Motortrak Ltd v FCA Australia Pty Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Moulder |
| Judgment Date | 30 April 2018 |
| Neutral Citation | [2018] EWHC 990 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2016-000438 |
| Date | 30 April 2018 |
[2018] EWHC 990 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Moulder
Case No: CL-2016-000438
Hugh Norbury QC and Adil Mohamedbhai (instructed by Russell-Cooke LLP) for the Claimant
Nigel Tozzi QC and Matthew Lavy (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for the Defendant
Hearing dates: 26 February-1 March, 5–7 March, 12,13,15 March 2018
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 is a claim arising out of outstanding invoices under an agreement entered into between the claimant (“Motortrak”) and the defendant (“FCAA”) which provided for the supply of web based marketing services by Motortrak to FCAA. The sole director and principal shareholder of Motortrak is Mr Gary Pask. FCAA is the Australian subsidiary in the Fiat Chrysler group. It sells vehicles in Australia under the Chrysler, Jeep, Dodge Fiat and Alfa Romeo brands. FCAA denies liability asserting that payments made by Motortrak to a company associated with the defendant's then managing director, Mr Clyde Campbell were in effect bribes to procure that FCAA entered into the agreement and claims damages for loss suffered.
Chronology
The chronology so far as relevant to the issues, in my view, is as follows:
On 4 January 2008 the claimant entered into a consultancy agreement (the “Consultancy Agreement”) with ACN124 (“ACN”), a company owned by Mr Campbell's wife, for Mr Campbell to provide consulting services including “foreign market strategic advice” and “facilitation of services to potential clients” in return for a payment of AU$20,000 per month.
It is Motortrak's case that, in early 2009, Motortrak then entered into a licence agreement (the “Licence Agreement”), again with ACN, for Mr Campbell to market and sell Motortrak's services in the Asia-Pacific (“APAC”) region.
In May 2009 Mr Campbell incorporated a company, Motortrak Pty Ltd (“MPL”), to service the existing Australian clients of the claimant which up until that point had been serviced through Motortrak Australia Pty Ltd (“MAPL”).
From mid-2009 to October/November 2010 discussions took place between the claimant and Dealer. com for a potential sale of Motortrak to Dealer. com, a US competitor.
It is also Motortrak's case that, in May 2010 Mr Pask, on behalf of Motortrak, agreed orally with Mr Campbell to terminate the Licence Agreement and a licence termination agreement was signed on 30 June 2010 (the “Licence Termination Agreement”). Under the terms of the Licence Termination Agreement Motortrak agreed to pay to ACN AU$2.5 million within four years.
In August 2010 Mr Campbell was interviewed for the role of managing director of FCAA and was subsequently appointed, commencing his role on 3 October 2010.
As of 23 December 2010 an agreement was entered into between Motortrak and FCAA for Motortrak to provide web based services to FCAA for a period of three years from 1 January 2011 (the “Original Agreement”) at a cost of AU$690 per dealer per month. The services to be provided by Motortrak were dealer websites, dealer vehicle administration system, used car locator and vehicle searches.
On 16 May 2012 the Original Agreement was amended and its term extended to 31 August 2016 (the “First Extension”). Additional services were to be provided to an increased number of dealers and the charges were increased to AU$1695 per dealer per month.
On 15 August 2012 the Original Agreement was further amended and its term extended to 31 December 2017 (the “Second Extension”). The services were extended to include SEO (search engine optimisation) and the charges increased to AU$4100 per dealer per month from 1 January 2013.
On 30 April 2013 Mr Campbell resigned as managing director of FCAA and went to run Fiat Chrysler's New Zealand distributorship. He was replaced by Ms Veronica Johns with effect from 1 May 2013.
On 1 April 2014 the Original Agreement was further amended to include additional services and extended to 31 December 2019 (the “Third Extension”). The charges remained at AU$4100 per dealer per month.
On 1 December 2014 Ms Johns was replaced as managing director by Mr Dougherty.
In May 2015 FCAA instituted proceedings against Mr Campbell alleging that he had acted in breach of duty in relation to a number of contracts with third parties.
In May 2015 and October 2015 subpoenas were served on Motortrak ordering Motortrak to produce various documents in connection with the Australian proceedings.
In May 2016 FCAA applied to join Motortrak to the Australian proceedings. An order was made in June 2016. However Motortrak issued an anti-suit injunction application in July 2016 relying on the exclusive jurisdiction clause in the Original Agreement and on 5 August 2016 FCAA discontinued the Australian proceedings against Motortrak.
