Case No: HC 03 C 01811
Neutral Citation Number: [2005] EWHC 3214 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 27 October 2005

Before :

MR MARK HERBERT QC SITTING AS A DEPUTY JUDGE

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Between :

	DAVID CHAWLA		
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	JONATHAN HARE		

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Miss Joanna Smith (instructed by Beachcroft Wansbroughs) for the Claimant
The Defendant in person

Hearing dates : 12, 13, 14 July 2005

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JUDGMENT
Mr Mark Herbert QC : 

1.	At its simplest this action consists of no more than a claim for the repayment of a loan but, partly because of the nature of the defence, there are complications with which I shall need to deal.  It is an action between two brothers-in-law.  The claimant is Mr David Chawla, and the Defendant is Mr Jonathan Hare, married to Mr Chawla’s sister Susan.  The principal disputes between them in the action concern (i) the terms and conditions of a loan made by Mr Chawla to Mr Hare, (ii) alternatively the terms and conditions of a compromise agreement claimed to have been made in respect of that loan and other indebtedness, and (iii) a counterclaim seeking a declaration of the ownership of the copyright in certain computer software developed by Mr Hare.

2.	Mr Chawla appeared before me by counsel (Miss Joanna Smith) and Mr Hare has appeared in person.  Mr Hare is intelligent and articulate, but his unfamiliarity with the relevant law and legal procedure has been a disadvantage to him, and for that reason I have felt constrained where possible to make some procedural allowances in his favour in the course of the hearing.

The proceedings

3.	The parties to the action originally consisted not only of Mr Chawla and Mr Hare but also companies of which they were respectively directors and substantial shareholders, Big River Limited (‘Big River’) and Black Box Software Developers Limited (‘Black Box’), originally called J Hare & Company Limited.  Mr Chawla makes two alternative claims against Mr Hare in regard to the loan.  One of these is simply for repayment of the loan claimed to have been made in the sum of £48,000 with interest, and the other is for £60,000 with interest at a lower rate based on the compromise agreement.  In addition Big River claimed several items of relief in respect of the computer software which I have mentioned.  These included a claim for a declaration that the software is owned beneficially by Big River and Black Box in equal shares, associated injunctions and an order for an account.

4.	Mr Hare’s defence to the claim for repayment of the loan is that the original loan was made on the express condition that it was repayable only out of the income to be derived from exploiting the software rights (income which has largely not materialised), and that the loan was not repayable on demand as Mr Chawla has claimed.  Mr Hare also claims that the loan was in the sum of £40,000, not £48,000.  At the opening of the trial, I gave permission for two further amendments to the particulars of claim.  The first was to plead that the original loan was repayable within a reasonable time, as an alternative to being repayable on demand.  The second was to the effect that, if I should find that the loan was repayable only out of the income from the software, then Mr Hare has himself been exploiting that software through his current company Courier Software Limited, and that I should order an inquiry of those profits.  No formal amendments to the defence have been made in response, but I have treated these additional claims as denied by Mr Hare.  I shall postpone dealing with Big River’s claims not based on the loan, and also Mr Hare’s counterclaim, until the end of this judgment.

5.	The crucial issue is to determine the precise terms on which the loan and the compromise were made.  Neither was reduced to writing, and the issue depends on the factual context in which the loan and the compromise came to be made and the oral evidence of Mr Chawla and Mr Hare themselves.  I must therefore say something about the witnesses.

The witnesses

6.	On Mr Chawla’s side I heard evidence from Mr Chawla himself and, briefly, from his brother Mr Neil Chawla and their father Mr Mohan Chawla.  I have also read a witness statement of Hannah Jane Godwin, who now lives in California, which was introduced by virtue of a notice given pursuant to rule 33.2 of the Civil Procedure Rules 1998.  Mr Hare did not object to the introduction of Ms Godwin’s statement but he rightly warned me against giving undue weight to it, being untested by cross-examination.  On Mr Hare’s side I heard oral evidence from Mr Hare himself, Mr Ian Mackintosh, Mr Hare’s wife Susan and finally Mr Benjamin Hinton, all of whom had served witness statements.

7.	Mr Chawla was a confident witness, and in my view generally a witness of truth.  Even so, there were times when his frustration and even anger with Mr Hare, combined with understandable lapses of his recall of detail and the timing of events, led to his evidence being exaggerated or inaccurate.  I have therefore had to treat some of his evidence with a degree of caution where it was uncorroborated.  The evidence of his brother Mr Neil Chawla and of their father Mr Mohan Chawla was not controversial and not significantly challenged in cross-examination.  I have no difficulty in accepting their evidence as truthful.

8.	Mr Hare is more introspective than Mr Chawla.  He gave his evidence calmly, but I found him a less satisfactory witness.  Miss Smith drew my attention to eight instances in which inaccuracies in his oral evidence, or omissions from his evidence, could be demonstrated from admitted documents.  I shall mention only five of them :  (1) In the course of claiming that the intellectual property rights in the software belonged to himself personally Mr Hare unguardedly said that he had never suggested that the rights belonged to Big River.  But he had to accept that this was untrue in the light of his own ‘system requirements’ document of January 2000 at pages 13A et seq of Bundle C.  (2) Mr Hare also said that he had not suggested that the rights were owned by Black Box, and yet he had implied just that on 18 April 2000 in a letter to his bank seeking a loan for Black Box (see paragraph 17 below).  Faced with the dilemma of having to admit that the rights did belong to Black Box or that he had given false information to the bank with a view to inducing a loan, his explanation was that he had been ‘teasing the bank’.  Miss Smith described this as extraordinary, and I agree.  (3) When faced with an earlier document of November 1999 in which he had written, ‘The system will remain the sole property of [Black Box],’ he refused to accept that this would affect ownership.  (4) He similarly refused to accept that a copyright notice in the name of a company was an assertion of ownership.  (5) He was quickly forced to admit that his statement that two software contractors had worked on the ‘Logistics’ software (see below) was incorrect.  All these matters relate in one way or another to the beneficial ownership of the software rights, an issue which in the end I cannot resolve in these proceedings (see paragraphs 74 and 75).  But these instances reveal by their nature, and by Mr Hare’s manner of dealing with them, that he is on occasion prepared to sacrifice a strict regard for accuracy in the interests of advancing his case.  Much of his other evidence was duly corroborated by other witnesses or contemporaneous documents, and in some instances I have preferred his evidence to that of Mr Chawla.  But where Mr Hare’s word was not supported by other evidence I have had to treat it with more than ordinary caution.

