​Where an overseas company’s agent transacts in England and Wales, that company is not carrying on its activities in the jurisdiction for the purpose of serving a party under Rule 6.9 of the Civil Procedure Rules (the CPR). The serving party must therefore take steps to serve out of the jurisdiction: Noble Caledonia Ltd v Air Niugini Ltd [2017] EWHC 1095 (QB).

The claimant (NC) is a tour operator that operates cruises in various parts of the world. The defendant (ANG) is the national airline of Papua New Guinea. This claim relates to an ANG flight from Singapore to Port Moresby, which was to carry a number of NC’s clients to embark on a cruise ship at Port Moresby, but which failed to be available for take-off in time for them to do so. The flight was arranged by NC through its UK-based agent, Flight Directors Scheduled Services Limited (FDL), which is claimed to form the contractual basis for the relationship between NC and ANG.

NC sought to bring a claim in England against ANG for breach of contract. This judgment deals solely with the preliminary issue of whether NC had properly affected service on ANG under Rule 6.9 of the CPR.

CPR 6.9

CPR 6.9 deals with service of the claim form where the defendant has not given an address at which it may be served. For the purpose of this case, the relevant part of CPR 6.9 provides that service must be made on an overseas company at “any place within the jurisdiction where the corporation carries on its activities; or any place of business of the company within the jurisdiction,” and when there is no such place, then service must be made out of the jurisdiction. It was common ground between the parties that the judge’s decision would be centred on whether ANG carried on its activities within the jurisdiction.

The parties’ arguments

NC purported to serve the claim form on ANG by way of personal service on the general manager of FDL, who indicated that she was not accepting service but would pass the documents on to ANG.

NC’s argument that service was valid was based on certain actions and behaviours of FDL’s Head of Sales and Marketing, who was also Head of Sales in relation to the general sales agency that FDL operated on behalf of ANG. NC contended that she was effectively carrying on the activities of ANG in the UK, that she had primary responsibility for the provision of ANG services in the UK and that she held her actions out as being those of ANG. For instance, the individual prefaced FDL’s office address with “Air Niugini GSA” and implied she was an employee of ANG in correspondence with NC. Accordingly, NC argued that this showed ANG as present in the jurisdiction.

ANG relied on a string of authorities that demonstrate the English court’s reluctance to confirm that an overseas company carries on its activities within the jurisdiction. In particular, in his judgment Gilbart J cited the criteria for determining whether an overseas company had “presence” in the jurisdiction as set out by Slade LJ in Adams v Cape Industries, in summary:[1]

(a)the English Courts will likely treat an overseas company as having presence in the jurisdiction only if either:

  • (i)it has established and maintained at its own expense a fixed place of business of its own in the jurisdiction and for more than a minimal period of time has carried on its own business at or from such premises by its servants or agents; or
  • (ii)a representative of the overseas company has, for more than a minimal period of time, been carrying on the overseas company’s business in the jurisdiction at or from some fixed place of business.

In either of the two above cases, presence will likely only be established if it can fairly be said that the overseas company’s business has been carried out at or from that business address. In respect of the second limb, in particular, the court will conduct an analysis of the functions the representative has been performing and all aspects of the relationship between him and the overseas company.

In particular, a non-exhaustive list of questions is to be asked, including, among other matters, an enquiry about the reimbursement of the representative, the degree of control exerted by the overseas company and whether the individual can bind the overseas company.

ANG contended that FDL’s activity did not amount to a presence in the jurisdiction for the purpose of CPR 6.9, that FDL only ever acted as ANG’s agent for ticket sales and that nothing it did could be described as the “activities” of ANG. The reality was that FDL worked for several principals and made similar arrangements surrounding telephone numbers and business cards with them as it did with ANG. Further, it was limited in its ability to enter into contracts or exercise any real autonomy in relation to negotiating contractual terms or pricing.

Judgment

On the facts of this case, Gilbart J found that service was not validly affected under CPR 6.9. Points of particular importance for him were that:

  • the relationship between ANG and FDL had to be considered in the context of parties operating in the airline industry. Therefore, the terms of the agreement between the two parties had to be considered. This particular agreement limited FDL’s discretion and provided that they were paid only on commission; and
  • the facts indicated a lack of control by ANG over FDL’s actions. Previous cases have held that where business is done through an agent, the less freedom the agent has to negotiate contracts, the less likely the ‘presence’ test is to be met.

Therefore, Gilbart J held that NC would have to serve proceedings on NC out of the jurisdiction.

Comment

This case provides a cautionary tale to persons seeking to effect service on an overseas company through a third party agent in England and Wales. The wording “Any place within the jurisdiction where the corporation carries on its activities; or any place of business of the company within the jurisdiction” in CPR 6.9 should be construed narrowly. It should be seen as a gateway through which to serve on an overseas company only where it is clear that the overseas company carries out its activities from a specific location within a jurisdiction. This case provides helpful clarification on the relevant test and confirms that an agency relationship alone is not enough to satisfy the test under CPR 6.9.

The concept of a company “carrying on” business of some sort in the UK is a familiar one, used in various ways in certain pieces of UK legislation, for example section 7 of the Bribery Act 2010, which provides for the exercise of jurisdiction where an entity “carries on… part of a business, in any part of the United Kingdom”. This is intended to (and does) have extra-territorial reach, and for public policy reasons the standard to be met may be lower than that applied by Gilbart J in this case for the purpose of establishing jurisdiction. Gilbart J’s approach is in keeping with the common law rule that having an agent somewhere is not akin to “carrying on” its business there. [2]

As such, although the factors taken into account in Noble Caledonia will be relevant to an assessment of whether an overseas company is carrying on its business in the jurisdiction for any purpose, the standard to be met for CPR and jurisdiction purposes may be higher.