On 30 June 2016 FCAA informed Motortrak through its lawyers that it required Motortrak to cease to provide services under the Agreement.
The claim form and particulars of claim were issued by Motortrak in these proceedings in July 2016.
In September 2016 the Australian proceedings against Mr Campbell were settled. Evidence
For the claimant I heard oral evidence from Mr Pask, his wife Sharon Pask, Mr Cox, Chief Operating Officer of Motortrak, Mr McClure, Head of Client Services at Motortrak, and Mr Ducker. The evidence of Mr Lidstrom, a lawyer at FCAA involved in the negotiation of the Original Agreement, was admitted as hearsay (he has unfortunately died since preparing his witness statement). In closing submissions, counsel for the defendant identified certain paragraphs of the witness statement of Mr Lidstrom which the defendant says it would have challenged had it had the opportunity to do so and I bear this in mind in considering his evidence. The evidence of Mr White, the sales and marketing director of Motortrak from May 2015 to April 2017, was agreed and he was not called to give oral evidence. Mr Rae was finance director of Motortrak from February 2016 to May 2017. His evidence was accepted by FCAA except in relation to his opinion evidence in paragraph 9 of his witness statement.
For the defendant I heard oral evidence from Mr Manley, Mr McCraith, Mr Dougherty and Mr Kett. At the time the original agreement was entered into Mr Kett was CEO of Chrysler Asia-Pacific operations based in Shanghai. Mr Campbell as CEO of FCAA reported to Mr Kett and was interviewed by him for the role. Mr Kett reported to Mr Manley who at that time was Executive Vice President for International Sales and Global Product Planning Operations of FCA US. Mr Dougherty succeeded Ms Johns as CEO of FCAA. Mr McCraith was Director of Marketing at FCAA from May 2013 to April 2015. The evidence of Mr Phillippo, a lawyer with the ultimate parent company of dealer. com, was agreed. The evidence of Mr Dasgupta, IT director of FCA US, was agreed subject to certain qualifications set out in the claimant's closing submissions and to which I have regard in preparing this judgment.
I also had the benefit of expert evidence. Mr O'Leary, appointed by the claimant, prepared a report dated 18 December 2017 and a supplemental report dated 1 February 2018. Mr Olver, appointed by the defendant, prepared a report dated 15 December 2017 and a reply dated 2 February 2018. There was also a joint statement of the experts dated 22 January 2018.
In preparing this judgment I have had the benefit of rereading the daily transcripts of the evidence. Both counsel prepared written opening and closing submissions which I have also taken into account; a failure to refer to a particular submission, either oral or written, in the course of judgment does not mean that it was not considered by the court in reaching its conclusions.
In this judgment references to the “Agreement” are to the “Original Agreement” as amended by the First Extension, the Second Extension and the Third Extension except where otherwise stated.
Issues for the court
Following the trial it seems to me that the principal issues which the court has to determine are as follows:
i) Bribery: Was the Licence Termination Agreement a genuine document? If the Licence Termination Agreement was a genuine document, were the payments made to Mr Campbell (through ACN) by the claimant made pursuant to the Licence Termination Agreement?
ii) Did the defendant affirm the Agreement in 2015? (It is now common ground that when the Third Extension was entered into in 2014, that could not amount to affirmation by the defendant of the Agreement as there is no evidence that Ms Johns knew of the payments to Mr Campbell.)
iii) Is FCAA liable to pay invoices submitted prior to 1 July 2016 in respect of the quarter commencing 1 July 2016 and is Motortrak's claim for loss of profit excluded by virtue of the limitation of liability clause (clause 9.5) in the Original Agreement?
iv) If the payments made to Mr Campbell amounted to bribes,
a) Is FCAA entitled to recover the amount of the bribes?
b) Has FCAA established that it has suffered loss as a result of entering into the Agreement? If so what is the amount of that loss?
The parties have agreed that the question of whether FCAA breached the exclusive jurisdiction clause in the Original Agreement by bringing proceedings against Motortrak in Australia should be left to the consequential hearing following judgment being handed down.
Bribery: Relevant law
I understand from the closing submissions that...
To continue reading
Request your trial
-
Soteria Insurance Ltd (formerly CIS General Insurance Ltd) v IBM United Kingdom Ltd
...used, and the need for clear language to exclude such an obvious remedy) explains why, in Motortrak Limited v FCA Australia Pty [2018] EWHC 990 (Comm), Moulder J referred to an exclusion clause like this (namely one that excluded loss of profit but did not refer to wasted costs or wasted e......