ("
Tokyo").
Various
deals were discussed, primarily between Mr Betesh and Mr Mellor. The role of Mr Betesh in the negotiations reflected Ticketline's economic interest in SSD in terms both of being the main creditor and as being a major shareholder in IG Industries. The general ideas was that Mr Mellor, through one or more companies belonging to him, would advance sums permitting the 2022 Festival to go ahead, take over organising the 2022 Festival and also acquire certain assets (bare or through acquiring the companies that held them), as well as certain proceeds of ticket sales for the 2022 Festival. No final binding agreement was ever reached. Instead, informality ruled the day. In anticipation of an agreement, but as I shall explain, on the basis that a deal had been done, though the detail needed to be fleshed out, the Claimant paid in excess of £756,000 to fund the 2022 Festival and in effect took over the management and operation of the 2022 Festival. Ultimately, it received nothing in return.
Tokyo
now claims against Ticketline, primarily by way of a claim in unjust enrichment, on the basis that, as a result of the funding provided by
Tokyo,
the Defendant was unjustly enriched in
various
ways, not least in retaining proceeds of ticket sales from the 2022 Festival (in effect that, without the Claimant's funding, it would not have retained because the Festival would not have gone ahead and ticket proceeds would have had to have been refunded) and the share of the booking fee that would otherwise have been receivable by SSD Music under the ticketing arrangement between it and Ticketline, but which Ticketline retained (presumably to reduce the debt owed to it by SSD Music).
Tokyo
claims a total of just under £601,000 in respect of the former and just over £30,000 in respect of the latter, a total of £630,921.90. In the alternative, it brings a claim on the basis that Ticketline became its ticketing agent with a fiduciary duty to account to it for the proceeds of the ticket sales, which it has failed to do in breach of its alleged fiduciary duty.
The Parties and representation
Tokyo
Industries (Live) Limited on 7 October 2022. As I have said, I shall refer to it in this judgment as "
Tokyo".
Tokyo.
There were 100 issued Ordinary Shares of £1 each. Mr Mellor, as the person with significant control over the company, held over 75% of these issued shares.
Tokyo
were transferred to a company called FAC251 Limited. At all relevant times Mr Mellor was the person with significant control over FAC251 Limited holding, directly or indirectly, 75% or more of the shares and
votes
in that company. In fact, he seems to be the holder of the one issued share in that company.
Tokyo"
within their name.
Tokyo
Industries as a "brand" operates over 45 bars, clubs and music
venues
in the UK.
Tokyo
was represented by Mr Richard Stubbs, instructed by Ward Hadaway LLP.
Orbit
Tickets Limited". As I have said, I will refer to it in this judgment by the name "Ticketline".
various
statements as to the involvement of solicitors at Aticus Law in
various
decisions that he made. That caused Aticus Law to terminate its retainer. The firm kindly stayed to the end of Mr Betesh's oral evidence in order to continue noting what that evidence was. Thereafter, Mr McGarry continued to represent Ticketline, but by way of direct access.
THE WITNESSES
verified
by a statement of truth, and who are called at the trial to give oral evidence under oath, first being asked to confirm the correctness of their witness statement(s) made by them and then to be asked, by way of cross-examination, questions about their evidence and the case. The court will usually have to assess the credibility of the witness, in terms of their reliability by reference to their honesty and their ability to recall the facts in relation to events that may have been some years ago by the time that they make their witness statement and the time at which they give oral evidence.
v
General Medical Council [2020] EWHC 1974 (Admin) at paragraphs [39] to [41] where he said (with emphasis removed, and inserting sub-paragraph numbers for bullets in the extracts from the judgment in the Kimathi case, referred to below):
"[39] There is now a considerable body of authority setting out the lessons of experience and of science in relation to the judicial determination of facts. Recent first instance authorities include Gestmin SGPS SAv
Credit Suisse (UK) Ltd [2013] EWHC 3650 (Comm) (Leggatt J, as he then was) and two decisions of Mostyn J: Lachaux
v
Lachaux [2017] EWHC 385 (Fam) [2017] 4 WLR 57 and Carmarthenshire County Council
v
Y [2017] EWFC 36 [2017] 4 WLR 136. Key aspects of this learning were distilled by Stewart J in Kimathi
v
Foreign and Commonwealth Office [2018] EWHC 2066 (QB) at [96]:
"i) Gestmin:
(1) We believe memories to be more faithful than they are. Two common errors are to suppose (1) that the stronger and morevivid
the recollection, the more likely it is to be accurate; (2) the more confident another person is in their recollection, the more likely it is to be accurate.
(2) Memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is even true of "flash bulb" memories (a misleading term), i.e. memories of experiencing or learning of a particularly shocking or traumatic event.
(3) Events can come to be recalled as memories which did not happen at all or which happened to somebody else.
(4) The process of civil litigation itself subjects the memories of witnesses to powerful biases.
(5) Considerable interference with memory is introduced in civil litigation by the procedure of preparing for trial. Statements are often taken a long time after relevant events and drafted by a lawyer who is conscious of the significance for the issues in the case of what the witness does or does not say.
(6) The best approach from a judge is to base factual findings on inferences drawn from documentary evidence and known or probable facts. "This does not mean that oral testimony serves no useful purpose… But itsvalue
lies largely… in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth".
ii) Lachaux:
(7) Mostyn J cited extensively from Gestmin and referred to two passages in earlier authorities.[1] I extract from those citations, and from Mostyn J's judgment, the following:-
(8) "Witnesses, especially those who are emotional, who think they are morally in the right, tendvery
easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason, a witness, however honest, rarely persuades a judge that his present recollection is preferable to that which was taken down in writing immediately after the incident occurred. Therefore, contemporary documents are always of the utmost importance…"
(9) "…I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test theirveracity
by reference to the objective fact proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities…"
(10) Mostyn J said of the latter quotation, "these wise words are surely of general application and are not confined to fraud cases… it is certainly often difficult to tell whether a witness is telling the truth and I agree with theview
of Bingham J that the demeanour of a witness is not a reliable pointer to his or her honesty."
iii) Carmarthenshire County Council:
(11) The general rule is that oral evidence given under cross-examination is the gold standard because it reflects the long-established common law consensus that the best way of assessing the reliability of evidence is by confronting the witness. However, oral evidence under cross-examination is far from the be all and end all of forensic proof. Referring to paragraph 22 of Gestmin, Mostyn J said: "…this approach applies equally to all fact-finding exercises, especially where the facts in issue are in the distant past. This approach does not dilute the importance that the law places on cross-examination as avital
component of due process, but it does place it in its correct context.
[40] This is not all new thinking, as the dates of the cases cited in the footnote make clear. Armagas
v
Mundogas, otherwise known as The Ocean Frost, has been routinely cited over the past 35 years. Lord Bingham's paper on "The Judge as Juror" (Chapter 1 of The Business of Judging) is also familiar to many. Of the five methods of appraising a witness's evidence, he identified the primary method as analysing the consistency of the evidence with what is agreed or clearly shown by other evidence to have occurred. The witness's demeanour was listed last, and least of all.
[41] A recent illustration of these principles at work is the decision of the High Court of Australia in Pell
v
The Queen [2020] HCA 12. That was a criminal case in which, exceptionally, on appeal from a jury trial, the Supreme Court of
Victoria
viewed
video
recordings of the evidence given at trial, as well as reading transcripts and
visiting
the Cathedral where the offences were said to have been committed. Having done so, the Supreme Court assessed the complainant's credibility. As the High Court put it at [47], "their Honours' subjective assessment, that A was a compellingly truthful witness, drove their analysis of the consistency and cogency of his evidence …" The Supreme Court was however divided on the point, and the High Court observed that this "may be thought to underscore the highly subjective nature of demeanour-based judgments": [49]. The High Court allowed the appeal and quashed Cardinal Pell's convictions, on the basis that, assuming the witness's evidence to have been assessed by the jury as "thoroughly credible and reliable", nonetheless the objective facts "required the jury, acting rationally, to have entertained a doubt as to the applicant's guilt": [119]."
31. The question of the significance of the demeanour of a witness has also been addressed by Leggatt LJ (as he then was) in R (on the application of SS (Sri Lanka)
v
Secretary of State for the Home Department [2018] EWCA Civ 1391:-
"[36] Generally speaking, it is no longer considered that inability to assess the demeanour of witnesses puts appellate judges "in a permanent position of disadvantage as against the trial judge". That is because it has increasingly been recognised that it is usually unreliable and often dangerous to draw a conclusion from a witness's demeanour as to the likelihood that the witness is telling the truth. The reasons for this were explained by MacKenna J in words which Lord Devlin later adopted in their entirety and Lord Bingham quoted with approval: "I question whether the respect given to our findings of fact based on the demeanour of the witnesses is always deserved. I doubt my own ability, and sometimes that of other judges, to discern from a witness's demeanour, or the tone of hisvoice,
whether he is telling the truth. He speaks hesitantly. Is that the mark of a cautious man, whose statements are for that reason to be respected, or is he taking time to fabricate? Is the emphatic witness putting on an act to deceive me, or is he speaking from the fullness of his heart, knowing that he is right? Is he likely to be more truthful if he looks me straight in the face than if he casts his eyes on the ground perhaps from shyness or a natural timidity? For my part I rely on these considerations as little as I can help." "Discretion" (1973) 9 Irish Jurist (New Series) 1, 10, quoted in Devlin, The Judge (1979) p63 and Bingham, "The Judge as Juror: The Judicial Determination of Factual Issues" (1985) 38 Current Legal Problems 1 (reprinted in Bingham, The Business of Judging p9).