9.	Mrs Susan Hare was visibly nervous and uncomfortable in giving oral evidence.  She accepted that her evidence was given out of loyalty to her husband, and I am sure that the conflict of loyalties between her brother and her husband made her participation in the hearing an ordeal.  Fortunately her evidence was brief and ultimately not decisive.  I found Mr Hinton a helpful, thoughtful and careful witness, with a degree of objectivity somewhat lacking in some of the other witnesses.  I regard him as a witness of truth.  I can say the same of Mr Mackintosh.

Background to the loan

10.	The events which have given rise to the disputes took place between 1999 and 2002, and in order to explain and do justice to Mr Hare’s defence I shall need to examine those events in some detail and at some length.   It is convenient to begin by mentioning a company called Sprint International Express Limited (‘Sprint’), which played an important off-stage role.  Sprint was established in 1988 by Mr Chawla and three colleagues.  It is involved in the air courier industry, and specialises in international deliveries and warehousing.  In 1999 Mr Chawla left Sprint and in September 1999 established Big River together with a friend, Mr Benjamin Hinton.  (As I have mentioned, Mr Hinton gave evidence on behalf of Mr Hare.)  Mr Hinton says, and I accept, that Mr Chawla’s principal contributions to the company are his business acumen and marketing skills and that Mr Hinton mainly provided more technical expertise, as well as introducing some of his existing business contacts.

11.	Mr Hinton and Mr Chawla founded Big River (with their wives as co-directors) with a view to exploiting what they had identified as a gap in the market by developing user-friendly, Windows-based software for the courier industry.  Three particular applications programs are relevant to the action, later identified by the names Customer, Courier and Logistics.  It came to be hoped that all three might be marketed together as a suite of applications under the name Worldtrak.  A brief description of these is desirable : −

i)	The simplest was Customer, a program designed to be installed on computers in the post-rooms of courier companies’ clients, and to manage the printing of consignment notes and the despatch of courier consignments.

ii)	Courier was the most ambitious of the three and in the event was not completed.  It was intended to enable a courier company to monitor the delivery of packages from collection until the delivery of the invoice.

iii)	Logistics enabled a courier and warehouse business to manage the whereabouts of products in a warehouse and to assemble them into courier shipments.

All these applications were potentially marketable profitably, as Ms Godwin’s evidence confirms.

12.	The Customer program was developed first, by November 1999, essentially by Mr Hinton.  Not long before this, soon after Big River was established in the autumn of 1999, Mr Chawla mentioned his proposals to Mr Hare at a family occasion.  At that time Mr Hare was working in an unrelated computer business, but Mrs Hare was involved with designing a brochure for Big River.  Mr Chawla remembers the idea for the Courier program as coming from himself, while Mr Hare says that it was his idea.  Mr Hinton’s evidence, which I accept, is that he and Mr Chawla had discussed a complete software package for Big River to develop before Mr Hare became involved, and that they had first approached a different programmer for the purpose but had not gone ahead with him.  At the same time I accept that Mr Hare was instrumental in formulating the detail of many of the features the software would need to have.  Certainly Mr Hinton did not have the time or the skills to develop the software on his own, and it quickly became a project on which Mr Hare worked after leaving his existing job in October 1999.

13.	The first step was a written proposal for the development of the Courier software, prepared by Mr Hare on 15 November 1999.  The report divided the development into four phases, all to be completed within a total period of 36 weeks, though it was expressly acknowledged that it was not possible to guarantee deadlines.  A passage in section 9 of the report (at page 9 of Bundle C) said :  ‘There is a need for a minimum of three sales to be made immediately Phase 1 is completed to fund the following two phases of development.’  For this Big River would pay Black Box a development fee of £15,000 for Phase 1, plus fees on each sale to a customer and ongoing monthly support fees.

14.	Big River accepted Mr Hare’s proposals subject to some amendments, and on 10 December 1999 a letter of agreement was signed on behalf of both companies.  The amendments included a revised timetable (13 weeks for Phase 1 beginning on 13 December 1999) and a timetable for the development fee (half on 13 December, half on ‘sign off of Phase 1 on or around 17 March 2000’).  If Phase 1 were never delivered the initial sum of £7,500 would be wholly refundable.  The agreement included a sales forecast of three sales in each of the first four quarters, starting from 13 December 1999.

15.	The timetable proved over-optimistic, largely because efforts were diverted towards Logistics.  Mr Hinton says that in about January 2000 Mr Chawla came back from a meeting with Sprint, saying that Sprint had expressed interest in a new logistic system, though they also remained interested in Courier.  Mr Hare and Mr Hinton were both reluctant and thought that it would not be possible to develop Logistics in the six-month period envisaged by Mr Chawla, but they both agreed to go ahead with it.  On 21 January 2000 Mr Hare prepared a written report headed Systems Requirement for what was then called by the codename Project Montecristo.  This was superseded by a second version on 14 February 2000, also prepared by Mr Hare, now under the title world-trak/logistics.

16.	To begin with there were no terms agreed for Big River to pay Mr Hare or Black Box to develop the Logistics software.  Instead payments were made more or less according to the timetable agreed for payments for Courier, with £7,500 paid in December 1999, a further £3,750 on 29 February 2000, and the balance of £3,750 paid in March, but with Phase 1 of Courier not delivered.  This meant that neither Big River nor Black Box was receiving any of the fees expected on sales of the Courier program or monthly support fees.

17.	Mr Hare soon found this lack of income worrying.  By April 2000 he was approaching his bank for a loan in the sum of £20,000 to be made to Black Box, explaining that the company might be able to sell the Logistics software for about that sum.  He also considered applying for a personal loan, but his wife would not agree to mortgage their house, the only substantial asset they could offer as security.

18.	The details of what happened next are disputed.  Mr Hare’s evidence is that he asked Mr Chawla and Mr Hinton for a meeting, and told them at the meeting (on a hot evening at the end of April) that he had no alternative but to abandon the project, refund the investment made by Big River, and look for work elsewhere.  No such meeting or threat is mentioned in Mr Chawla’s witness statement, and in cross-examination he said that he had no recollection of a meeting containing such a threat.  Mr Hinton wrote in his statement of a meeting in about May 2000 at Big River’s offices in Teddington, and said that at that meeting Mr Hare had threatened to leave.  In cross-examination he was not sure of the date of the meeting but was clear that the threat had been made at a meeting, and that this had led to a discussion about the ownership of the software, with Mr Chawla and Mr Hinton being understandably concerned that the software belonged at that time either to Mr Hare personally or to Black Box.  I prefer Mr Hinton’s evidence on this point to Mr Chawla’s.  It is not necessary to decide whether an explicit threat of this kind was made at a meeting attended by Mr Chawla and, if so, when, but I am satisfied that Mr Chawla knew by May 2000 that Mr Hare was having financial difficulties, that he might not be able to afford to continue with the project, and that the ownership of the software rights had become a live issue.

