England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LEEDS DISTRICT REGISTRY
(His Honour Judge McGonigal)

		Royal Courts of Justice Monday, 15th October 2001

1. LORD JUSTICE BUXTON: The substantive hearing of this appeal was preceded by a number of preliminary or interlocutory matters. We announced our determination on those matters in the course of the hearing this morning, reserving our reasons until this judgment. Although those matters, logically speaking, come before the judgment on the substantive appeal, it will be convenient to deal with the substantive appeal first, because it is not only the more important issue but also sets the background for the various interlocutory matters that we had to deal with.
2. The background to this appeal is an action in which Messrs Rakusens Limited are the claimants, Rakusens being an English company, and the defendants, although they are two defendants titularly, are, as we understand it, associated companies, to whom I shall refer as Baser. They are manufacturing companies carrying on the business of manufacture in Turkey.
3. The substance of the complaint in the points of claim is to allege that there was an oral contract made, on some date before 11th March 1999, between a Mr. Bowman, acting on behalf of the claimants, and a Mr. Phillipson, described in the claim as being "of the defendant", for the supply by Baser to the claimants of skillets; that is to say, objects used in the manufacture of biscuits. Fortunately we do not need to go into exactly what skillets are or how they are used. Suffice it to say that it is alleged that they were defective, and in the process of manufacture contaminated biscuits that Messrs Rakusens were making. The skillets were replaced, but there is a claim for nearly £60,000 in damages for contingent loss in terms of defective products. That claim has not been in issue before us. We are not entirely clear that it has been conceded as being valid, but certainly there is at the moment no sign that there is any substantive defence to it.
4. The application with which we are concerned is an application originally before the District Judge, and then on appeal before His Honour Judge McGonigal, sitting as a judge of the High Court in the Leeds District Registry, to set aside the judgment obtained in this case, on the basis that the claim form was not properly served on Baser. The claim form was served at an address in Harrogate, 10 Rutland Road, which is the home of the Mr. Phillipson to whom I have already referred. The service was on the basis that 10 Rutland Road is a place of business established by Baser in England for the purpose of section 695 of the Companies Act 1986. Baser contends that that address in Harrogate is not their established place of business. It is merely the place from which Mr. Phillipson conducts an agency in which he does not have authority to contract on behalf of Baser.
5. It is important to emphasise that the application is made and, for reasons that I will indicate later in the judgment made only, and was before the judge made only, under section 695 of the Companies Act. The service, therefore, was said to be on Baser itself and not on Mr. Phillipson as an agent for Baser, arrangements for such latter service being provided not by section 695 but by Part 6.16 of the Civil Procedure Rules. That latter process of course requires an application to the court in contradistinction to section 695 itself.
6. I turn then to the structure that the claimants relied on when effecting service under the Companies Act. As is well known, section 691 of the Companies Act provides that when a company that is incorporated outside Great Britain establishes a place of business in Great Britain, it shall within one month of so doing deliver to the registrar of companies certain specified documents, one of which is a notification of the name and location of persons who are entitled and authorised to accept process on behalf of the company. As to such service of process, or indeed other documents, section 695(1) provides that process is sufficiently served on such a company if it is addressed to a person whose name has been given or registered under section 691. Subsection (2), with which we are principally concerned in this appeal, deals with a situation where the overseas company should have identified a person for such service but has not done so. Subsection (2) reads as follows:

"However -

(a) where such a company makes default in delivering to the registrar the name and address of a person resident in Great Britain who is authorised to accept on behalf of the company service of process or notices,

(b) ...

a document may be served on the company by leaving it at, or sending it by post to, any place of business established by the company in Great Britain."

