David Newton-Sealey v Armor Group Services Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CRANSTON,Mr Justice Cranston |
| Judgment Date | 14 February 2008 |
| Neutral Citation | [2008] EWHC 233 (QB) |
| Date | 14 February 2008 |
| Court | Queen's Bench Division |
| Docket Number | Case No: IHQ/08/0005 |
[2008] EWHC 233 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Cranston
Case No: IHQ/08/0005
James Dingemans QC and Andrew Young (instructed by Irwin Mitchell) for the Claimant
S Maskrey QC and H Preston (instructed by Jones Day) for the Defendant
Hearing date: 1 February 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic
This case raises the issue of liability within a corporate group. It is sometimes described as an issue of enterprise liability. Persons deal with a business, as in this case an international business, and do not necessarily distinguish between its different corporate members. From their point of view they are dealing with the enterprise as a whole. Something goes wrong and they seek to hold the group liable through its most convenient member or members. They are then met with the argument that as a matter of law each member of the group is quite distinct, that their dealings were with one member of the group only, and that other parts of the group have no legal responsibility to them. The context in which this issue arises here is a claim for personal injuries against three members of a corporate group.
This is not a trial of the action. The present application is by two members of a corporate group for an order for “reverse” summary judgment against the claimant, alternatively for an order that the claims against them be struck out. For the application to succeed on the summary judgment application the two members of the corporate group must prove that the claimant has no real prospect of success with any part of his claim and that there is no other compelling reason for a trial: CPR 24.On the strike out application the companies must prove that the particulars of claim disclose no reasonable grounds for bringing the claim against those two defendants or that the claims are an abuse of process: CPR 3.4(2) (a), (b). There is a well-accepted overlap between these two applications. In both the basic question is whether there is some real prospect of the claimant succeeding, something more than what has been termed fanciful: Swain v Hillman [2001] 1 All ER 91.
Background
Sometime around May 2003 the claimant was contacted by email through a specialist website for retired military personnel. As a result he went for an interview at the first defendant's London office with a view to being deployed as a watch keeper in Iraq. Ultimately he ended up signing a contract and providing security protection for civilians and engineers engaged on various reconstruction projects in Iraq. The engineers worked for a well-known United States multinational engineering and construction company called Bechtel. The claimant escorted the Bechtel engineers to and from the construction projects. In March 2004 the claimant sustained serious injuries when the Land Rover he was driving in a convoy rolled over. The details of how he says this happened is not for now except to explain that he was responding to what was thought to be a threat to the Bechtel engineers under his protection from an Iraqi vehicle. It is his case that although the driver of the unknown Iraqi vehicle was to blame for the immediate impact to his Land Rover, the defendants were responsible for the larger consequences. For example, one of the particulars in the claim is that the Land Rover, which had been adapted to fulfil its security function, was unstable.
The defendants are members of the ArmorGroup of companies. This is a leading provider of protective security services, security training and weapons and mine reduction services. Its experience goes back over 25 years and has involved providing those services in many countries including those suffering civil war, diminished law and order or a high risk of terrorist activity. The third defendant, ArmorGroup International plc, hereafter AG plc is the holding company of the group, and is incorporated in England and Wales with its headquarters and registered office in Buckingham Gate, London. The first defendant, ArmorGroup Services Ltd, hereafter AG (UK), is also incorporated in England and Wales, with its headquarters and registered office in Buckingham Gate, London. It is fair to say that it performs important functions for the group. The second defendant, ArmorGroup Services (Jersey) Ltd, hereafter AG (Jersey), is a Jersey company, with an office in St Helier, Jersey.
