Legal News

What are the practical implications of this case? Under statutory limitation principles, an equitable set-off defence is ordinarily not caught by a time bar. Typically, limitation statutes render a claim unenforceable rather than erasing the underlying debt or liability. That is, time limits usually bar remedies without destroying the obligation itself. Hence the defence remains available. Consequently, equitable set-off, operating as a shield and not as enforcement, can still neutralise a claim for defendants who have acted a touch late. However, in this matter the High Court confirmed the parties’ contractual freedom to stipulate a different result: that their contractual time limit extinguishes the underlying liability entirely. Applying the now well-rehearsed canons of contractual construction, Mrs Justice May emphasised the need to read each agreement within its own context. This stands as a reminder to contracting parties not to assume that statutory...

Original news Tongue v Royal Society for the Prevention of Cruelty to Animals and another [2017] EWHC 2508 ( Ch), [2017] All ER ( D) 81 ( Oct) No relationship of bailment was formed between the first respondent, the RSPCA, and the appellant, T, when T allowed the RSPCA to go onto the land to look after the cattle following T’s convictions for causing the herd unnecessary suffering. As a result, the RSPCA did not assume a duty of care to T regarding the safeguarding of the cattle, nor did it acquire any corresponding entitlement to recover its expenditure from T... What was the background to this case? This was an unusually troubling and distressing matter. Mr Tongue was a farmer with a sizeable landholding, yet a persistent offender under the Protection of Animals Act 1911, having been found guilty on numerous occasions of...

Original news UBS AG ( London Branch) and another v Kommunale Wasserwerke Leipzig; UBS Ltd v Depfa Bank plc; UBS AG ( London Branch) v Landesbank Baden- Württemberg [2017] EWCA Civ 1567, [2017] All ER ( D) 119 ( Oct). The Court of Appeal ( Civil Division) concluded that the judge had been wrong to decide that the financial advisers were acting as the claimants’ agents when arranging for their client, the principal defendant, to enter into a single tranche collateralised debt obligation ( STCDO), and to treat any bribe as within that agency, thereby fixing the claimants with legal responsibility despite their lack of knowledge. The court further held that, because the claimants dishonestly assisted the advisers’ abuse of their fiduciary duty to the principal defendant, the bribe tainted the claimants’ conscience, making it inequitable for them to enforce the STCDO secured through that...

Original news Interserve Construction Ltd v Hitachi Zosen Inova AG [2017] EWHC 2633 ( TCC), [2017] All ER ( D) 82 ( Nov) What are the practical implications of this case? Although the outcome rested largely on the parties’ bespoke terms, the case underscores the need to examine termination provisions with care both when contracting and before attempting to terminate. It also indicates that, when interpreting the parties’ chosen wording, the court is unlikely to construe it in a manner that fails to give operative effect to expressions such as ‘subject to’. What was the background? Hitachi, the EPC contractor for an energy from waste plant in Worcestershire, engaged Interserve as sub‑contractor. Dissatisfied with Interserve’s performance and delay, Hitachi served a notice under sub‑clause 43.1 of the sub‑contract, invoking grounds (h) and (q). Those grounds provided that, if Hitachi failed to proceed regularly or...

Original news Ivey v Genting Casinos ( UK) Ltd (t/a Crockfords) [2017] UKSC 67, [2017] All ER ( D) 134 ( Oct). Dishonesty is not a separate legal ingredient of cheating in gambling. The Supreme Court so decided, dismissing the professional gambler appellant’s appeal against the first‑instance ruling (upheld by the Court of Appeal) that he was not entitled to his ‘winnings’ from the respondent casino because he had cheated. The court considered the judge’s finding—that the appellant’s acts amounted to cheating—unassailable, and cautioned that seeking a definition of cheating would be unwise. It also ruled that the second limb of the R v Ghosh [1982] 2 All ER 689 test does not accurately state the law and directions founded on it should no longer be given. See: Supreme Court overrules Ghosh test in ‘most significant criminal law decision in a...

Original news Blue v Ashley [2017] EWHC 1928 ( Comm), [2017] All ER ( D) 198 ( Jul) Briefly, what was the background to this case and the issues before the court? Jeffrey Blue, an investment banker, spent an evening drinking with Mike Ashley, founder of Sports Direct, at the Horse & Groom in London’s West End. The night was arranged to present Mr Ashley to the sales team of Sports Direct’s potential new corporate brokers. As the night wore on, and beer was taken by everyone save one attendee, talk moved to Sports Direct’s share price. Mr Blue contended that, during that gathering, Mr Ashley pledged to pay him £15m if he could lift the Sports Direct share price to £8—about twice its level then—within three years. The issue before Leggatt J was whether, in that pub, Mr Ashley and Mr Blue...

