Law reports

Law reports

ARBITRATION

Award declared of no effect - arbitration reverting to position before award made - arbitral tribunal retaining jurisdiction

Hussmann (Europe) Ltd v Pharaon (formerly trading as Al Ameen Development and Trade Establishment): CA (Lord Phillips of Worth Matravers Master of the Rolls, Lords Justice Rix and Scott Baker): 4 March 2003

By a contract made in 1990, P became the sole distributor of H Ltd's products in Saudi Arabia.

Relations deteriorated until H Ltd terminated the contract and began arbitration proceedings under the contract.

Confusion arose because P had in the meantime changed his trading name.

The arbitrators made an award in favour of P under his new trading name.

On H Ltd's application the judge held that the arbitrators had had no jurisdiction to make the award, which should be set aside and could not be enforced, and made an order under section 67(1)(b) of the Arbitration Act 1996 declaring the award to be of no effect.

The arbitrators then made a second award in favour of P by reference to his original trading name.

H Ltd's application to have the second award declared of no effect was refused on the ground, among other things, that the arbitrators had not exhausted their jurisdiction.

H Ltd appealed.

Cyril Kinsky (instructed by McClure Naismith) for H Ltd; Richard Siberry QC and Paul Key (instructed by Zaiwalla & Co) for P.

Held, dismissing the appeal, that a declaration under section 67(1)(b) that an arbitration award was of no effect did not mean that the jurisdiction of the tribunal was spent; that in principle the arbitration reverted to the position in which it had been before the arbitrator had published his award, whether the award was set aside under section 67(3)(c) or declared to be of no effect under section 67(1)(b); and that, accordingly, the arbitrators had retained jurisdiction to make the second award.

COSTS

Solicitor practising under rule 27 of Solicitors Indemnity Rules 2001 - not entitled to charge for time as solicitor in personal litigation

Boyd & Hutchinson v Joseph: ChD (Mr Justice Patten, sitting with Costs Judge Seager-Berry and Mr Howells as assessors): 14 March 2003

The defendants were ordered to pay the claimant's costs of a taxation hearing.

The costs judge found that costs incurred by the claimant prior to 26 April 1999 fell to be assessed under RSC order 62 and that the claimant was a practising solicitor within the meaning of that order and was therefore entitled to charge for her time as a solicitor rather than be treated as a litigant in person.

The defendants appealed against that decision on the grounds that since the claimant had been practising under rule 27 of the Solicitors Indemnity Rules 2001 (then rule 29) she had not been entitled to charge for her time and so could not be regarded as a practising solicitor for the purposes of RSC order 62.

Jeremy Morgan (instructed by Boyd & Hutchinson) for the defendant: Jeffrey Littman (instructed by Jennifer Joseph, Feltham) for the claimant.

Held, allowing the appeal, that under CPR 51 PD 18(2) a party had a right to recover any costs incurred before 26 April 1999 if such costs would have been allowed on a taxation under RSC order 62; that the costs incurred by the claimant before 26 April therefore fell to be considered as if RSC order 62 applied; that under RSC order 62, rule 18(6) and The London Scottish Benefit Society v Chorley [1884] 13 QBD 872 a solicitor who represented themselves in litigation was entitled to recover costs for their own time; that since, however, the claimant had practised under rule 27 of the Solicitors Indemnity Rules 2001 she could not have her time regarded as valuable and could not demonstrate that she had used up time in litigation which she could otherwise have used to practise as a solicitor for reward; that a solicitor's ability to charge for their time was the defining criterion for the purposes of RSC order 62, rule 18(6); and that, accordingly, the claimant could not be classed as a practicing solicitor but was classed as a litigant in person for the purposes of costs incurred prior to 26 April 1999.

