George Ryan and Another v Strickland Jarvis
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hoffmann |
| Judgment Date | 29 June 2005 |
| Neutral Citation | [2005] UKPC 27 |
| Date | 29 June 2005 |
| Court | Privy Council |
| Docket Number | Appeal No. 60 of 2003 |
[2005] UKPC 27
Privy Council
Present at the hearing:-
Lord Hoffmann
Lord Millett
Lord Phillips of Worth Matravers (The Master of the Rolls)
Lord Rodger of Earlsferry
Lord Carswell
[Delivered by Lord Hoffmann]
Mr Strickland Jarvis is a motor vehicle dealer who trades from premises in Martin's Village, St John's, Antigua. In 1993 his Isuzu jeeps, pick-ups and trucks were selling rather slowly. Some time in August or September he had a conversation with Mr Paul Ryan, who sold Honda cars in St John's. Mr Ryan and his father Mr George Ryan traded through a company called Antigua Motors Ltd which had recently acquired spacious new premises. Mr Paul Ryan told Mr Jarvis that Isuzu commercial vehicles would usefully complement his Honda cars and suggested a joint venture by which Mr Jarvis would provide Isuzus for sale by Antigua Motors. Mr Jarvis found this attractive because he thought his stock was more likely to sell in St John's than in Martin's Village.
The parties entered into an oral agreement on terms which were subsequently written down by Mr Paul Martin and signed by him and Mr Jarvis. This document must be quoted in full, with some obvious mistakes corrected:
"AGREEMENT BETWEEN GEORGE & PAUL RYAN OF ANTIGUA MOTORS LTD AND STRICKLAND JARVIS OF JARVIS AUTO SUPPLY
This document serves to support the verbal agreement between the above named parties in which it is intended that Antigua Motors Ltd will retail Isuzu vehicles under the following conditions for a period of twelve months.
1. A 35/[65] profit share basis. 35 percent for Antigua Motors Ltd and [65] percent for Jarvis Auto Supply. Profit is accrued after all expenses are deducted. A monthly statement will be printed of all accounts.
2. To correctly document all transactions of the sale and maintenance of the vehicles, charges and cost, and to operate totally separate accounts from Antigua Motors Ltd. Jarvis Auto Supply will give Antigua Motors Ltd documents relative to the costs, duty and taxes for all vehicles.
3. The agreement consist[s] of the sales of all vehicles currently in stock as well as any model we wish to order during a period of one year. Vehicles will be of commercial type light trucks vans and buses.
4. The expenses will include predelivery inspection, preparation of vehicles, repairs, salesman commission, a fee for handling the accounts, and any other cost incurred for the sale of the vehicles.
5. Sale prices will be agreed between both parties on each vehicle current or imported during the term.
6. No trade-in will be taken without positive agreement between the parties, documents will also be agreed.
7. All cost for warranty work will be recovered from the supplier via Jarvis Auto Supply, and after sales service will be carried out by Antigua Motors Ltd on site. First and second services will be labour free and termed as an expense. A one year warranty will apply to each vehicle sold.
8. Jarvis Auto Supply will import a limited supply of spare parts for the vehicles during the period, [from] which Antigua Motors Ltd could purchase from time to time as required. Antigua Motors Ltd will only stock fast moving items [such] as filters, brake parts etc on site on a consignment basis.
9. Jarvis Auto Supply will provide Antigua Motors Ltd with brochures of all Isuzu products, parts catalogues, workshop manuals and possible special tools and equipment during the period. Also Antigua Motors Ltd would like to be granted the opportunity to have direct contact with suppliers to obtain information needed from time to time. During the period Jarvis Auto Supply will also be Sales Agent for the products and could recommend customers to Antigua Motors Ltd for purchases of Isuzu vehicles.
10. At the end of this period any or both parties could form a company for the sales of the above products on a 50/50 share basis. Jarvis Auto Supply agrees not to differ from the above agreement during the period. At the end of the period a final financial statement will be prepared. During the period profits due to each party will be paid and payment for actual vehicles paid on a monthly basis."
This document was signed by Mr Jarvis on 8 October 1993. Mr Paul Ryan's signature is against the date "10/06/93". He said in evidence that he signed in October and may therefore have been writing the date in American style.