What are the practical implications of this case? Where the 2008 Regulations bite, not giving written notification of the cancellation right may stop solicitors recovering their fees from clients and block a winning party from obtaining costs from the opponent. It is a criminal offence as well. The 2008 Regulations cover any CFA concluded by solicitors and clients at the client’s home or workplace. If the CFA was agreed somewhere else away from the solicitor’s offices, the Court of Appeal held that one must assess the particular setting and the purpose of the meeting to decide whether the 2008 Regulations are engaged. The 2008 Regulations have no application to agreements made on or after 13 June 2014, when the Consumer Contracts ( Information, Cancellation and Additional Charges) Regulations 2013 took effect. The Court of Appeal did not express a view on how matters would fall under the...

Original news Minerva ( Wandsworth) Ltd v Greenland Ram ( London) Ltd [2017] EWHC 1457 ( Ch), [2017] All ER ( D) 154 ( Jun) The Chancery Division found that the defendant company unlawfully blocked the claimant’s continuation of a construction scheme by declining to enter the requisite agreement with the local authority that would have permitted it to advance. The claimant was entitled to make its planning application at the time it did, and the defendant’s conduct amounted to a contractual breach by stopping the works from proceeding. What is the background to the case? Minerva ( Wandsworth) Ltd obtained planning consent to redevelop the Ram Brewery site in Wandsworth, South West London, featuring a 34‑storey residential tower, and entered into a section 106 Town and Country Planning Act 1990 agreement obliging the delivery of affordable housing within the scheme. Minerva then sold the site to...

Watson & Ors v Watchfinder.co.uk Ltd [2017] EWHC 1275 ( Comm) In this decision, the High Court examined a clause in an option agreement that seemed to grant the company’s board an absolute veto over any exercise of the option. The court considered whether an implied obligation bound the directors not to behave unreasonably, capriciously or arbitrarily when deciding whether to give consent. What was the background to the case? This was a claim by three individuals— Marcus Watson, Rob Hersov and Twysden Moore (the Claimants)—for specific performance of a written share option agreement between them and Watchfinder.co.uk Limited ( Watchfinder). The Claimants were directors and shareholders of Adoreum Partners ( Adoreum), a business development consultancy engaged by Watchfinder to provide services including introducing new prospects, investment investors and partners. Adoreum was paid a monthly retainer under a services agreement, and separately the Claimants and...

Original news Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354 What are the practical implications of this case? This ruling, in brief: affirms that once a judgment has been satisfied, further claims against other tortfeasors responsible for the same harm are generally precluded as a matter of course however, satisfying a settlement—rather than a judgment—will only preclude claims against other tortfeasors for the same harm if the amount agreed and paid was intended to determine and fix the claimant’s loss in full acknowledges (and succinctly sets out) the differences and practical distinctions between consent orders and Tomlin orders indicates that the court will look at the 'substance and effect' of a consent order’s terms and, if these are 'the same as would be made following a judgment', it is proper to treat the consent order as a...

What is Australia’s approach towards international free trade agreements? Australia is a proactive participant in global trade. In recent years, its commercial ties have centred on Asia, having lately finalised free trade agreements ( FTAs) with China, Japan and South Korea. Shortly after the 2016 EU referendum, the Australian Government signalled its readiness to negotiate an FTA with the UK. To advance this, a trade working group was established with a remit to ‘scop[e] out the parameters of a future ambitious and comprehensive’ FTA. The group first met in late November 2016. However, talks may not start until the UK has left the EU. How does Australia’s market compare to the UK? UK– Australia trade has taken place within the EU framework. The EU is Australia’s third-largest trading partner. Australia’s sales to the EU are dominated by mineral commodities (fuels and mining products) and...

Original news J Toomey Motors Ltd and Another v Chevrolet UK Ltd [2017] EWHC 276 ( Comm) What should commercial lawyers take note of? Commercial practitioners should note the following: The court confirmed (in line with established authority) that a recital expressing intention, without operative effect, cannot override the contract’s operative terms. When applying the ‘commercial or practical coherence’ test for implying terms after the Supreme Court’s decision in Marks and Spencer v BNP Paribas, the court emphasised that coherence must be determined objectively from the viewpoint of the ‘officious bystander’, not merely one party’s standpoint. The court dismissed reliance on a course of dealing as an independent ground for implied terms, noting that although prior dealings may inform whether a term is to be implied, they do not create a separate category of implied terms solely by reason of such...

In brief: When is an expedited trial appropriate in a public procurement case? ( Joseph Gleave & Son Ltd v Secretary of State for Defence) Original news Joseph Gleave & Son Ltd v Secretary of State for Defence [2017] EWHC 238 ( TCC) What should public procurement lawyers take note of? The judgment offers a helpful recap of the principles for deciding applications for an expedited trial, together with the core questions when considering a stay. It also makes plain that, despite Directive 89/665/ EEC as amended (the Remedies Directive), there is no presumption in favour of speeding up proceedings in procurement disputes, whether the challenge arises before or after the tender process has concluded. Applied to the facts, two practical lessons stand out: First, any party contemplating expedition should alert the opponent at the earliest opportunity to evidence genuine urgency. Second, a...