CRIMINAL

Defendant applying tourniquet to arm of deceased to enable the deceased to inject himself with heroin - defendant charged with administering poison so as to endanger life and manslaughter - defendant committing both offences as principal

R v Rogers: CA (Lord Justice Rose, Mr Justice Gross and Mr Justice Pitchers): 14 March 2003

The defendant held his belt as a tourniquet around the deceased's arm while the deceased injected himself with heroin, as a result of which he collapsed and died.

The defendant was charged under section 23 of the Offences against the Person Act 1861 with one offence of administering poison so as to endanger life, and with one count of manslaughter.

The trial judge ruled that the application of the tourniquet was 'part and parcel of the unlawful act of administering heroin' and that there was no defence to either count.

The defendant accordingly pleaded guilty to both charges.

He appealed against conviction.

Nick Lewin (assigned by the Registrar of Criminal Appeals) for the defendant; Geoffrey Mercer QC (instructed by the Crown Prosecution Service, Plymouth) for the Crown.

Held, dismissing the appeal, that the crucial question was whether the defendant's conduct had been that of a principal, in which case he would be guilty of both offences, or of a secondary party, in which case he would be guilty of neither since no offence had been committed by the deceased; that it was artificial and unreal to separate the application of the tourniquet from the injection since the purpose of the tourniquet was to raise a vein into which the deceased could insert the syringe; that, accordingly, by applying and holding the tourniquet, the defendant had been playing a part in the mechanics of the injection which had caused death; and that the judge's ruling had therefore been correct.

(WLR)

Having a bladed article in a public place without good reason or lawful authority - defence for defendant to prove good reason or lawful authority - legal burden imposed on defendant not incompatible with convention right to presumption of innocence

R v Matthews: CA (Lord Justice Mantell, Mr Justice Field and Judge Paget QC): 25 March 2003

The defendant was tried on a count of having a bladed article in a public place without good reason or lawful authority contrary to section 139 of the Criminal Justice Act 1988.

By section 139(4)(5) it was a defence for the defendant to prove that he had good reason or lawful authority for having the article with him in a public place, and in particular for use at work, for religious reasons or as part of any national costume.

The defendant claimed that he had good reason to have the knife with him, and the judge directed the jury that it was for the defendant to prove that it was more likely than not that he had the knife for a good reason.

The defendant was convicted.

He appealed on the ground that section 139(4)(5) was a reverse onus provision which was incompatible with article 6(2) of the European Convention on Human Rights.

Philip Sinclair (assigned by the Registrar of Criminal Appeals) for the defendant; Keith Stones and Richard Hearnden (instructed by Crown Prosecution Service, Woolwich) for the Crown.

Held, dismissing the appeal, that, if construed without reference to section 3(1) of the Human Rights Act 1998, section 139(4)(5) imposed a persuasive, and not merely evidential, burden and thereby made inroads on the right conferred by article 6(2) of the convention; that there was objective justification for some derogation from the presumption of innocence, and the imposing of a reverse onus within the provisions was proportionate; that the provisions were therefore not incompatible with article 6(2); and that, accordingly, no question arose as to whether they could be read down pursuant to section 3(1) of the 1998 Act so to impose merely an evidential burden.

(WLR)

INSOLVENCY

Fraudulent trading - evidence showing that one creditor was defrauded not proving that directors were knowingly party to carrying on company's business with intent to defraud creditors - any contribution to assets to compensate for loss to creditors, not to punish

Morphitis v Bernasconi and others [2003]: CA (Lords Justice Aldous and Chadwick and Mr Justice Munby): 5 March 2003

A liquidator sought a declaration against, among other things, two former directors that business of the company had been carried on with intent to defraud creditors contrary to section 213 of the Insolvency Act 1986.

At trial the liquidator relied on one misrepresentation designed to mislead one creditor.

The judge found that fraudulent trading had been made out and made a declaration that the directors should contribute to the assets of the company, including a punitive element, that liability having been extinguished by the liquidator's acceptance of a payment into court.

The liquidator appealed.

The directors cross-appealed.

David Chivers QC (instructed by Stephenson Harwood) for the liquidator.

