J Pereira Fernandes SA v Mehta
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Pelling QC |
| Judgment Date | 07 April 2006 |
| Neutral Citation | [2006] EWHC 813 (Ch) |
| Docket Number | Case No: M5X152 |
| Court | Chancery Division |
| Date | 07 April 2006 |
[2006] EWHC 813 (Ch)
His Honour Judge Pelling QC
(Sitting as a Judge of the High Court)
Case No: M5X152
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY
Courts of Justice
Crown Square
Manchester
Mr Metha in person
Mr P. Aslett (instructed by Ian Simpson & Co for the Respondent)
Introduction
This is an appeal from the Judgment of District Judge Harrison given on 9 th November 2005, by which he gave summary judgment to the Respondent (JPF) in the sum of £24,985.53 and ordered the Appellant ( Mr Metha) to pay the costs of the claim which were summarily assessed in the sum of £1080.00. Permission to appeal was given by His Honour Judge Holman on 20th February 2006.
JPF is a Portuguese company that supplies bedding products. It supplied such products in July 2002 to Bedcare (UK) Limited (Bedcare) a company of which Mr Mehta was a director. Bedcare failed to pay for the products it had received and ultimately it was wound up on JPF's Petition by an Order made on 7th March 2005.
The relevant history begins with the presentation of a winding up petition by JPF on 12thJanuary 2005. On 20thFebruary 2005, Mr Mehta asked a member of his staff to send an e mail to JPF's solicitors in the following terms:
"…I would be grateful if you could kindly consider the following. If the hearing of the Petition can be adjournedfor aperiod of 7 days subject to the following:
(a) A Personal Guarantee to be given in the amount of £25,000 in favour of your client -together with a list of my personal assets provided to you by my solicitor
(b) A repayment schedule to be redrawn over a period of six months with a payment of £5000.00 drawnfrom my personal funds to be made before the adjourned hearing.
I am also prepared to give a company undertaking not to sell market or dispose of any company assets without prior consent from your client pending the signing of the Personal Guarantee… "
The e mail was not signed by Mr Mehta but is described in the header as having come from Nelmehta@,aol. com. This e mail address appears on other e mails sent to JPF's solicitors by Mr Mehta, which have been signed by him.
The evidence in support of the application for summary judgment was given by Ms Albaster in a witness statement dated 21stJune 2005. Ms Albaster is a clerk employed by JPF's solicitors. At Paragraph 7 of her statement, she says that when she received the e mail referred to above, she telephoned Mr Mehta, accepted his proposal and agreed to adjourn the hearing of the Petition which in the event was adjourned for a period of 14 days. Ms Albaster continues:
"Although I sent the Defendant an agreement to cover the instalment payments and Personal Guarantee, I heard nothing further from him, he never returned the documents and he did not pay the £5,000 which had been promised from his personal funds. "
Mr Mehta's statement in answer to the application is dated 12th July 200Aside from a suggestion that the debt owed by Bedcare was £14,715.00, Mr Mehta sets out his case as to the claim against him in Paragraphs 4–6 of his statement. In essence, he says the claim against him should fail because JPF has failed to produce any signed agreement or Personal Guarantee and that the only maintainable claim that JPF has is against Bedcare.
Mr Mehta appeared in person before me as he did before the District Judge. In the course of his initial submissions he told me that the e mail had been sent with his authority by one of his staff who he later identified as a Ms Durkin. Later, in the course of his reply submissions, Mr Mehta told me that the sender name that appears in the e mail had been typed by his employee Ms Durkin without his authority. There was no evidence to support such a contention (or to explain how, technically, it could be right) and the application by Mr Mehta to adduce such evidence was strongly resisted by Mr Aslett who appears for the Respondent. For reasons that I gave at the conclusion of the hearing, I dismissed that application. In summary, there was no satisfactory explanation as to why the evidence had not been adduced at a much earlier stage. The evidence in support of the application for summary judgment and in particular Paragraph 7 of Ms Albaster's statement made clear that the application was based on the contention that the e mail I have referred to in Paragraph 3 above constituted the guarantee and in any event it was or ought to have been entirely clear to Mr Mehta as to how JPF's case was being put at the latest by the time when the District Judge gave judgment. It is also fair to say that Mr Mehta had accepted that he had authorised the sending of the e mail in the form it was sent until a very late stage in his reply submissions. In those circumstances, it seemed to me that the application to adduce further evidence ought to fail.
