Oxnard Financing S.A. v Rahn
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NOURSE,LORD JUSTICE MUMMERY,SIR JOHN VINELOTT |
| Judgment Date | 01 April 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0401-13 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CHANI 96/1298 CMS3 |
| Date | 01 April 1998 |
[1998] EWCA Civ J0401-13
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Robert Walker)
Royal Courts of Justice
Strand, London WC2
Lord Justice Nourse
Lord Justice Mummery and
Sir John Vinelott
CHANI 96/1298 CMS3
MR C TURNBULL (instructed by Messrs Bircham & Co, London SW1) appeared on behalf of the Appellant Defendants.
MR M BRIGGS QC (instructed by Messrs Peters & Peters, London W1) appeared on behalf of the Respondent Plaintiff.
Wednesday, 1st April 1998
Lord Justice Mummery will deliver the first judgment.
This is an appeal from an order of Mr Justice Robert Walker dated 16th July 1996, following a hearing on 26th March 1996 and the delivery of a reserved judgment on 19th April 1996. The judge granted leave to appeal.
The case concerns a claim for payment of Can$2 million, being the balance of the purchase price alleged to be due under a contract claimed to have been made on 4th August 1998, as evidenced by an exchange of telexes and a contract note. The subject matter of the contract was 3,125,000 shares in a company called Coastline Resources. The sale price was Can$5 million, to be paid on or before 11th November 1988. The price was calculated at Can$1.60 per share. The sellers were a firm of London stockbrokers, T C Coombs & Co, which collapsed in 1991. The plaintiff claims as assignee of T C Coombs & Co in respect of the balance of Can$2 million. The purchasers were a Swiss banking general partnership, Rahn & Bodmer, who have paid Can$3 million, but there is a dispute on liability to pay the balance of Can$2 million.
The main point in contention before Mr Justice Robert Walker, and, as things have turned out, the sole point for decision on this appeal, relates to the joinder as defendants of four named individuals, two of whom were partners in Rahn & Bodmer at the time when the cause of action arose, and all four of whom were partners in the bank at the time when the writ was issued. There was a fifth partner at that time, but no point has been taken on the failure to join him.
The point raised involves a consideration of:
(a) the nature and status of the bank under Swiss law, on which there was uncontroversial expert affidavit evidence from two Swiss lawyers, one on each side; and
(b) the procedure and practice of English courts governing the description of unincorporated bodies as parties to litigation. On that point there were competing submissions from Mr Turnbull, on behalf of the bank, and Mr Briggs QC, on behalf of the plaintiff.
The Proceedings
The writ was issued on 2nd August 1994. The plaintiff is named as Oxnard Financing SA. The defendants are described in the following fashion:
"(1) Dr Christian Rahn
(2) Hans-Jakob Biedermann;
(3) Martin Haab-Biedermann;
(4) Frank Bodmer Defendants"
The writ then states, "To the Defendants" and their names are repeated. There follow the words, "of Rahn and Bodmer Banquiers Zurich". The address given is of the firm of Rahn & Bodmer in Zurich. The endorsement reads as follows:
"The Plaintiff's claim is for
(1) payment of the outstanding sum of Can$2 million due under a contract made between T C Coombs & Co Limited and the Defendants on 4 August 1988, the benefit of which has been assigned to the Plaintiff …"
There is in (2) a claim for interest on that sum and, in (3), costs.
It is clear from the writ that the claim on the contract was made against the four individuals as members of Rahn & Bodmer.
By 14th October 1994 all the defendants had acknowledged service of the proceedings. The statement of claim should have been served by the beginning of November 1994. By 11th November 1994 the limitation period had expired. On 5th June 1995 a statement of claim was purportedly served out of time and without leave.
The statement of claim makes it clear that the claim was for breach of contract against Rahn & Bodmer. Paragraph 1 states:
"The Defendants are and/or were at all material times partners in the banking partnership of Rahn & Bodmer Banquiers, Zurich (lsquo;Rahn & Bodmer')."
Paragraph 2 refers to the contract alleged to have been made for the sale of the shares, and concludes:
"TCC [T C Coombs & Co] agreed to sell and Rahn & Bodmer agreed to purchase 3,125,000 shares in Coastline Resources NPV (lsquo;the Shares') at a price of Can$1.60 per share, amounting in total to Can$5 million, settlement to be on or before 11th November 1988."
