Claramoda Ltd v Zoomphase Ltd (t/a Jenny Packham)

For the purposes of compensation under Commercial Agents (Council Directive) Regulations 1993, an agency does not necessarily end when the main selling period or primary negotiations finish. The court must identify when the agent’s continuing authority was effectively withdrawn. Continuing commercial activity, including dealing with customer enquiries, order discrepancies, repeat orders, promotional material and stock requests, may demonstrate that the agency continued. The statutory concept of negotiating is broad. It includes dealing with, managing or conducting a sale and does not require bargaining through offer and counter-offer. Where there is no written agreement or termination notice, the surrounding circumstances, oral evidence and the parties’ conduct may be particularly important.

The claimant had acted as the defendant’s exclusive United Kingdom and Republic of Ireland agent for its mainline evening-wear collection since about 1998. The parties agreed that the agency relationship ended, but disputed whether termination occurred by 31 October 2006 or in January 2007.

The dispute arose because notice of the claimant’s intended compensation claim was given on 27 November 2007. Under Regulation 17(9) of the Commercial Agents (Council Directive) Regulations 1993, notice had to be given within one year of termination. The preliminary issue, ordered by HH Judge Mackie QC, was the effective termination date and whether the notice was timely.

1. Preliminary issue determined. The effective termination date was in mid-January 2007, and the claimant’s notice dated 27 November 2007 was given within 12 months. The claimant therefore retained its entitlement to pursue compensation under Regulation 17(9) of the Commercial Agents (Council Directive) Regulations 1993.
2. The absence of a written agency agreement or termination notice meant that the surrounding circumstances, oral evidence and the parties’ conduct shown by documents were especially important. The court rejected the defendant’s evidence that termination had occurred at the end of October.
3. Although the main selling of the Spring/Summer 2007 collection had ended by mid-October, the claimant continued to deal with customer enquiries, order discrepancies, repeat orders, promotional material and related commercial matters after 31 October. This activity demonstrated that the claimant’s authority had not yet been withdrawn.
4. Applying the guidance in Parks v Esso Petroleum Co Ltd (2000) Eu LR 25, the concept of negotiating in Regulation 2(1) is broad. It includes dealing with, managing or conducting a sale and does not require bargaining in the narrower sense. The agency contract also need not end immediately when the agent ceases actively to negotiate sales.
5. The defendant’s 3 December 2007 reference to the claimant’s work having ended 11 months earlier was not determinative, but it was inconsistent with termination on 31 October 2006.

This was a first-instance trial of a preliminary issue ordered by HH Judge Mackie QC on 5 May 2009. No appellate decision is stated.