Tuke v JD Classics Ltd

An agency relationship may arise by implication from the parties’ words and conduct. The parties need not use the words agent or agency, or consciously recognise the legal relationship. An advice and assistance agreement may also constitute an agency agreement where the alleged agent undertakes to act on the principal’s behalf and with the principal’s authority.

Summary judgment should be refused where the evidence gives the claimant a realistic prospect of establishing the relationship at trial. Cross-examination on credit is permissible where the matters relied upon are materially connected with the issues. Procedural defaults may justify an extension of time and relief from sanctions where the failure is neither serious nor significant, the opponent suffered no real prejudice, and justice requires the issue to be determined on its merits.

The claimant alleged that the defendant, through its owner and directing mind, acted as his agent in acquiring, managing and selling high-value classic cars. He sought delivery of documents, an account and payment of any sum shown to be due.

At a pre-trial review, the defendant sought summary judgment under CPR r 24.2. The claimant sought permission to cross-examine the defendant’s principal on alleged fraudulent misrepresentations and an extension of time, with relief from sanctions, concerning a notice to prove invoices.

The central issues were whether the evidence gave the claimant a realistic prospect of proving an implied agency relationship, whether the proposed credit evidence was material, and whether procedural relief should be granted.

1. Summary judgment. The defendant’s application was dismissed. The court applied the approach in Easyair v Opal Telecom [2009] EWHC 339 (Ch). The question was whether the claimant had a realistic, rather than fanciful, prospect of proving agency. The court was not to conduct a mini-trial, but it could analyse evidence and decide a short legal issue where the material was complete.
2. Agency. Agency is a fiduciary relationship arising where one person manifests assent that another should act on his behalf so as to affect his relations with third parties. No particular formality or express use of the words agent or agency is required. Authority may be conferred expressly or impliedly from the parties’ conduct. Applying Garnac Grain Company Incorporated v HMF Faure & Fairclough Ltd [1968] AC 1130 and Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, the relevant question was what the alleged agent was said to have done on behalf of the alleged principal.
3. The claimant’s evidence of the December 2009 meeting and subsequent emails could support an inference that the defendant advised on purchases, negotiated with sellers, sought authority, advised on sales and acted for the claimant on a percentage commission. An advice and assistance agreement did not, as a matter of law, exclude agency. A trial judge could therefore find that the defendant bought and sold cars on the claimant’s behalf and owed the pleaded fiduciary duties.
4. Cross-examination. Permission was granted to cross-examine on six alleged fraudulent misrepresentations. Under Hobbs v Tinling [1929] 2 KB 1, cross-examination on credit is permissible, but evidence cannot be called to rebut testimony on matters immaterial to the case. The allegations were materially connected with the parties’ relationship, the alleged sales agency and the credibility dispute concerning the December 2009 meeting.
5. Notice to prove. The notice was served out of time under CPR r 32.19. Nevertheless, applying the three-stage approach in Denton v TH White Limited [2014] 1 WLR 795, the court extended time and granted relief from sanctions under CPR rr 3.1(2)(a) and 3.9. The default was an honest oversight, neither serious nor significant, and the defendant had long known that the invoices’ authenticity was challenged.
6. The claimant was awarded £45,000 plus VAT for the reverse summary judgment and cross-examination applications. There was no order as to the costs of the notice-to-prove application, and the costs of the pre-trial review were costs in the cause.

First-instance decision on applications made at a pre-trial review. No appellate history was stated in the judgment.