……
[39] To the contrary, empirical studies confirm that the distinguished judges from whom I have quoted were right to distrust inferences based on demeanour. The consistent findings of psychological research have been summarised in an American law journal as follows: "Psychologists and other students of human communication have investigated many aspects of deceptive behavior and its detection. As part of this investigation, they have attempted to determine experimentally whether ordinary people can effectively use nonverbal indicia to determine whether another person is lying. In effect, social scientists have tested the legal premise concerning demeanor as a scientific hypothesis. With impressive consistency, the experimental results indicate that this legal premise is erroneous. According to the empirical evidence, ordinary people cannot make effective use of demeanor in deciding whether to believe a witness. On the contrary, there is some evidence that the observation of demeanor diminishes rather than enhances the accuracy of credibility judgments." OG Wellborn, "Demeanor" (1991) 76 Cornell LR 1075. See further Law Commission Report No 245 (1997) "Evidence in Criminal Proceedings", paras 3.9–3.12. While the studies mentioned involved ordinary people, there is no reason to suppose that judges have any extraordinary power of perception which other people lack in this respect.
[40] This is not to say that judges (or jurors) lack the ability to tell whether witnesses are lying. Still less does it follow that there is novalue
in oral evidence. But research confirms that people do not in fact generally rely on demeanour to detect deception but on the fact that liars are more likely to tell stories that are illogical, implausible, internally inconsistent and contain fewer details than persons telling the truth: see Minzner, "Detecting Lies Using Demeanor, Bias and Context" (2008) 29 Cardozo LR 2557. One of the main potential benefits of cross-examination is that skilful questioning can expose inconsistencies in false stories.
[41] No doubt it is impossible, and perhaps undesirable, to ignore altogether the impression created by the demeanour of a witness giving evidence. But to attach any significant weight to such impressions in assessing credibility risks making judgments which at best have no rational basis and at worst reflect conscious or unconscious biases and prejudices. One of the most important qualities expected of a judge is that they will strive to avoid being influenced by personal biases and prejudices in their decision-making. That requires eschewing judgments based on the appearance of a witness or on their tone, manner or other aspects of their behaviour in answering questions. Rather than attempting to assess whether testimony is truthful from the manner in which it is given, the only objective and reliable approach is to focus on the content of the testimony and to consider whether it is consistent with other evidence (including evidence of what the witness has said on other occasions) and with known or probable facts."
"1.3 Witnesses of fact and those assisting them to provide a trial witness statement should understand that when assessing witness evidence the approach of the court is that human memory:
(1) is not a simple mental record of a witnessed event that is fixed at the time of the experience and fades over time, but
(2) is a fluid and malleable state of perception concerning an individual's past experiences, and therefore
(3) is
vulnerable
to being altered by a range of influences, such that the individual may or may not be conscious of the alteration."
various
matters in accordance with CPR PD57AC paragraph 4.1 and that (unless the statement is signed when the relevant party is a litigant in person or the court orders otherwise) there should be a certificate of compliance by a relevant legal representative.
Tokyo,
were:
(1) Mr Aaron Mellor and
(2) Mr Michael O'Sullivan.
i) There was one trial witness statement from each of Mr Mellor and Mr O'Sullivan, each being dated 15 January 2025.
Tokyo,
gave the main evidence and was cross-examined for just over a day.
Tokyo
to pay the sums of over £745,000 for the 2022 Festival that it did in the genuine and bona fide belief that there was a deal between himself and Mr Betesh (as key player for Ticketline and SSD) which only had to be reduced to relevant legal components, recorded in documents and executed. The precise details of such deal in every respect (some of which detail had still to be worked out) are not really significant.
Tokyo
since its incorporation, gave limited evidence in his witness statements about dealings, which were essentially between Mr Mellor and Mr Betesh, leading up to
Tokyo
starting to fund the 2022 Festival. Most of his evidence in this respect was what he had been told by Mr Mellor though, to the extent he saw emails at the time, those emails fitted in with that narrative. He also gave some evidence about the position after the festival and the attempts of
Tokyo
to recover sums. He also deals, in his witness statement, with the payments, between 29 July and early August 2022, of some £746,000 by
Tokyo.
Ultimately the evidence of such payments was not challenged. I have no hesitation in accepting Mr O'Sullivan's written and oral evidence, which was given carefully and was convincing not least in being consistent with the contemporaneous documents.
very
clear disclosure order requiring (as agreed) disclosure under Model D (extended disclosure) and a disclosure certificate signed by Mr Betesh as regards the Defendant's disclosure, there were, in my judgment, huge gaps between the disclosure as ordered and that provided by the Defendant. This was in the face of several pertinent and precise letters from
Tokyo's
solicitors chasing for certain documents or classes of documents in the light of spelled out failures in the disclosure given by Ticketline. Mr Betesh's constant refrain in cross-examination, when asked why there had not been disclosure by the Defendant of documents that, in cross-examination he asserted existed (and supported the Defendant's case), was that he did not know that they had not been disclosed and/or he had not thought that they were relevant. Mr Betesh is a businessman. He is not stupid. The disclosure review document which set out documents to be produced largely deals with the issue of relevance by defining classes of documents to be produced, so that the simple question was what documents fell within the relevant categories as described. He had the benefit of legal advice. I simply do not accept his evidence on this point. I also draw inferences adverse to his general credibility. I do not accept that documents that he relied upon before me but which have not been produced by the Defendant are documents which show matters that he relied upon.
Tokyo.
The result is that Mr Betesh was either propounding falsehoods in relevant respects when he put forward the relevant Heads of terms documents or he was lying to the court. In either event, his credibility as a witness before me was inevitably seriously damaged.
"The Court will no doubt approach the evidence advanced by Mr Betesh with particular care. That evidence was characterised by a series of unheralded admissions against the Defendant's interest and case, and the notable concessions relating to the preparation of the 'July Heads of Terms.' (footnotes omitted).
very
great caution. As well as the sort of matters already referred to, I should add that his evidence was on occasions
vague,
unclear and inconsistent with what he had said on other occasions in the course of giving evidence.
"In being realistic, it is also important to recognise that a witness
under cross examination may reveal that historic documents or prior evidence lacked candour, without thereby wholly undermining credibility4. Ultimately, the issue of how to approach credibility is one of weight, whilst consistently bearing in mind that the Claimant bears the persuasive burden throughout."
The content of footnote 4 was as follows:
"This is the basis of the so-called "Lucas direction" in criminal proceedings."
Volume
1 and is as follows, (footnotes omitted):
"1. A defendant's lie, whether made before the trial or in the course of evidence or both, may be probative of guilt. A lie is only capable of supporting other evidence against D if the jury are sure that:(1) it is shown, by other evidence in the case, to be a deliberate untruth; ie it did not arise from confusion or mistake; (2) it relates to a significant issue; (3) it was not told for a reason advanced by or on behalf of D, or for some other reason arising from the evidence, which does not point to D's guilt."
(1) The Defendant made refunds to customers from monies held in its business account including in relation to the [2022] Festival;
(2) The Defendant required prior authorisation or approval for refunds from SSD Music Limited (or any relevant event organiser);
(3) The last transfer of monies from the SSD Music Ltd bank account to the Defendant's bank account was 14 December 2020.
THE FACTUAL HISTORY
venues.
Steve Davis was responsible for artist bookings, ticketing and the "financial side".
Tokyo
company had arranged in about 2014. Mr Mellor had not personally been involved in the relationship with Ticketline at that time and it did not continue beyond the one festival.
2017-18
value
of the ticket. Of this 10%, a rebate of 50% was payable to SSD Group Holdings on each ticket sold (and not returned or refunded) but effectively at the end of the day, as I shall go on to explain.
(1) Ticketline would advance £360,000 to SSD Group Holdings within 3 days of the signing of the agreement (the "Advance").
(2) Ticketline would retain the entire Booking Fee. However, the Advance would be set off against the Initial Rebates (i.e. the 50% of the 10% Booking Fee to which, ultimately and otherwise SSD Group Holdings was entitled and described as a "rebate").
(3) The actual ticket monies (ie. face
value
of the ticket and leaving aside extra elements of Booking and Delivery Fees) would be paid for each event to SSD Group Holdings by Ticketline on a weekly basis (clause 8.3) though this was subject to clause 8.4, which provided that whilst the Advance was being recouped against Rebates (i.e. SSD Holdings' 50% of the Booking Fee), Ticketline would only pay ticket monies that it had taken from customers "upon settlement of the events". Once the Advance was fully recouped, Ticketline was to pay the remaining applicable Rebates together with the ticket monies to SSD Holdings during settlement.
(4) Once the Advance had been fully recouped then the parties were to enter into good faith discussions with a
view
to securing a further advance payable no later than 6 months after recoupment of the Advance. The
value
of the further advance was to be agreed taking into account the number of events that had taken place and the growth of SSD Holdings during the recoupment of the initial Advance.
(5) Ticketline was to be entitled to adjust reported ticket sales to reflect reporting inaccuracies or to take into account refunds resulting from fraudulent activity or other exceptional events.
(6) Ticketline was authorised to self- bill, using SSD Holdings
VAT
number, for the face
value
of ticket sales (defined as "Ticket Income" and excluding Booking and Delivery Fees). This suggests that SSD Holdings would invoice Ticketline for the Ticket Income (but that Ticketline would be responsible for actually carrying out the invoicing on SSD Holdings behalf). This also suggests that until invoiced and paid over or otherwise accounted for to SSD Holdings, Ticketline would own the Ticket Income but be under a duty to pay an equivalent sum to SSD Holdings. There were provisions on the agreement to allow SSD Holdings to bring to an end Ticketline's self-billing rights.
(7) In the event of postponement or cancellation of an event, SSD Holdings agreed and undertook to reimburse Ticketline in full in respect of all monies received from Ticketline in relation to that event. This suggests that Ticketline would have the liability to members of the public buying the ticket to reimburse/compensate in the event of cancelation/postponement of events. Further, the indemnity was only in respect of sums received by SSD Holdings: it did not encompass sums retained by Ticketline (whether in terms of Booking Fee or the face
value
of the tickets less certain fees (the Ticket Income), not yet received by SSD Holdings.