7. It is that provision that the claimant relies on.
8. The structure of this part of the Companies Act is of some importance, as Mr. Berkeley QC for the appellant pointed out, in that it only comes into operation when a place of business has been established within Great Britain. It is for that reason that it is permitted by section 695(2) to serve on such a place when it exists. This might, therefore, appear to be, and indeed it is, a question of fact; that is to say, whether the company has established a place of business in Great Britain and where it is. That of course means, and this is not a merely verbal distinction, the company's place of business, not just and not sufficiently a place of business that is properly said to be the place of business of its agent and not of the company itself.
9. I now turn to the facts that were before the judge in respect of that question. He held at page 2 of his judgment that the onus was on the claimants to show that 10 Rutland Road, Harrogate, was, at the date of service, that is to say, 21st January 2000, the place of business of Baser. Again, it is pertinent to note, for reasons that will become apparent later, that he approached that simply as a question of fact to be determined on the balance of probabilities, with the onus on the claimant. He then set out the facts that were before him. The first was Mr. Phillipson's business card which gave the 10 Rutland Road address, and then set out the names or approximately the names of the defendants and said "UK Division, John Phillipson."
10. On three dates in 1999 the claimants sent orders addressed to Mr. John Phillipson, followed by the name of the company, Baser Ambalaj Plastik, at 10 Rutland Road, Harrogate, HG1 2PY. The judge made the following finding at page 3 of his judgment:

"Those orders were accepted by Baser but there is no evidence as to how they were accepted. It is clear that they were accepted because skillets were subsequently delivered by Baser to the claimants pursuant to those orders."

11. The suggestion that Mr. Phillipson was, or the address was the address of, the "UK Division of Baser" was not upheld and was abandoned before the judge. As to relationships otherwise between Baser and Mr. Phillipson, the evidence was that filed by Baser's solicitor who set out a letter from Baser to Mr. Phillipson dated 6th February 1997, which said:

"At the time being, because we have just met you, we cannot give you any representship, but at least we can say that we will not get in touch with your customers directly, until we see how we are settling our relations with your company."

12. The solicitor then continued in his evidence to say that the letter accurately recorded the terms on which Baser conducted business with Mr. Phillipson; that is to say, that Mr Phillipson was authorised to find customers on behalf of Baser and to forward details of the orders which those customers wished to place. Baser would deliver direct to the company. He said that Baser had no knowledge of Mr Phillipson's business card describing him as "UK Division" of Baser. Mr. Phillipson had no authority to produce such a card. That was the evidence that the judge acted upon. There were other possible items of evidence drawn to our attention by Mr. Rollason on behalf of the respondents to this appeal. In my judgement, they do not take the matter further. It is suggested that Mr. Phillipson had authority to deal with complaints. Indeed, at one point he is said, though not by himself, to have "been minded to cancel" an order that had been placed. In my judgement, it would not be appropriate for the judge to rely on those indicia because, granted that Mr. Phillipson was an agent, it was understandable that complaints about misperformance might well be directed at him in the first place, and he may or may not have said -- if he did say he may not have been right in saying -- that he, rather than Baser itself, would cancel any order.
13. On the basis of that evidence the judge had to consider the question of fact that he had identified for himself. In my judgement he went wrong because he misdirected himself as to the test that he ought to apply to that question. The crucial passage is to be found at the end of his judgment at page 8:

"In my view a place of business is a place at which the business of the company is transacted, whether by agents or by employees and an address can be a place of business of an overseas company even if none of the people at the address have the authority to enter into contracts on behalf of the company. The business of a company is much wider than entering into contractual relations. This was exemplified by the South India case. Part of the business of Baser was the negotiation of orders through the agency of Mr Phillipson, the receipt of those orders at his premises in Harrogate and the transmission of those orders to Baser in Turkey. There is sufficient evidence for the conclusion that that part of Baser's business was being conducted at 10 Rutland Road, Harrogate during 1999 and there is no suggestion that there had been any change in the position by January 2000."