Paragraph 3 refers to the assignment and paragraph 4 to the notice of assignment. Paragraph 9, having referred to various assignments and notices of assignment given, states:
"In the premises, the Defendants are liable to pay the Debt, being the outstanding balance of Can$2 million due under the Contract, to the Plaintiff, but they have failed to do so."
The prayer repeats the claim for payment of the sum alleged to be due with interest.
The response of the defendants to the service of the statement of claim was to issue a summons on 13th June 1995 to set aside service of the writ under RSC Ord.12,r.8, to strike out the writ under RSC Ord.18,r.19, to strike out the writ and statement of claim for non-compliance with the rules under RSC Ord.19,r.1, and to dismiss the action for want of prosecution.
The counter-response of the plaintiff was to take out a summons on 2nd October 1995 for leave to amend the proceedings, if necessary, to describe the defendants as Rahn & Bodmer, for leave to serve the statement of claim out of time under Ord. 18,r.1, and, if necessary, for a declaration under Ord. 2,r.1 that the writ was to be treated as duly served on the general partnership of Rahn & Bodmer by 14th October 1994 at the latest.
The Judgment
Justice Robert Walker held that, although Rahn & Bodmer had the characteristics of a separate entity under Swiss law, it was not a corporation. Under English law, the lex fori, the plaintiff had correctly sued Rahn & Bodmer in the name of the four individuals in their capacity as partners in Rahn & Bodmer. He held further that, if he was wrong about that, the position was, first, that he had no jurisdiction under Ord. 20,r.5(3) to grant leave by substituting Rahn & Bodmer as defendant. He found as a fact that the defendants had been left in reasonable doubt as to the identity of the person intended to be sued.
Secondly, he held that he had jurisdiction, if necessary, under Ord. 2,r.1, to grant leave to amend by substituting Rahn & Bodmer as defendants, but that, thirdly, he would have refused to exercise his discretion to grant such leave, as that would defeat the accrued right of limitation of Rahn & Bodmer and the justice of the case would not have demanded the amendment.
Fourthly, he dismissed the defendants' application to strike out the writ and gave leave to serve the statement of claim out of time. He also allowed the plaintiff to clarify the position on the capacity in which the individual defendants were sued by adding, in brackets, after the names of parties, the words "Partners in, and trading as, Rahn & Bodmer". That was not objected to by the defendants. Their primary contention was that this clarification did not enable the plaintiff to overcome the problem created by naming the individual defendants rather than naming Rahn & Bodmer. Alternatively, if it did enable the plaintiff to overcome that problem by making Rahn & Bodmer a party, that was impermissible, as it would in effect be allowing for an amendment as to parties after the expiration of the limitation period.
The Appeal
The defendants appeal against the decision of the judge that the four defendants were correctly sued. By a respondent's notice, the plaintiff challenges the judge's conclusions on jurisdiction and discretion as to amendment. If the appeal fails on the first point, then the amendment points taken in the respondent's notice do not arise for decision. There is no appeal by the defendants against the judge's refusal to strike out the case for want of prosecution or his order granting leave to serve a statement of claim out of time.
Swiss Law
An important part of the judgment is in the findings on Swiss law. Expert evidence was given by affidavit by two Swiss lawyers, Dr Paltzer and Dr Gully-Hart. The evidence referred to the provisions of the Swiss Code of Obligations, in English translation, Third Division, Twenty-fourth Title, headed "General Partnership".
The evidence, on which there was no disagreement, was to this effect. Rahn & Bodmer is a general partnership, within the meaning of Article 552, which carries on the business of banking in Zurich. Article 552 states:
"1. A General Partnership is a company composed of two or more natural persons joining together to conduct, under a common company name (Art. 944 et seq.), a trading, manufacturing or other business carried on in a commercial manner, without limitation of their liability towards company obligees.
2. The partners must have the company registered in the Commercial Register."
The evidence of Dr Gully-Hart, which was not disputed by Dr Paltzer, was that a general partnership is not a corporation under Swiss law. The evidence of both of them was that, under Swiss law, a general partnership is in certain respects an entity distinct from the individual partners. It can make contracts in its name; it can sue or be sued in its name; it can own property. Particular reference was...
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