What are the key changes brought about by the coming into force of the FCA’s new rules on price comparison sites? The FCA has brought in new provisions for high-cost short-term credit ( HCSTC) in section CONC 2.5A of the Consumer Credit Sourcebook ( CONC) within the FCA Handbook. These rules introduce extra obligations in the following areas: Rankings When credit brokers act as price comparison websites ( PCWs), HCSTC products must be listed in ascending order by price, calculated using the total amount payable ( TAP). The display must ensure that neither the order of results nor the prominence of any product is determined by the firm’s commercial interests or its commercial relationships. Advertising On PCWs, any financial promotion or other advertising for HCSTC must appear outside the ranking tables and not be mixed within them, and the search results must be clearly distinct from any...

Original news Middleton and another v Person Unknown or Persons Unknown [2016] EWHC 2354 ( QB) What should IP & IT lawyers take note of? This decision exemplifies a section 12 matter, which generally provokes little dispute. Section 12 was first examined in Cream Holdings Ltd and others v Banerjee and another [2003] EWCA Civ 103, [2003] 2 All ER 318. In Cream, the court affirmed the ‘more likely than not’ test, while preserving a discretion to grant an injunction where declining an interim order pending a full hearing would inflict substantial injustice on a claimant. Practitioners should ensure compliance with HRA 1998, s 12(4). HRA 1998, s 12(4) states: ‘ The court must have particular regard to the importance of the…right to freedom of expression and, where the proceedings relate to material which the respondent [to an application for an...

Original news Eurasia Sports Ltd v Tsai and others [2016] EWHC 2207 ( QB) The Queen’s Bench Division declined an application by three Peru‑based defendants (the applicant defendants) to set aside the leave previously granted to the claimant, an online betting operator, to serve its claim form out of the jurisdiction. The applicants maintained that the court had no authority to hear the case, which alleged, among other matters, that they and eight further defendants had conspired to cause loss to the claimant. The court concluded that the claimant had made good that jurisdiction existed: it demonstrated a serious issue to be tried in relation to each head of claim, advanced a good arguable case that the claims fell within one of the jurisdictional gateways in paragraph 3.1 of the Civil Procedure Rules Practice Direction ( CPR PD), and showed that England was plainly or...

Background e IDAS Regulation: Regulation ( EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/ EC What are the principal changes ushered in by the e IDAS Regulation? In what respects will the current regime be altered? Although signatures are commonly used on commercial paperwork, under English law a document generally need not be signed to have legal force, save for particular classes including: guarantees consumer credit agreements sales of real property, or wills When electronic formats such as fax and email emerged in the 1980s and 1990s, the courts in England adopted a notably liberal stance, treating even a telex answerback, generated without human action, as a valid signature. As a result, Directive 1999/93/ EC (the 1999 e Signature Directive), which came before the e IDAS...

Practical implications Mr Justice Knowles CBE reviewed how releases in a settlement agreement should be read, with a particular focus on provisions addressing fraud-based claims. He applied the approach articulated in BCCI and in Satyam. Allegations of ‘sharp practice’ levelled at those relying on the settlement to shut out future claims were rejected. Here, the releases were expressly identified and did not amount to a general release, the type of clause where any ‘sharp practice’ might call for relief. How did this construction issue arise? Kaupthing Bank had advanced a loan in exchange for security that was already, directly or indirectly, encumbered in favour of senior lenders. Mr Johannsson was appointed first to Kaupthing’s Resolution Committee and subsequently to its Winding Up Committee. Following Kaupthing’s collapse, the Serious Fraud Office opened investigations concerning Mr Tchenguiz and others, which included Mr...

Practical implications It is widely accepted that the prime authority on prohibitory injunctions is the House of Lords ruling in American Cyanamid, which lays down broad criteria the court should ordinarily address when deciding whether to grant such relief. In exercising its discretion, the court will ask: Is there a serious issue to be tried? Would compensation be an adequate remedy? Where does the balance of convenience fall? Is this an exceptional case? The present decision examines the particular situation in which an employer seeks to uphold a restrictive covenant through an injunction, though the analysis could arguably extend to most cases where a respondent proposes to do exactly what he has freely promised not to do. By way of illustration, similar reasoning could arguably be applied to non-compete terms in a commercial agreement. In those circumstances: the default position is that a prohibitory injunction ought to be...

Practical implications This ruling offers a helpful and clear demonstration of the court’s method when carefully judging, in the circumstances of a case, whether a party’s conduct under an agreement truly constitutes a repudiatory breach—either taken in isolation or viewed collectively—so as to allow the other party to accept the repudiation and terminate the contract. It addresses, in particular, in such disputes: the so-called Heisler qualification, namely the general principle that a party who declines to perform a contract, yet states an incorrect, inadequate, or no reason, may later justify objectively that refusal if facts then existing and at the relevant time supplied a proper basis for it, does not operate where “the point taken is one which if taken could have been put right” ( Heisler). In the view of Males J, the Heisler qualification can only arise where the breach in...