14. The judge, in my judgement, was wrong to consider that, as he puts it, the receipt of orders at the premises in Harrogate and the transmission of those orders to Baser in Turkey was sufficient to determine that 10 Rutland Road was a place of business of Baser, which is the question he had to decide. Mr. Phillipson, on the evidence accepted by the judge, was not deciding what orders should be accepted and what orders should be rejected. He was not making the contracts on behalf of Baser. The receiving and transmitting of orders, particularly when that is done at the agent's home, does not create the agent's home an established place of the business of the company such as has to be registered under section 691. First of all, it would be unreasonable if such a place had to be registered by Baser under the pain of the penalties provided by section 691. Secondly, to approach the matter in the way that the judge did failed to give sufficient and proper weight to the need for the establishment -- I emphasize that word -- of a place of business of the company itself.
15. Further, I venture to differ from the judge's legal analysis in two ways. First of all, in the sentence already quoted, starting "in my view", he put together the considerations that apply when there is a place that can be said to be that of the company in considering whether it matters whether those employed there are able to conclude contracts; with, on the other hand, the considerations that arise, as in our case, when all that is relied on for the establishment of a place of business is the conduct of persons who are agents, not employees, of the company at that place. The judge, it will be recalled, said that he was led to the conclusion that he reached by the South India case; that is to say, South India Shipping Corporation Ltd v Export-Import Bank of Korea [1985] 1 WLR 585. Although a case on what was then section 412 of the Companies Act 1948 and therefore, prima facie, relevant to our concerns, that was in fact a case on a different point from that with which we are concerned. That can be demonstrated from the statement of the factual background given by Ackner LJ at page 587G:

"Although the defendants conduct their main business from Korea, they rent office accommodation in Plantation House in Fenchurch Street, London EC."

16. It was to that office, an office rented by the overseas company, to which the writ was delivered. The issue in the South India Shipping case arose because there was argument about whether a substantial part of the business had to be conducted from the place of business in the jurisdiction, and the Court of Appeal held that it did not. Ackner LJ said this at page 592B:

"The defendant bank is an import-export bank, not a high street bank. It has both premises and staff within the jurisdiction. It conducts external relations with other banks and financial institutions. It carries out preliminary work in relation to granting or obtaining loans. It seeks to give publicity to the foreign bank and encourage trade between Korea and the United Kingdom... It has therefore established a place of business within Great Britain and it matters not that it does not conclude within the jurisdiction any banking transactions or have banking dealings with the general public as opposed to other banks or financial institutions."

17. The question for the court in South India was whether it was sufficient that there was some business transacted at a place that was distinctively a place of business of the overseas company. The court held that that was sufficient. In our case the judge should have given weight to the fact that, on the evidence before the court, Mr. Phillipson was not entitled to conclude contracts. If he was not so entitled he was a mere agent and his place of business, his home address as it were, was not an established place of business for the company itself. For those short reasons, therefore, the judge misconstrued the law that he had to apply to this question in the way that I have ventured to describe, he having approached what is at root a question of fact on a basis that was not open to him. It falls to this court to reconsider the matter. For the reasons that I have indicated, I do not consider that the address in question was an established place of business of Baser for the purposes of section 695. For that reason I would allow the appeal.
18. I turn to the other matters that were argued before us. The first is the question of security for costs. At the opening of the appeal Mr. Rollason applied to us for the appeal to be struck out or dismissed on the basis that the appellants had failed to perform an agreement that had been reached with regard to security for costs. There is no formal application to this effect. This claim, as other claims, appeared only for the first time in Mr Rollason's skeleton argument that was delivered to the court and to the appellants at some time on Friday last, on the working day immediately before the hearing of the appeal.
19. As has already become clear, the appellants in this case are an overseas company located in Turkey and therefore not subject either to the relevant rules of the European Union or the Lugano Convention. I quite accept that it is a case in which normally security for costs would be likely to be ordered. However, the matter was not pursued by those representing the respondent until 15th August 2001, some seven months after permission had been granted for this appeal to proceed. On that date they wrote to the solicitors for Baser raising the question of security. There were disputes or disagreements, first, as to the appropriate amount of costs and, secondly, how it should be paid or secured. In the event, however, after a good deal of exchanges of that nature, Baser's solicitors wrote on 21st September, saying:

"Our client is prepared to give security to the value of £7,500.00. It intends to do so by way of a Bank Guarantee. . . "

20. Rakusens' solicitors replied on 25th September:

"We have taken our client's instructions upon your recent letter and our client is willing to accept your client's offer of security, to the value of £7,500, by way of bank guarantee.

We would be grateful if you could provide us with details of your client's banking details and, in particular, a draft of the guarantee documentation which your client intends to provide."

21. They wrote again on 2nd October:

"As our client has advised you that it is happy to accept your client's offer of security, to the value of £7,500 by way of bank guarantee we would request that relevant guarantee documentation is provided by return. If not, our client must reserve its rights in regard to an application for this security.

Due to the closeness of the appeal we require that the security and guarantee documentation is in agreed and signed form by close of business on Friday."

22. Mr. Rollason argued, on the basis of that exchange, that there was an implied term in the agreement between the parties that, if security was not given as agreed, the appeal would not proceed. I, for my part, am not at all certain that that is the correct construction. On the basis of the letter of 2nd October 2001 (which it might be said was written after the agreement was concluded) the clear intention of and understanding of the respondent's solicitors appeared to be that, if security was not given, then an application would be made to the court. Be that as it may, if we proceed on the construction that Mr. Rollason favours, he makes the bold submission that, in the light of that agreement that the appeal would not proceed if security was not given, this court has no discretion to continue with the appeal but must give effect to the agreement that the parties had reached. I am quite unable to accept that submission. The fact that the parties have made an agreement in a context where otherwise they could come to court does not deprive the court of its discretion over the control and management of the appeal, especially in a case where there is no order of the court relied on, as there is no order in this case. If we ask ourselves why no order has been made, it is true that the matter has not been progressed with any vigour or enthusiasm by the appellant's solicitors, but that has to be looked at in the context where the application for security and the issues about security were only raised comparatively late in the day; that is to say, less than two months ago and a long time after the appeal was on foot and known to be on foot. In those circumstances, I do not think that it would be right for this court to exercise its discretion to say that this appeal should not proceed further. Mr. Rollason said that it was not enough to say: "Well, everybody is here. Why don't we go ahead?" But that is not what I say. What I do say is that we are here and ready to go ahead because the matter was, in the first instance, delayed by those acting on behalf of the respondent. I do not think that justice would be served in this case if the appeal was stifled on those grounds. Although I would not wish to think that the court endorses the way in which the matter has been conducted by the appellants, much less its failure to act on its solicitors' assurance, the punishment would be too severe to stop the appeal going forward. It is for that reason that I did not grant Mr Rollason's first application.
23. His second application, though it was not originally presented as such, was that he should be permitted or his client should be permitted to rely upon a range of points not apparent from the original appellate documents and which have not been the subject of any respondent's notice. They again emerged only from the skeleton argument produced on Friday. Put briefly, they were as follows: firstly, that either the judge should have relied on, or alternatively it was now open to the respondent to rely upon, Civil Procedure Rules Part 6.5.6 which may provide for different criteria for service from section 695. That would be a completely new point, never argued in the appeal before, and not the basis upon which the matter was put to the judge below. Secondly, that in reliance upon authority of high standing, all that the judge should have required to be established was "a good arguable case" with regard to the matter of place of business rather than the basis upon which he proceeded. There again, he was never asked to do that. In my judgement, that would introduce new arguments into the appeal and would involve the judge being potentially reversed on a basis that was never put to him. Thirdly, by a combination of Part 6.20 and Part 3.10 of the Civil Procedure Rules, it was argued that since, in any event, it would be possible to serve Baser in Turkey, the mistake that the judge found of their being served in the United Kingdom should be regarded merely as a technicality or slip that this court could correct.
24. All of those arguments, interesting as they were, in my judgement raise extensive new points, most of them, indeed all of them, not subject to current authority. In some cases, particularly the argument about good arguable case, even if it were correct, it would be difficult to fit it into the structure of the judgment below, and a considerable amount of reflection would be needed in order to decide the matter. In my judgement, Mr. Berkeley was justified in complaining that the very late notice that he had been given of these points had not given him the opportunity to give the court the assistance that it would require in determining this range of new issues. I might say as a footnote that the court itself has not been able to give these matters the attention that it would otherwise wish to direct to important points of company and procedural law in advance of the hearing. In those circumstances, I have no doubt that it would be unfair to permit these points to be taken at this late stage. It is for that reason that I did not grant that application on behalf of Mr. Rollason.