(8) Ticketline was not liable to refund Booking Fees it had collected, by reason of cancellation or postponement of an event.
(9) SSD Holdings was to insure its liability in the event of cancellation of an event or other eventualities leading to a cancellation of an event. Ticketline's interest was to be noted on the policy.
varied.
"As well as working with government and other bodies for the benefit both of consumers and the ticketing industry, STAR offers general advice and information on ticket buying and provides an approved dispute resolution service for customers who have an unresolved problem with their purchase from a STAR member.
….
Buying entertainment tickets from a STAR member – in person, by phone or online – enables you to buy with confidence. All STAR members sign up to our Code of Practice, which requires them to treat customers fairly and make all transactions clear and straightforward."

"Model Terms and Conditions for Selling Entertainment Tickets or provide a platform for reselling tickets under our Model Resale Platform Terms and Conditions (together or separately known as our model terms and conditions"
various
relevant points (for example on SSD Music's website and that at least one contemporaneous email shows that at some point he had had a say in the content of the terms and conditions), but that for reasons he could not satisfactorily explain they had not been disclosed by the Defendant.
" Refund at least the face
value
of the ticket if an event is cancelled and the event organiser enables and authorises refunds"(emphasis supplied as relied upon by Mr Betesh).
"2.7 Once you have purchased tickets, they can only be returned or exchanged or refunded in the circumstances as described below: -
2.7.1.1 If we fail to fulfil an order as a result of any negligence, or similar act or omission of our own or in breach of contract, you will be entitled to a full refund including any booking or supplementary fees charged.
2.7.1.2 In those circumstances where events are cancelled or postponed or materially altered and a refund is accepted in accordance with these terms (a material alteration is one which in the reasonable opinion of the Event Organiser, makes the Event materially different from the Event that a purchaser of the ticket, taken generally, had reasonably expected) , you will only be refunded for the facevalue
of your ticket(s) on condition that the Event Organiser has refunded monies to us but you will not be refunded the booking and/or processing and/or any other supplementary fees which may have been imposed on the purchasing of your ticket. Where tickets have been sold without a booking fee, we will charge an administration fee of up to 10% of the face
value
of your ticket(s) which will be deducted from the
value
of the refund. Where an Event is rescheduled, tickets shall normally be transferable and automatically applicable to the date of the rescheduled Event or alternatively you may be offered replacement tickets. If you are unable to make the rescheduled date a refund shall become applicable subject to the Event Organiser providing us with a refund of your ticket price.
2.7.1.3 You should make any request for a refund within 28 days of the date of cancellation, re-scheduling or from the date of any material alteration of an Event. On condition you make any such request within 28 days and We are in a position pursuant to clause 2.7.2 to refund monies to you, then we shall do so within 28 days of your request. If you make any request after 28 days, and if we are in a position to refund ticket monies to you, then any such Refund shall be subject to an additional administration fee of or equivalent to 10% of the refund amount.
2.7.1.4 Cancellation Protection – You may wish to secure cancellation protection from a creditable supplier such as TicketPlan (www.ticketplangroup.com). If you do secure any such a policy, please note that We shall not be liable, in any way, for the repayment of any premium, policy excess or shortfall as between your ticket price and level of refund.
2.8 Decisions to cancel, alter or reschedule Events are the responsibility of the Event Organiser, and legal responsibility for refunds or compensation for cancelled or curtailed events rests at all times with the Event Organiser."
"1. About Ticketline and this Site
….
1.2 Ticketline is a ticket agency. Ticketline sells tickets as an agent on behalf of the organisers, producers or promoters of Events (each an "Event organiser"). We do not host, promote or produce any of the Events which are described on this Site and for which you might wish to buy a ticket. We do not control Events, nought we set ticket prices for Events. We only charge a booking fee, handling fees, up cells or other supplementary fees as determined by otherwise agreed with the Event Organiser. We do not accept any liability arising from a users ticket purchases made
via
this Site save as set out in these terms
…
2. Buying Tickets and Returns
….
2.7 Once you have purchased tickets, they can only be returned, exchanged or refunded in the circumstances described below.
2.7.1 Error……
2.7.2 Cancellation. If the event is cancelled in full (and not rescheduled), and the Event Organiser enables and authorises refunds, your order will be cancelled and you will receive a corresponding refund for your tickets. However, booking and/or handling fees will not be refunded as Event cancellations are outside our control. In the event of partial cancellation or abandonment of a multi-day event, the original tickets you have purchased will remain
valid
for the revised Event. Any compensation offers in respect of partial Event cancellations are strictly subject to the terms and conditions of the relevant Event and/or the discretion of the Event organiser and cannot be guaranteed.
2..7.3 Rescheduling. If an Event is rescheduled, your tickets will usually be
valid
for the new date, or alternatively you may be offered replacement tickets for the rescheduled show. If you are unable to attend the rescheduled Event you must notify us by the deadline specified in clause 2.11. If you're refund request is accepted, and the Event Organiser enables and authorises refunds, you will receive a corresponding refund for your tickets (but not booking and/or handling fees).
2.7.4 Material Alteration. If material changes are made to the Event, for example a change of the
venue
or (for non-multi-day events as bracket the headline acts, or other changes which in our reasonable opinion materially alter the Event, the original tickets that you have purchased will remain
valid
for the revised event unless otherwise advised. If you do not wish to attend the altered Event you must notify us no later than the deadline specified in clause 2.11. If you're refund request is accepted, and the Event Organiser enables and authorises refunds, you will receive a corresponding refund for your tickets (but not booking and/or handling fees). For the avoidance of doubt, curtailment due to adverse weather conditions; changes of lineup, supporting acts or non-headliners; changes to artist or stage personnel; or cancellation or abandonment of Event where the majority of the scheduled performances take place will not be deemed to constitute a Material Alteration for the purposes of these terms.
2.8 Decisions to cancel, alter or reschedule Events are the responsibility of the Event Organiser, and legal responsibility for refunds or compensation for cancelled or curtailed events rests at all time with the Event Organiser.
….
6. Miscellaneous
....
6.2 These terms, together with our Privacy Policy, represent the entire understanding and agreement between you and us and shall have priority over any and all prior statements, understandings or agreements with oral or in writing..
6.3 These terms do not create any rights or obligations by against anyone other than Ticketline, you and the Event Organiser, to the extent that it has direct rights and obligations under these Terms. Except as provided in the previous sentence, these Terms do not create any rights enforceable by any person who is not a party to it but does not affect any right or remedy that a third-party has which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999.
"All members must make sure that they have adequate financial accounting and security arrangements and procedures when handling customers' money. In particular, members must agree that they will protect all money they receive from customers in one of the following ways.
1.1 Holding it in a separate 'client account' at a reputable bank or building society, so it is kept separate from the member's own money.
1.2 The member will keep a bond, guarantee or other security in the way and for the amount we feel is acceptable.
1.3 The member will arrange insurance cover on the conditions and for the amount we feel is acceptable.
1.4 Any other way we may approve"
"What do the Defendant's bank statements and accounting records show regarding the flow of funds related to the Festival, including ticket sales, any payments to SSD and offsets against alleged debts?"
"3. If an event is cancelled before the event date or before the member has passed the customer's money to the organiser of that event, the member must do their best to refund the customer's money as soon as possible (once the tickets have been returned to the member, if necessary). However, if the member has already passed the customer's money to the event owner, the member will not be responsible for refunding the customer's money unless the event organiser returns the money to the member".
Tokyo.
value
of the ticket, to enable refunds to take place. There was nothing for SSD Music to "refund" nor any payment by it necessary to "enable" repayment". As between Ticketline and SSD Music, SSD Music had not received a sum quae ticket monies. Ticketline still, at least notionally, retained the ticket sale proceeds and had not accounted to SSD Music/IG Industries for them. Although the actual monies received and banked may have been paid across to SSD Music/IG Industries that was as a separate loan (by way of forward funding) to SSD Music and not as being in satisfaction of any liability to account for ticket sale proceeds. In terms of clause 3 of section F of the STAR Code, Ticketline would not have passed the customer's money to the event owner (or organiser). In terms of satisfaction of that obligation (by actual payment or by set off) would only be made at the end of the event in question. Therefore, on the face of it, Ticketline would be obliged to refund tickets if the organiser cancelled the event and other conditions were met: it would be no answer to say that it had made an advance by way of forward funding to SSD Music/IG Industries.
2019
Richard Wylie 20
Paul Betesh 10
Colin Mableson 10
Steve Davis 40
Paul Davis 20
2021
values.
By email dated 22 April 2021, a breakdown of monetary
values
for the Bingley Weekender was given: the refunds were some £35,040.
vat
"for the advance on ticket rebates" and said that he understood that the "outstanding balance for this [£60k or 70k]" was to be settled in cash. He asked when the funds would be sent over as "we are planning our cash outlays in the next few days at present".
VAT)
and projected income of only £831,065 (net of
VAT),
suggesting that the event was anticipated to make a loss of in excess of £104,000. As I understood matters, it was common ground between the parties that the 2022 Festival in the end did make a loss and that at all material times of the negotiations between the parties it was anticipated to do so.
very
real concerns that the debt would not be repaid. He had, he says, many discussions with Steve Davis about this issue, the likelihood that Ticketline would not be prepared to lend further sums and the need to look for outside investors. It is against that background that Mr Mellor comes onto the scene.
Tokyo
company and, according to Mr Mellor, largely as a result of the Covid pandemic there was a large debt outstanding to
Tokyo
Industries Ultimate Limited. Some £70,000 or so seems to have been outstanding in this respect by the end of 2021. o
venues.
version
of events and in particular this was an attempt to downplay the real control that Ticketline had over SSD Music and its associated companies.
venue
opportunity".
