Carvill America Incorporated v Camperdown UK Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Clarke,Lord Justice Longmore,Lord Justice Ward |
| Judgment Date | 27 May 2005 |
| Neutral Citation | [2005] EWCA Civ 645 |
| Docket Number | Case No: A3/2004/2002 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 May 2005 |
[2005] EWCA Civ 645
Lord Justice Ward
Lord Justice Clarke and
Lord Justice Longmore
Case No: A3/2004/2002
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
COMMERCIAL COURT
His Honour Judge Havelock-Allan QC
EWHC 2221 (Comm)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Millett QC and Ms Philippa Hopkins (instructed by Leboeuf, Lamb, Greene & Macrae) for the 14 th Defendant
Ms Barbara Dohmann QC and Mr Andrew Green (instructed by DLA Piper Rudnick Gray Cary UK LLP) for the Claimants
Mr Timothy Howe and Ms Tamara Oppenheimer (instructed by Messrs Reynolds Porter Chamberlain) for the 1 st to 12 th Defendants
Introduction
This is an appeal from an order made by His Honour Judge Havelock-Allan QC in the Commercial Court on 2 September 2004 in which he dismissed the application of the appellant and 14 th defendant, XL Specialty Insurance Co Ltd ("XL"), to set aside the order for service of the claim form upon it out of the jurisdiction made by Morison J on 26 February 2004. The claimants, to whom (like the judge) I shall refer collectively as "Carvill" and (for the most part) individually as "Carvill America" and "Carvill UK" respectively, obtained permission to serve XL on the basis that XL was a necessary or proper party to an existing claim against thirteen other defendants. Both the claimants and the 1 st to 12 th defendants are respondents to this appeal, which is brought with the permission of Potter LJ. As I understand it, the thirteenth defendant is not a party to this appeal.
XL's application challenged the jurisdiction of the court under CPR Part 11 on three bases as follows:
i) that there was no serious issue to be tried against it on the merits;
ii) that there was no good arguable case that XL was a necessary or proper party for the purposes of CPR 6.20(3); and
iii) that England was not the forum conveniens for the trial of this action, given particularly that the same issues are the subject of proceedings brought by Carvill America in the courts of Connecticut.
The judge rejected XL's challenge on each of those bases but XL appeals only in respect of the first two. It does not seek to challenge the judge's decision on the third. On the footing that there was a serious issue to be tried against XL on the merits and that there was a good arguable case that XL was a necessary or proper party for the purpose of CPR 6.20(3), the judge held that the claimants had shown that England was the proper place in which to bring the claim within the meaning of CPR 6.21(2A).
Mr Richard Millett QC submits on behalf of XL that neither of the two issues which arise in this appeal involves any real element of discretion. He says that the first issue turns on the construction of a short written contract, while the second issue involves a consideration of the particulars of claim, the contract between Carvill and XL and the contract between XL and the other defendants. He submits that the judge misdirected himself in law in the case of both issues and that if XL succeeds on either issue the appeal must be allowed and the service of the proceedings set aside.
The facts
The facts are set out in some detail in the judgment. In so far as it is necessary to recite them here I can do so shortly, principally on the basis of the judgment. The dispute concerns brokerage under reinsurance treaties of non-marine risks placed by Carvill as broker for XL as reinsured with the first to thirteenth defendants as reinsurers ("the reinsurers"). The substantial issues are: (1) whether the brokerage was earned on placement or only earned when the premium in question was due and payable or was paid, and (2) whether the reinsurers or XL are liable to Carvill for the amount of the brokerage. The first issue arises because XL terminated Carvill's appointment as broker mid-way through a period of cover. The second issue arises because XL has withheld an amount equivalent to brokerage from its premium payments to reinsurers from the date of termination of Carvill's appointment, with the result that payment of Carvill's remuneration ceased as soon as its appointment as broker was terminated.
Carvill America and XL are both Delaware companies and have their principal places of business in Atlanta, Georgia and Wilmington, Connecticut respectively. Carvill America is a reinsurance broker, whereas XL is an American insurance company. Both have subsidiary or associated companies incorporated in England which carry on insurance business in London. Carvill UK is a subsidiary or associate of Carvill America.
In 1999 XL appointed Carvill America to act as its reinsurance broker on the terms of a "Reinsurance Broker of Record Appointment Letter" dated 26 August 1999. It provided, so far as relevant, as follows:
"1. Effective on 8/26/99 Executive Liability Underwriters, an XL Specialty Division ("ELU") hereby appoints Carvill America ("Carvill") as its exclusive reinsurance Broker of Record for the purpose of procuring and servicing the Reinsurance program(s)/contract(s) specified in Addendum B ("the Program placement(s)").