25. Thirdly, an application was made to adduce further evidence in the shape of a further statement from Mr. Phillipson. There is no application to do this before the court. The evidence was served as late as Thursday, 11th October, one working day before the appeal, and supported by an affidavit made by the respondent's solicitor. It was proposed in this statement that Mr. Phillipson would give evidence about three things: (1) that he had authority to conclude contracts; (2) that Baser did know about his business card, and (3) that Baser had made statements to Rakusens supporting the role that Mr. Phillipson was now claimed to have had. It is clear that that was very different from the evidence before the judge, which I have already set out. I accept that, if admitted, it would be relevant to the question that the judge had to decide. In deciding whether it should be admitted, I accept that the court should approach the matter in the light of the overriding objective in the Civil Procedure Rules as set out and deployed in the case of Hertfordshire Investments v Bubb 2001, unreported. The conclusive objection to admitting the evidence, in my judgement, is that, for reasons good or bad, it comes too late. It is completely unreasonable to expect the appellants to deal with this evidence at the short notice that they have been given. If it were admitted, I have no doubt at all that the appellants could say that they wished to have an opportunity, which they have not properly had, to take instructions on it and, if needs be, to reply to it. That is not possible within the time frame that we are faced with. Mr. Rollason said that that was an irrelevant point, irrelevant because, as we have seen, the appellants have already given evidence about these issues and therefore could do no more than repeat that which they have already said. But that is not right. They have not given evidence in the context of what Mr Phillipson now says and they have not had an opportunity, which they may or may not need and which may or may not be relevant, to put Mr. Phillipson's evidence into context and possibly give further information about their relationship with Mr. Phillipson that may or may not illuminate the factual dispute. For that reason therefore, and for that reason alone, I would not permit this evidence to be used.
26. There are two subsidiary questions to that. First of all, was it available at the trial or previously? I am prepared to accept the point made in that connection, that at the trial and for a period after it, for all that Rakusens knew, Mr. Phillipson was still the trusted agent of Baser and could not be expected to give evidence on behalf of Rakusen. Secondly, was the matter pursued with appropriate diligence once the matter came to Rakusens' attention? Mr. Sladdin, their solicitor, has set out in some detail the steps that he took when it came to his attention that Mr. Phillipson might be available to give evidence on behalf of Rakusens. I do not intend to go through that in detail, save to say this. There have been a considerable number of difficulties on behalf of the respondent in dealing with Mr. Phillipson, not least because dealings took place with his solicitors. If I had to decide this matter, I would hold that it was incumbent upon the respondent's solicitors, bearing in mind the late date at which these matters arose, to put the maximum pressure, both on Mr. Phillipson and on his solicitors, to make sure that they understood the importance of the matter, the imminence of the appeal, and the need for speed. While fully appreciating the difficulties that they were under, I am not wholly satisfied that everything was done in that respect that could be done. I do not however decide the matter on that basis but on the overriding basis that, whatever the reason for the evidence appearing last Thursday, it is not fair for it to be admitted in this appeal now.
27. LADY JUSTICE ARDEN: I agree that this appeal should be allowed and that the ancillary applications made by the respondent should be dismissed for the reasons which Buxton LJ has given in each case.
28. I wish to add some reasons of my own on the substantive issue in the appeal, namely that the judge's conclusion that Baser had established a place of business within the meaning of section 691 of the Companies Act 1985 was erroneous. If there was no such place of business, it was not open to Rakusens to serve a claim form in these proceedings in accordance with section 695 of the Companies Act 1985.
29. Section 691 of the Companies Act provides that when a company incorporated outside Great Britain establishes a place of business in Great Britain, it must within one month of so doing deliver to the registrar of companies certain documents. Section 690B states that this section does not apply to limited companies which are incorporated outside the United Kingdom and Gibraltar and have a branch in the United Kingdom. For those companies there is a different statutory scheme which is designed to implement the 11th Company Law Directive. Subject, however, to section 690B, a company is a company to which section 691 applies if it satisfies two conditions. First, it must be incorporated outside Great Britain and, second, it must have an established place of business in Great Britain. Baser, without doubt, satisfied the first of these tests since it was incorporated in Turkey. The issue is whether it also satisfied the second.
30. The judge treated that question as a single composite question. At page 150 of the bundle he identified the question as follows:

