Rakusens Ltd v Baser Ambalaj Plastik Sanayi Ticaret AS

For service under section 695 of the Companies Act 1985, an overseas company must have established its own place of business in Great Britain. It is insufficient that an independent agent carries on business, receives and forwards orders, or uses the address as the agent’s business premises. The inquiry requires a proper distinction between carrying on business and establishing a place of business, and between the company’s business and the agent’s own business. An agent’s lack of authority to conclude contracts is a powerful indication that the premises are not the company’s established place of business.

The claimant served a claim form on a Turkish company at the Harrogate home and business address of its commission agent. The service was purportedly made under section 695(2) of the Companies Act 1985, on the basis that the address was an established place of business of the overseas company.

The district judge and the circuit judge treated the issue as a question of fact and upheld service. The company appealed, contending that the address belonged only to its agent, who lacked authority to conclude contracts. The central issues were the meaning of an established place of business and whether the court should entertain late procedural points and further evidence.

1. Substantive appeal allowed. The address was not an established place of business of the overseas company for the purposes of section 695 of the Companies Act 1985.
2. Section 691 deliberately concerns a company which establishes a place of business, rather than every company which merely carries on business in Great Britain. The distinction prevents the registration obligations from applying to all overseas companies conducting business in the jurisdiction.
3. The inquiry involved two separate questions: whether the company had established a place of business in Great Britain, and whether the place occupied by its agent was also a place of business of the company. The expression required continuity, recognisability and a local habitation of the company’s own.
4. The agent was authorised to find customers and forward orders, but not to accept or reject them or conclude contracts. Orders were acted upon by the company in Turkey. The agent was therefore carrying on his own business, and his premises did not become premises of the company. South India Shipping Corporation Ltd v Export-Import Bank of Korea was distinguishable because it concerned premises rented by the overseas company and distinctively used as its place of business.
5. The respondent’s late security-for-costs application did not deprive the court of its discretion to control the appeal, particularly where no court order embodied the parties’ agreement and the issue had been raised late.
6. New points based on the Civil Procedure Rules and the proposed further evidence were refused. They had not been advanced below or in the appellate documents, and the evidence was served too late for the appellant to respond fairly. The approach was governed by fairness and the overriding objective, with assistance from Hertfordshire Investments v Bubb.
7. Order: appeal allowed with costs of the appeal and the hearings before the circuit judge and district judge. No payment was to be made until conclusion of the proceedings on the writ, with liberty to apply.

• High Court, Queen’s Bench Division, Leeds District Registry: His Honour Judge McGonigal upheld the service of the claim form at the Harrogate address.
• Court of Appeal (Civil Division): The appeal was allowed and the lower decision was reversed.