19.	What is clear is that on 24 April 2000 Mr Chawla prepared a business plan in which he suggested to Mr Hare that the businesses of their two companies would be merged into a new company, and that Black Box would sell the Logistics software to the new company for £10,000 plus one third of the existing Big River business.  Mr Hare rejected this.  For one reason or another he did not want to be a co-director of the new company.  Instead he applied to his bank for a personal loan, and on 6 June 2000 he duly received a loan of £17,500.

20.	Whatever the detail of meetings may have been, changes in the business relationship were implemented during May and June 2000.  Mr Chawla and Mr Hare were both thinking seriously about the ownership of the software, and on 25 May 2000 they had a meeting with solicitors Collyer-Bristow on the subject, as is evidenced by an exchange of e-mails with the company accountant Mr Andrew Passer on the following day.  By the end of May Mr Hare had told Mr Chawla that he was running late with the software development.  On 1 June 2000 Mr Hinton came to the conclusion that it would be best for him to join Mr Hare in the development.  On 5 June 2000 he met Mr Hare at a project meeting, which Mr Chawla could not attend, and for which Mr Hare made a written minute for him.  The minute records, amongst several other points, that Mr Hinton should start to work for Black Box immediately to help on the development of Logistics, and that Black Box would take on one or two other contractors for some weeks to work on Courier.  The minute continues :  ‘[Mr Hare] will advise all parties before proceeding due to the shared cost implications to Big River and Black Box.’

21.	The words ‘shared cost implications’ in that minute referred to a proposal for Big River and Black Box to bear the development costs of the software in equal shares.  Mr Chawla says that this was agreed at a meeting between him and Mr Hare on an evening in June 2000, on the same day (he believes) as the minuted meeting held earlier in the day, at his flat in Teddington.  He says that he first presented Mr Hare with a choice, either to repay Big River’s investment or to have the software owned equally between the two companies.  He goes on to say that they agreed the latter on the basis that in addition all the development costs would be shared equally between the two companies.  Mr Hare claimed that the shared ownership and shared cost implications applied only to Courier, not Logistics.  His explanation was that Big River’s added financial input and its share of development costs made it only fair that Big River would have a share of the rights in Courier.  The shares were half and half.  But in my judgment this was another instance of Mr Hare adjusting his evidence to suit his case on the ownership of rights in Logistics.  Certainly costs were, after this time, shared between the two companies in relation to Logistics as well as Courier, and I find that it was agreed to share ownership of both programs.

22.	It appears to me possible that this agreement was reached before, rather than after, the minuted meeting of 5 June 2000 because of the reference to shared cost implications in that minute.  The almost casual form of that reference suggests that the sharing of costs was already understood between the parties.  The more likely alternative is that the agreement was reached shortly after the minuted meeting took place, as Mr Chawla says, but before the minute was written up.  Be that as it may, I find that it was agreed that the income generated from the software, and also the development costs, would be shared equally by the two companies.  No distinction was made between Logistics and Courier.

23.	At about the same time Mr Chawla realised that Big River needed a further injection of capital and suggested to Mr Hinton that they should each make a further contribution of about £30,000 to the company.  Mr Hinton declined and, in the event, left the company, resigning his directorship in June or July 2000.  After Mr Hinton’s departure, as Mr Hare saw it, Mr Chawla was running an IT consultancy without any IT skills.  As a result Black Box undertook all of Big River’s IT work in return for half of Big River’s profit on that work.  Over the next months Black Box made payments to contractors and other suppliers in connection with the software development, and invoiced half of these amounts to Big River as part of the cost-sharing agreement.  At the same time Big River invoiced Black Box for half of its development costs.  In fact Big River also paid directly some of the invoices addressed to Black Box.  It also accounted to Black Box for half of the income from IT services.

The making of the loan

24.	This account of the business relationship has perhaps been overly detailed.  But it is the background against which I need to evaluate the evidence about the making of the loan which is the main subject matter of the action, and the comparatively few (but important) matters which are in issue.  The bare facts are not disputed, namely that four sums (two of £20,000 each, followed by two of £4,000 each) were paid from a personal account held in the names of Mr Chawla and his wife to a personal account held in the names of Mr Hare and his wife.  The payments were received on 2 August, 25 September, 31 October and 8 December 2000 and debited against Mr and Mrs Chawla’s account a few days later in each case.

25.	Mr Chawla’s case is that the loan was agreed at a personal meeting in September 2000, and that it would be made in four instalments.  He says that Mr Hare approached him for the loan and explained that because of a shortage of money he and Susan had had to postpone some intended improvements to their house.  Mr Chawla also knew that Mr Hare needed money to continue working on the software.  But the loan was a personal one to Mr Hare, not to Black Box, and not limited to either of the purposes mentioned.  As he wrote in paragraph 48 of his witness statement, ‘I was therefore aware that by using the loan to fund the refurbishment of the house, [Mr Hare] would be able to continue to develop software programs as this financial concern had been resolved.  I was of course aware that, once I had given the cheques to [Mr Hare], it was really out of my hands what [Mr Hare] would use the money for.’  Interest was agreed at the rate of 8 per cent.  Interest would be payable on the loan from the outset in monthly instalments.  No fixed date was set for repayment of principal.  None of these terms was put in writing.

26.	Mr Hare does not dispute that he received £40,000 as a loan.  The evidence of Mr Chawla’s brother Neil and of their father Mr Mohan Chawla was that on two separate occasions Mr Hare had acknowledged that he owed Mr Chawla money and that he fully intended to repay it.  On the other hand Mr Hare maintains that he would never have asked Mr Chawla for a loan, and that the loan was a business loan made at the suggestion of Mr Chawla, expressly to fund the equal share of business expenses for which Black Box was liable, and to enable Mr Hare to continue working in business with Mr Chawla.  He says that the loan was not made for the purpose of improvements to the house, and Mrs Hare backs this up with evidence (which I accept) that no improvements were carried out at the property until August 2001 and that, when they were, they were paid for with the proceeds of an insurance claim and a maturing savings plan of her own.  Crucially Mr Hare claims that the loan was not agreed to be repayable on demand.  He says that he would never have agreed to such a term, and that he and his wife had expressly told Mr Chawla that they would not put their house at risk.

