Yam Seng Pte Ltd (a Company Registered in Singapore) v International Trade Corporation Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leggatt |
| Judgment Date | 01 February 2013 |
| Neutral Citation | [2013] EWHC 111 (QB) |
| Docket Number | Case No: HQ11X00722 |
| Court | Queen's Bench Division |
| Date | 01 February 2013 |
[2013] EWHC 111 (QB)
Mr Justice Leggatt
Case No: HQ11X00722
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Adrian Salter (instructed by Benson Mazure LLP) for the Claimant
David Eaton Turner (instructed by Edwin Coe LLP) for the Defendant
Hearing dates: 31 October, 21-23, 26-27 November 2012
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.
A. INTRODUCTION
On 12 May 2009 the parties to this action entered into a written contract entitled "Manchester United Distribution Agreement". Under this Agreement the Defendant ("ITC") granted the Claimant ("Yam Seng") the exclusive rights to distribute certain fragrances bearing the brand name "Manchester United" in specified territories in the Middle East, Asia, Africa and Australasia. The rights were for the most part limited to duty free sales but also included "domestic" sales in Hong Kong, Macau and two provinces of mainland China. The contract period initially ran from 12 May 2009 until 30 April 2010 but was later extended until 31 December 2011.
To begin with, the business relationship between the parties was a warm one, despite some strain caused by delays in supplying products. In 2010, however, the relationship soured and in July 2010 it ended acrimoniously with Yam Seng informing ITC that it was terminating the contract as ITC was in breach.
In this action Yam Seng claims damages for alleged breaches of the Agreement which are said to have consisted in late shipment of orders, failing or refusing to supply all the specified products, undercutting prices agreed with Yam Seng and providing false information. Yam Seng also claims damages on the alternative ground that it was induced to enter into the Agreement by misrepresentation.
Both claims are strenuously denied by ITC. As regards the claim for breach of contract, ITC denies that it committed any breach, or any breach which caused loss, and in any event denies that it committed any breach which was repudiatory and justified Yam Seng in terminating the Agreement. As regards the claim for misrepresentation, ITC denies that any misrepresentation was made or, if made, was relied upon by Yam Seng. ITC also disputes the quantum of damages claimed.
The Parties
Although the contract in this case was made between two companies, the business relationship was essentially one between two individuals.
The Claimant, Yam Seng, is a company incorporated in Singapore which is controlled by Mr Sunil Tuli. Mr Tuli was born in India but now lives in Singapore. He is employed by King Power Group (Hong Kong) as managing director of its Duty Free Travel Retail Division; but he also carries on business ventures through his own company, Yam Seng. Mr Tuli has extensive experience of duty free sales, particularly in the Asia Pacific region, having been in this business for some 28 years.
The Defendant, ITC, is an English company controlled by Mr Roy Presswell. Mr Presswell is also a very experienced businessman, who has been selling fragrances for some 40 years. Since 1990 he has carried on business through ITC.
The Evidence
Mr Tuli and Mr Presswell were the only two witnesses of fact who gave evidence at the trial. There are many matters on which they disagreed. Fortunately their business dealings are well documented. In particular, there are many contemporaneous emails. I approach the evidence on the basis that, as in almost every case where there is a contemporaneous documentary record, the documents provide the best evidence of what happened. Human memory is notoriously unreliable, and the strong interests and emotions to which disputes resolved through litigation give rise are powerful distorting factors, however honest and well-intentioned the witness. Indeed, the more patently honest and convincing the witness, the greater can often be the risk of placing reliance on their testimony.
That was not a risk presented by the evidence of Mr Presswell. It is clear from the correspondence that when his business relationship with Mr Tuli broke down, he felt angry and outraged at what he regarded as unwarranted attacks on his integrity. Those feelings were equally apparent when he gave evidence. Mr Presswell was completely unwilling to contemplate that in relation to the matters complained of he might have been in any way at fault. In seeking to justify his conduct, Mr Presswell made numerous claims about what he said or must have said on various occasions to Mr Tuli which were inconsistent with the documentary evidence. I have no doubt that Mr Presswell believed those claims, many of them made for the first time during cross-examination. I am unable, however, to attach any credence to his testimony.