In late September or early October, before the document had been signed, Mr Jarvis transferred his Isuzu stock, consisting of 11 vehicles, to the premises of Antigua Motors, which sold them at various dates between then and May 1994. But it sold no other Isuzu vehicles supplied by Mr Jarvis during the period of the agreement. Instead, in late 1993, it bought six vehicles from various sources in the Caribbean (Miami, Trinidad and Grenada). Subsequently it sold a number of vehicles which it had imported directly from Japan under an exclusive dealership agreement concluded with Isuzu in December 1993. In November 1994 it rendered an account of the proceeds of Mr Jarvis's vehicles which it had sold and sent him a cheque for $396,501,79.
Mr Jarvis was dissatisfied with the account for three reasons. First, it was late. Secondly, he said that there was a shortfall of $67,535.22 on the amount due to him out of the proceeds of sale of his 11 vehicles. Thirdly, he said that he should have been paid his share on the profit realised on the sale of the other vehicles. On 11 October 1995 he commenced an action against the Ryans, claiming payment of the $67,535.22 shortfall, winding up of what he alleged to have been a partnership constituted by the agreement, the usual accounts and inquiries and damages.
In his statement of claim, Mr Jarvis particularised what he alleged to have been wrongful conduct on the part of the Ryans in respect of their purchases of other vehicles. He said that it was an implied term of the agreement that the Ryans would not prevent him from obtaining the vehicles which he was to supply for the purposes of the partnership venture. His suppliers were, as the Ryans knew, Cruzan Motors TC Ltd of St Croix, US Virgin Islands and Southern Sales Service Company of Trinidad. Both were accredited Isuzu dealers and agents, entitled to supply vehicles for sale in Antigua. However, in fundamental breach of the agreement, the Ryans prevented him from obtaining supplies by negotiating a dealership with Isuzu which gave them the exclusive right to distribute Isuzus in Antigua.
The defence denied that the Ryans had acted in breach of the agreement. It alleged that Mr Jarvis had represented that he was the exclusive agent for the sale of Isuzu vehicles in Antigua and Barbuda but that the representation was, to his knowledge, false. Mr Jarvis had been unable to provide the vehicles ordered by Antigua Motors. When the Ryans found out by direct inquiry from Isuzu that he was not an accredited agent, they decided to obtain the vehicles themselves. They accordingly obtained the exclusive dealership for Antigua.
The pleadings thus show that it was common ground that the agreement contemplated that for the initial period of a year, Mr Jarvis would supply Antigua Motors with the Isuzu vehicles required for the purposes of its trade and that the Ryans would buy only from him. The dispute centred upon two matters. First, the Ryans said that they agreed to buy only from him because he had falsely represented that they had no choice: he was the only person who could supply them with Isuzu vehicles in Antigua. Secondly, Mr Jarvis said that his admitted inability to supply vehicles was caused by the action of the Ryans who, in breach of an implied term, had persuaded Isuzu to give them the exclusive dealership for Antigua. Both of these allegations were in issue. And then, of course, there was the minor question of the alleged shortfall in accounting.
The action was tried by George J over various days between 3 November 1999 and 1 June 2000. Judgment was given on 21 March 2001. The judge recited extracts from the pleadings and his notes of evidence. Mr Jarvis's claim, he said, was that he had been appointed authorised dealer in Antigua by Cruzan Motors, who also traded as Hexagon and were authorised by Isuzu to distribute vehicles in an area which included Antigua. But he had no documents to substantiate this allegation. The evidence was simply that over some years Cruzan had supplied him with vehicles.
The judge's conclusion was:
"I am satisfied on a balance of probabilities and find as a fact that prior to the agreement the plaintiff falsely held out to the defendants that he had the exclusive dealership for Isuzu vehicles in Antigua and Barbuda and that this was a material factor which induced the defendants to enter into the partnership agreement in October 1993."
On the question of whether Mr Jarvis had been able to supply vehicles in accordance with the agreement, the judge recited the evidence of Mr Paul Ryan, which he said he accepted in preference to that of Mr Jarvis. Mr Paul Ryan had said that he had gone to Mr Jarvis with an order for vehicles but that he had been unable to obtain them from Cruzan. "They had none in stock and they could not order as I requested right hand...
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