Axa Sun Life Services Plc v Mortgage UK Financial Services Ltd & others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Stanley Burnton,Lord Justice Wilson,Lord Justice Rix |
| Judgment Date | 12 May 2011 |
| Neutral Citation | [2011] EWCA Civ 549,[2011] EWCA Civ 133 |
| Docket Number | Case No: A3/2010/1024,Case No: A3 2010 1024 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 May 2011 |
[2011] EWCA Civ 133
HH Judge Graham Jones (sitting as a Deputy High Court Judge)
Before: Lord Justice Rix
Lord Justice Wilson
and
Lord Justice Stanley Burnton
Case No: A3/2010/1024
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BRISTOL DISTRICT REGISTRY
MERCANTILE LIST
Simon Picken QC and Susanne Muth instructed by Connell Associates appeared for the Appellant in each appeal.
Andrew Spink QC and John Virgo instructed by Farrells appeared for the Respondents Ideal Financial Planning Ltd, Harry Bennett And Associates Ltd, and Harry Edward John Bennett.
Gerard McMeel instructed by Everett, Tomlin, Lloyd & Pratt appeared on behalf of the Respondents Kymin Mortgage Services Ltd, Richard John Hill and Simon John Aston.
The Respondents Campbell Martin Ltd, Brendon Partington and Gary Tibor Hosznyak were not represented.
Hearing dates: 15 & 16 December 2010
Lord Justice Stanley Burnton:
Introduction
This is the appeal of AXA Sun Life Services Plc (to which I shall refer as "AXA") against the orders dated 24 March 2010 made by HH Judge Graham Jones, sitting as a Deputy High Court Judge in the Mercantile Court in Bristol. The orders were made in five claims, on the trial of preliminary issues that were common to each of the claims, and related to the effect of certain provisions in the standard form agreements entered into between AXA and its appointed representatives. The preliminary issues concerned the construction of the contractual provisions and the effect, if any, on them of the Unfair Contract Terms Act 1977 (universally referred to as " UCTA"). The Defendants to AXA's claims are the companies that entered into such agreements and were appointed by them as AXA's authorised representatives and the personal guarantors of the companies' liabilities to AXA.
The Defendant companies in question are Campbell Martin Ltd, Harry Bennett and Associates Ltd, Ideal Financial Planning Ltd and Kymin Mortgage Services Ltd. A fifth claim had been brought against Mortgage UK Financial Services Ltd and its guarantors. The issues in those proceedings are similar to those in the proceedings to which I have referred. Mortgage UK Financial Services Ltd was dissolved on 12 May 2009. AXA's claim against its guarantors was stayed by order dated 15 December 2009 on the surviving personal Defendants undertaking to be bound by the determination of the preliminary issues in the other proceedings. Those Defendants did not, therefore, play any part in the proceedings before the judge, and will be similarly bound by the result of this appeal.
The agreements
I can take the Campbell Martin agreement and AXA's claim against it and its directors as typical. It is dated 31 October 2004, and is entitled "AXA Assurance Adviser Appointment Agreement". Campbell Martin Ltd is defined as "the Adviser". There are three bullet points on the front title page, of which the second states:
"This Agreement contains the terms on which [AXA] appoints the Adviser to act as their agent and provide the Services (as later defined). The Adviser has agreed to accept such appointment."
AXA is referred to in the first person, and the Adviser in the second person. The agreement is signed by the parties on the following pages. There follows a list of contents, in capital letters, giving a heading for each clause of the agreement. For present purposes, the pertinent clauses and headings are: clause 1, "Appointment"; clause 2, "Limits of Authority"; clause 3, "Your obligations"; clause 5, "Commission, Procuration Fees and Charges"; clause 7, "Business Benefits Allowance and Development Allowance"; clause 13, "Term and Termination"; clause 15, "Set Off"; clause 24, "Entire Agreement"; and clause 28, "Definitions".
"Services" are defined in clause 28 as follows:
"making arrangements for or with a view to another person buying (or otherwise bringing about a purchase of) a Product from an AXA Product Provider or a member of the AXA Mortgage Panel or the General Insurance Panel and advising a person on the merits of buying or selling a Product, or exercising any right conferred by a Product".
