David Shaw Silverware North America Ltd v Denby Pottery Company Ltd (Respondent/Claimant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Smith |
| Judgment Date | 03 May 2013 |
| Neutral Citation | [2013] EWHC 4458 (QB) |
| Date | 03 May 2013 |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ12X02125 |
[2013] EWHC 4458 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Rolls Building
Fetter Lane
London EC4A 1NL
The Honourable Mr Justice Andrew Smith
Case No: HQ12X02125
Miss M Bleasdale appeared on behalf of the Claimant
Mr Y Kulkarni appeared on behalf of the Defendant
Approved Judgment
This is an appeal against an order of Master Fontaine on 30 January 2012, whereby she dismissed an application by the appellant defendant ("DS") challenging the jurisdiction of the English court. In her order the application is said to be dated 29 May 2012, but as I see it, that must be wrong and the application is made on 2 July 2012. Jeremy Baker J gave permission to appeal on 3 April 2013.
The claimant ("Denby") is an English company who manufacture and supply potteryware and other such goods. In January 2010 DS, a Canadian company, entered into an agreement with Denby to be the sole distributor for the resale of Denby's goods in Canada. On 20 January 2012 Denby terminated that agreement or purported to do so. In these proceedings Denby claim payment of £139,557.31 said to be due for goods supplied before the termination. These proceedings were issued on 23 May 2012 and on the same day Master Leslie granted permission for Denby to serve them on DS in Canada.
The application was supported by a witness statement of witness statement of Mr Burn, a solicitor of Wright Hassall LLP, Denby's solicitors. It was made on the basis that the contract is governed by the laws of England and Wales and that "clause 20.10 [of the contract] provides that the venue of any litigation lies in the English courts." The contract did have provision for English law to govern it. Clause 20.9 provides:
"This agreement shall be governed by and construed in accordance with English law, save that issues relating to the validity enforcement of any trade mark or intellectual property shall be governed by the law of the country of registration (if any) of those rights."
Clause 20.10 provided that the parties hereby submitted to the non-exclusive jurisdiction of the English courts "in relation to any claim, dispute or difference concerning this agreement." It did not therefore state that the venue of any litigation lies in England. Mr Burn misstated the position. He did not exhibit the contract to his witness statement and it was not before Master Leslie. However the Particulars of Claim were before Master Leslie and they recited in full clause 20.10.
Before these proceedings were brought on 24 January 2012, DS had brought proceedings against Denby in the Ontario Superior Court of Justice alleging that the notes of termination of the agreement was invalid and that in any event Denby were in breach of their good faith obligations to DS.
Denby were aware of the Ontario proceedings well before these proceedings were brought because their managing director was informed of them by email on 17 February 2012, and on 24 February 2012 its Canadian lawyers were asked to accept service of the Ontario proceedings but they declined to do so. Denby demanded payment of the disputed invoices. As a result, in April 2012 the Ontario proceedings were amended to allege that Denby had supplied defective goods. On 6 June 2012, these proceedings were served on DS in Canada. On 8 June 2012, the Ontario proceedings were served on Denby in England. On 2 July 2012, DS applied to set aside Master Leslie's order and service of it and also that the "claim be dismissed, alternatively the claim is stayed or that such relief may be granted to the defendant as may be appropriate". On 14 August 2012, Denby submitted to the jurisdiction of the Ontario court in respect of the proceedings brought against them there.
DS's application of 2 July 2012 came before Master Fontaine on 31 August 2012. She reserved her judgment until 4 December 2012. At the hearing on 4 December 2012, at which she had planned to hand down a judgment that she had circulated in advance, DS sought and was granted permission to make further submissions and Denby was permitted to respond to them. Eventually the judgment was handed down only on 30 January 2013, five months after the hearing.
Before that hearing on 30 January 2013 the Master had circulated a draft addendum to her judgment confirming her decision, but granting permission to appeal. At the hearing on 30 January 2013 she was persuaded to change her mind about that and she refused permission to appeal, but, as I have said, Jeremy Baker J granted it.
