Re Guardian Newspapers Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE NEUBERGER |
| Judgment Date | 08 December 2004 |
| Neutral Citation | [2003] EWHC 1238 (Ch),[2004] EWHC 3092 (Ch) |
| Docket Number | CH/2002/PTA/957,Case No: HC02–1107 |
| Court | Chancery Division |
| Date | 08 December 2004 |
[2003] EWHC 1238 (Ch)
Mr Justice Neuberger
CH/2002/PTA/957
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Royal Courts of Justice
The Strand
London WC2
MR M MANN QC with MR ADAIR (instructed by Radcliffes Le Rosieur SW1) appeared for the Appellant
MR R PRICE QC with MR S RITCHIE (instructed by Theodore Goddard, EC1) appeared for the Respondent
This is an appeal by the claimant, Mr Chan U Seek, against the decision of Deputy Master Cousins who, on 21 st October 2002, dismissed and struck out his claim against the defendant, Alvis Vehicles Limited. The claim was for over £6 million commission in respect of contracts entered into in 1995 and 1996 between the defendant and the Indonesian Ministry of Defence for the sale of military vehicles and equipment.
. The facts, as disclosed by the pleadings and the evidence, being the facts which I am assuming for the purpose of the interlocutory proceedings, and which the deputy master assumed, are as follows.
On 4 th November 1981, Mr Chan wrote to Mr Peter Levine, who was then a director of the defendant, regarding a contract between the Indonesian Ministry of Defence ("IMOD") and a competitor of the defendant, for the supply of spare parts for certain armed fighting vehicles (AFVs). Mr Chan suggested that the defendant should get involved in that business and that he could help the defendant in that connection. Between late 1981 and April 1982 the defendant sought and obtained advice and introductions from Mr Chan in connection with the personnel, and the sale of equipment, to the IMOD.
In early 1982 Mr Levine and Mr Chan went to Indonesia to interview local agents, and in or about May 1982 Mr Chan introduced a Mr Yoesie and a Mr Soekaino to the defendant as potential local agents.
In June 1983, Mr Chan financed and assisted with the organisation of the visit of certain representatives of the IMOD to London. At the end of October or beginning of November 1983, Mr Chan met Mr Levine in London and concluded an oral remuneration agreement, which is said in the particulars of claim to be in these terms:
"In consideration of the advice and assistance of Mr Chan with providing for the defendant, Mr Chan would be paid four per cent of the FOB price of any contract concluded for the sale of AFVs to the Indonesian Armed Forces."
The pleading goes on to allege that this agreement was "evidenced in writing" by a letter to Mr Chan from the defendant dated 22 nd November 1983. That letter ("the 1983 letter") was in these terms:
"Further to our recent discussion and negotiations, I am pleased to confirm by this letter that we have reserved a commission of four per cent for you on the FOB price which we shall be quoting the supply of our vehicles shortly for the Indonesian Army. We look forward to a successful outcome of this business."
The 1983 letter was addressed to Mr Chan at his place of business in Singapore, was on the defendant's headed writing paper, and was signed by Mr Levine, as chairman of the defendant.
On 9 th January 1984 the defendant submitted a quotation to the IMOD. It appears clear that, as pleaded in the point of defence:
"The transaction contemplated at that time was an agreement between the defendant and the Republic of Indonesia for the transfer of technology and facilities for the manufacture of [AFVs] in the Republic of Indonesia together with the product to be proceeded by an initial supply of 84 [AFVs]."
These AFV's were Scorpion 90's. This contemplated agreement was known as the "know-how agreement".
22. During April and May 1984 Mr Chan advised the defendant's directors in connection with a projected visit to Indonesia, and helped organise a further visit to London of representatives of the IMOD in connection with the negotiations. In September 1984, the IMOD was advised by the appropriate Indonesian agency that the Scorpion 90 AFV fulfilled the requirements of the Indonesian Armed Forces ("IAF") and indeed was the preferred choice of the Indonesian cavalry. Mr Yoesie and Mr Soekaino had been appointed agents and their agency arrangements were extended by the defendant in a letter dated 16 th March 1985.
23. On 2 nd June 1987 the IAF agreed the allocation of a budget for implementing the know-how agreement and some two months' later the IMOD appointed a team to negotiate the transaction. However, the negotiations were terminated as a result of the IMOD's financial difficulties.
