Page v Combined Shipping And Trading Company Ltd

At the interlocutory stage, a commercial agent seeking a Mareva injunction need only show a good arguable case for substantial compensation and a clear risk of asset dissipation.

For compensation under the commercial agents regulations, it was sufficiently arguable that proper performance meant the normal performance intended by the parties. The principal could not necessarily rely on a hypothetical lawful performance designed to minimise its liability. The protective and harmonising purpose of the regime, reinforced by its anti-derogation provision, supported that approach.

Graham Page, a sole trader and commercial agent, had an agreement with Combined Shipping and Trading Company Ltd intended to continue for at least four years. After the respondent announced that its parent company would disinvest and its activities would end, Mr Page treated the conduct as a repudiation and claimed compensation.

Wright J refused a prior restraint injunction because he considered that Mr Page had no good arguable case for recovering a substantial sum. The appeal concerned whether the respondent’s contractual discretion to reduce trading to nil could eliminate compensation under regulation 17(6) and (7), and whether there was a sufficient risk of dissipation of assets.

1. Disposition. The appeal was allowed with the costs of the application and appeal. A Mareva injunction was granted in the sum of £300,000, with a special allowance for solicitor/advocate.
2. Compensation claim. Staughton LJ held that the appeal concerned only whether Mr Page had a good arguable case for recovering substantial compensation. The court therefore did not finally construe the agreement or determine the amount payable. It was arguable that the respondent could not defeat the claim by relying on its contractual power to reduce trading to nil, or on a hypothetical performance chosen solely to minimise damages.
3. Regulatory purpose. The commercial agents regulations were intended to harmonise the law and protect commercial agents. Regulation 19 prohibited derogation from regulations 17 and 18 before expiry of the agency contract. Those features supported the view that the regulatory regime could depart from domestic rules concerning contractual choices and damages.
4. Meaning of proper performance. Millett LJ considered it plainly arguable that regulation 17(7) supplied its own measure of compensation. The relevant comparison was with the commission that normal performance, as intended by the parties, would have generated during the remaining term, rather than with commission under a lawful but abnormal performance designed to minimise the principal’s liability. Regulation 18(b)(i) was identified as the exception relied upon where the agent had terminated because of circumstances attributable to the principal, but its final application was not decided.
5. Injunction. There was a clear risk of dissipation because the respondent intended to repatriate money to South Africa. The proposed limit of £300,000 was not excessive on the available evidence and could be revisited by the judge if necessary. Staughton LJ treated Brasserie du Pecheur SA v. Germany [1996] All ER (EC) 301 as not necessarily governing the distinct question of what compensation was payable for.

1. Court of Appeal (Civil Division): Allowed the appeal and granted a Mareva injunction for £300,000: [1996] EWCA Civ 1312.
2. High Court of Justice, Queen’s Bench Division: Wright J refused the prior restraint injunction because the claimant lacked a good arguable case for substantial compensation.