In taking up his employment of providing security protection in Iraq, the claimant signed a contract. He did that on the same day that he had his interview at the offices of AG (UK) and AG plc in Buckingham Gate. The contract that he signed was actually with the Jersey company, AG (Jersey). The claimant says that he did not appreciate that and that his dealings were with the London office. Of course he accepts that the contract he signed was in fact with the Jersey company. Notwithstanding that the contract he signed was with the Jersey company, AG (Jersey), he contends that, as a matter of law, the London companies, AG (UK) and AG plc are liable to him in contract and tort. There is no need to explore the reasons he wants to sue them, suffice to say that the Jersey contract and associated release contain wide exemption clauses for personal injuries which he says would not be valid in England. Moreover, the Jersey contract is expressly governed by Jersey law and has a non-exclusive jurisdiction clause in favour of the Jersey Court. On the other hand AG (UK) and AG plc contend that there is no prospect of his establishing that he has a contract with them, nor that they have assumed any duty of care in negligence towards him. His contract was with the Jersey company, AG (Jersey), and any claim he has must be brought against it.
The backdrop to the contract that the claimant signed with the Jersey company is a contractual network governing the performance of ArmorGroup's security responsibilities to Bechtel in Iraq. In outline a subcontract agreement, dated July 1999, is between what is now AG (UK) and AG (Jersey). Its general thrust is for AG (Jersey) to provide to AG (UK) security personnel, equipment or both. Under the agreement AG (Jersey) cannot enter an agreement with another party on behalf of AG (UK) without the latter's prior written authorisation. AG (UK) provides AG (Jersey) with advice on its requirements and has the sole right to approve or veto any personnel or equipment proposed by AG (Jersey). AG (UK) can require the termination of employment of personnel provided under the agreement. However, AG (Jersey) is solely responsible for the arrangement and administration of security personnel and their routine welfare and is responsible for administering the procurement and transport of equipment.
That 1999 contract was superseded by a “Technical Services Agreement” between AG (UK) and AG (Jersey) with effect from 5 January 2004. Under that agreement AG (UK) agrees to pay the Jersey company fees for the provision of personnel and equipment under the terms of the agreement. AG (Jersey) is responsible for managing the personnel provided. AG (UK) reserves the sole right to approve or disapprove personnel or equipment proposed by the Jersey company, and to require their replacement. There is a sub-clause enabling AG (UK) to provide timely written instructions to AG (Jersey) of its requirements for the Jersey company to provide resources sufficient for it to service the agreement effectively.
There are two recruitment contracts between AG (UK) and AG (Jersey), the first dated December 199Under the first AG (UK) employs the Jersey company for the recruitment of security personnel for its (AG (UK)'s) clients. The successor service agreement, dated 26 November 2003, may be in error in its preamble, which says AG (Jersey) wishes to employ AG (UK) for the recruitment of security personnel. In the substantive clauses AG (Jersey)'s employees carry out the service although AG (UK) provides protection equipment as is necessary and recommended. Schedule 1 of the service agreement sets out the standard form agreement to be entered between AG (Jersey) and security personnel. It is the Jersey company which under this provides their equipment and other materials for performing their duties.
Then there is the Bechtel contract: it is with Bechtel International Systems Inc and is headed “Iraq Infrastructure Reconstruction Programme. General Reconstruction Programme”. The subcontractor is ArmorGroup Services Limited, AG (UK), with the address given as Vienna, Virginia, USA. Under that contract nothing in the contract, any lower tier purchase order, or subcontract that AG (UK) enters into creates any contractual relationship between Bechtel and the lower tier supplier or subcontractor. AG (UK) agrees to perform its obligations in accordance with its own methods subject to compliance with the contract.
Finally, reference should be made to two further documents. One is a certificate of insurance, issued by the Fidelity and Casualty Company of New York, which names AG (UK) as the insured. Apparently the policy was taken out to comply with US Defence bases' legislative requirements. Then there are payment slips where AG plc is named as the insured in relation to the same contract with Bechtel.
Contractual Duties
It is convenient to begin with the contractual duties which the claimant argues are owed to him by AG (UK) and AG plc. The claimant says that these arise because...
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