"AXA Product Providers" are defined in clause 28 as "those companies listed in Schedule 2 as amended from time to time". Those companies are all companies in the AXA Sun Life Group of companies. Clause 1 is, as mentioned above, headed "Appointment". Clause 1.1 is as follows:
"1.1 This Agreement sets out the terms of your appointment as our Appointed Representative (subject to Clause 1.3) and agent (subject to clause 1.4) to provide the Services in relation to such of the Investment Products, Mortgage Products, Protection Products and/or the General Protection Panel Products as are set out in Schedule 5 (your "Appointment"). You agree to provide the Services in the UK from the dates specified in clause 1.4 on the terms of this Agreement. By signing this Agreement you accept the Appointment on those terms. Insofar as, at the Effective Date, you are a party to any Adviser Appointment Agreement (or other agreement appointing you as an Appointed Representative and/or agent of any member of the AXA Group howsoever named) with us or any member of the AXA Group in relation to Investment business, this Agreement shall operate as a variation of that agreement."
"Investment Products", "Mortgage Products", "Protection Products" and "General Insurance Products" are all defined terms. The appointment of the Appointed Representative is by clause 1.3 made subject to the required approvals of and registration with the Financial Services Authority. Clauses 1.8 and 1.9 provide:
"1.8 In the event a Customer seeks a mortgage contract or General Insurance Contract of a type not made available by us under this Agreement, we agree that you may, strictly in accordance with the AXA Compliance Manual, effect introductions to other companies providing such contracts.
1.9. In the event a Customer seeks a Pure Protection Contract of a type not made available by us under this Agreement, we agree that you may, strictly in accordance with the AXA Compliance Manual, effect introductions to other companies providing such contracts, until close of business on 13 January 2005, or such other date as we may notify to you."
Clause 2.1, under the heading "Limits of Authority", provides:
"2.1. Your authority under this Agreement is restricted to providing the Services only in relation to such of the Products provided by AXA Product Providers, the AXA Mortgage Panel, the General Insurance Panel as are specified in Schedule 5 and to providing the Services in accordance with the terms of:
2.1.1 this Agreement;
2.1.2 the FSA Handbook;
2.1.3 the AXA Professional Development Programme;
2.1.4 the AXA Advice Standards;
2.1.5 the AXA Handbook;
2.1.6 the AXA Compliance Manual;
2.1.7 any sales processes, and/or training programmes or instructions provided by AXA in relation to the provision of the Services; and
2.1.8 all applicable laws from time to time in force."
Clause 3, "Your Obligations", includes detailed provisions designed in part to ensure compliance with FSA requirements, but also including the following restrictions:
"3.23 subject to clause 1.8 and clause 1.9, you will not, without limitation, be engaged concerned or interested either directly or indirectly and whether on your own behalf or on behalf of or in association with others and in any capacity whatever in carrying on Investment Business, General Insurance Business, Pure Protection Business or Mortgage Business in competition with us anywhere within the U.K.;
3.24 you will not, without limitation, be appointed as an Appointed Representative by, or carry on Investment Business, Mortgage Business, Pure Protection Business or General Insurance Business as an Appointed Representative for, any other Firm;
3.25 you will not, without limitation, be engaged in any business other than a business we approve in writing;"
Clause 5 provides for the payment of commission on the sale of Products, provided the premium is received, and for the claw back of commission if a customer cancels his purchase of a Product. Clause 5.5 is one of the provisions in issue in these appeals:
"5.5 Any decision that we make on your entitlement to commission under clause 5.1 or upon any calculation by us of Commission due or repayable under this clause 5 shall, save for manifest error, be final and conclusive and binding on you."
Clause 7 incorporates Schedule 4. In paragraph 1.1, AXA undertook to provide an Initial Development Allowance of £77,000 which "must be used for the purposes of developing your business as approved by us", together with 8 laptop computers, portable printers and undefined "Mortgage Solutions", and a Business Benefits Allowance of £43,032, being "the provision of support … to enable you to conduct the Services". Schedule 4 laid down annual commission targets, and provided a formula for repayment in part of the Initial Development Allowance and Business Benefits Allowance if the commission earnings in any year were less...
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