Roder UK Ltd v Titan Marquees Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore,Lady Justice Hallett,Lady Justice Black |
| Judgment Date | 12 October 2011 |
| Neutral Citation | [2011] EWCA Civ 1126 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2011/0383 |
| Date | 12 October 2011 |
[2011] EWCA Civ 1126
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CAMBRIDGE COUNTY COURT
DISTRICT JUDGE KIRBY
Royal Courts of Justice
Strand, London, WC2A 2LL
The Right Honourable Lord Justice Longmore
The Right Honourable Lady Justice Hallett
and
the Right Honourable Lady Justice Black
Case No: B2/2011/0383
OCB00761
Mr Watson Pringle (instructed by Mason Bullock) for the Appellants
Mr Cameron Maxwell Lewis (instructed by Fowler De Pledge) for the Respondent
Hearing dates : 18 th July 2011
Introduction
Every law student knows that s. 4 of the Statute of Frauds Act 1677 required (and still requires) a guarantee to be in writing if it is to be enforceable. What every law student may not know, however, is that Pasley v Freeman (1789) 3T.R. 51 decided that a representation by one person that another person was creditworthy was actionable if made fraudulently. Since oral guarantees would often have been preceded by some representation of creditworthiness, many cases were brought alleging that such a representation had been made, which the maker knew to be false. Not only was this an easy way round the Statute of Frauds but it led to litigation about oral representations or promises which the Statute had intended to keep out of court. Parliament decided to intervene by enacting section 6 of the Statute of Frauds (Amendment) Act 1828. Abbott CJ as Chief Justice of the King's Bench took an active interest in the matter and appears to have drafted the Act which was passed soon after he became Lord Tenterden and it is always known as Lord Tenterden's Act. Section 6 provides as follows:—
"No action shall be brought whereby to charge any person upon or by reason of any representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade or dealings of any other person, to the intent or purpose that such other person may obtain credit, money or goods upon [sic], unless such representation or assurance be made in writing, signed by the party to be charged therewith."
Background
The defendants are the sole directors and shareholders of a company called Titan Marquees Limited ("Titan"), whose business was providing marquees for events. The respondent ("Roder") is a wholesaler of marquee equipment. Roder provided goods to Titan on ten occasions between 2002 and 2008. On each occasion the goods were provided expressly on terms that payment would be made within 30 days. Nevertheless Titan's account was in debit throughout the trading relationship between the parties, the extent of its indebtedness ranging between £4,000 and just over £40,000.
There was at trial a dispute as to the ownership of certain goods that Roder provided to Titan. This dispute concerned the incorporation into the contract of a retention of title clause, contained at clause 9 of Roder's standard terms and conditions. The clause provided that property in the goods sold would not pass until Roder had received full payment in cash or cleared funds for the price of the contract goods and all other goods agreed to be sold by Roder to Titan for which payment was then due. The District Judge held that Roder's terms (including Clause 9) were part of the contract between the parties.
In around March 2007, Roder threatened proceedings through a debt recovery firm called LPL Commercial Investigations and a payment plan was agreed between the parties whereby Titan would endeavour to make monthly payments of £1,000 to reduce the outstanding balance ("the Payment Plan"). Three payments were made under the Payment Plan before it became apparent that payment could not be sustained at that level and a standing order was put in place for £500 per month. Payments at that level continued from July 2007 to October 2008 inclusive, when they ceased save that a few payments were made sporadically in May 2009 onwards.
On 17 th March 2009 Ms Minall, Roder's Office Manager, called Mr Phillips to ask about the outstanding payments. He did not answer but called back. He told her that Titan had an insurance payout pending, and that once that was received it would be able to resume the Payment Plan. In fact no insurance payout was pending at the time.
In July 2009 there was a conversation between Mr Lavy, the managing director of Roder, and Mr West. Mr West said that Titan was "selling up" and that at the end of the trading season it would pay all of its creditors from the proceeds of sale.
Mr West did not reveal that on 31 st May 2009 Titan had entered into an agreement with Richard Roff Limited ("Roff"), trading as Meadow Marquees. This Agreement provided inter alia that Meadow Marquees would provide Titan with labour and fuel to enable it to perform its contracts during the 2009 summer trading season. Titan would retain the bulk of the income earned from those contracts, which it would use to pay off its debts by the end of that season. At that time Titan would cease trading and property in its goods would pass to Meadow Marquees as consideration for the overheads borne by Roff. Titan did in fact cease trading on 31 st October 2009 and Meadow Marquees acquired such assets as they had at that time.
Roder issued proceedings on 7 th May 2010 and in its Amended Particulars of Claim they claimed in debt against Titan for unpaid invoices for the price of the goods, and in damages against the Directors in the tort of deceit. The basis for the latter claim was that as a result of the Directors' representations Roder had not sued Titan earlier than May 2010 or sought to recover its goods, which it had now lost the opportunity to do because Titan no longer had any assets and had ceased trading. Titan did not defend the claim and was not represented. Accordingly judgment was entered against it on the first day of trial.
The judge held
i) Mr Phillips' representation that an insurance payout was pending was false to his knowledge;
ii) Mr West's representation that Titan was selling up and that everyone would be paid in full from the proceeds of sale was made recklessly without regard to the likelihood of Titan being, in fact, able to repay its creditors;
iii) in reliance on these representations Roder refrained from issuing proceedings in 2009 and also refrained from exercising their rights under the retention of title clause;
iv) the Directors could not rely on section 6 of the Act because the oral representations had not been made with the intent or purpose that Titan should obtain credit; Titan already had credit and the intent of the representations was to avoid Roder repossessing its goods, or suing for outstanding sums;
v) the Directors were accordingly liable in the tort of deceit for the amount of the value of the goods in respect of which Roder would have been able to recover under the retention of title clause; the judge gave judgment for £6,500 against the second and third defendants.
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...arguable case as against the first (or any other) defendant in deceit. 52 Corrected for a typographical error following Roder UK Ltd v Titan Marquees Ltd [2012] QB 752, per Longmore LJ at paragraphs 13–16, s.6 provides that: “ Action not maintainable on representation of character etc., un......