27.	Specifically he claims that ‘the terms of the loan meant that repayment was linked to sales revenue generated by [Mr Chawla and Big River].’  This became refined as a claim that the loan was made subject to the express condition that it was repayable only out of future exploitation of the Logistics and Courier software.  Mr Hare also says that the loan consisted of £40,000 only.  His witness statement made no mention of the two later payments of £4,000 each, and he gave no explanation of them in his oral evidence.  He did not claim that they were gifts or that they had been made for any other purpose.  There is no evidence of any other comparable payments from the Chawlas to the Hares.

28.	In support of these points Mr Hare points out that the whole of the first sum of £20,000 was almost immediately paid by him to Black Box.  He also points out that he paid £12,000 to Black Box within days of the receipt of the second payment of £20,000, and that the remaining sum of £8,000 was used to discharge or reduce a personal overdraft which had been run up in the meantime.  Those payments were indeed made.  Mr Chawla does not dispute them but says that Mr Hare was under no obligation to use the money in that way.

29.	During December 2000 Mr Hare also borrowed two further sums of £20,000 each from the Woolwich Building Society and National Westminster Bank Plc.
Background to the compromise

30.	In the months after December 2000 work continued on developing the Logistics and Courier software.  There were commitments to Sprint, including a contract on 28 May 2001 for Big River to provide ongoing development and support for Logistics.  And yet the software was not complete.  From 26 June 2001 Big River paid Mr Hare £1,150 a week for seven weeks in order to enable him to complete it.  (Mr Chawla claims that this is the time when he knew that Mr Hare was in financial difficulties, but I have said already that I prefer Mr Hinton’s evidence that he knew this, in principle at least, about a year earlier.)  The software was indeed duly delivered to Sprint in stages during 2001.  At this stage the parties reaffirmed that the income and expenses of the Logistics software would be shared equally between Big River and Black Box.

31.	The development of the Logistics software had evidently taken far longer than the parties had originally hoped or expected, and it had impeded the development of Courier (as Mr Hinton and Mr Hare had predicted).  It had involved expenditure by Black Box, largely in the form of fees to contractors engaged on Courier, or to a recruitment agency called MSB International Limited (which I shall need to mention again later).  Half of this was reimbursed or due to be reimbursed by Big River.  Big River had incurred expenses as well, including paying some of the fees of MSB International Limited directly on behalf of Black Box.  Big River was also receiving fees from Sprint and other customers and paying half of those fees to Black Box.   Not all of these payments were actually made, giving rise to inter-company debts.  Mr Hare accepts that a net debt was owed by Black Box to Big River.

32.	In addition Mr Hare had not paid any interest on the loan from Mr Chawla, and Mr Chawla had not demanded repayment of the principal.  By July 2001, however, the Courier program had not been completed, and it had become apparent that it was not going to be completed.  As Mr Hare puts it in paragraph 20 of his witness statement :  ‘. . . by this time [July 2001] we had laid off the contractor who was writing the Courier product and withdrawn the product from sale because of unfinished and unsatisfactory work.  We had run out of money.’  The only relevant sources of further income, apart from the Sprint contracts, were possible sales of Logistics packages to other customers, and Mr Chawla was finding them hard to come by.  Mr Hare took on other work, unrelated to computer software.

33.	By the end of October 2001 Mr Chawla was writing e-mails to Mr Hare summarising the indebtedness.  An e-mail of 30 October 2001 (page 80 of Bundle C) listed what he called the personal loan in the sum of £45,000 (a figure which both parties now say was inaccurate, though for different reasons) plus inter-company indebtedness taking the total to more than £86,000.  The same e-mail mentioned a further sum of £12,000 odd owed to MSB.  Another e-mail of the same day (page 83) claimed that Big River had made payments amounting to more than £90,000 to Black Box between February 2000 and June 2001.  (I take it that these sums were Black Box’s share of the fees for IT work unconnected with Logistics.)  It went on, ‘If we’d had the product we probably could have made it!’  In other words Mr Chawla’s analysis of the situation was that the cause of the difficulty was Mr Hare’s failure to complete the Logistics software earlier, and indeed his failure to complete the Courtier software at all.

34.	Mr Chawla planned a meeting with Mr Hare on 7 November 2001, but in the event the meeting did not take place.  Instead Mr Chawla sent him a two-page memorandum about finances (pages 84–85 of Bundle C).  On the loan, the memorandum stated, ‘Your debt to me.  I need to know how and when you propose to pay this, not that I am asking for immediate payment but what are your plans re this?’  In the same vein, Mr Chawla wrote again on 10 December 2001 (pages 87–88), ‘Monies owed to me by you, can you look at this please.  I haven’t had any income for a while now and would appreciate you looking at this issue.  Can you add the amount to your mortgage, I don’t want this to become an issue.’

35.	Mr Hare replied in the evening of the same day (page 87), ‘I am afraid that I do not have sufficient income to increase my mortgage.  I am still close to £10,000 overdrawn (personal account) with only a small income.  The business account is also over-drawn and costing me interest each day until I receive income from Sprint – which I have promised the Bank Manager this week.  As we discussed before, the only means I have to repay you is through sales and support income from Logistics . . .  Lets meet when you come down to talk these issues through – I don’t want this to be an issue either.  Please bring your cheque book to pay my Sprint support invoice.’  Mr Hare points to the phrase ‘as we discussed before’ as reiterating what was agreed at the time of the loan.

36.	The relationship became more strained with an exchange of e-mails on 11 and 12 February 2002.  To begin with Mr Chawla mentioned a number of payments due to Black Box, and asked for invoices for them.  Mr Hare replied (pages 89–90) to the effect that in future he would issue invoices personally, and asked for future payments to himself personally.  ‘Any invoices from you to Black Box will remain unpaid as the company is going into liquidation.  There are simply no funds available.’  Mr Chawla replied on the following day (page 89).  On the subject of the loans he wrote, ‘While we’re on the subject we need to talk about the monies owed to me, I have given you opportunities to discuss it but you never talk about it . . . it’s a serious issue . . .  I want a serious proposal from you about how you are going to pay me back, if you have to sell your house you have to sell your house.  You have debts.  I think you can get the message here I have had enough of the whole thing now.’

