Pure Fishing (UK) Ltd. v Cooper & Ors

At the permission stage, the Court of Appeal considered it arguable that the concept of termination in Regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 is sufficiently wide to include a principal’s failure to renew a fixed-term agency. The principal might therefore be treated as having terminated the contract for the purposes of Regulation 18(a), making the agent’s default relevant to compensation. The Court did not finally determine the compensation claim or the meaning of default. Permission was granted and the appeal was allowed.

Pure Fishing (UK) Ltd and the other appellants were employers of commercial agents and manufacturers of fishing tackle. The respondents acted as sales agents under six-month fixed-term agreements. They informed the appellants that they could not sell products intended for introduction into one of the appellants’ ranges. The agreements were not renewed, and a compensation claim arose under the Commercial Agents (Council Directive) Regulations 1993.

HHJ Kershaw, sitting as a High Court Judge in the Manchester District Registry Mercantile Court, held that the agreements ended by expiry on 30 June 1999. He construed Regulation 17 as applying to expiry by effluxion of time, but held that Regulation 18(a) applied only where the principal terminated the contract. He also found that no attributable default justified immediate termination. The central issue was whether non-renewal could amount to termination by the principal for the purposes of Regulation 18(a).

Disposition. Lord Justice Schiemann delivered the judgment and Lord Justice Rix agreed. Permission to appeal was granted and the formal order was that the appeal be allowed.

1. Regulation 17. The appellants accepted that Regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 has a wide meaning of termination, extending to an agency ending by effluxion of time.
2. Regulation 18(a). The Court considered the judge’s narrower construction arguably wrong. If termination under Regulation 17 has that wide meaning, a principal may arguably be regarded under Regulation 18(a) as having terminated an agency contract when it fails to renew it.
3. Attributable default. The separate question was whether the agents’ conduct amounted to default attributable to them which would justify immediate termination. The lower judge had found that the agents’ conduct was understandable and that the alleged default did not satisfy Regulation 18(a). The Court did not finally determine that issue.
4. Commercial context. The Court recognised the commercial difficulty of an exclusive agent marketing only some of a manufacturer’s products, particularly where the manufacturer introduces a new range. It also noted the unresolved relationship between that circumstance, the principal’s motive, and the compensation provisions.
5. Lord Justice Rix added that the appellants should ensure their grounds adequately raised the challenge to the judge’s findings about motive and the evidence.

1. Court of Appeal (Civil Division): in [2003] EWCA Civ 1349, permission to appeal was granted and the appeal was allowed.
2. Manchester District Registry (Mercantile Court): HHJ Kershaw, sitting as a High Court Judge, held that the fixed-term agency agreements ended by expiry and that Regulation 18(a) did not apply. The judgment’s citation is not stated.