2. This appointment shall continue in force until Carvill resigns this appointment, ELU terminates this appointment, or ELU appoints a successor broker of record, any of which may be done at any time.
3. At least quarterly, Carvill will render accounts to ELU accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by, or owing to, Carvill from ELU. Carvill will remit all funds due to ELU within 30 days of receipt.
4. All funds collected for ELU's account will be held by Carvill in a fiduciary capacity in a bank acceptable to the regulatory authorities involved. Carvill's records shall identify ELU's ownership interest in any funds held for more than one insurance company. Upon request from ELU, Carvill shall furnish copies of records relating to deposits and withdrawals for or on behalf of ELU. It is understood and agreed that all fees and expenses charged by the bank(s) for service shall be paid by Carvill, and any interest on said funds shall accrue to Carvill. It is further understood that Carvill's obligations under this paragraph are in addition to its obligations under any federal law.
5. After expiration or termination of each Program placement transacted through Carvill for ELU, for a period of time at least equal to the period specified by the regulatory authorities having jurisdiction over this appointment, Carvill will keep a complete record for each transaction, showing the following:—
…
f. Rates of all reinsurance commissions …
10. It is understood that Carvill has not been granted authority to establish terms and conditions of the Program placement(s) nor to make the final selection of the reinsurer(s) allowed to participate in the Program placement(s). Nor is Carvill granted any authority to effect claim or other settlements on behalf of the ELU without prior written authority from the ELU. This authority rests solely with ELU. There are no fees or other remuneration to be paid to Carvill by ELU under this appointment letter. Remuneration earned by Carvill is to be received from the reinsurer(s) to which ELU's premium is ceded as is customary in the industry."
There was an addendum to the letter which provided by clause 1 that Carvill's appointment was to last for a minimum of 5 years and that any termination of the appointment was to take effect at the date of renewal of Carvill's reinsurance placements. It also included these two clauses, which (like the judge) I have included because Carvill say that they form part of the factual matrix against which the critical letter dated 2 October 2002 falls to be construed:
"2. Brokerage: ELU confirms Carvill's understanding that it has contractual entitlement to full brokerage remuneration for all business ceded to Carvill Program placement years, including brokerage on any future adjustment and reinstatement premiums arising therefrom. Carvill agrees to return brokerage on any premiums.
3. Servicing: It is agreed that where ELU appoints a successor intermediary to procure and service placement(s) covering the same class(es) of business, Carvill's servicing obligations will cease with effect from the date of termination of Carvill's appointment without any diminution of Carvill's brokerage entitlement as specified in 2 above."
Notwithstanding the terms of the addendum, the letter quoted above was replaced by a further appointment letter dated 2 October 2002, which provided for the retainer to continue with effect from 1 January 2002. The second appointment letter was in almost identical terms to the first, except that the wording of clause 10 was slightly different and it contained no addendum. As the judge observed, the difference in the wording of clause 10 was very slight. In the last sentence the phrase "is to be received from" was replaced by the phrase "will be paid entirely by", so that the last two sentences of clause 10 now read as follows:
"… There are no fees or other remuneration to be paid to Carvill by ELU under this appointment letter. Remuneration earned by Carvill will be paid entirely by the reinsurer(s) to which ELU's premium is ceded as is customary in the industry."
There was no addendum to the second appointment letter because in the United States it is a requirement of the NAIC...
To continue reading
Request your trial
-
Gulf Air B.S.C. (C) v One Inflight Ltd
...the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] 2 Lloyd's Rep 457, at [24]. Second, the claimant must satisfy the court that there is a good argua......
-
Martin S. Kenney Cc International Ltd Appellants v Ace Ltd Respondent to Appeal
...test as for resisting summary judgment; namely whether there is a real (as opposed to a fanciful) prospect of success: e.g. Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645. Second, the applicant must satisfy the court that there is a good arguable case that the claim falls withi......
-
Tajik Aluminium Plant v Ermatov and Others
...one. A claimant has a real prospect of success if its chances of success are not fanciful. ( Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645 at [24], Longmore LJ). 114 The court will not give permission unless it is satisfied that England and Wales is the proper place in which t......
-
Alliance Bank JSC v Aquanta Corporation
...Shipping Inc (The Baltic Flame) [2001] EWCA Civ 418, [2001] 1 Lloyd's Rep 203, at [33] and in Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] 2 Lloyd's Rep 457, at [48], where Clarke LJ also used, or approved, in this connection the expressions "closely bound up" and "a ......
-
Insurance Briefing - Anomalies of Insurance Law
...However, there is some inconclusive case law to the contrary, eg Carvill America Incorporated & anor v Camperdown UK Ltd & ors [2005] EWCA Civ 645. See draft decision paper headed 'Grossing up and Net Equivalent for Lloyd's Regulatory Board', 25 July 1994 (para See Pacific & Gen......