"The question is one of fact as to whether 10 Rutland Road was a place of business of Baser at the time of service."

31. At page 152 of the core bundle he identified the question in materially different terms:

"The question for the District Judge, and the one on which this appeal turns, is whether in January 2000 10 Rutland Road, Harrogate was a place of business for the purpose of section 695."

32. That formulation does not in terms state whose place of business it must be, and that is an important but separate question to which I will have to turn in a moment. At this stage my point is that identifying the question as a single composite question obscures the fact that two steps are involved in answering the question: first, has Baser established a place of business within the jurisdiction? Second, was the place of business of Baser's agent a place of business of Baser?
33. I turn to the first question. It is important to note that section 691 uses the words "establishes a place of business". It does not impose obligations on an overseas company which simply carries on business here. That the obligations are hinged upon establishing a place of business, and not on the carrying on of business, must be seen as a deliberate choice by Parliament. If Parliament had imposed the obligations in section 691 on an overseas company which merely carried on business here, the registration obligations would have been extremely wide in their application.
34. The meaning of "an established place of business" for the purposes of what was then section 106 of the Companies Act 1948 and is now section 409 of the Companies Act 1985 was considered in Re Oriel Limited [1986] 1 WLR 180. Oliver LJ, with whom Mustill LJ and Sir Denys Buckley agreed, said this:

"That expression is not peculiar to section 106 [the predecessor of section 409 of the Companies Act 1985]. It occurs also in Part X of the Act, which applies to companies which 'establish a place of business in Great Britain.' Section 407 [the predecessor of section 691 of the Companies Act 1985] assumes that there is going to be some readily identifiable point of time at which it can be said that a company has established a place of business because it imposes [obligations on the company] doing so. Similarly, section 412 [the predecessor of section 695 of the Companies Act 1985], in cases where an overseas company has not furnished the registrar with the name and address of a living resident authorised to accept service, enables documents to be served by leaving them at, or sending them to, 'any place of business established by the company in Great Britain.' Here again there seems to be implied some degree of continuity and recognisability in the establishment of a 'place of business.'" (page 187).

