23rd March 2018 - BCA and Tradeouts - British Car Auctions
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BCA and Tradeouts

BCA has welcomed the dismissal of a £21.5 million claim brought against BCA Trading Limited by the founder of Tradeouts Limited, a digital platform connecting car dealers.

The claim arose following BCA’s purchase of 51% of the shares in Tradeouts Limited from founder, David Brown, and his business partner in 2014.  In a 12-day High Court trial, the unfair prejudice case brought by David Brown was unconditionally dismissed.  BCA was awarded costs.

David Brown’s claim made wide-ranging allegations of bad faith against BCA, accusing BCA and its employees of having deliberately sought to damage Tradeouts in order to neutralise it as a competitor and prevent Mr Brown being paid under earn-out provisions of the acquisition documents. He also accused the BCA-nominated directors of Tradeouts of breaches of their directors’ duties.

These allegations were comprehensively rejected following a 12-day trial in October 2017.

The Court found that the bad faith case was contrary to the contemporaneous documents, far-fetched, and verging on the irrational.  The court also found that David Brown had planned from summer 2015 onwards to disclaim his responsibilities to Tradeouts and, instead, manoeuvre into a stronger position to abandon the company and sue BCA.

Martin Letza, BCA Group Legal Director and Company Secretary commented “We are delighted with the outcome of the case and very much welcome the wholesale dismissal of Mr Brown’s claims.  Some of our witnesses at the trial faced what the Judge described as “extreme and sometimes convoluted attacks on their honesty”. The rejection of any suggestion of dishonesty by those witnesses is especially gratifying and we are very grateful to those colleagues and former colleagues who took part in the trial process.”

BCA was advised by Berwin, Leighton, Paisner LLP  and represented by Sa’ad Hossain QC and Joyce Arnold of One Essex Court.