The grounds of the application of 2 July 2012 are stated in the notice as follows:
"The claimant being obliged to disclose all relevant matters on the without notice application permission to serve the proceedings out of the jurisdiction failed to (a) inform the court that the jurisdiction clause in the contract has not been for exclusive jurisdiction in the English court; (b) disclose that the defendant had commenced proceedings in Canada on 24 January 2012. 2. Further or alternatively, having regard to all the circumstances of the case, the most appropriate forum for determining the dispute between the parties is Ontario Canada."
On the first ground Master Fontaine upheld the complaint of non-disclosure on both points. She was right to do so. To my mind the failure to mention the Ontario proceedings and the inaccurate presentation of the jurisdiction clause in the witness statement were bad breaches of the duty of those presenting without notice application of this kind. However, the Master concluded that the failure should not be met with the sanction of setting aside the order she was entitled so to conclude.
The question whether an ex parte order is set aside for non-disclosure depends in part on the nature of the order so obtained, as is said in Gee Commercial Injunctions 5th Edition 2004 at paragraph 9.001 Footnote 6. Although in principle the same duty arises in relation to an order to serve out the jurisdiction as on other without notice applications, in practice oversights are more likely to be penalised only in the form of costs as "it would not be right to drive the [applicant] to an inappropriate jurisdiction or to bar a bona fide claim from a proper one. To that extent the practice may be different in relation to [an order for service out of the jurisdiction] in cases involving injunctions." Gee cited A/A D/S Svendborg v Maxim Brand (Court of Appeal unreported 23 January 198, per Kerr LJ).
There is no appeal against that part of Master Fontaine's order. The appeal is directed to her conclusion at paragraph 53 of her judgment, which is as follows:
"… I consider that the claimant has discharged the burden of establishing that permission to serve proceedings out of the jurisdiction is correctly given and that this jurisdiction is clearly the more appropriate forum and I do not consider the defendant has discharged the burden of demonstrating that there is clearly some other forum that is the more appropriate forum. Accordingly the application is dismissed."
As the Master rightly said at paragraph 9 of her judgment, in order to obtain permission Denby had to establish (1) that one of the grounds of paragraph 3.1 of PD6B applies; (2) that the claim has a reasonable prospect of success; and (3) that the English court is the proper place to bring a claim.
In this case there was and could have been no dispute about the first requirement in view of the choice of governing law and the jurisdiction agreement in the contract. The second was not in dispute before the Master and is not in dispute on this appeal. The dispute was and remains as to the third requirement.
CPR 52.11 (3) provides:
"The Appeal Court will allow an appeal where the decision of the lower court was (a) wrong; or (b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court."
DS says that both limbs are engaged, that the Master's decision was wrong and that it was unjust because of procedural or comparable irregularities.
I consider the irregularity complaint first. The complaints are these:
"1. At the hearing on 31 August 2012 the learned Master failed to invite further submissions from the appellant clarifying how it proposed to defend the claims.
2. At the hearing on 31 August 2012 the learned Master failed to indicate that she regarded the proceedings as not overlapping with the Canadian proceedings so that the appellant could make further submissions on this point.
3. Although on 4 December 2012 the learned Master adjourned to permit further submissions to be made, she refused to have regard to those submissions and review the conclusions made by her in her draft judgment.
4. The learned Master wrongly characterised all the additional submissions from the appellant filed on 11 December 2012 as advancing new arguments not raised on 31 August 2012 and she failed to have regard to those submissions.
5. On 10 January 2012 the learned Master informed the parties that she was prepared to grant permission to appeal as there was a real prospect of success on appeal.
6. Then following further submissions, the learned Master declined permission to appeal on 30 January 2013.
The last two points are now of no consequence since permission has now been granted, and in any case the Master was entitled to refuse permission, despite stating in the circulated appendix to the judgment that she had granted: see L and B...
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