Clare Hoffmann (instructed by Steptoe & Johnson) for the directors.

Held, dismissing the appeal and allowing the cross appeal, that for the purposes of section 213 of the 1986 Act it was not sufficient to show that any creditor of the company had been defrauded in the course of carrying on the business of the company: it had to be shown that the business of the company had been carried on with intent to defraud; that, although one transaction against a single creditor could suffice, on the facts fraudulent trading was not made out; that there was no power to include a punitive element in any contribution to the assets; and that any contribution ordered to be made to the assets in which the company's creditors would share in the liquidation should reflect and compensate for the loss caused to those creditors by the carrying on of the business in the manner which gave rise to the exercise of the section 213 power.

(WLR)

LAND

Easement - right of way granted by lease - use of right of way by tenant of dominant land to access road on non-dominant land not constituting permissible ancillary use

Sargeant and another v Macepark (Whittlebury) Ltd [2003]: ChD (Mr Gabriel Moss QC sitting as deputy High Court judge): 5 March 2003

Dominant land, consisting of a hotel situated close to a motor racing circuit, was leased by the tenant from the landlords.

The lease granted a right of vehicular access from the main road to the dominant land, by way of easement, over land belonging to the landlords (servient land).

Visitors to the hotel used the access to get to the main road and thus to reach the circuit by a circuitous route.

A copse owned by a third party (non-dominant land) was situated between the dominant land and the circuit.

The tenant proposed, by agreement with the owners of the copse, to construct a 'fast access' road through the copse to enable hotel guests to reach the circuit directly from the hotel.

The landlords objected and the parties referred to arbitration the question whether, for example, it would be a lawful use of the right of access for hotel guests to enter the dominant land by that access and then drive through the copse to the circuit.

The arbitrator made an award in favour of the landlord, deciding that such use was outside that grant by the lease.

The tenant appealed pursuant to section 69 of the Arbitration Act 1996.

Martin Dray (instructed by Beachcroft Wansbroughs) for the landlords; Patrick Rolfe (instructed by Prettys, Ipswich) for the tenant.

Held, dismissing the appeal, that as a general principle, a right of access by easement of its nature had to be used for the benefit of the dominant land and not for the benefit of the non-dominant land, whether or not the non-dominant land was owned by the owner of the dominant land; that the doctrine of ancillary use could provide an exception to that rule where there was no benefit to the non-dominant land, for example where no profit could be made out of the its use, or the extent of the use for the benefit of the non-dominant land was insubstantial; and that, since the use described could benefit the non-dominant land (because the owners could charge the tenant) and in substance the copse and the circuit would also become dominant properties, the use described did not constitute merely ancillary use.

LANDLORD AND TENANT

Claim for possession for unpaid rent - payment of rent by cheque two days before hearing neither refused nor presented for payment - court having jurisdiction to adjourn hearing for cheque to be cleared

Day v Coltrane: CA (Lords Justice Potter and Tuckey and Mr Justice Wall): 14 March 2003

The landlady brought possession proceedings under ground 8 in part I of schedule 2 to the Housing Act 1988 against her assured tenant for non-payment of rent which had been owing for more than eight weeks as at the date of notice under ground 8 and which remained unpaid and was accumulating.

Two days before the hearing of the possession proceedings the tenant sent a cheque for all the arrears of rent to the landlady's solicitors, who neither refused nor returned it.

The district judge adjourned the hearing for 56 days for the cheque to be cleared.

The circuit judge allowed the landlady's appeal and made an order for possession, holding that the payment by cheque was not legal tender and the court had no jurisdiction to adjourn the hearing.

The tenant appealed.

Mark Wonnacott (instructed by Mary Ward Legal Centre) for the tenant; Simon Braun, solicitor-advocate (of Sherrards, St Albans) for the landlady.

