Gastronome (UK) Ltd v Anglo Dutch Meats (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE TUCKEY,LORD JUSTICE DYSON,SIR PETER GIBSON |
| Judgment Date | 26 July 2006 |
| Neutral Citation | [2006] EWCA Civ 1233 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B5/2005/2958 & B5/2005/2958(C) |
| Date | 26 July 2006 |
[2006] EWCA Civ 1233
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(MR JUSTICE PARK)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Tuckey
Lord Justice Dyson
Sir Peter Gibson
B5/2005/2958 & B5/2005/2958(C)
MR I HARE (instructed by Messrs Gaby Hardwicke, 33 The Avenue, Eastbourne, EAST SUSSEX, BN21 3YD) appeared on behalf of the Appellant.
MR A HILL SMITH (instructed by Messrs Brookstreet Des Roches, 1 Des Roches Square, Witan Way, Witney, OXON, OX28 4LF) appeared on behalf of the Respondent.
1. This is an appeal from a judgment of HHJ McCahill QC sitting in London as a High Court Judge in which he found the defendants, Anglo Dutch Meats UK Limited ("ADM") , liable to the claimant under the terms of a guarantee and gave judgment for the principal sum of £184,824.26 plus interest and costs. ADM say that the judge was wrong to reject their defence that the claimant was not the beneficiary of the guarantee.
ADM is a meat processor and wholesale supplier to the manufacturing and food service industries. It is part of a substantial group of companies, 40% of which is owned by Mr Askaroff.
The claimant was incorporated in 1991 and changed its name from Sapod UK Limited to Gastronome UK Limited in March 2004. It is based in Wallingford and is the United Kingdom subsidiary of a French company, Gastronome SA, which specialises in the supply of poultry products and is owned by French agricultural co-operatives. Other Gastronome subsidiaries carry out various activities in France, including Soparvol Industrie Le Bignon SARL, whose name changed to Gastronome Le Bignon SARL in April 2004, which prepares and cooks chickens at a factory on an industrial estate in Le Bignon, and another subsidiary which prepares fresh turkey crowns on premises at Luche Priange, 250 kilometres away.
The claim arises out of the supply of cooked chicken and turkey crowns by the claimant to International Foods Solutions Limited ("IFS") , another English company of which ADM was a 76% shareholder. IFS went into liquidation in December 2004, owing the claimant the principal amount to which it had obtained judgment.
The guarantee under which the claim was made is dated 19 December 2003 and was in identical terms (except as to dates) to an earlier guarantee dated 26 June 2002. It was in the form of a letter on ADM paper addressed to Gastronome ZA La Foret, 44140 Le Bignon, France. The letter reads:
"Dear Sirs
"IFS Limited
"We confirm that we are willing to guarantee any amounts properly due from IFS Limited to you for a period of 12 months from 1 July 2003. We trust that this is satisfactory for your purposes.
"Yours faithfully."
The letter was then signed on Mr Askaroff's express instructions by his personal assistant above his name, which is shown as "Nick Askaroff FCA Managing Director". The French address was that of the factory in Le Bignon but the letter was sent by IFS to the claimant at its address in Wallingford.
There was a good deal of evidence before the judge about how this and the earlier guarantee came to be provided, and this has given rise to some argument about how much of this evidence was admissible as an aid to construction. I will start, however, by setting out what I think are the salient features of this evidence.
IFS was incorporated in November 2001 and started discussions with the claimant, which it referred to as "Sapod UK/Gastronome" ,with a view to its supplying Gastronome's poultry products to the UK market. ADM specialised in beef and pork and wanted to expand its business into poultry through its interest in IFS. The judge found that through Mr Askaroff it was closely involved in IFS's business and had a detailed and intimate knowledge of its day-to-day affairs. Gastronome products for the UK market were to be supplied by the claimant but it would not supply IFS without credit insurance or some other means by which it could ensure that its invoices would be paid. IFS's first orders were for chicken, which was to come from Le Bignon, but these orders were not accepted until IFS sent the June 2002 guarantee to the claimant which it said was "confirmation of ADM's invoice guarantee for" IFS.
After receiving the guarantee the claimant fulfilled IFS's orders for Gastronome products. IFS was not supplied by any other Gastronome company. The judge found that these facts and the fact that the claimant was a Gastronome subsidiary were known to ADM. The claimant's invoices to IFS were paid by ADM into the claimant's bank account. The claimant itself was supplied by and paid another Gastronome subsidiary, Gastronome Distribution SA.
By 1 July 2003 the claimant had become concerned at the amount owing by IFS and that ADM's guarantee had expired that day. In an e-mail to IFS the claimant's Managing Director Mr Rostron said:
"Reference my telephone conversation with you today, I note that the guarantee given by ADM Ltd in relation to the credit extended to International Food Solutions Limited by Sapod UK Limited expired today …
"As a matter of urgency would you kindly arrange for ADM Ltd to send to me a renewal of their guarantee for a further 12 months of all payments due to Sapod UK Ltd in respect of all invoices raised by Sapod UK Ltd for product ordered by and delivered to or on behalf of IFS.
"Please arrange for the original document to be sent to me, which must be signed by a director/directors of ADM Ltd authorised by the Board to give such a guarantee."
After a number of delays, the guarantee of 19 September was sent by IFS to the claimant in Wallingford after the claimant had said that without it future business would not be allowed to proceed. IFS wished to place a large order for turkey crowns from Luche Priange for the Christmas market. ADM accepted that it had given the guarantee to enable the continued supply of Gastronome products to IFS.
ADM's submission to the judge was that there was no ambiguity in the guarantee. As a matter of construction, its...
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