37.	A little later, on 19 February 2002, Mr Chawla again referred to the loan in the inaccurate sum of £45,000.  Mr Hare replied, ‘I agree the £45K and would propose to repay it from the Sprint income.’  Mr Chawla replied almost immediately, ‘I would like you now to draw up your repayment proposal, it only seems reasonable that you do this and not give me approximations.’  This prompted Mr Hare to send a spreadsheet on 5 March 2002 showing how he proposed to repay the sum of £45,000.   It showed that the loan would not be repaid in full until July 2006 (pages 96–97 of Bundle C).

38.	I have set out these exchanges at some length in order to make the observation that in none of his e-mails did Mr Hare claim that repayment of the loan was conditional on the receipt of income from the Logistics software.  The closest he came was on 10 December 2001 (see paragraph 35 above), but that falls short of a claim that repayment was conditional.  It merely states Mr Hare’s then current shortage of means to make the repayment.  Similarly on 19 February 2002 (paragraph 37 above) Mr Hare wrote that he ‘would propose’ to make repayments from the Sprint income, but did not claim that this was what Mr Chawla had agreed in the first place.

The compromise agreement

39.	On 14 May 2002 Mr Chawla reiterated the amounts which he claimed to be outstanding, the same sums which were mentioned on 30 October 2001.  This e-mail was timed at about 1.00 pm.  Soon afterwards he and Mr Hare had a meeting in the garden of Mr Hare’s house.  Mr Chawla puts the meeting at Tuesday 14 May 2002 (that is, in the evening of the same day as the most recent e-mail), and claims that he and Mr Hare shook hands on an agreement for Mr Hare to pay £60,000 in settlement of the loan and all inter-company debts.  This seems to have been made up of £45,000 (the inaccurate sum of the original loan) and about £15,000 (some but not all of the claimed inter-company debt).  

40.	Mr Hare’s attitude to this meeting was different to Mr Chawla’s.  He wrote an e-mail on 15 May 2002 timed at 00.13 (that is, just after midnight of the evening during which Mr Chawla puts the meeting, but not mentioning it), suggesting that they go through the details of what each side paid to get to the difference (which I take to mean the net inter-company debt), and suggesting a meeting in the following week.  The following morning he wrote again to say that he would spend the day going through the invoices, and that he could not simply agree to figures of £15,000 odd without knowing in detail what this was for.  These messages suggest that Mr Hare regarded the meeting earlier as having been inconclusive.

41.	For his part Mr Chawla followed up the meeting with an e-mail on 17 May 2002 :  ‘A few things I would like to get agreement/progress on please.  (1) Do we have agreement on the final figure owed to me from our meeting on Tues? . . .’  He went on to say that he had discovered that First Direct’s rate of interest for a loan of this size was 4.75 per cent for a secured loan over five years, and asked, ‘Date of commencement of loan shall be from Jan 2001 correct?’  There was no reply, and Mr Chawla wrote again on 21 May 2002, reminding Mr Hare that a week had passed since the meeting.  Mr Hare did reply to that in an e-mail written later that evening, ‘I agree in principle to your offer which reduces your original debt reclaim and I will prepare a new spreadsheet which reflects our discussion.’

42.	Mr Hare disputes the date of the compromise meeting, and I have mentioned that his two e-mails of 15 May 2002 give the impression that nothing significant had happened earlier, in other words that the meeting had been inconclusive.  But there is no evidence of any meeting between the two men on any other date in mid or late May, and I accept Mr Chawla’s evidence of the date.  In any event Mr Hare does not dispute that he shook hands on an agreement made at a meeting in May at his house.  His case is that this agreement also was subject to the condition that the agreed debt would be payable only from income derived from the Logistics software.  It is consistent with that claim that Mr Hare next prepared further spreadsheets showing the amount of the debt at £60,000 (or thereabouts), interest at 4.75 per cent per year, and the sources of income from which the repayments would be made.  Those sources included a sum for the sale of software to a Mr Mark Leyshon which was then expected, and which would fund the first tranche of repayment in June 2002.  Of these e-mails, the first two were sent on 28 May 2002 showing repayment of the debt by August 2007, a period of more than five years.

43.	Mr Chawla’s response did not come until 1 July 2002, rejecting the schedule of repayments and including (in some cases repeating) many other complaints of Mr Hare not having paid his debts.  Mr Hare protested late on 2 July 2002 that, having agreed figures almost six weeks earlier, and having later sent his proposal, he had assumed that Mr Chawla’s lack of response meant that he had accepted that proposal.  He went on to write that the first payment in June had depended on the sale to Mr Leyshon, and as Mr Chawla had not made that sale the payment was ‘obviously not possible’.  Mr Chawla’s reply to that came almost immediately that night, after midnight (page 114) :  ‘I don’t think any of that is relevant really.  I have had time to evaluate my position financially and this debt must be called in.  We agreed amounts yes – I did not agree repayment plan – and even if you thought I had you did not make a payment anyway.  The repayment of this money is not dependent on what sales I make!!’

44.	On 10 July 2002 Mr Hare tried another spreadsheet, this one reverting to a loan in the sum of £45,000 (omitting the inter-company debt altogether).  On 15 July 2002 Mr Chawla wrote that he was now in no mood to compromise and would put the matter in the hands of solicitors.  He explained his position forcefully and at some length.

45.	Relations deteriorated further with a dispute as to the ownership of the rights to the Logistics software.  Mr Mackintosh is a director of Sprint, and indeed was one of the original founders of that company with Mr Chawla.  His evidence was that the Logistics program remained crucial to Sprint’s business, and this was not in dispute.  For the same reason the software remains a valuable source of income, taking the form of fees from Sprint for using it and for support services provided in respect of it.  The source code for Logistics was sited on servers belonging to Black Box, and not on any computer belonging to Big River.  In practical terms it was therefore under the control of Black Box, even though Big River claimed property in one half of it.  Mr Hare took the step of approaching Sprint and soon made arrangements for himself, through a new company called Courier Software Developers Limited, to provide Sprint with the continuing services associated with Logistics.

Conclusions on the loan

46.	The first basis of Mr Chawla’s claim is the compromise agreement made in May 2002, but I shall start chronologically with the original loan.