Held, allowing the appeal, that the tender of a cheque which had not been refused by the payee was a conditional payment which would become absolute on the date of the payment if, and only if, the cheque were cleared when first presented for payment; and that, since the landlady or her solicitor had not refused to accept the payment of the tenant's cheque in place of cash, towards the unpaid rent, the court had jurisdiction to adjourn the hearing for seven days because it could not be satisfied on the date of the hearing that the rent claimed under ground 8 notice and that which had accumulated thereafter remained unpaid.

PRACTICE

Submission to jurisdiction - defendant indicating intention to defend and to challenge jurisdiction - no submission to jurisdiction

SMAY Investments Ltd v Sachdev: ChD (Mr Justice Patten): 14 March 2003

The claimants issued proceedings in England concerning a dispute over funding of and ownership of the third defendant.

The first and third defendants in their acknowledgment of service indicated both that they intended to defend the action and in the case of the first defendant that he intended to challenge the jurisdiction of the court, maintaining that India was the appropriate forum and in the case of the third defendant that it was applying to set aside service on it outside the jurisdiction.

The first defendant had sought and obtained an extension of time for service of his defence and also sought the discharge of a freezing order by offering undertakings to the court.

He was represented by counsel on his applications.

The claimants maintained that those actions on the part of the first and third defendants meant that they had waived their rights to challenge the jurisdiction of the court under CPR part 11.

Anthony Trace QC and Jonathan Russen (Merriman White) for the claimants; Murray Rosen QC and Robert Deacon (Charles Russell, Guildford) for the first and third defendants; James Drake (Stevens & Bolton, Guildford) for the fourth defendant.

The second defendant did not attend and was not represented.

Held, finding that the defendants had not submitted to the jurisdiction, that any conduct on the part of a defendant said to amount to a submission to the jurisdiction of the court, and therefore a waiver of the right to challenge the jurisdiction of that court, had to be wholly unequivocal that an application for the extension of time for the service of a defence could only operate as an unequivocal submission to the jurisdiction if the only possible explanation for it was an intention on the part of the first defendant to have the case tried in England; that a party who attended before a judge to challenge a freezing order obtained without notice did not thereby waive his right to contest jurisdiction unless as part of those proceedings he agreed to an order which in terms regulated his position until the trial of the action; that since the first defendant's conduct was anything but unequivocal and since he had not offered an undertaking until trial, and since the third defendant's conduct had been equivocal, neither the first nor the third defendant had waived their right to challenge the jurisdiction of the court.

Claim for damage caused by road traffic accident restricted to amount of insurance policy excess - insurers' agreement for court's decision to determine liability for full repair costs - claimant not to be required to increase claim to reflect full amount of loss

Khaiban v Beard: CA (Lords Justice Ward and Dyson): 10 March 2003

The claimant and the defendant, both covered by insurance, disputed liability for a road traffic accident which had resulted in damage to both their vehicles.

The claimant paid an insurance excess of 125, the balance of his repairs costs being met by his insurers.

The parties' insurers reached an agreement to accept a decision of the court as to liability to determine how the repair costs should be allocated between them, and the claimant brought an action to recover 125.

The district judge ordered the claimant to increase his claim to reflect the full amount of his loss and, when he failed to do so, struck it out.

The claimant appealed.

Michael Ashe QC and Constance Mahoney (instructed by Websters) for the claimant; the defendant did not appear and was not represented.

Held, allowing the appeal, that there was nothing in the Civil Procedure Rules 1998 preventing a claimant from limiting the amount of his claim; that there was therefore nothing objectionable about the practice sometimes adopted by insurance companies of bringing subrogated claims in traffic cases, limited to the amount of the insured's excess in order to use the small claims track, to get a decision on liability; and that, accordingly, the district judge had been wrong to order the claimant to increase the amount of his claim and had not been entitled to strike it out for his failure to do so.

