Britannia Steamship Insurance Association Ltd v Ausonia Assicurazioni S.p.A.
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE BROWNE-WILKINSON |
| Judgment Date | 10 April 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0410-1 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 84/0150 |
| Date | 10 April 1984 |
[1984] EWCA Civ J0410-1
Lord Justice Ackner
and
Lord Justice Browne-Wilkinson
84/0150
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
(CIVIL DIVISION)
From: Mr Justice
Hobhouse
(Q.B.D., London)
Royal Courts of Justice,
MR V.V. VEEDER (instructed by Messrs Biddle & Co.) appeared on behalf of the Appellants (Defendants).
MR R.J.L. THOMAS (instructed by Messrs Richards Butler & Co.) appeared on behalf of the Respondents (Plaintiffs).
On 8 July 1983 Mr Justice Hobhouse refused to set aside the service of a writ in Italy made earlier in the year pursuant to an ex parte order made by Mr Justice Parker on 17 December 1981, and it is against that decision that the defendants now appeal.
The plaintiffs are shipowners protecting and indemnity associations and they are known collectively as the London Group of Protecting and Indemnity Associations. The defendants are an Italian insurance company carrying on business in Milan.
The plaintiffs claim against the defendants under two contracts of reinsurance covering the period 20 February 1975 to 20 February 1976 (and that has been conveniently referred to as the 1975 contract) and 20 February 1976 to 20 February 1977 (and that has been known as the 1976 contract). The plaintiffs contended that under these two contracts the defendants had agreed to accept 1% of 100% of the reinsurance of protecting and indemnity risks insured by the plaintiffs.
The jurisdiction to grant leave to serve out of the jurisdiction was based upon the contention, which is accepted by the defendants, that both contracts were, by their terms or by implication, governed by English law within the meaning of Order 11, Rule 1(1)(f)(iii). The central question before Mr Justice Hobhouse was whether the plaintiffs' case was a proper one for service out of the jurisdiction within the meaning of Order 11(4)(2). The essential dispute between the parties was whether or not these two contracts were validly made and therefore binding. The resolution of that issue depended in English law upon whether the contracts were signed by those having ostensible authority and, if not, whether the contracts were ratified by those who had ostensible authority to ratify. It was not disputed before Mr Justice Hobhouse that the proper or putative proper law was English law, and it was further accepted that the apparent authority of an agent and the question of ratification is governed by English law. The proper law of the contract was English law because the contract had its closest and real connection with English law. As has been pointed out by Mr Thomas, this contract was a 1% line on a contract, 65% of which was placed in London.
The plaintiffs' primary case was based upon ostensible authority or ratification (not upon actual authority), which would be governed by English law.
It was not disputed before us that the plaintiffs have a good arguable case. The sole question was therefore: Had the plaintiffs made it "sufficiently to appear to the court that the case was a proper one" for service out of the jurisdiction?
If this appeal is to succeed it must be upon the basis that this decision, which was essentially a matter for the exercise of the discretion of the learned judge, was wrongly arrived at by him. The Abidin Daver (1984) 2 W.L.R. 196, which has been referred to us in the course of this case, stressed yet again the limited grounds on which an appellate court is entitled to interfere with the decision of a judge of first instance who has exercised his discretion in one way or another. Lord 3randon said at page 211:
"It cannot interfere simply because its members consider that they would, if themselves sitting at first instance, have reached a different conclusion. It can only interfere in three cases: (1) where the judge has misdirected himself with regard to the principles in accordance with which his discretion has to be exercised; (2) where the judge, in exercising his discretion, has taken into account matters which he ought not to have done or failed to take into account matters which he ought to have done; or (3) where his decision is plainly wrong".
The learned judge had the advantage of having before him the very recent decision—it was only a day or so old when he had to give judgment in the case—of Amin Rasheed Shipping Corporation v. Kuwait Insurance Co., now reported in (1984) 1 A.C 50. He was clearly fully aware of what was said in the speeches in that case and, in particular, the principles which were stated, or restated, in that decision. This is reflected in his judgment, because having concluded that the plaintiffs had a good arguable case, he then went on to say this:
"I bear in mind the discretionary and exorbitant nature of the Order 11 jurisdiction and that I should not exercise it without a clear balance of advantage being proved to make England the appropriate forum.
"In the present proceedings, all turns on questions of relevant laws and the effect of the relevant laws. Mr Veeder submits that if this action is referred to Italy the Plaintiffs would, on his affidavit evidence, clearly fail.
"I have to consider the position in the English courts and whether that makes a difference. It is accepted for present purposes before me that the apparent authority of an agent and ratification are governed by English law, but that actual authority is governed by Italian law. The Plaintiffs said that their primary case is ostensible authority or ratification".
He then dealt separately with the situation in relation to ostensible authority and then with ratification. With regard to ostensible authority he accepted that that raised questions of the Italian law because what is the ostensible authority of a person in a certain position in Italy may well involve questions of Italian law and practice.
He went on to say that these difficulties were sought to be avoided by relying on the principles of Royal British Bank v. Turquand, "which relates to the ordinary authority of a person occupying an ordinary position in a company". He concluded by saying that the question of convenient forum remains evenly balanced since what a reasonable person is entitled to assume will include a consideration of Italian law and practice.
He then turned his attention to the issue of ratification and he said this:
"For a period of three years there was no dispute raised by the Defendants over the validity of these contracts, though there is clear evidence that the Defendants were aware of one and probably both contracts. They were the subject of discussion with Mr Bussolini in May 1978 and I consider that the evidence that he recognised that the Defendants were bound by those...
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