Mr Tuli was a far more moderate and reasonable witness who was prepared to make sensible concessions in cross-examination.
In relation to the email correspondence, Mr Presswell pointed out that he does not use a computer or mobile phone and does not have direct access to emails, but relies on a secretary to print out messages received and type emails for him. He suggested that this explains why he sometimes did not respond promptly or at length to Mr Tuli's emails.
I bear in mind that Mr Presswell was not as avid in his use of email as Mr Tuli, but it is clear from the documentary record that Mr Presswell received Mr Tuli's emails and, when it suited him, replied to emails promptly. I do not consider that Mr Presswell would have inadvertently left unanswered significant email messages.
B. THE FACTUAL HISTORY
Before considering the allegations of breach of contract and misrepresentation, I will first describe the history of the parties' business relationship. In doing so, I will record my findings on material points of fact that are in dispute.
The Start of the Relationship
The first communication between the parties was an email sent by Mr Presswell to Mr Tuli on 23 January 2009. In that email Mr Presswell said that he had been introduced by a mutual friend and that his company, ITC:
"has recently signed an exclusive three year worldwide licence agreement with Nike/Manchester United to manufacture and sell Manchester United fragrances."
Mr Presswell went on to say that he intended to visit Hong Kong and would like to meet Mr Tuli to discuss a potential deal.
The statement that ITC had "recently signed" a licence agreement to manufacture and sell Manchester United fragrances was untrue. Documents disclosed by ITC on the morning of the second day on which Mr Presswell gave evidence put that fact beyond doubt. That disclosure showed that the only document which ITC had signed as at 23 January 2009 was a 2-page "Licence Deal Summary". There were two versions of this document, the first dated 24 October 2008 and the second dated 24 November 2008. Both documents started with the words (underlined in the original):
" The following details shall not constitute a legally binding contract, nor create any pre-contractual liabilities on either party. They are simply a summary of what has been discussed previously in relation to the proposed licence and are strictly subject to contract."
Both documents also ended with a statement that, by signing the deal summary, "you agree that this reflects what has been previously discussed as forming the basis on which we will proceed with negotiations."
I am sure that Mr Presswell knew perfectly well when he contacted Mr Tuli on 23 January 2009 that he had not signed a licence agreement and that his proposed deal with Manchester United Merchandising Limited was at that stage subject to contract. From my impression of Mr Presswell, however, I do not think that it would have struck him that he was making a false statement, as he undoubtedly was. Mr Presswell's attitude, both in his dealings with Mr Tuli and in giving evidence, was characterised by a striking ability to treat wishful thinking as fact.
Under cross-examination Mr Presswell would not admit that his statement that he had signed a licence agreement was untrue. He sought to justify the statement on the basis that the licence agreement for Manchester United fragrances which he did ultimately sign at the beginning of May 2009 specified the licence period as having begun on 1 January 2009. The fact that Mr Presswell was able to convince himself that this somehow made true the statement in his email to Mr Tuli is symptomatic of the attitude I have described.
The meeting proposed by Mr Presswell duly took place in Hong Kong on 26 February 2009. Mr Tuli and Mr Presswell gave very different accounts of what was said by Mr Presswell at this meeting about the availability of the products under discussion. According to Mr Tuli, Mr Presswell said that he already had stock of two products: Eau de Toilette ("EDT") 100ml and Deodorant Body Spray 150ml in red packaging. Other products were already in production including hair gel and body gel (referred to as "toiletries") and gift sets. Mr Tuli also claimed that Mr Presswell told him that ITC had a licence from Manchester United for the full product range. Mr Presswell's evidence, by contrast, was that he made it clear that there was no product on the market at that time and that the initial launch would be limited to EDT 100ml, packaged in red to match the Manchester United red home shirt. Subsequently he planned to launch EDT 100ml in black packaging in August 2009 to match Manchester United's new black kit for away matches. Thereafter he hoped to develop deodorant, toiletries and gift...
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