Tokyo
Group's
venues
could benefit from hosting shows of the type SSD Music was promoting. Mr Mellor understood that SSD Music was under financial strain partly due to the covid pandemic and partly due to a lack of adequate capitalisation. Mr Betesh, he understood, had become involved as a shareholder to help provide additional funding going forward. At the December meeting, Mr Mellor says that Mr Betesh referred, with some frustration, to having made substantial loans to SSD Music which he was uncomfortable with and wished to recover by selling some or all of his stake in the company.
Tokyo,
things apparently went no further at this stage.
2022
"Hi Steve
Please can you get the text changed on the website to say Ticketline will be in touch to offer facevalue
refunds to give you the opportunity to retain your ticket for next year
` Or words to that effect
Please do state refunds are at facevalue
Cheers"
In my judgment, though this may not have related to the 2022 Festival, this (and a later email from Mr Betesh of 8 April 2022 on the same subject) demonstrates (a) a control by Ticketline over refund policy and (b) the realities of the need (factual and, I would add legal) to make refunds where appropriate to do so.
Paul Davis 20
Steve Davis 40
Richard Wylie 20
Paul Betesh 610
Colin Mableson 10
Tokyo
Industries Limited" (company registered no 0646221) was entered into between the two companies. (The front sheet actually refers to the agreement as being made between IG Industries and
Tokyo
Group Limited). The registered number of
Tokyo
Group Limited was 06462216. It seems likely that the last digit was left out of the company registered number given in the NDA. There is therefore some doubt, based on the contractual document itself, as to which
Tokyo
entity was involved but I accept Mr Mellor's evidence that
Tokyo
Group Limited was the finance
vehicle
for the group umbrella structure at that point and that it was the relevant contracting
Tokyo
company under the NDA.
Tokyo
Industries Limited". The purpose for which the information was to be supplied was (as set out in Schedule 2) to enable
Tokyo
to carry out due diligence with a
view
to taking a shareholding in IG Industries.
venues
and concert and event promotions and associated services". (In my judgment this probably included
venues
and concerts etc, carried on indirectly by IG Industries through subsidiary or connected companies such as SSD Music).
Tokyo
Group Limited was the finance
vehicle
within the
Tokyo
group structure. At this point, he said, and I accept, Mr Mellor, through
Tokyo,
was looking to acquire the whole business of IG Industries and SSD Music and the NDA was not limited to or put in place to provide information limited to the 2022 Festival (or even the 2022 Festival and that festival in future years).
the "proposed group restructure and investment. The restructure will result in trading through clean companies so that your investment is not affected by previous trading"
"Whoever we take this forward with does have to agree to some money coming back towards the debt to Ticketline. The company debt position needs to be reduced. Ticketline have increased its debt in order to reduce third party debt in the company.
…
There is no effective security for Ticketline in the ticket money as we are liable to the customer if the show does not go ahead in line with Ticketline's terms and conditions. The document suggested debentures with equal priority but I can agree to letting your security sit before mine but we would both have debentures over the whole company.
Please can you have another look at what we are proposing in the light of the above and let me know your thoughts."
value
of ticket sales, less relevant booking fees which payment was only due once a festival was completed (or cancelled) and (b) in light of the fact that, as he had earlier admitted, in the past SSD had always agreed to ticket refunds properly requested and it was likely that it would agree to ticket refunds were the 2022 Festival to be cancelled.
"This is as I explained in our call that Ticketline had taken control of SSD until the debt to Ticketline is reduced. Shares were inadvertently issued in my name rather than Ticketline and this was rectified last week. We still want to do a deal."
Tokyo
that by this time Ticketline had indeed taken over control of SSD and that it could require SSD Music to consent to a refund of tickets if the 2022 Festival did no go ahead and that Ticketline would suffer severe reputational damage if refunds were not made in such circumstances. I do not accept Mr Betesh's evidence that Ticketline did not have control because it did not have sufficient board members of SSD Music (it could have appointed more if needed) and because Mr Paul Davis was asserting he had never sold his original shareholding and that his brother had forged his signature on relevant documents (there also being no contemporaneous evidence before me of such allegations by Paul Davis). The email of 18 July reinforces the fact of control that I consider to have been exemplified by way of control over refunds in relation to the "This is Tomorrow" festival as shown by the emails in April 2022.
"You need the £550k Ticket Money included in this P&L or it just wont work.
If you cancel it you will need to refund the ticket money anyway (especially as Ticketline now own the festival at companies hse)
The Ticket money has to go in for the festival to work-or it gets refunded if the festival cancels.
I will loan in on the terms Adam previously suggested to cover cashflow and timing-that will then get everyone through BINGLEY and we can plan a proper restructure-but without the full ticket money going into this P&L its impossible for this to work so the festival cancels the £533K needs returning anyway-so whichever way that money is lost.
This can be managed but only with the ticketmoney in."
"We have to stop thinking this way its counterproductive, the fact so far as the Bingley customer is concerned is that TICKETLINE have their money if the event is cancelled TICKETLINE must return it, Ticketline own promoter now- so I cant see any way it cant [sic] not refund that money".
Mr Mellor was again speaking economic and social realities. I will have to deal with the legal analysis later.
"I am replying on behalf of all parties to try and remove any emotion from the position, and to try and get a resolution on the last hour.
Ticket Money Loan
Tokyo
will cash flow Bingley Festival and ensure that the event opens and proceeds to prevent refunding of tickets. On successful completion of the event
Tokyo
will loan Ticketline £550k on account of ticket monies and Ticketline will pay over the balance of ticket monies held for Bingley above the £550k but not rebates which are being worked off against an advance with SSD Music…
…
Tokyo
provide cashflow to Bingley Festival to enable the festival to proceed and fully open to prevent refunding of tickets…".
vast
majority of the proceeds of ticket sales and at this point there had been no set off nor agreement to set off the same against advances made by Ticketline.
" The further discussions did not involve any indication that Mr Mellor intended to take over the operation of SSD or assume any responsibility for organising, promoting or managing the Festival".
In fact, the contemporaneous emails show the quoted passage to be simply untrue.
The Three Options: July 2022
Various
permutations of deal, including an immediate loan by
Tokyo,
were discussed. However, by an email dated 28 July 2022, Mr Mellor set out two options (by way of a negotiated deal) and a third option of a cancelled festival.
Tokyo
entity) purchasing all assets, IP and Goodwill to include 100% of the share capital of IG Festivals Ltd and SSD
Venues
Ltd for £1. Ticketline would keep all ticket money in respect of all events/
venues
received up to 1 July. [Again suggesting that Ticketline had the ticket money and/or was obliged to pay it or an equivalent sum to SSD]. All tickets sales from 1 July would be paid over on maturity of the events. In summary, the proposed deal was summarised as being one under which Ticketline would obtain £500k ticket money + a £475k
VAT
Refund + £200k potential future
VAT
Returns, so circa a return of £1.2m in respect of Ticketline's (otherwise) £2.8 million write off. Precisely how Ticketline would receive a
VAT
refund was unclear but it seems likely that this was intended to be used to pay down debt owed to Ticketline by SSD Music or possibly by IG Industries.
Tokyo
entity) purchasing all assets, IP and goodwill, to include 100% of the shares in the two SSD companies mentioned in Option 1 for £1.
Tokyo
Industries would then take over and pay for all contract supplier costs for Bingley 2022 and pay them directly. Ticketline would release all ticket money for Bingley and any other show as it matured. "NewCo" would then pay Ticketline 5% of all ticket sales + 10% of "PDQ" up to a combined
value
of £1 million. Ticketline would retain future ticketing income until the £1m cap had been repaid. Ticketline would retain £475k
VAT
initial
VAT
return but pay forward any future
VAT
returns on a £ for £ basis (expected to be £200k).
Tokyo
would loan Ticketline £550k payable over 6 months in monthly instalments at 1.5% interest. The end result for Ticketline was said to be that Ticketline would receive, as against a debt or investment of £2.8 million, a £1.457m return (being the £1m and the
VAT
of £475k).
VAT
return would be lost because of a formal insolvency intervening before the refund was received. "This gets you zero
value".
Tokyo
would place some £200k to pay for "critical immediates to keep this rolling". If the heads of terms did not materialise into an agreement, then Ticketline would have to repay the £200k. The relevant wording was as follows:
"If we can agree either OPTION 1 or 2 in a binding HoT - I will place £200k today to pay for critical immediates to keep this rolling. If the Binding HoT is not completed after agreed - Ticketline will need to repay this £200k.
We can then agree a short form asset purchase agreement when your lawyer returns tomorrow to complete by Monday."
various
things was clearly a reference to a relevant
Tokyo
company owned/controlled by Mr Mellor and which he might nominate in due course.
Tokyo
and if the heads of terms was not completed (and it seems to have been envisaged separately that the heads of terms would be "completed" by at the least a short form asset purchase agreement when Mr Betesh's lawyer returned) the £200,000 would be repaid. However, a binding heads of terms was not agreed (though as I find Mr Betesh constantly assured Mr Mellor not to worry as there was an agreed deal) and in the event Mr Mellor, through
Tokyo,
committed a lot more than £200,000 as the only way of keeping the 2022 Festival "on the road" and avoiding the need to cancel it. Although I accept that at this point Mr Mellor was indicating an intention to commit only to £200,000. I do not accept, as Mr McGarry submitted, that "the risk to both parties was capped at £200,000". The suggestion in question was, as I have explained, overtaken by events.
vary
it by asking if Ticketline could pay ticket money over "from today rather than 1 July").
"we have to stop thinking the ticket money is yours its not legally it's the customers that you are holding in escrow for the customer will until the show maturity then to the promoter-it's never Ticketline's ????"."
