Costs v sales agent? Not just yet, judge tells Retro Computers Ltd
ZX Spectrum-themed game console firm didn't quite win court order, either
ZX Spectrum Vega firm Retro Computers Ltd has had its attempt to force former sales agent Nick Cooper to hand over extra information in the ongoing court battle between the two postponed today by the London County Court.
RCL had applied for a court order that would have forced Cooper to answer a series of questions designed to make him disclose extra information the company believes he holds about the firm he used to be MD of, Cornerstone Media International. It would also have forced him to identify the sources of payments he passed along to former RCL director Paul Andrews’ company, Andrews UK Ltd.
Cornerstone used to be RCL’s trade sales agent, handling payments and arranging the movements of stock from its manufacturers to distributors and retailers. RCL sued Cornerstone last year, claiming it was improperly withholding payments that should have been passed on. Cooper disputes this and maintains that he paused payments pending the outcome of an intellectual property dispute between RCL’s directors (see below), which, it seemed to him, might change who the monies were rightly owed to.
The proposed order RCL sought was amended today to allow Cooper not to produce the information RCL demanded, on condition he formally explained why. In court he maintained he couldn’t comply with the order for the simple reason that he didn’t have any extra information to hand over. According to Cooper, “All information relating to Cornerstone Media International ... was handed over at the creditors’ meeting.” That meeting occurred when the firm was placed into liquidation.
Paul Emerson of Devereux Chambers, counsel for RCL, accused Cooper of a “blanket lack of co-operation” and “therefore ask[ed] for costs in the application.” Judge Lightman declined to make the order immediately, instead reserving it until the next hearing in the case.
Following the money
Emerson told the court: “We are trying to follow the money ... in the letter we got yesterday they identified a number of payments made; they don’t appear on documents disclosed to date.”
Andrews and fellow former RCL director Chris Smith had written to RCL’s legal team explaining that the monies under dispute at this hearing were for sales of goods unrelated to RCL. A copy of the letter was handed to Judge Lightman this afternoon by Cooper.
The letter also said that Paul Andrews’ name and contact details had been wrongly added to the RCL website and to the company’s Indiegogo (crowdfunding site) page, and made various allegations about police involvement.
The next hearing in RCL v Cornerstone will take place later this year, when the issue of costs will be considered. Last week a £52,000 costs order was awarded against RCL and three of its four directors in unrelated litigation between Andrews and the firm.
What’s this all about, then?
Retro Computers Ltd was set up a few years ago to produce ZX Spectrum-themed gaming consoles, complete with Sir Clive Sinclair’s blessing (and branding). It originally had four directors: Paul Andrews, Chris Smith, David Levy and, corporately, Sinclair Research Ltd (SRL), Sir Clive’s company.
A bitter falling-out between the three human directors in April last year saw Andrews and Smith resign, though both retained their 25 per cent shareholdings in the firm. Smith retained the IP rights to the firmware he had written for the company’s followup Vega+ handheld console – something RCL initially disputed.
Its first product, the Vega, was produced under the original directors. It was a modest success and can be found in shops today. RCL’s second product, the Vega+, was due to enter production last year after the directors split.
The Vega+ has absorbed £513,000 donated by 5,000 individual backers on Indiegogo. Since the funding campaign closed, there has been no sign of the Vega+ entering production, though RCL has repeatedly published updates promising that it will arrive soon. It has missed two self-imposed deadlines over the past year. A number of people asking for refunds claim that RCL’s current management have ignored their requests, though some later did get their money back.
In February this year, the Chancery Division of the High Court ordered RCL and its current directors – Levy, SRL, Suzanne Martin and Janko Mrsic-Flogel – not to strip Andrews and Smith of their shareholding in the firm, something that Levy claimed he could do in lieu of debts he said Andrews and Smith owed. The company also appears not to have paid tens of thousands of pounds in contractually guaranteed donations to Great Ormond Street Hospital for children.