(WLR)

SHIPPING

Typed words on face of bill of lading prevailing over pre-printed words on reverse - shipowners' entitlement to rely on Himalaya clause - no cause of action in tort accruing to cargo owners unless title already obtained

Homburg Houtimport BV v Agrosin Private Ltd (the Starsin): HL (Lord Bingham of Cornhill, Lord Steyn, Lord Hoffmann, Lord Hobhouse of Woodborough and Lord Millett): 13 March 2003

Cargoes of wood, carried by the defendants' vessel, the Starsin, under bills of lading of which the cargo owners at various dates became holders, suffered progressive deterioration owing to faulty stowage.

At the time of the voyage the Starsin was on time charter to CPS, which subsequently became insolvent.

A representative bill of lading contained on its face in a box headed 'Signature' the typed words 'As Agent for [CPS] (The Carrier)'.

By condition 2 of 35 conditions in very small print on the reverse of the bill the Hague-Visby Rules (as scheduled to the Carriage of Goods by Sea Act 1971) were incorporated.

On the cargo owners' action against the shipowners, Mr Justice Colman [2000] 1 Lloyd's Rep 85 held that the bills of lading were charterer's bills and that CPS had been the contractual carrier.

The Court of Appeal [2001] 1 Lloyd's Rep 437 by a majority reversed the judge, holding that the bills were shipowner's bills and that the shipowners had been the contractual carriers.

The shipowners appealed; the cargo owners cross-appealed.

Steven Gee QC, Vasanti Selvaratnam QC and Mark Jones (instructed by Holmes Hardingham Walser Johnston Winter) for the shipowners.

Iain Milligan QC and Nigel Jacobs (instructed by Clyde & Co) for the cargo owners.

Held, allowing the appeals except in the case of one cargo owner and dismissing the cross-appeals, that, in so far as there were inconsistencies between the typed words on the face of the bills of lading and the pre-printed conditions on the reverse, greater weight was to be given to the former and, in view of the statement on the face, the bills were charterer's bills; that (Lord Steyn dissenting) article III, rule 8 of the Hague Rules limited the shipowners' protection against liability to the cargo owners in tort to that available to the carrier; but that the cargo owners' cause of action in tort had arisen once and for all when more than insignificant damage to the cargo had occurred and, accordingly, only the one cargo owner who had obtained title to the goods before that date was entitled to recover.

(WLR)

TORT

Animals - horse bolting from field and colliding with car on highway - owners strictly liable because propensity to bolt when alarmed characteristic normal for species

Mirvahedy v Henley and anor: HL (Lord Nicholls of Birkenhead, Lord Slynn of Hadley, Lord Hobhouse of Woodborough, Lord Scott of Foscote and Lord Walker of Gestingthorpe): 20 March 2003

The claimant was injured when a horse belonging to the defendants, which had panicked for some unknown reason, bolted with two others from its field on to a main road and crashed into his car.

The judge, on his claim for damages, held that the defendants had not been negligent and that, although the horse had displayed characteristics normal for the species in the particular circumstances within the second limb of section 2(2)(b) of the Animals Act 1971, those characteristics had not caused the damage.

The Court of Appeal see [2002] Gazette, 17 January, 25; [2002] QB 769 allowed the claimant's appeal.

The defendants appealed.

Richard Lissack QC and David Westcott (instructed by P Jane M D Phillips, Tavistock) for the defendants; Christopher Sharp QC and Richard Stead (instructed by Sharpe Pritchard for Foot Anstey Sargent, Exeter) for the claimant.

Held, dismissing the appeal (Lord Slynn of Hadley and Lord Scott of Foscote dissenting), that the keeper of a non-dangerous animal which behaved in a way that, though not normal behaviour for the species, was normal for the species in the particular circumstances, such as a horse bolting if sufficiently alarmed, was strictly liable under section 2(2)(b) of the 1971 Act for damage or injury caused by it; that the accident to the claimant had been caused by the defendants' horses behaving in an unusual way caused by their panic; and that, accordingly, they were liable to him.

(WLR)