Whether or not Ticketline was obliged hold ticket sale money separately, at the
very
least it owed a debt to SSD Music/IG Industries in respect of those proceeds unless and until (a) otherwise agreed or (b) on completion of the relevant event, the proceeds (less refunds) being then due to SSD Music/IG Industries, were set off by agreement against sums owing to Ticketline or paid to SSD.
Heads of Terms: 28 July 2022
v3)
to be made between SSD Music (the "Borrower"), Ticketline ("Lender One") and "
Tokyo
Industries [] Limited" (with blank detail under registered number and registered office and being defined as "Lender Two") (the "HoT") had been provided by Mr Betesh to Mr Mellor and Steve Davis by email dated 28 July 2022 at 11:58 (ie. before completion of the email exchanges on the Three Options which took place that day). The draft has a typed date of "[] day of July 2022". Mr Mellor accepted that the proposals there set out were "significantly different" from Option 1 and Option 2 previously set out and discussed in emails.
" At all material times, the Defendant believed that the "unnamed" entity [In the heads of terms] was either Mr Mellor himself, or and by consequence of the Non-Disclosure Agreement as entered into between he parties on the 8 July 2022,
Tokyo
Group Limited as the only communication that was sent to the Defendant was from an email address signed by Mr Mellor himself but deriving from the
Tokyo
Group email."
I conclude that the Defence was deliberately put in these terms to counter a case on unjust enrichment based upon (in part) an anticipated contract with the Claimant not having materialised.
variously
that he was "trying to get a deal done" and that he didn't think it was "material". However, as he also accepted, the recital in effect stated the point that Mr Mellor had made by email dated 28 July (by inserting comments into Mr Betesh's earlier email). As I have said, in response to Mr Betesh's comment that "Ticket monies have already paid across" Mr Mellor had replied:
" we have to stop thinking the ticket money is yours it's not legally it's the customers that you are holding on escrow for the customer will until the show maturity then to the promoter - it's never Ticketline's ???".
Tokyo
to enable Ticketline to re-establish an escrow account or through some other route). In any event however, and even if I am wrong about the escrow account point, the refund obligation point remains good.
29 July to 8 August 2022
Tokyo
(again, directly or indirectly) in a total sum of approximately £260,000. On 4 August 2022 a third batch of invoices was paid by
Tokyo
in like manner in a total sum of approximately £156,140. On 8 August 2022 further invoices were paid by
Tokyo
amounting to approximately £9,576. The relevant schedule in evidence, produced by Mr O'Sullivan, shows the payments in total to amount to £746,081 and this evidence was ultimately not challenged. As explained by Mr O'Sullivan, the relevant invoices were all re-issued in
Tokyo's
name, they were checked by a number of persons (including Mr Mellor, who approved each payment), payments were processed
via
Tokyo's
bank account.
Tokyo
was making. His oral evidence that he knew that Mr Mellor was or would shortly be paying for things (through his company) in connection with the 2022 Festival, but that he did not know at what level is not credible. He, in effect, controlled SSD and had been the source from which Steve Davis had urgently been seeking more funding to let planning go ahead and avoid cancellation of the 2022 Festival. He was constantly getting emails about the 2022 Festival and was negotiating a deal with Mr Mellor which would require him to have kept on top of things as they developed.
" on the basis that we had an in principle agreement I felt we could now proceed and effectively at that moment
Tokyo
took over from SSD Music and assumed the role of the event organiser of the Bingley Festival. Our communications move into
Tokyo
taking over the running of the Bingley Festival [and he refers to
various
contemporaneous emails showing this]."
"For something like this we would usually use a Special Purpose
Vehicle
(SPV). However as a result of not having the time to, we used
Tokyo,
then named Tiki-o (Bradford) Ltd, a dormant company in which I owned 100% of the share capital – had the transaction completed I would have used this company to complete the £1 purchase.
Tokyo
already had a bank account, which meant faster and swifter payments. Without this, for us to set up a new company bank account, it could easily take 3 to 6 months, which would mean the festival could not be funded.
Tokyo
was also used as it was an entity with no prior liabilities, which made accounting simpler; and
Tokyo
was already part of the
Tokyo
group structure, and was therefore a
very
appropriate entity to proceed with. I made it clear to Mr Betesh and Steve Davis that
Tokyo
was
Tokyo
Group's operating entity in this deal. Invoices would be addressed to and paid by
Tokyo.
They never expressed confusion or concern at the time. Suppliers were all told to re-address invoices to Tiki-o (Bradford) Ltd i.e.
Tokyo
for payment and subsequently invoices were sent to and paid by
Tokyo."
Tokyo/Mr
Mellor's perspective but also from the stance taken by Steve Davis and by Mr Betesh that "Option 1" was agreed and it was on that basis that
Tokyo
took over the running and funding of the 2022 Festival the idea being that the paperwork would, as Mr Mellor expressed in in cross-examination "catch up" later on:
"26. Mr Davis, with the knowledge and approval of Mr Betesh, emailed me a list on 2 August 2022 [reference] setting out the payments needed to book artists and
venues
for the Bingley Festival. Mr Davis and Mr Betesh were aware that
Tokyo
was funding payments, it is irrelevant that Tiki-o (Bradford) Ltd was used, I owned 100% of that company and
Tokyo
Group funded
Tokyo
to make the payments (
Tokyo
is
Tokyo
Group and
vice
versa);
Mr Davis sent them to me for confirmation and invoices were addressed to and paid by
Tokyo
[reference] I was fully aware of all invoices and payments, Finance would send me an Excel spreadsheet with all payments on which I would then approve (
via
email response). Although I repeatedly requested formal Heads of Terms urgently after 28 July (we wanted these to pay critical people and to have clarity), Mr Betesh failed to provide them. However, Mr Betesh's acceptance of Option 1 and ongoing communications from Steve Davis (SSD Music's only Director), together with their silence on any disagreements, reinforced my understanding that Option 1 governed our relationship and
Tokyo
would now run Bingley, cover the costs, and receive the ticket revenue post-1 July 2022 as well as purchase of the shares of SSD.
27. Further emails show that I was now involved in getting the Bingley Festival running and increasing sales, including [reference] trying to increase marketing of the event to boost ticket sales, ensuring that the event would attract enough attendees to mitigate losses. Despite the urgency, Mr Betesh and Steve Davis never objected to
Tokyo
funding and taking over the organisation of the festival in full. They continued to send requests for payments, treating
Tokyo
as the de facto event organiser. If they had any issue with
Tokyo's
role, they did not
voice
it. Indeed Mr Betesh failed to even attend any aspect of the festival and Steve Davis only attended
very
briefly and assumed no control, management or organisation. From 29 July 2022 onwards,
Tokyo
took immediate steps to salvage the festival. It was
Tokyo
teams dealing with Police Licensing, SAG (Safety Advisory Groups), festival landlords, the Rugby Club.
Tokyo
was now the organiser. On 2 August 2022, I emailed Mr Betesh confirming that we were proceeding on the agreed Option 1 and that if, for any reason, it did not proceed,
Tokyo
would be entitled to the ticket sale revenues and cost recovery. Mr Betesh did not dispute this."
Draft Settlement Agreement 9 August 2022
Tokyo"
and asking that Steve Davis put in any other information that he thought wad relevant to say that this "is the best investment deal for SSD". On 2 August Steve Davis replied, sending a revised
version
and saying that it was "pretty much bang on so have added little." I should add that emails after the 2022 Festival demonstrate that Steve Davis was also pressing Mr Betesh to honour the deal reached between Mr Mellor and Mr Betesh and give effect to Option 1. This again confirms that Steve Davis, as director of SSD Music and therefore SSD Music was behind and agreeable to the deal.
" Conclusion: I am left with no alternative other than to negotiate terms with
Tokyo
so that the Bingley Weekender can proceed. I am of the
view
that this is in the interest of SSD's creditors."
"Thanks for the update Paul. Please send ASAP, I am proceeding on the basis of our deal as agreed.
And on the assumption if that cant or doesnt happen for whatever reason then we will need full ticket money and cost recovery for any shortfall as you'd expect."
He went on to express
various
concerns about matters emerging at that time.
version
5 of a document named "Settlement Agreement". The covering email referred to the attached "Heads" said to have been drafted up "to best reflect the following agreement and
Tokyo's
commitment to seeing through Bingley and the other events that SSD Music currently have on sale for which Ticketline have sold tickets". Option 1 from the earlier email was then set out on a cut and past basis. Mr Betesh went on to say:
"Because of the potential insolvency position of SSD Music, the
VAT
rebate has been labelled as a 'purchase price' within the Heads, as a mechanism to fulfil what has been agreed. This in no way changes the terms of Option 1 above just safeguards the
VAT".
Tokyo
Industries [ ] Limited. It had a its head in typed format "Dated this [ ] day of August 2022"
Tokyo
Industries that had been paying relevant sums on behalf of SSD Music. He accepted that the drafter, Mr Betesh's "man" did not have the full details and that it would have been for him, Mr Mellor ultimately to confirm the full name of the relevant
Tokyo
entity.
Tokyo
had incurred the costs.