35. The matter has also been considered by the Inner House of the Court of Sessions in Lord Advocate v Huron and Erie Loan and Savings Co 1911 S.C. 612, which is cited by Buckley in the Companies Acts (15 ed) para [691.23]. In that case the issue was whether a company had satisfied the requirements of section 274 of the Companies Consolidation Act 1908, which to all intents was in the same form as section 691. The Lord President, Lord Dunedin, said:

"On behalf of the department we had cited to us a set of cases which arose under the Income Tax Acts, where the phrase which had to be considered was 'carrying on business'. Well, the simple answer to the income tax cases seems to me to be that 'carrying on business' is one thing and 'establishing a place of business' another. If what the legislature meant was that these requirements were to be imposed upon all foreign companies who carried on business within the United Kingdom, it would have been perfectly easy to say so. Therefore I am driven to the conclusion that when the legislature selected the phrase 'establishes a place of business' it meant something other than 'carrying on business'. And if I were at liberty - I do not know that I am - to search for reasons, I think the reason would be very apparent. The expression 'carrying on business' is so wide that it would really touch all persons having business in the United Kingdom, a result from which the legislature may well have shrunk. On the other hand, we had another set of cases quoted to us, where undoubtedly the expression was nearer the present expression, because there the expression used was 'having a place of business'. But these were cases which dealt with jurisdiction, and, in so far as our own courts are concerned, dealt with the jurisdiction of the Sheriff Court. As I have already said, I think it was quite right that those cases should have been quoted, but I think it would be a little unsafe to rely upon them for this reason: no doubt the wisdom of Parliament is supposed to have before it all the statute law and all the decided cases that are extant, but, even supported by that comfortable doctrine, I think it would be a little rash to take it that those who framed the Companies (Consolidation) Act of 1908 had in mind the phraseology of the Sheriff Courts (Scotland) Act of 1876.

I therefore, in my judgment, merely look at the expression as it is used. That expression seems to me clearly to point to this, that the company must have what I may call a local habitation of its own. I do not wish to say more, because I do not think that exact definition is at all a profitable pursuit;in fact, it always leads one into this trouble that one deserts the words which Parliament has used and substitutes others. But taking the requirement of a local habitation of its own as a sort of note, when I come to look at the facts here I do not find anything of that sort."

36. Lord Johnston and Lord Skerrington agreed with the Lord President. Here, the judge found that 10 Rutland Road was the business address of Mr. Phillipson. That did not prevent it from also being a place of business of Baser. The judge also found that the address had been used by Mr Phillipson on stationery with the name of Baser, but he made no finding as to whether Baser had in any sense a local habitation of his own at 10 Rutland Road. In my judgment, that ought to have been a separate inquiry. The judge should have come to a conclusion upon it. He did not do so on the evidence. It seems to me, particularly in the light of the second question, that he would have been bound to accept that the company had not established a place of business of its own.
37. I now turn to that second question. At this point some guidance can be found, as Mr Berkeley QC suggested, from the inquiry which the court makes when it has to consider whether a company is resident in a foreign country, where a default judgment has been entered against it which it is sought to enforce here. That was the inquiry that had to be made in Adams v Cape Industries Plc [1990] Ch. 433, to which Mr Berkeley referred us. In that case this Court came to conclusions which are summarised at pages 530 to 531. The Court there set out a list of factors which were likely to be relevant to the investigation as to whether an overseas corporation was present within the jurisdiction. I do not need to go through that list. It has to be remembered that, while there is some overlap between the question of presence and the carrying on of business, the overlap is not complete. Moreover in neither case is there any requirement for the establishment of a place of business. The judge relied on the guidance and, in my judgment, he was entitled to do so, provided he kept those differences in mind. At page 8 of his judgment the judge concluded:

"... a place of business is a place at which the business of the company is transacted, whether by agents or by employees and an address can be a place of business of an overseas company even if none of the people at the address have the authority to enter into contracts on behalf of the company. The business of a company is much wider than entering into contractual relations. This was exemplified by the South India case."

38. As Buxton LJ has explained, however, the South India case turns on its own special facts. The judge went on to say:

"Part of the business of Baser was the negotiation of orders through the agency of Mr Phillipson, the receipt of those orders at his premises in Harrogate and the transmission of those orders to Baser in Turkey."