24. The defendant's pleaded case (confirmed on oath by one of its directors) is that, thereafter, in about 1992 "a new team" comprising a new sales director, a new sales manager, and a new agent, was appointed to represent the defendant in Indonesia and that they began promoting Scorpion 90 AFV's to the Indonesian government. It would seem that negotiations, following the appointment of the new team, started in 1993. The defendant's solicitor puts it this way:
"As a result of a new initiative made on the behalf of the defendant during the period of 1992 to 1995 the defendant entered into two contracts. Those contracts were entered into on 13 th January 1995 and 19 th August 1996."
I will call them the 1995 contract and the 1996 contract respectively.
25. The 1995 contract was for the sale of 50 Scorpion AFVs and ancillary equipment at a total FOB price of some £76.5 million. Its terms envisaged payment of 20 per cent on the contract date and the balance payable by instalments, depending on when the material was shipped. There was no transfer of know-how, albeit there was a clause in the 1995 agreement which contemplated that there might (but might not) be subsequent independent agreements relating to the transfer of know-how.
26. The 1996 contract related to a further 50 Scorpion AFVs and ancillary equipment and was in very similar termsto the 1995 contract, save that the FOB price was slightly higher, just over £79 million.
27. On 26 th September 1996 Mr Chan, having just learned of the 1995 contract, wrote to the defendant requesting payment of the fees which he said were due to him under the agreement made in October/November 1983 ("the 1983 agreement"). The last substantial paragraph of that letter said this:
"Now that a contract has been awarded and delivered, commission is therefore due to me. Please confirm that payment will be made promptly."
28. Mr Preston of the defendant replied denying liability. Mr Chan repeated his claim on 25 th September 1998, some two years later saying in a letter to Mr Preston, with a copy to Lord Levine (as he had then become):
"I am sure you will agree that I have played a part in introducing the Alvis vehicles to Indonesia. We have spent a lot of time, effort and money for the work we have done and would like your consideration to compensate me the expenses which I have paid."
Again, this claim was denied by the defendant.
29. More than a year later, on 27 th October 1999, Mr Chan wrote a fuller letter to the defendant repeating his request for payment, the last two paragraphs of that letter were in these terms:
"I wish to dispel one particular matter which may assist in the sensible resolution of the matter and which could make each of us reasonably content and that is that I am not claiming any agency for what took place at the time in Indonesia. My claim is of a consultant and all I wish is to be reimbursed by proper expenses and reasonable compensation in connection with the matter. It occurred to me in reading the correspondence that you might be able to revere the subject of a major claim for commission based upon the capital value of the product ultimately sold or the monies earned by the group. This is not the case.
"I would be happy to meet with you, show you the copy correspondence and indeed provide you with copies to support what I was saying. It has become a matter not only of money but of principle and I can only assume that there has been a misunderstanding as to what you might think my requirements may be …"
Again, this claim was rejected by the defendant.
30. On 20 th July 2001, these proceedings were issued and Mr Chan claims some £6.3 million, being four per cent of the aggregate of the FOB price, payable for the AFVs and associated equipment under the 1995 and 1996 agreements. There were then exchanges of correspondence and applications, including an application for security for costs, and it is right to record that the defendant has provided £25,000 which has been lodged in a joint deposit account as such security.
31. The particulars of claim were served on 3 rd December 2001, the particulars of defence much more promptly on 21 st December 2001, and a reply on 21 st June 2002. On 15 th July 2002 the defendant issued an application to strike out or dismiss the claim under CPR 3.4(2) and/or 24. That application came before the deputy master who struck out and dismissed the claim. He rejected the contention that it should be struck out or dismissed on the basis that the proceedings were being pursued in bad faith as a bargaining weapon by Mr Chan to recover his expenses. He also rejected the contention that he should dismiss the claim on the grounds that it had been conducted in such a leisurely and slow way.
32. The defendant, who appears through Mr Richard Price QC and Mr Stuart Ritchie, does not seek to cross-appeal on those aspects, but, quite understandably, seeks to rely upon those facts as providing support for the master's first reason for dismissing the claim, namely that the claim stands no real chance of success and should, therefore, be dismissed. The alternative basis for dismissing the claim only...
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