47.	I find that the purpose of the loan was mixed.  I accept Mr and Mrs Hare’s evidence that the loan was not made for the purpose of funding improvements to their house.  On the other hand I do not accept that it was made solely for the purpose of funding Black Box’s contributions to the shared business expenses.  If that had been the case, the loan would have been made to Black Box, in common with other payments made in connection with the business.  In my opinion a number of motivating factors were in play.  By September 2000 Mr Hare was short of money, he had been sceptical about the Logistics project from the outset and might not complete it (as I find Mr Chawla also realised), he and Mr Chawla were aware that until the Logistics system was ready it could not produce any income (and the same could be said of Courier), Mr Hinton had left, so that Mr Hare’s expertise and continued commitment were essential to the project.  Part of the motive for the loan, so far as Mr Chawla was concerned, was to enable Mr Hare to continue working on the software development.  Mr Chawla effectively confirms this in the passage from his witness statement which I have quoted in paragraph 25 above.

48.	But I find that there was no term agreed between Mr Chawla and Mr Hare that the loan was repayable only out of the income derived from the Logistics software.  There are two strong indicators pointing to that conclusion.

49.	One such indicator is to be found in the contents of e-mails passing between Mr Chawla and Mr Hare in the period after the making of the loan and before the compromise.  Or rather it is to be found in what is lacking from those e-mails.  During that period there was no protestation from Mr Hare pointing out that the loan was repayable only from income derived from the software.  There were several opportunities at which it would have been natural, and indeed essential, for Mr Hare to have reminded Mr Chawla of this condition, if it existed.  I have summarised those exchanges in paragraphs 33 to 37 above and need not repeat them.

50.	A second indicator is a spreadsheet, prepared during November 2000 at the request of both parties by Mr Andrew Passer, the accountant to both Big River and Black Box.  This is at page 267 of Bundle C.  It is headed Big River/Black Box Software, Calculation of Interest Due on Loan.  Under that it has seven columns going down the page :  the first column on the left is a list of dates, namely the first of each month from August 2000 to March 2003;  the second column is headed Amount Brought Forward, starting with £20,000 in the first row at 1 August 2000;  third is Interest Charged, with £133.33 in the first row (one month’s interest on £20,000 at 8 per cent);  fourth is Amount Due, the total of the sums in the second and third columns;  fifth is Amount Repaid, which is in each case the same as the interest charged;   sixth is Extra Borrowed (to which I shall return);  seventh is Amount Carried Forward, produced by subtracting the amount repaid from the amount due and adding anything extra borrowed.  The amount in the seventh column then becomes the amount in the first column for the next month, and so on down the page.  The column headed Extra Borrowed has only three entries, namely £20,000 for September, £4,000 for October and £4,000 for December.  The column showing the amounts repaid starts at £133.33 for August, rising by steps as the extra borrowed amounts become added to the principal until the amounts brought forward and carried forward settle at £48,000.  Then the amounts for interest charged and amount repaid both stabilise at £320 per month.  Each row from 2001 onwards is identical.  The amount carried forward remains at £48,000 indefinitely.

51.	This spreadsheet is relied on by both parties.  Mr Chawla points out that it refers to the two sums of £4,000 as additional borrowings, and also that it shows income to be payable monthly from the beginning.  By contrast Mr Hare says in paragraph 18 of his witness statement : −

‘It was further agreed, and demonstrated by a spreadsheet prepared by our accountant, that if no monthly repayment was made the interest would be rolled up in the debt and carried forward.  In other words, it was understood from the outset that there would be no initial repayments as there would not be enough profit to give me both an income and allow repayments to begin.’

52.	The problem with that statement is that the spreadsheet at page 267 of Bundle C does not demonstrate what Mr Hare says it does.  It shows payments matching interest as it falls due month by month, and no interest is shown rolled up in the debt or carried forward.  The only sums carried forward are the sums of outstanding principal.  Mr Hare is correct to the extent that the spreadsheet shows no repayments of principal, but he is wrong to suggest that it reveals an understanding that there would be no initial payments of interest.  It is clear to me that the spreadsheet does not link payments to income from the software.  It does not mention that income at all.

53.	In cross-examination, when faced with the two sums of £4,000 listed on the spreadsheet as extra borrowings, and the absence of any link between software income and loan repayment, Mr Hare pointed out for the first time that the spreadsheet was on a computer at Big River’s office, and even that there may have been another spreadsheet.  But no other spreadsheet of Mr Passer’s from this date has been disclosed.  I am satisfied that this is the spreadsheet which Mr Passer prepared at the time.  Mr Hare even relied on it himself in his closing speech.  Unfortunately it supports Mr Chawla’s case that the loan was in the sum of £48,000, it was not conditional on income from the software, and that interest was payable on it from the outset.

54.	But it is also a question of oral evidence, and as between Mr Chawla’s and Mr Hare’s evidence on this point, having seen and heard them both in the witness box, I prefer Mr Chawla’s.  He said that he would never have agreed a condition making the loan repayable only out of the software income, and I believe him.  I do not overlook that Mr Hare also said that he would not have agreed to accept a loan which was repayable on demand, because that would have put his house at risk.   But that is unrealistic.  It is a necessary term of any loan that it will be repaid, and in general all unsecured borrowers are at risk of having to use what resources are at their disposal to discharge their debts.  By the same token I find that Mr Chawla would not have agreed, and the parties did not agree, to make repayment of the loan conditional on something which essentially lay within the power of Mr Hare, as the person who had the expertise to complete the software development and had, by the time the loan came to be made, made progress towards completion.  No doubt all parties hoped and even expected the Logistics and the Courier software to generate substantial income and profits in due course, and that this would have been the primary source to enable the loan to be repaid.  But that is a far cry from the existence of that income being a formal condition for repayment.

55.	Mr Hare has forcefully relied on the argument that he was never in a position to repay the loan on demand, and that he always relied on the prospect of the software income to enable him to repay it.  He points to profit forecasts made in the early days (April 2000) by Mr Chawla (pages 41A to 41AM in Bundle C), and claims that it was a failure of Mr Chawla’s that those forecasts were not met.  But these forecasts cannot be regarded as contractual obligations for Mr Chawla or Big River to perform, such that failure to achieve the profits discharges the obligation to repay.  They were forecasts and nothing more, and indeed the business plan to which the forecasts were annexed itself stated (at page 39) that ‘sales forecast figures are always a “best guess”.’

56.	Mr Hare also points out, rightly, that he was sceptical from the outset about taking on the commitment to develop the Logistics software, and he claims too that he was reluctant to accept Mr Chawla’s offer of a loan.  I do not accept that latter claim, seeing that Mr Hare was evidently prepared to take other commercial loans at the same time.  He too was optimistic that the project would succeed and no doubt hoped that Mr Chawla as his brother-in-law would act leniently towards him if necessary.  But even if I had accepted his reluctance to accept the loan, none of the arguments in the previous paragraph and this one would amount to an effective defence to the claim.  The fact is that, wisely or not, Mr Hare accepted the loan and has had the benefit of it.