"B. The Parent Company is the sole shareholder of the SSD Music, IG Festivals Limited (11740186) ('IGFL') and SSD
Venues
Limited (11740170) ('SSDVL');
C. SSD Music is the organiser and host of a musical concert and event known as the 'Bingley Weekender' (the 'Event') which is schedule to proceed on the weekend of the 5, 6 & 7 August 2022. SSD Music has also commenced the process of sales in respect of other events and as particularised in the attached Schedule (hereinafter referred collectively as 'Future Events') and from which they have secured revenue ('Future Events Revenue');
D. IGFL and SSDVL are dormant and are not trading companies.
E. SSD Music is the legal owner of any and all intellectual property rights of and associated with the Event and is the contracting party with any and all performers and the providers of any services to the Event itself and is owner of the Intellectual Property of and associated with the Tomorrow Festival (the 'Assets') and is entitled to all ticket sale income, proceeds of bar takings and other revenue as generated by the Event less the suppliers' costs ('Event Revenue');
F. Ticketline is a company which processes ticket sales for and on behalf of the SSD Music and which has provided, by way of forward funding, a loan to the Parent Company and the Parent Company has in turn, advanced funds to the SSD Music to a sum no less than £550,000 (the 'Ticketline Loan');
G. Ticketline had sold tickets for the Event to the
value
of or in excess of £550,000 up and unto the 30 June 2022 ('Existing Ticket Sales');
H. Ticketline have sold since the 1 July 2022 and shall continue to sell tickets for the Event through and unto its conclusion. (the 'Future Ticket Sales Revenue');
I. The Event has experienced cash flow problems and is required to secure further funding, failing which, the Event will fail;
J.
Tokyo
is prepared to purchase SSD Music for the sum of £675,000 (six hundred and seventy five thousand) (the 'Purchase Price') [This was obviously a change from Option One as originally formulated];
K.
Tokyo
is prepared to meet those costs and disbursements as are, or may be required, in order to complete the Event.
L. If and in the event, the Event is cancelled absent this Agreement, Ticketline will be required to refund the Existing Ticket Sales and SSD Music shall be exposed to further and wider financial Claims from the artists and creditors and it is accepted by the Parties that such conduct will severely damage the reputation of the Parent Company and those other events which are currently being managed by SSD Music, including and in particular, the Tomorrow Festival. As such, it is not in the interest of the parties, to cancel the Event; and
M. Ticketline recognises and accepts that it will not recover all of that proportion of the Ticketline Loan to the Parent Company from SSD Music."
(1) Clauses 1 and 2 dealt with
Tokyo
taking over the conduct of and responsibility for the 2022 Festival and for thereafter paying relevant costs through and to "Completion". "Completion" was defined as being:
"The conclusion of the musical event on the 7 August 2022 and the payment of any and all costs of and associated with the conduct of the Event and such measures and/or costs as are, or may be, required to satisfy any and all creditors of and as incurred after the Event to return the land on which the Event is conducted, back to its original condition and state".
It was put to Mr Betesh that clauses 1 and 2 reflected what had already happened and was ongoing. He confirmed that he believed that to be the case.
(2) Clause 3 provided that Ticketline was not to be liable to pay to SSD music or
Tokyo
the Existing Ticket Sales and "such sum shall, as of the date of this Agreement, be utilised to set off as against the Ticketline Loan".
(3) Clause 4 provided that on Completion (I have set out the definition of "Completion" earlier in this judgment) or such other date as may be agreed, Ticketline would pay Future Ticket Sales Revenue to
Tokyo
(less certain administrative expenses). Clause 5 contained authority from SSD Music to do this.
(4) Clause 6 provided that as regards subsequent ticket sale revenue in respect of other events, Ticketline would retain the same and set it off against the Purchase Price of £675,000.
(5) Clause 7 dealt with payment of the purchase price of £675,000 to the parent company, in two instalments. The first was £475,000 to be paid once SSD Music received the Existing
VAT
Claim and the second was £200,000 (or a proportion thereof) from any future
VAT
claim.
(6) Clauses 8 & 9 dealt with the transfer of shares in IGFL, SSDVL, SSDS Music to
Tokyo.
(7) Clause 10 dealt with cancellation of events.
(8) Clause 11 dealt with
VAT
refunds. SSD Music was said to have applied for a
VAT
reclaim and to be awaiting a decision on the same. If received then the entirety of that sum was to be paid to IG Industries and then used in partial satisfaction of the Ticketline Loan. A further
VAT
reclaim was to be made by SSD Music and again that was to be paid to IG Industries in partial satisfaction of the Ticketline Loan.
(9) The remainder of the agreement dealt with matters such as confidentiality, continuation of normal trading, advisors' costs and fees and governing law and jurisdiction.
various
versions
of the Heads of Terms/Settlement Agreement, he was saying that they were complicit in drawing up a document containing (according to him) false statements in the respects identified, he confirmed "That is the case".
Tokyo
the £746,000 odd that it had paid out on the 2022 Festival. The deal either needed to be concluded that week or the £746,000 odd repaid.
various
options on how to move forward on this" and that they would revert.
"Guys this isn't my battle - I'
ve
stepped in to save all your asses & worked the whole festival for free
You need to agree now to complete on the deal or get me my money back - reneging & keeping the ticket money isn't possible
Please, it's freshers week now - someone needs to manage these business's.
Get me a secure payment plan to return my £741k or Complete the deal - none of us need this to go nuclear & will tomorrow unless this is resolved"
"One way or another this needs to conclude.
In good faith you agreed to the terms below when Aaron came in at the last minute as you could not cash flow the festival as promised to myself and ssd senior management team.
I understand that your circumstances changed due to the court case involving Rob Da Bank and from that I was forced to find the funding to avoid the 707k of refunds and the total collapse of SSD Music Ltd and the holding company you own the majority of.
As that was the case I went out to seek someone else to take over the finance of the event and y our shares in the business that Adam asked me and we also spoke about to protect ticketline from 750k + worth of refunds.
Aaron stepped in on the terms below and the email you replied to agreeing to option 1. The heads of terms he was provided did not reflect the agreement below and then in turn you haven't had a heads of terms back so both sides need to sort that out one way or another.
To move forward if you are not going to pay anymore of the ticket money over as agreed previously below is it agreeable that this just concludes with Aaron taking the assets and you don't send the ticket money?
We are basically selling the business for 750k to Aaron. If any liquidator questioned that we'd give the good reason we'd have had 750k more debt if we didn't.
It can't be that SSD is yours to do the deal and then not yours when the deal doesn't work or why would Aaron be negotiating with you and not me?"
The last sentence is another indicator of the control of Ticketline over SSD and of the fact that SSD accepted the deal negotiated by Mr Betesh
vented
his frustration to Mr Betesh, Mr Adam [Bolger] and Steve Davis:
" What is happening here please - you absolutely promised me that you would release the ticket sales from 00:00hrs 1 July 2022 to completion immediately after the show on the Monday - we are 2 weeks on.
I feel Ive jumped in to save you on this and its really backfired - nothing I was told was correct. The Bars had already been sold to John Adamson for 100k+
vat
to fund a previous show that had nothing at all to do with Bingley - the costs have come in way more than anticipated.
We paid everything that was show critical to make the show happen - but we'
ve
now all artists and agents screaming for the post show costs - Ive done what I promised I would do and got the show over the line – costing me personally £750k with zero bar income so far. Theres at least another £350k in costs I am not prepared to pay a single penny more until (a) we have the ticket income for all sales post 00:00hrs 1 july 2022 (b) we get this deal completed.
To be clear the Ticket Money you need to release today is
- All ticket sales that occurred after 00:00hrs 1st July 2022
- The FULL SALES for camping, campervan and parking sales for the entire event (as Camping / Parking is paid to someone else)
- Where camping and parking where sold as a package the camping parking element will need to come over for all sales
- If any refunds have occurred after 00:00 1st July 2022 but relate to sales that happened pre- 23:59 30 June 2022 must not come from the post 1 July 2022 sales
THE FULL & FINAL SALE PRICE OF £746,081 (being the amount paid to talent and suppliers as attached breakdown of costs paid on behalf THE TICKETLINE NETWORK LTD to ensure the BINGLEY WEEKENDER 2022 proceeded and ensuring THE TICKETLINE NETWORK LTD did not have to refund £700k+ of guests and £1m+ talent / production and site did not sue IG INDUSTRIES LTD for its breach of contract. Protecting TNL and IG of further damages in excess of £1.7m
THE FULL & FINAL SALE PRICE OF £746,081 IS TO INCLUDE (As Agreed OPTION 1)
- 100% share transfer of IG FESTIVALS LTD (Formally SSD CONCERTS & FESTIVALS LTD) for £1.00
-100% share transfer of SSD
VENUES
LTD for £1.00
- Asset purchase of all assets / IP and any Land rights owned by IG INDUSTRIES LTD (Formally SSD INDUSTRIES LTD) held under the fixed and floating charge for the sum of £1.00. To be clear we are not purchasing the company IG INDUSTRIES LTD this stays owned by The TicketLine Network Ltd to reclaim any future
VAT
refunds by way of its fixed and floating charge. No way I cant get involved in that - its 'preference' - you need advice on that - your charge may allow that - it would certainly not allow me to take it and gift it you.
The transfer of all shares / assets must complete on or before 31st August 2022 to allow the clean TUPE transfer of all staff and payroll at 1st September 2022. TUPE Consultations on both sides must commence now.
Guys to have jumped into this festival and financed it and operated it at 4 days notice was lunacy - but if I had not you would have lost all credibility,
value
and industries respect - I have kept my part of the deal the festival completed - please not release the Ticket Monies you said you would release today and lets complete this deal as agreed.
ACCOUNT NAME TIKI-O (BRADFORD) LTD
BANK BARCLAYS PLC
[Bank Details]
I need the ticket money TODAY to pay the rest of these show costs - if I cant get this resolved I have no option but to tell all suppliers / talent - that these must be paid by SSD as contracted and that Ticketline are holding all the festivals money. This helps no one and just needlessly pisses people off, after we'
ve
actually done the hard work and delivered the festival. Please send funds today.
Please guys Im nervous as hell over this position and we need to close it - Ive agreed this deal with Paul and The Tickeline Network Ltd - we just need to stand on whats been agreed release the ticket money and complete this messy situation allowing us all to move forward.
We need to do this quickly. Each day is costing us all serious reputation and financial damage.
