Rakusens Ltd v Baser Ambalaj Plastik Sanayi Ticaret as
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUXTON,LADY JUSTICE ARDEN,MR. JUSTICE BODEY |
| Judgment Date | 15 October 2001 |
| Neutral Citation | [2001] EWCA Civ 1820 |
| Docket Number | A2/00/3848 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 October 2001 |
[2001] EWCA Civ 1820
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LEEDS DISTRICT REGISTRY
(His Honour Judge McGonigal)
Royal Courts of Justice
Lord Justice Buxton
Lady Justice Arden
Mr. Justice Bodey
A2/00/3848
MR. D. BERKELEY Q.C. and MR. J. RULE (instructed by Messrs McCormicks, Leeds) appeared on behalf of the Appellant
MR. M. ROLLASON (instructed by Messrs Pinsent Curtis Biddle, Leeds) appeared on behalf of the Respondents.
The substantive hearing of this appeal was preceded by a number of preliminary or interlocutory matters. We announced our determination on those matters in the course of the hearing this morning, reserving our reasons until this judgment. Although those matters, logically speaking, come before the judgment on the substantive appeal, it will be convenient to deal with the substantive appeal first, because it is not only the more important issue but also sets the background for the various interlocutory matters that we had to deal with.
The background to this appeal is an action in which Messrs Rakusens Limited are the claimants, Rakusens being an English company, and the defendants, although they are two defendants titularly, are, as we understand it, associated companies, to whom I shall refer as Baser. They are manufacturing companies carrying on the business of manufacture in Turkey.
The substance of the complaint in the points of claim is to allege that there was an oral contract made, on some date before 11th March 1999, between a Mr. Bowman, acting on behalf of the claimants, and a Mr. Phillipson, described in the claim as being “of the defendant”, for the supply by Baser to the claimants of skillets; that is to say, objects used in the manufacture of biscuits. Fortunately we do not need to go into exactly what skillets are or how they are used. Suffice it to say that it is alleged that they were defective, and in the process of manufacture contaminated biscuits that Messrs Rakusens were making. The skillets were replaced, but there is a claim for nearly £60,000 in damages for contingent loss in terms of defective products. That claim has not been in issue before us. We are not entirely clear that it has been conceded as being valid, but certainly there is at the moment no sign that there is any substantive defence to it.
The application with which we are concerned is an application originally before the District Judge, and then on appeal before His Honour Judge McGonigal, sitting as a judge of the High Court in the Leeds District Registry, to set aside the judgment obtained in this case, on the basis that the claim form was not properly served on Baser. The claim form was served at an address in Harrogate, 10 Rutland Road, which is the home of the Mr. Phillipson to whom I have already referred. The service was on the basis that 10 Rutland Road is a place of business established by Baser in England for the purpose of section 695 of the Companies Act 1986. Baser contends that that address in Harrogate is not their established place of business. It is merely the place from which Mr. Phillipson conducts an agency in which he does not have authority to contract on behalf of Baser.
It is important to emphasise that the application is made and, for reasons that I will indicate later in the judgment made only, and was before the judge made only, under section 695 of the Companies Act. The service, therefore, was said to be on Baser itself and not on Mr. Phillipson as an agent for Baser, arrangements for such latter service being provided not by section 695 but by Part 6.16 of the Civil Procedure Rules. That latter process of course requires an application to the court in contradistinction to section 695 itself.
I turn then to the structure that the claimants relied on when effecting service under the Companies Act. As is well known, section 691 of the Companies Act provides that when a company that is incorporated outside Great Britain establishes a place of business in Great Britain, it shall within one month of so doing deliver to the registrar of companies certain specified documents, one of which is a notification of the name and location of persons who are entitled and authorised to accept process on behalf of the company. As to such service of process, or indeed other documents, section 695(1) provides that process is sufficiently served on such a company if it is addressed to a person whose name has been given or registered under section 691. Subsection (2), with which we are principally concerned in this appeal, deals with a situation where the overseas company should have identified a person for such service but has not done so. Subsection (2) reads as follows:
“However -
(a) where such a company makes default in delivering to the registrar the name and address of a person resident in Great Britain who is authorised to accept on behalf of the company service of process or notices,
(b)
a document may be served on the company by leaving it at, or sending it by post to, any place of business established by the company in Great Britain.”
It is that provision that the claimant relies on.
The structure of this part of the Companies Act is of some importance, as Mr. Berkeley QC for the appellant pointed out, in that it only comes into operation when a place of business has been established within Great Britain. It is for that reason that it is permitted by section 695(2) to serve on such a place when it exists. This might, therefore, appear to be, and indeed it is, a question of fact; that is to say, whether the company has established a place of business in Great Britain and where it is. That of course means, and this is not a merely verbal distinction, the company's place of business, not just and not sufficiently a place of business that is properly said to be the place of business of its agent and not of the company itself.
I now turn to the facts that were before the judge in respect of that question. He held at page 2 of his judgment that the onus was on the claimants to show that 10 Rutland Road, Harrogate, was, at the date of service, that is to say, 21st January 2000, the place of business of Baser. Again, it is pertinent to note, for reasons that will become apparent later, that he approached that simply as a question of fact to be determined on the balance of probabilities, with the onus on the claimant. He then set out the facts that were before him. The first was Mr. Phillipson's business card which gave the 10 Rutland Road address, and then set out the names or approximately the names of the defendants and said “UK Division, John Phillipson.”
On three dates in 1999 the claimants sent orders addressed to Mr. John Phillipson, followed by the name of the company, Baser Ambalaj Plastik, at 10 Rutland Road, Harrogate, HG1 2PY. The judge made the following finding at page 3 of his judgment:
“Those orders were accepted by Baser but there is no evidence as to how they were accepted. It is clear that they were accepted because skillets were subsequently delivered by Baser to the claimants pursuant to those orders.”
The suggestion that Mr. Phillipson was, or the address was the address of, the “UK Division of Baser” was not upheld and was abandoned before the judge. As to relationships otherwise between Baser and Mr. Phillipson, the evidence was that filed by Baser's solicitor who set out a letter from Baser to Mr. Phillipson dated 6th February 1997, which said:
“At the time being, because we have just met you, we cannot give you any representship, but at least we can say that we will not get in touch with your customers directly, until we see how we are settling our relations with your company.”
The solicitor then continued in his evidence to say that the letter accurately recorded the terms on which Baser conducted business with Mr. Phillipson; that is to say, that Mr Phillipson was authorised to find customers on behalf of Baser and to forward details of the orders which those customers wished to place. Baser would deliver direct to the company. He said that Baser had no knowledge of Mr Phillipson's business card describing him as “UK Division” of Baser. Mr. Phillipson had no authority to produce such a card. That was the evidence that the judge acted upon. There were other possible items of evidence drawn to our attention by Mr. Rollason on behalf of the respondents to this appeal. In my judgement, they do not take the matter further. It is suggested that Mr. Phillipson had authority to deal with complaints. Indeed, at one point he is said, though not by himself, to have “been minded to cancel” an order that had been placed. In my judgement, it would not be appropriate for the judge to rely on those indicia because, granted that Mr. Phillipson was an agent, it was understandable that complaints about misperformance might well be directed at him in the first place, and he may or may not have said -if he did say he may not have been right in saying -that he, rather than Baser itself, would cancel any order.
On the basis of that evidence the judge had to consider the question of fact that he had identified for himself. In my judgement he went wrong because he misdirected himself as to the test that he ought to apply to that question. The crucial passage is to be found at the end of his judgment at page 8:
“In my view a place of business is a place at which the business of the company is transacted, whether by agents or by employees and an address can be a place of...
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