57.	I therefore reject Mr Hare’s contention that the original loan was repayable only out of the income from the software.  I am also satisfied that the amount of the loan was £48,000, in other words that the two later sums of £4,000 were paid to Mr Hare as part of the agreement to make him a loan.  Again Mr Passer’s spreadsheet of November 2000 is a clear indication that these sums were additional borrowings, and I accept Mr Chawla’s evidence to the same effect.

58.	It remains to decide whether the loan was repayable on demand.  I do not find that there was an express agreement to that effect, but it is of the essence of a loan that the borrower agrees to repay it, or at least that he agrees to repay it if asked.  Surprisingly perhaps, the ordinary presumption of law is, in the absence of an express term for repayment, that a loan is repayable immediately without any need for a formal demand, though the parties can expressly agree to make it repayable only on demand.  But even if the present loan (being unconditional as I have decided) was not repayable on demand and not repayable immediately, the law will imply a right for the lender to give notice, at a reasonable time, to call for its repayment.  In all the circumstances of the present case it was in my judgment reasonable for Mr Chawla to give such a notice at any time from the beginning of July 2002.  And I find that there was a sufficient notice or demand for repayment in each of Mr Chawla’s e-mails of 1 and 3 July 2002 (page 114 and pages 120–123 of Bundle C), or alternatively his longer e-mail of 15 July 2002 (pages 128–129).  I accept that until this time no formal notice or demand had been made.

59.	Because of my finding that the loan was not conditional on income receipts from the software it is unnecessary for me to order an inquiry as to income derived from the Logistics by Mr Hare’s new company Courier Software Limited.

Conclusions on the compromise

60.	Mr Chawla’s case here is that he, acting for this purpose also on behalf of Big River, met Mr Hare at his house and agreed to compromise the claims in respect of the personal loan and the inter-company debt for the sum of £60,000.  That sum was apparently arrived at by taking the personal loan in the inaccurate sum of £45,000, adding two items of inter-company debt amounting to £15,964.47, writing off further inter-company debt, and rounding it down.  He and Mr Hare shook hands.  Interest remained to be agreed, but after checking with his bank he suggested a rate of 4.75 per cent per year (even though that was appropriate for a secured debt for a five-year period), and in the event Mr Hare did not dispute that rate.  Mr Chawla also suggested that the debt, and therefore presumably the interest, should run from January 2001.  In the final form of the pleadings he claims that the sum was agreed to be repaid within a reasonable time, or that a reasonable period for payment should be implied.

61.	Mr Hare admits that he shook hands, but claims that this agreement too was on terms that repayments would be made only from income from Logistics.  I have mentioned that there are other respects in which Mr Hare does not seem to have regarded the meeting in the same way as Mr Chawla.  His e-mails immediately after the meeting are in terms of checking the accuracy of the inter-company debt (but apparently not the personal loan), and soon afterwards generating further spreadsheets identifying sources of income from which repayments could be made over a five-year period.  The starting point for these calculations was not the round figure of £60,000 or even £45,000 plus the inter-company debt, but rather the two original sums of £20,000, extra borrowing in the sum of £5,000, inter-company debt in the sum of £15,964.45 plus interest dating back to August 2000.  Repayments would come from Sprint income and from Mr Leyshon’s contract.

62.	It is more difficult to evaluate Mr Hare’s claim for a conditional contract in relation to this compromise than it is in relation to the original loan.  There is less exchange of e-mails, and there is no input from Mr Passer.  The context was also different for the two parties.  By May 2002 Mr Chawla saw the Worldtrak project as a failure, Customer was a mediocre product, Logistics was late and had attracted fewer customers than expected, Courier had been abandoned, Big River had spent tens of thousands of pounds on software development, Black Box had not paid all of its agreed share of the cost of that development and now seemed to be insolvent, and on top of that Mr Hare had not even paid any interest on the personal loan since its inception more than 21 months before, let alone any of the principal.  He regarded Mr Hare as the party at fault in most of this.  What he wanted at the time of the May meeting was no more and no less than the repayment of the original loan plus whatever could be recovered of the Black Box debt as well.

63.	Mr Hare by contrast felt that he had been cajoled into the Logistics project against his own better judgment, side-lining the Courier proposal in the process, he had had to make significant commercial borrowing in order to finance himself during the process, and he had moved out of his house in order to obtain an income by letting it.  As he saw it, the only way to discharge Mr Chawla’s loan was to use Black Box’s share of the Sprint or other Logistics income.  A sale of the house was virtually unthinkable.  What Mr Hare wanted was for Mr Chawla to accept a programme of repayments, together if possible with some overall reduction in the debt.

64.	The indications are that they each regarded the handshake agreement as having achieved broadly what they wanted.  Indeed, if Mr Chawla is right that there were no conditions at all attached to the compromise, it was favourable to him, since it turned a debt in the sum of £48,000 (or £45,000 as he thought at the time) into £60,000, the uplift representing debts owed by a company which was probably insolvent, perhaps hopelessly so.

65.	I do not disregard the evidence of Mr Mohan Chawla and Mr Neil Chawla, confirming that Mr Hare acknowledged the debt in principle after the date of the meeting in May 2002 (though neither of them mentions any specific sum of money) and that he intended to repay it if he could.  Nor do I disregard the astonishing and unhelpful fact that Mr Hare’s witness statement passed over the May meeting in silence, as if it had not taken place at all.  But the question which I have to answer is whether I am persuaded, on the balance of probabilities, that a concluded and unconditional agreement was reached at that meeting.  And in the end I am not so persuaded.  I find that the source of funds for Mr Hare to make repayments was a significant issue at the meeting, and that Mr Hare would not have agreed, and did not agree, to increase his personal debt to £60,000 unconditionally.  The essence of the agreement was for the personal debt to be increased to £60,000 at a rate of interest to be agreed, and with a revised programme of repayments also to be agreed.  I accept that Mr Chawla would not have agreed to allow repayments to be made conditional in the way Mr Hare has claimed, but I find that he did leave it open for Mr Hare to put forward some other, no doubt shorter, repayment schedule as the price for including part of the inter-company debt.