39. In my judgment, he was here assuming the very question which he had to decide, namely the question the business which Mr Phillipson was carrying on was that of Baser, and accordingly whether his place of business was a place of business of Baser. The findings of the judge were that Mr Phillipson was a commission agent and that he had no authority to accept contracts. Implicit in the sentence which I have read is a finding that orders were not accepted at 10 Rutland Road but were transmitted to Baser in Turkey and there acted upon by it. In those circumstances, the proper inference in my judgment was that the business of Mr Phillipson was that of independent contractor and not that of Baser, and accordingly the requirements of section 691 were not met.
40. In reaching this conclusion, I have found assistance in the judgment of the Court of Appeal in Adams v Cape Industries Plc, above, and in particular, in the extracts there set out from the earlier decisions in Okura & Co Ltd v Forsbacka Jernverks Aktiebolag [1914] 1 KB 715 (see pages 524 and 526-527 of the Adams case), and also in Jabbour v Custodian of Absentee's Property of State of Israel [1954] 1 WLR 139, which is cited by Slade LJ at page 531 in the report of the Adams case. I will read that last extract:

"A corporation resides in a country if it carries on business there at a fixed place of business, and, in the case of an agency, the principal test to be applied in determining whether the corporation is carrying on business at the agency is to ascertain whether the agent has authority to enter into contracts on behalf of the corporation without submitting them to the corporation for approval..."

41. The Court of Appeal in the Adams case expressed its agreement with this general principle. The Court of Appeal emphasised that for an overseas corporation to be present in the jurisdiction the business that was being carried on must be that of the overseas corporation and not simply that of the agent. It held that if the agent in the jurisdiction never made contracts in the name of the overseas corporation, that would be a powerful factor pointing against the presence of the overseas corporation in the jurisdiction. I return now to Lord Advocate v Huron and Erie Loan and Savings Co. Dealing with the facts Lord Dunedin said this at page 616:

"These companies do, I think, carry on business in the United Kingdom, that is to say, they tout for loans and, in order to have their touting properly carried out, they have agents. Well, these agents put forth prospectuses in which they say that the companies are willing to receive money upon debenture. They indicate a bank to which that money can be paid, and they give the terms upon which the money will be received. But everything in the way of making the contract itself - by issuing the debenture, inscribing the debenture in the proper register, and so on - is all done by the foreign company at its own domicile in Canada. And, by terms of this special case, which, of course, is an agreed-on statement of facts between the parties - I find the second party (and it is equally true of the other parties) does not own any office in the United Kingdom, nor does it possess any office under lease or otherwise, or pay any rent or other allowance for the use of any office. The second party has no salaried representative in this country. The case goes on to explain that their agents are paid by commission on debentures which they place. Now, in that state of facts, I look in vain to discover where is its 'established place of business'. In point of fact, I think the learned Solicitor-General was in difficulties in attempting to say where its place of business was. Was it the office of the agent who sent out the touting circular? Or was it the office of the person who had the power of attorney?Or was it the offices of the Bank of Scotland where alone the money was going to be received?Well, it is perfectly clear that each of these, whatever it was, was not the office or place of business of the company."

42. The Huron case shows in the context of the Companies Acts that an overseas corporation, which has agents with offices here who carry on business here but do not make contracts of the name of the overseas corporation, does not thereby have a place of business here. In this case there was only one agent. In my judgment, for the reasons given above, the agent was carrying on his own business and not that of Baser. In all the circumstances, the agent's place of business did not become that of Baser. For these reasons, I too would allow the appeal.
43. MR. JUSTICE BODEY: I agree with both judgments and I also allow the appeal.
Order: Appeal allowed with costs of the appeal and of the hearing before the circuit judge and of the hearing before the district judge; no payment to be made in respect of costs until the conclusion of proceedings on the writ and there to be no formal assessment of costs until the same time; both parties to have liberty to apply. (Order not part of the judgment of the court)