England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		28/10/2016

Mr Justice Lavender:

1. At the conclusion of the trial of this action, it emerged that there was a point in issue between the parties which needed to be resolved before I give judgment on the Claimants' claims. The purpose of this short judgment is to address that point, on which I have had the benefit of brief written submissions from the parties.
2. It is not in issue that each of the Claimants retained as their Spanish lawyers either Miguel Ángel Aroca Seiquer ("Sr. Aroca"), a Spanish lawyer, or Aroca Seiquer & Asociados S.L., a Spanish company which was formerly known as Atlastax Internacional S.L. ("Atlastax"). Sr. Aroca and Atlastax (together, "Aroca") contend that the Claimants' contracts were with Atlastax. The Claimant's primary case is that their contracts were with Sr. Aroca. If that is wrong, the Claimants also pursue claims in the alternative against Atlastax.
3. It emerged from Claimants' written opening that their primary case is that that they contracted with Sr. Aroca, but that Atlastax was his undisclosed principal. It is well settled that if such a contract is broken, a person in the Claimants' position can obtain judgment against either the agent or the undisclosed principal, but not both. See Bowstead & Reynolds on Agency, 20th Edn.:

(1) Article 82(1), para. 8-114:

"Where an agent enters into a contract on which he is personally liable, and judgment is obtained against him on it, the judgment, though unsatisfied is, so long as it subsists, a bar to any proceedings against the principal, undisclosed or (perhaps) disclosed, on the contract."

(2) Article 104, para. 9-057:

"Any liability of an agent on any contract made by an agent on behalf of his principal is discharged by the obtaining of judgment against the principal, …"

4. On behalf of the Claimants, Mr. Knox contended that:

"If they have to make an election, it is only if and when judgment is given in their favour."

5. In his closing submissions, Mr. Knox amplified this, contended that the Claimants could (if I were to find that Sr. Aroca was liable to them in contract) make their election either: (a) in the period between the handing down of my substantive judgment and the drawing up of the consequential order; or (b) in the period between the production of my judgment in draft and the handing down of my judgment.
6. Mr. Turner, who represents Aroca, disagreed, contending that by that stage it would be too late for the Claimants to choose whether, on their primary case (if successful), they should have a judgment against Sr. Aroca or against Atlastax. (I should record that Mr. Turner did not contend that it was already too late for the Claimants to make such an election.)
7. I agree with Mr. Turner. In my judgment on the Claimants' claims, I will be deciding both whether the claims in contract against Sr. Aroca succeed or fail and whether the claims in contract against Atlastax succeed or fail. It is common ground that those claims cannot both succeed. Once I have decided those issues, it will not be open to the Claimants to invite me to change that decision. So there will be no opportunity after judgment is handed down for the Claimants to make an election of the kind proposed. Nor would it be right for the Claimants to make such an election after I have produced my judgment in draft. The process of producing judgments in draft is not intended to allow the parties to reopen contentious matters: see Robinson v. Fernsby [2003] EWCA Civ 1820, at [92], per May L.J..
8. Mr. Knox submitted that the Claimants should not have to make a "blind" election, but he did not indicate what, if anything, my judgment might contain which would inform what would, in effect, be a commercial decision for the Claimants, namely whether, if they are entitled to a judgment for breach of contract on their primary case, it would be preferable for them to have a judgment against Sr. Aroca or against Atlastax. One can readily see how factors such as Sr. Aroca's claim that he personally is not insured would be relevant to that decision, but I do not see how my judgment would inform that decision.
9. By contrast, it would assist me in preparing my judgment to know the Claimant's position. Unless the Claimants indicate otherwise, I will proceed on the basis that their primary claim in contract is against Sr. Aroca and not against Atlastax. However, I will not produce my draft judgment before Friday 4 November 2016, to give the Claimants an opportunity to consider their position in the light of this judgment and to notify me of their considered position.