66.	This conclusion is consistent with the subsequent exchange of e-mails recorded in paragraphs 41 to 44 above.  Mr Hare wrote on 21 May 2002, ‘. . . I will prepare a new spread sheet which reflects our discussion,’ and Mr Chawla did not then reply to the effect that they had agreed to have no more delay in repayments.  As Mr Hare later commented on 2 July 2002, six weeks had then passed since his latest proposal of 28 May 2002 without any complaint or other comment from Mr Chawla.  In the event therefore the rate of interest was agreed, but the programme of repayments was not.  I am therefore not satisfied that a concluded and unconditional agreement was reached between the parties at the meeting in May 2002, and the claim based on that compromise therefore fails.

67.	In the result I find that Mr Hare is indebted to Mr Chawla in the aggregate sum of £48,000.  Interest is due on that sum at 8 per cent per year from the dates on which the four payments were received by Mr Hare, as listed in the Re-amended Particulars of Claim.  One of those dates is admittedly inaccurate, but Miss Smith accepted on behalf of Mr Chawla that his claim stood in the terms pleaded.  I shall make an order in those terms.

Part 20 Counterclaim

68.	I now turn again to the counterclaim.  Prior to a major amendment which I shall mention, the relief claimed by Mr Hare and Black Box consisted of the following :  (1) an injunction restraining Mr Chawla from making threats of violence and from contacting Mr Hare and his family;  (2) an injunction restraining the claimants from (I paraphrase) telling Mr Hare’s suppliers and customers that his use of the software was illegal;  (3) payment of Mr Hare’s costs;  (4) an indemnity in respect of a debt in the sum of £12,000 owed by Black Box to MSB International Limited;  (5) a claim by Black Box for £17,343.09 as Big River’s half share of certain costs incurred in developing the software;  and (6) a claim by Black Box against Big River for damages in the sum of £83,333, essentially for failing to meet certain sales forecasts.

69.	During 2004 the claimants and indeed Mr Hare discovered that Black Box had been struck off the register on 11 February 2003 and soon afterwards dissolved.  Mr Hare successfully applied for it to be restored to the register, the date of restoration being 15 December 2004.  On 28 January 2005 the claimants prepared their list of issues which they wished to have tried, and in that document they explained the dissolution of Black Box, their understanding that it had recently been restored to the register (but they had not then seen a copy of the order), and their belief that it was insolvent.  They went on to offer to withdraw their claims against Black Box with no order as to costs if Black Box would also withdraw its counterclaims against the claimants.  Effectively that offer was accepted.  On 3 February 2005 Master Bragge gave the claimants permission to re-amend the Particulars of Claim in a form which deleted all claims against Black Box and deleted Big River as a claimant.  The costs of this amendment were reserved to me as the trial judge.  The master gave the defendants permission to file and serve an amended Defence and Counterclaim.

70.	The Re-amended Particulars of Claim were served in due course, and Mr Hare served a Re-amended Defence and Counterclaim in which all claims by Black Box and against Big River were removed.  They were not, however, simply deleted, but amended so as to be claims by Mr Hare against Mr Chawla.  The items of relief as finally sought, therefore (adhering to the same numbering as appears in paragraph 68 above), are claims by Mr Hare against Mr Chawla personally for the following :  (1) a declaration that the software belongs to Mr Hare personally (this entirely replaces the injunction relating to threats of violence);  (2) the same injunction as before restraining allegations of illegality;  (3) Mr Hare’s costs;  (4) an indemnity for Black Box’s debt owed to MSB International Limited;  (5) Big River’s share of development costs;  and (6) damages for not meeting the sales forecasts.

71.	Obviously some of those claims, in that final form as between Mr Hare and Mr Chawla personally, are unsustainable.  During the hearing Mr Hare accepted before me that the last three of these claims cannot be maintained as claims by Mr Hare personally.  Even assuming that they were originally good claims by Black Box, as to which I make no finding at all, they cannot be pursued by Mr Hare.  Black Box has been restored to the register on Mr Hare’s application, but that does not affect the matter.  The Counterclaim now stands amended so as not to include claims by Black Box, or against Big River, and that has occurred because the defendants accepted the claimants’ proposal made in January 2005 to drop the claims against Black Box if the claims against Big River were dropped as well.  That is the effect of the master’s order of 3 February 2005 and the subsequent amendments, and all this occurred after Black Box was restored to the register.  I shall therefore dismiss those last three items of the Counterclaim.

72.	The claim for an injunction has not been formally abandoned, but it was not pressed before me.  Mr Hare does not claim that Mr Chawla or Big River or their current solicitors have been repeating the acts complained of.  I shall therefore dismiss this claim too.

73.	The claim for costs cannot be maintained as a claim for damages, and costs will be dealt with in the usual way after this judgment has been handed down.

74.	The claim for a declaration as to the ownership of the Logistics software is different, but for other reasons I do not find that I can properly determine it.  Before the major amendments of the pleadings in early 2005 the possible issues would have been (1) whether legal title to the software belonged to Mr Hare as its original developer, (2) whether, because he was a director of Black Box at the relevant time but not its employee, the beneficial ownership was in Black Box, and (3) whether or not there was an agreement by which the beneficial ownership came to be shared between Black Box and Big River.  (There has been no written assignment such as to satisfy section 90(3) of the Copyright, Designs and Patents Act 1988.)  However, the effect of the amendments pursuant to the master’s order of 3 February 2005 was to remove any claim by Big River to a share in the Logistics software.  Miss Smith confirmed this to me during the hearing (even though she had earlier opened the case on the footing that the ownership of the software was a live issue).  The only possible owners are therefore Mr Hare himself and his company Black Box.  But Black Box is not separately represented before me, and there is no other party with an interest in promoting Black Box’s claim or in opposing Mr Hare’s claim to personal ownership himself.  In formal terms as well, the pleadings no longer include a claim to ownership by Black Box.

75.	I regret therefore that I cannot resolve the question of ownership between Mr Hare and Black Box in these proceedings, and I shall make no order on this part of the counterclaim.  What I can do is to record here that Big River, by the re-amended pleadings in the action, no longer maintains a claim to any share in the Logistics software, and that Mr Chawla’s counsel has explicitly confirmed in the course of the hearing that Big River has no such claim.  (There is no question of Mr Chawla personally having a claim to ownership.)  It may be that a recital to this effect can be included in the order which I shall make, after further submissions from the parties as to detail.  I understand that this may assist Mr Hare in exploiting the software, not only with Sprint but possibly also with other potential customers.

76.	I shall hear the parties on questions of costs.