Please keep to what we agreed and lets close this deal
< Option 1 > No Security / No Risk - Immediate Asset Sale.
We will purchase all assets, IP and goodwill to inc 100% share capital of IG FESTIVALS LTD + SSD
VENUES
LTD for £1.
You keep all the ticket money up to 1st July 2022 for all events.
You pay all ticket sales from 1 July 2022 over on maturity of all events."
"I am trying to work out how it affects our position with ticketline in accounts as in ticket money
vs
advance sales
vs
loan. It's a mess and want to make sure it is left correctly."
The nature of the loans made by Ticketline and the question of ticket refunds
"8. It is in effect a loan provided by the Defendant to the promoter. Repayment of the Loan is then repaid, not by fixed monthly payments but by a retention of the ticket sales income generated by the event. Accordingly, the amount paid by a customer in relation to a ticket purchase, is retained by us and set off as against the amount provided to the promotor by means of forward funding. Once the amount of ticket sales exceeds the amount provided by way of forward funding, the ticket sale proceeds are paid onto the promoter." It is in effect a loa
value
of the ticket price that was to be retained by Ticketline (according to its contract with ticket purchaser in an escrow account) until the event was finalised or the advance by Ticketline to SSD cleared. In the latter event, then Ticketline was supposed to pay to SSD on a weekly basis the ticket price (less rebate) thereafter received.
30-Jun-22 |
36,000.00 |
28-Jun-22 |
11,387.30 |
| 27-Jun-22 | 51,434.90 |
| 23-Jun-22 | 20,614.80 |
| 22-Jun-22 | 274,401.37 |
| 20-Jun-22 | 8,920.00 |
31-May-22 |
80,000.00 |
| 17-May-22 | 103,500 |
| 29-Apr.22 | 40,000.00 |
| 05-Apr-22 | 30,000.00 |
| 24-Mar-22 | 30,000.00 |
| 23-Mar-22 | 5,000.00 |
| 25-Feb-22 | 35,000.00 |
| 28-Feb-22 | 2,995.00 |
| 25-Feb-22 | 4,450.00 |
| 18-Feb-22 | 9,400.00 |
| 15-Feb-22 | 20,000.00 |
| 04-Feb-22 | 7,500.00 |
| 26-Jan-22 | 40,000.00 |
Tokyo
started injecting finds into SSD to ensure that the 2022 Festival went ahead, if not earlier, the advances made by Ticketline were treated as loans to IG Industries, the holding company of SSD Music. It may be, though I probably do not need to decide, that IG Industries was treated as on-lending the same sums to SSD Music, with an obligation on SSD to repay Ticketline. This analysis would entirely fit with the fact that Ticketline took a charge over IG Industries and took control (by way of shareholding) of IG Industries. It is also confirmed by the Heads of Terms. Mr Betesh did not in terms say that the Heads of Terms were incorrect in this respect.
value
of the tickets. Leaving aside the question of whether there were any proprietary claims in this respect, there would have been a debt obligation owed by Ticketline to SSD Music (or the relevant promoter) in this respect, as well as an obligation to pay the "rebate", one half of the booking fee to the promoter. As a matter of informal agreement, it was agreed that Ticketline could set-off, against the liability of SSD Music (or on my analysis and by 2022, IG Industries) to it, the obligation that it owed to the promoter, SSD Music, by way of rebate of the booking fee and the face
value
of the tickets.
value
of tickets was to be retained by Ticketline (or put another way, the obligation to pay a sum equal to the face
value
of tickets to the promoter) did not fall due until either the debt to Ticketline had been cleared OR, at the end of a festival when the financial side of the festival, was wound up. The reasons for such a term are clear. First, on the financial winding up of the festival, a set-off would be available at law to Ticketline against sums owed to it either as a matter of law (assuming the debts owed were owed between the same persons) and/or of agreement (if IG Industries was required to repay advances to Ticketline). Secondly, it would have the consequence that Ticketline would also be reputationally protected because it would be in a position to pay any appropriate ticket refunds.
VAT
Refunds which were to be paid to Ticketline.
"This gets you £500k ticket money +£475k
VAT
Refund +£200k potential future
Vat
returns.
So circa £1,2m return on your £2.8m write off."
"get the text changed on the website to say Ticketline will be in touch to offer face
value
refunds ro [sic] give you the opportunity to retain your ticket for next year". loan provided by the Defendant to the pro
In cross-examination Mr Betesh said (as the email headings confirm) that this email related to the "This is Tomorrow" festival, but it negates any suggestion that as a generality refunds were not generally taking place and that Mr Betesh was not fully in control of that policy.nf
Tokyo
and Mr Mellor.
Tokyo
paid out some £746,081.00 in directly or indirectly meeting
various
costs and expenses of the 2022 Festival which SSD Music would otherwise have had to meet but which it did not have the funding. Had
Tokyo
not provided finance at the
very
last minute as it did, the 2022 Festival would not have gone ahead and would have had to be cancelled.
Tokyo
funded the entirety of the 2022 Festival. Although Ticketline was lending SSD money up until 30 June 2022 it seems likely that some at least of the later payments were used to fund other events (such as a Diana Ross concert that took place in 2022).
Tokyo,
proceeded on the basis that there was a deal as set out in Option 1 of the three options that he put forward. That basis of proceeding was shared by Mr Betesh, Ticketline and SSD and Steve Davis. Of course, that might be subject to further amendment by agreement and Mr Betesh, having agreed to Option 1, then constantly asked for
variations
to Option 1. He accepted for example that the Heads of Terms he caused to be produced did not in fact match Option 1. Nevertheless, it is perfectly clear that both Ticketline and
Tokyo
proceeded on the basis that a binding agreement would be produced giving effect to Option 1 (with any
variations
as further agreed). Mr Betesh accepted in terms Option 1 even though in his acceptance he asked whether Mr Mellor would
vary
Option 1. I am satisfied that the "deal" or agreement in principle was Option 1. I do not accept the submission that Option 1 was not agreed because Mr Betesh made counter suggestions after he had said that he accepted (and he thereby accepted) Option 1.
Tokyo
essentially took the risk that a contract giving effect to Option 1 would not be entered into and that there is no room for a restitutionary remedy as a result. I shall have to consider this area of fact in more detail in the context of the requirements of a restitutionary remedy. For present purposes it is enough to say that I find that Mr Betesh was well aware that Mr Mellor through
Tokyo
was providing funding on the basis that a deal had been done on the terms of Option 1. The reason that heads of terms were not agreed before the funding commenced was because (a) of the immediate need for funding if the 2022 Festival was to be saved and (b) because of delays by Mr Betesh in actually producing first, any heads of terms and secondly, heads of terms that embodied Option 1.
" I took control of the company because it was insolvent, I was owed a huge amount of money along with several other creditors. I had said that I needed to take control in order not to put the company into admin. You were given several weeks to raise money to avoid this happening, but were unsuccessful. You never actually gave me the control that you agreed to.
The offer was that if money was paid back from ticket sales and debt reached a manageable level the bulk of the shares would be returned."
view
the level of control that had been agreed. The terms of the email itself takes matters little further forward as they do not explain what that level of agreed control over detail was agreed (or being referred to).
Tokyo
in connection with keeping the 2022 Festival running included (a) the ability to set off its obligation to pass to the organiser ticket monies against the debt owed to it (which, had
Tokyo
not paid the relevant sums, it would not have been able to do but would have had to used the ticket sale proceeds to refund customers; (b) the ability in like way to (a), to set off the sum it was obliged to pay SSD music as regards rebates (i.e. the 50% of the booking fee); (c) (as admitted by Mr Betesh) reputational damage flowing from a collapse of the festival (which might include reputational damage flowing directly from (a) and/or an insolvency of SSD Music and IG Industries (especially if that resulted in artistes and suppliers to those companies or either of them not being paid) (d) avoidance of formal insolvency of SSD Music and IG Industries and the retention of a major interest in those companies, such companies having an ongoing business and intellectual property rights and other assets of
value.
Tokyo
in connection with the 2022 Festival from July 2022 onwards the 2022 Festival would have been cancelled and that one consequence of that would have been that Ticketline would have had to find the money to refund ticketholders.
value
of the tickets sold and the one half of the booking fee (the rebate) otherwise payable by Ticketline to SSD.
Tokyo
limits its claim as regards the booking fee received by Ticketline to the rebate (equal to 50% of the booking fee) to which on the face of the agreement between Ticketline and SSD, SSD would have been entitled and which, as a result of the 2022 Festival going ahead and refunds not being paid, Ticketline had the benefit of and was able to set off against any debt owed to it by SSD. I did not understand Ticketline to dispute the figures finally relied upon by
Tokyo
as arising as regards the ticket process and the booking fee (and the rebate).
Unjust enrichment
v
Parc (Battersea) Ltd [1999] 1 AC 221, 227, and ask: (a) Has the defendant been benefitted in the sense of being enriched? (b) Was the enrichment at the claimant's expense? (c)Was the enrichment unjust? (d) Are there any defences? (see also e.g. Samsoondar
v
Capital Insurance Co Ltd [2020] UKPC 33 at paragraph [18] per Lord Burrows). The burden of proving the first three lies on the Claimant. The burden of proving defences lies on the Defendant.
v
Revenue & Customs Commissioners [2017] UKSC 29; [2018] AC 275 paragraphs [38] to [42] (and I summarise):
(1) the law of unjust enrichment is based on rules of law which are "ascertainable and consistently applied". It is not a label enabling the court in the individual case to decide what is just or unjust, fair or unfair as if the court had a discretion in the matter;
(2) The doctrine of precedent continues to apply even though the concept of unjust enrichment as "a unifying principle underlying different types of claim" may be a fairly recent phenomenon and the principle may still be in the course of development;
(3) Lord Steyn's four questions are no more than "broad headings for ease of exposition". They enable a structured approach to the analysis of unjust enrichment. However, they do not embody legal tests but rather "signposts to areas of inquiry" and one cannot apply Lord Steyn's words as it they were words of a statute,
(4) In carrying out relevant legal analysis, it is important to have at the forefront of one's mind the purpose of the law of unjust enrichment. It is "designed to correct normatively defective transfers of
value,
usually by restoring parties to their pre-transfer positions."