The Issue Concerning The Amount Owed by Bedcare
Ms Albaster's evidence is that Mr Mehta had agreed the sum due from Bedcare as being £24,709.33. This is clearly evidenced by the run of e mails at pages 21–26 of the Bundle. No evidence has been produced by Mr Mehta to support his contention that the true sum owed by the company is less than £24,709.33 or to explain why, if this was the case, he had agreed to the figure advanced by JPF's solicitors. This point is not mentioned by Mr Mehta in his Grounds of Appeal at Section 7 of the Appeal Notice. In those circumstances, it is not open to him to argue this point on the appeal. However, even if I am wrong on that point, for the reasons set out earlier in this paragraph, I am satisfied that on the evidence before the District Judge he was correct to conclude that Mr Mehta has no reasonable prospect of success on this issue.
The Issues In The Appeal
The only issue of substance that was considered by the District Judge concerned the assertion by Mr Mehta that there was no guarantee signed by Mr Mehta. The District Judge concluded that the e mail I have referred to in paragraph 3 above was sufficient to satisfy the requirements of the Statute of Frauds. He said that "The e mail document in itself is the guarantee ". He concluded that the presence of Mr Mehta's e mail address on the copy of the e mail received by JPF's solicitors constituted a sufficient signature for the purposes of Section 4 of the Statute of Frauds and he entered judgment accordingly.
Section 4 of the Statute of Frauds provides that "no action shall be brought…whereby to charge the defendant upon any special promise to answer for the debt default or miscarriage of another person…unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised ". It follows that:
9.1. The agreement in question must be in writing or, if the agreement is made orally, there must be a memorandum or note evidencing the oral agreement; and
9.2. The agreement or memorandum must be signed by either
9.2.1. The guarantor, or
9.2.2. Someone authorised by the guarantor to sign the agreement or memorandum on his behalf.
The effect of a non compliance with Section 4 is that the contract is unenforceable.
There were thus two issues that were argued at the hearing of the appeal namely:
10.1. whether the e mail constituted a sufficient note or memorandum of the alleged agreement for the purposes of Section 4; and
10.2. Assuming the e mail was a sufficient note or memorandum, whether it was sufficiently signed by or on behalf of Mr Mehta, it being contended on behalf of JPF that the presence of the e mail address on the copy of the e mail received by JPF's solicitors was a sufficient signature for these purposes.
Was The E Mail A Sufficient Note Or Memorandum?
The e mail relied on contains an offer. That this is so is apparent from the opening words of the operative part which starts with the words " …I would be grateful if you could kindly consider the following. If the hearing of the Petition can be adjourned…subject to the following… ". It is also apparent from the fact that the e mail contemplates that formal documents will be entered into by the use of the phrase "…pending the signing of the Personal Guarantee". It is clear from the evidence of Ms Albaster that it was regarded as such -see the part of Paragraph 7 of her witness statement referred to in Paragraph 4 above.
As a matter of first impression, such a document ought not to be sufficient to constitute a memorandum for Section 4 purposes. I say this because what has to be signed under Section 4 is " …the agreement upon which such action shall be brought or some memorandum or note thereof… ". As Cave J said in Evans v. Hoare [1892] 1 QB 593 the effect of these words is that " …there must be a memorandum of a contract, not merely a memorandum of a proposal…". However, that is not the way the law appears to have developed. I was referred to the current edition of The Law of Contract by Sir Guenter Treitel. At page 184 he says "…an offer signed by one party and orally accepted by the other…ha[s] been held sufficient". That this is the current state of English law is acknowledged (in relation to the old law under Section 40 of the Law of in Property Paragraph 4–027 of Chitty On Contract (29th Ed., Volume 1), where however it is
described as "exceptional ".
Four cases are cited by Chitty in support. Of those, only Lever v. Koffler [1901] Ch 543 was cited to me by Mr Aslett. That case was concerned with an offer in writing by the Defendant to sell two parcels of real property on alternative bases, where one of the alternatives was accepted both orally and by letter by the Plaintiff. In that case, there were two grounds...
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