THE CURRENT IMPORTANCE OF PLEADINGS 5 : THE CLAIMANT CAN’T NOW ARGUE SOMETHING CONTRARY TO HIS OWN PLEADED CASE
We are looking at another case in which the pleadings played a significant part. In Daniel Maurice Wagner v Bright Station Ventures Management Limited [2025] EWHC 669 (KB) Mr Justice Sweeting rejected an argument from the claimant that was contrary to his own pleaded case. The claimant could not argue that payments made to him by the defendant’s parent company were not to be set off in this action. This had a major impact on the balance due and led to the claimant being adjudged to be the “loser, having to pay the defendant £90,000 and 60% of the claimant’s costs (with an interim payment of £350,000).
“On the issue of whether payments made by BSVL to or on behalf of Mr. Wagner should be taken into account in determining the net sum due, the starting point is Mr. Wagner’s own pleaded case.”
THE CASE
The claimant brought an action against the defendant seeking repayment of sums due, the defendant counterclaimed alleging the claimant had paid some money out incorrectly. The judge found partly n favour of the claimant but certain parts of the claimant’s claim were not accepted. The defendant’s counterclaim for £1.15 million largely failed, only £2,000 was awarded.
THE ISSUE AT THIS HEARING
The primary issue at the subsequent hearing was whether payments made by the defendant’s parent company (“BSVL”) should be credited against his claim. This had a significant impact on the outcome as if those payments were included there was a net balance due from the claimant to the defendant of £90,000.
THE ARGUMENT
At this hearing the claimant argued that there was no agreement that payments by BSVL to him should reduce the amount due to him from this defendant.
“8. Mr. Wagner argues that there was no agreement requiring payments made by BSVL to be treated as reducing the amounts due to him from BSVM. He submits that the court’s findings did not establish that such payments should be offset and that any sums due from him to BSVL are recoverable, if at all, in the separate litigation. He argues that the court rejected the submission that BSVM was liable to him in debt for legal expenses and costs based on a direct agreement between him and BSVM or BSVL. He asserts that his alternative claim in restitution only applies to cash advances directly to BSVM. He argues that BSVM and BSVL have separate corporate identities and that BSVM cannot now rely on payments made by its parent company to escape its own liabilities. Mr. Wagner also draws attention to the fact that that BSVM did not counterclaim for the sums paid by BSVL and did not seek an order in the substantive trial to have those sums credited. It was the choice of those who now stand behind BSVM and BSVL to bifurcate the two sets of proceedings. As such, introducing an argument that they should be taken into account at this stage should not be permitted.
9. Mr. Wagner maintains that only payments made directly by BSVM should be credited against what is due to him. He asserts that approximately £387,000 plus interest is owed to him by BSVM, calculated by totalling his cash advances and recoverable legal expenses, then deducting payments received directly from BSVM and the separate £2,000 payment made at his direction.
10. Mr. Wagner contends that this is in keeping with his pleaded case which focused on BSVM’s obligations. Furthermore, he argues he was the prevailing party in the proceedings and should be awarded costs, given the substantial success of his claim, the near-total failure of BSVM’s counterclaim, and a reasonable pre-trial settlement offer, which was rejected.
11. He also emphasises BSVM’s aggressive conduct, including unfounded allegations of dishonesty and forgery, inflammatory correspondence, the unproven accusation of theft, and improper pressure to settle through threats of negative publicity, all of which he believes should be factored into the costs’ decision. Finally, Mr. Wagner seeks a substantial payment on account of his costs, calculated as a percentage of his actual and budgeted costs, reflecting his success and the conduct of BSVM as the opposing party. He suggests a payment on account of £461,402, based on 60% of actual pre-budget costs and 90% of budgeted or actual costs (whichever is lower) for post-budget phases.”
THE DEFENDANT’S ARGUMENT ON THE CLAIMANT’S PLEADED CASE
The claimant’s argument on this issue was, however, contrary to his own pleaded case.
“12.BSVM submits that, in calculating the final amount due, the court should take into account all relevant credits, including payments made by BSVL at Mr. Wagner’s direction.
13. BSVM argues that Mr. Wagner’s own pleadings originally acknowledged that payments made by BSVL were intended to reduce the amounts owed to him by BSVM. Mr. Wagner had stated in terms that such payments were made to reduce amounts he had advanced. RRAPOC Paragraph 11 states:
“It was agreed and understood between [Mr Wagner] and the directors of BSVL […] that such sums would be treated as being in partial diminution of the amounts outstanding to [Mr Wagner] from time to time as particularised in Annex 1.”
14. BSVM argues that not including BSVL payments is inconsistent with Mr. Wagner’s pleaded case and his factual evidence that he saw BSVM and BSVL as one and the same, so that payment by one would satisfy a debt owed by the other. When asked about BSVM’s funds in June 2016, Mr Wagner responded that it depended on when Attraqt stock was sold, even though that money went to BSVL, not BSVM. His explanation: was “We see it as the same entity.””
THE JUDGE’S DECISION
The judge held that the starting position was the claimant’s own pleaded case.
“23.On the issue of whether payments made by BSVL to or on behalf of Mr. Wagner should be taken into account in determining the net sum due, the starting point is Mr. Wagner’s own pleaded case. In his Re-Amended Particulars of Claim at, paragraph 11, Mr. Wagner expressly stated that payments made by BSVL were to be treated as reducing the amount owed to him by BSVM. This was a clear and unequivocal statement that the BSVL payments were integral to the overall accounting as between Mr. Wagner’s advances and BSVM’s liabilities. This was reflected in the agreed list of issues formulated at the outset of the trial.”
THE CLAIMANT’S ARGUMENT
The judge considered the claimant’s argument that as BSVL was not a party to the action then the defendant could not rely on payments made to him. That argument was rejected.
“30. Mr. Wagner argues that as BSVL is not a party to these proceedings BSVM cannot rely on the payments it made to him or on his behalf. However, this argument mischaracterises the issue. The relevant question is not whether BSVL has a direct claim against Mr. Wagner but whether these payments form part of the acknowledged financial relationship between Mr. Wagner and BSVM. Given that Mr. Wagner himself initially accepted that they did, it would be artificial and unjust to now disregard them.
31. The judgment contains no finding that the BSVL payments should be excluded. Whilst I determined that Mr. Wagner was entitled to recover his advances to BSVM, I did not expressly determine that BSVL’s payments should be ignored in calculating the final net position. Mr Wagner’s submissions appeared to indicate he remained ready to set the Annexe 2 and 1 amounts against each other (subject to success on his case as to the existence of an agreement). The gloss on this in closing submissions was, in effect, that he was prepared to do so if his case was accepted in relation to all of the sums in Annexe 1 to the Particulars of Claim. However it was always inherent in a claim of this nature that Mr Wagner might achieve only a partial success and I can see no logical reason why the credit which he was prepared to give depended on whether the net result was to his advantage. It follows in my view that all the relevant credits, including BSVL’s payments, should be taken into account.
32.Mr. Wagner’s alternative argument, that the BSVL payments should instead be litigated separately in the BSVL proceeding is procedurally inefficient and inconsistent with his case at trial. Since he originally treated the payments as part of this dispute, there is no compelling reason to defer their consideration to another forum.
33. I conclude that the BSVL payments should be taken into account in determining the net sum due. Once those payments are included, the proper calculation results in a net balance of around £90,000 in favour of BSVM.”