Has the Defendant benefitted in the sense of being enriched?
various
forms of financial enrichment were identified by Mr Stubbs, at the end of the day the form and quantity of financial enrichment relied upon for the purposes of founding a claimed remedy of disgorgement is that of the ticket money proceeds of the 2022 Festival, both of which Ticketline would not have retained (but been obliged to pay to SSD) had the 2017 agreement applied and there been no other considerations. I can therefore ignore potential arguments about whether Ticketline was enriched by retaining its reputation and whether there were other financial benefits obtained by Ticketline as a result of the 2022 Festival being saved by
Tokyo
(such as ownership, indirectly, of (if it was) a profitable and ongoing SSD business).
Tokyo's
argument is that by the sums it paid out (pursuant to a proposed agreement which did not materialise), a situation was avoided under which (a) the 2022 Festival was cancelled and (b) thereupon Ticketline would have had to refund the ticket price to ticketholders (or those that had purchased tickets). Instead, Ticketline was saved from having to make the refunds and was placed in a position where it could set off those sums against sums owed to it by SSD. For the reasons that I have already given, I consider that both proposition (a) and (b) are made out. I should add that, depending on the point at which one assumes that without the capital injection from
Tokyo
the festival would have had to be cancelled, it may be that some proceeds of ticket sales amount to enrichment of Ticketline not on the basis that they would have had to be refunded but on the basis they would not have been earned if the 2022 Festival had been cancelled earlier.
"12. …the common ground is that by mid-July 2022, the Bingley Festival required a significant cashflow injection of anything towards £1 million in order to meet costs to completion.
13. It is not in issue that the Claimant met these costs, and that the costs identified as paid within Annex 1 to the particulars of claim were costs associated with the Bingley Festival…"
Tokyo.
Tokyo
started pumping money into the 2022 Festival) that Ticketline was enabled to earn (and retain or set off against loans to SSD) the booking fee (and the 50% of it otherwise at the end of the day payable to SSD) by the payments made by
Tokyo.
In other words, as regards the booking fee received prior to the deal with
Tokyo,
Ticketline had received the same and it was available (in due course) to set off the rebate part against any obligation to Ticketline by way of repayment of loans by SSD. The fact that the festival was not cancelled by reason of the injection of sums by
Tokyo
did not affect booking fees already received but simply allowed further sales (and booking fees) to be received that would not otherwise have been received.
Was the enrichment at the Claimant's expense?
Tokyo
(and as I have held SSD) reached a deal which was understood on all sides to be directed precisely at (a) avoiding Ticketline having to make refunds of ticket sale proceeds and (b) thereby enabling it to be allowed to retain (as the deal provided for) the proceeds of ticket sales up to 1 July 2022; it being agreed that
Tokyo
would receive the proceeds of ticket sales from 1 July 2022 onwards.
Tokyo
should provide funding for SSD specifically so that SSD did not have to cancel the 2022 Festival and Ticketline could retain the ticket proceeds (in effect equivalent to a set off against the debt owed by SSD) and gift part of them to
Tokyo.
This was not an incidental consequence but a directly intended consequence that materialised (except that Ticketline retained all of the ticket proceeds) as a result of
Tokyo
paying the monies out that it did. As such it seems to me that the benefit was direct (or that difference from the direct provision of the benefit is more apparent than real). The benefit was not an incidental consequence of the funding of the 2022 Festival by
Tokyo,
it was the main (or one of the main) purposes of the deal. Further, it did not form a separate transaction, it flowed immediately from the laying out of funds by
Tokyo.
"the provision of something for the benefit of some other person with no intention of making a gift, that the defendant should have received some form of enrichment, and that the enrichment has come about because of the loss."
Lord Clyde in the Banque Financiere case ([1999] 1 AC 221 at 237) discussed at paragraph [44] of the Investment Trust Companies case.
Was the enrichment unjust?
Tokyo
paid the relevant sums to or for SSD Music. I was referred to a number of cases and a number of passages in Goff & Jones on Unjust Enrichment (10th edition). I did not understand the general principle to be contested. At paragraph 16-01 it is stated as follows (footnotes excluded):
" 16-01:
Where benefits are transferred in anticipation of a contractual agreement which is intended to provide for payment for those benefits, and the contractual agreement does not materialise, the general principles of failure of basis apply. The same principles that govern liability where the contract isvoid
or unenforceable would seem to be equally applicable where the contract does not come about. As Barry J commented in William Lacey (Hounslow) Ltd
v
Davis [[1957] 1 WLR 932 at 939]:
"I am unable to see anyvalid
distinction between work done which was to be paid for under the terms of a contract erroneously believed to be in existence, and work done which was to be paid for out of the proceeds of a contract which both parties erroneously believed was about to be made.""
(1) There was no shared basis which failed because whilst the parties envisaged there would be some contract they were never sufficiently ad idem as to what the terms of the contract would be. It is insufficient for there to be a shared basis that there will be some contract, the parties must have failed to enter into a contract ion the basis of shared understanding as to what the contract would be.
(2) There was no shared basis because SSD Music (one of the three proposed parties to the contract) had no shared basis and it is unclear that it understood and/or agreed to Option 1;
(3) The Claimant took the risk of the deal not being reflected in a written document binding the parties: there is no injustice in there being no restitutionary remedy;
(4) There is no total failure of consideration because
Tokyo
did obtain some rights regarding the annual Bingley festival because it (or Mr Mellor and/or other companies within the
Tokyo
group controlled/operated it in 2023.
vary
the agreement but Mr Mellor always stood firm. The key point is that Mr Betesh agreed in terms to Option 1. As regards the involvement of SSD Music (and I would add IG Industrials, though Mr McGarry did not refer to the latter company in this context), it is clear from my findings that SSD Music was aware of what had been agreed between Mr Mellor and Mr Betesh (i.e. Option 1) and that it would join in the legal documentation to give effect to Option 1. IG Industries was even more directly controlled by Mr Betesh and the same findings apply to it.
v
Yeoman's Row Management (where a claim in restitution did succeed) where the parties could be taken to have known that oral contracts for the sale of land (as they had entered) were unenforceable. Indeed, if in this case there was a binding agreement (rather than an agreement which was not binding) it is not clear to me that there could be a failure of basis claim in restitution.
v
London Docklands Development Corporation [1995] 1 WLR 212 that, by entering negotiations that were expressly subject to contract, each party:
"[M]ust be taken to know..that pending the conclusion of a binding contract any cost incurred by him in preparation for the intended contract will be incurred at his own risk in the sense that he will have no recompense for those costs if no contract results".
valid
legal form). Whatever the precise limits of the principle stated in Regalian in this case the benefit conferred by the Claimant arose from the Claimant performing its side of the putative contractual obligations, not mere "preparatory works" to put it in a state to do so. Further, that performance was a performance that was made in circumstances where emails from Mr Mellor made absolutely clear that the payments were not being made gratuitously and at
Tokyo's
risk of a contract did not materialise. Further, as I find, the payments were made at the encouragement of Mr Betesh/Ticketline supported by statements, as asserted by Mr Mellor in evidence and which I accept, that he was told at the time that he need not worry about the delay in production of the heads of terms (initially because, it was said, Mr Betesh's lawyers was away on holiday) because there was an agreed deal.
Tokyo
would have paid the relevant sums gratuitously with no recourse at all. Indeed, the contemporaneous emails show
very
clearly that was not the risk that Mr Mellor accepted.
Tokyo
(or a
Tokyo
company(ies), the position was not pinned down), had been in control of the 2023 festival at Bradford. He did not enlarge upon the legal position in this regard. Nor did he deal with the crucial question of whether, and if so how and when,
Tokyo
received any of the relevant consideration that it would have received under the agreed "deal" (which I understand is said by Mr McGarry to be intellectual property rights relating to the festival, otherwise to be transferred to
Tokyo
under Option 1). The fact of the 2023 Festival must have been well-known to Ticketline and, if that was the case, that it was not operated by SSD. In the circumstances I am not prepared to allow this case to be run and, in any event, do not accept that, on the balance of probabilities, Ticketline has established that there was not a total failure of consideration because some of the intellectual property promised to be transferred to
Tokyo
under Option 1 was in fact transferred. It is unclear to me that there was such a transfer or, if there was, that it was not transferred at a later date under some separate contract/arrangement.
Fiduciary claim
Tokyo,
in its capacity, as permitted by SSD and indeed Ticketline. as organiser of the festival, for the proceeds of ticket sales. It is said that once
Tokyo
took over management and organisation of the 2022 Festival, Ticketline was its agent, owing it fiduciary duties and that it failed to account to
Tokyo
for the ticket proceeds (and the rebate). The difficulty with this is that whatever the position might have been had the deal been concluded by way of binding legal documentation, embodying Option 1, Ticketline owed contractual duties (and possibly, although this is contested, fiduciary duties) to SSD. It is difficult to see how these were replaced by fiduciary duties to account to
Tokyo,
when SSD Music remained the relevant promotor and
Tokyo
was, in effect, assisting SSD Music in carrying out the day-to-day organisation and paying the bills.
Conclusion
Note 1 The dissenting speech of Lord Pearce in Onassis and Calogeropoulos
v
Vergottis
[1968] 2 Lloyd’s Rep 403, 431; Robert Goff LJ in Armagas Ltd
v Mundogas SA [1985] 1 Lloyd’s Rep 1, 57. [Back]