Case Spotlight. Yeah. We love it. Case Spotlight. Yeah. Although this could work for people with synesthesia, Corporate Blawg is considering getting a podcast, just so he can add jingles to his favourite themes like Case Spotlight (Yeah), but that might be a bit sad.
Corporate Blawg has paused in thought on the very recent case of Nearfield Ltd v (1) Lincoln Nominees Ltd (2) Lincoln Trust Co (Jersey) Ltd [2006] EWHC 2421 (Ch), of 9 October 2006. Very recent, see.
The facts are that there was a joint venture where one party "procured" to ensure that another party was repaid a £3 million loan. Basically, the procuring party didn't procure anything. The case came before court on the meaning of the work "procure".
The judgement held that to "procure" meant "to see it be done". This would have been quite obvious if the judge had consulted a dictionary, but due to The Antaios Compania Neviera S.A. v. Salen Rederierna A.B. 19851 A.C. 191, 201, judges aren't allowed to do this. Fortunately, Corporate Blawg can do whatever he pleases. Corporate Blawg has found that procuring means to "obtain or get by care, effort, or the use of special means". No sh*t Sherlock. However, and somewhat more interestingly to procure also means "to act as a procurer or pimp". Since pimping is illegal in the UK, this was clearly not the intention of the parties and the judge found no need to comment on this.
In sum, the claimant won, the case was done.
Rather curiously, in his judgement, Peter Smith J said in relation to a minor point:
One is reminded of the well known phrase “one does not hire a dog and bark oneself”
Corporate Blawg is mystified, and can only imagine that it is something to do with West London life (being a thoroughbred east ender). Afterall, how does one hire a dog? Have you ever hired a dog? Where can one hire a dog? Making more sense is the well-known phrase "one does not hire a dog because it's wierd" and "one does not bark at oneself or else one gets locked up". Despite this minor flaw in the judgement, there were a number of interesting contract law points raised, as summarised below:
- There can be no claim for rectification where there is no unilateral mistake known to the other party, or any mutual mistake.
- Where a company agrees to procure but does not procure that party is liable for damages to the extent that it did not procure - Moschi v LEP Air Services [1973] AC 331 as summarised in Barnicoat et al v Knights et al [2004] 2 BCLC 464.
- It is unlikely that the word "procure" would have a different meaning in different parts of the agreement. Very unlikely says Corporate Blawg, smelling potential negligence claims.
- Documents and drafts as evidence of intention are unhelpful and inadmissible in attempting to answer the question of construction. Documents cannot be construed in isolation from the "matrix of fact" from which they were derived. "evidence of negotiations, or of the parties' intentions […] ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the "genesis" and objectively the "aim" of the transaction.” - Prenn v Simmonds [1971] 1WR 1381
- The meaning of the document is what the parties use in its words, against the relevant background and what they would have reasonably understood them to mean - Investors Compensation Scheme v West Bromwich Building Society [1998] 1.
All Corporate Blawg has left to say is whichever lawyer advised the defendant to bring this case must have been barking.
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