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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Vava & Ors v Anglo American South Africa Ltd [2012] EWHC 1969 (QB) (16 July 2012) URL: https://www.bailii.org/ew/cases/EWHC/QB/2012/1969.html Cite as: [2012] EWHC 1969 (QB), [2012] 2 CLC 684, [2013] BUS LR D48, [2013] Bus LR D48 |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
FLATELA VAVA AND OTHERS |
Claimants |
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- and - |
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ANGLO AMERICAN SOUTH AFRICA LIMITED |
Defendant |
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Between : |
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JESSICA MARGARET YOUNG (by her Father and Litigation Friend Kenneth Niall Young) |
Claimant |
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- and - |
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ANGLO AMERICAN SOUTH AFRICA LIMITED DR PETER JOHN JANKOWITZ DR ATHOL STEWART DR BRIAN ROYSTON GLOVER DR GARETH OWEN JONES DR IAN SMITH |
Defendants |
____________________
Guy Philipps QC and Stephen Midwinter (instructed by Linklaters) for the Defendants in the Vava action and (instructed by Reynolds Porter Chamberlain ) for the First Defendants in the Young action
David Thomas (instructed by George Dodd, the Solicitor for the Medical Protection Society) for the Second Defendant in the Young action
None of the other Defendants in the Young action were represented or took part in the proceedings
Hearing dates: 11 May 2012 and 29 June 2012
____________________
Crown Copyright ©
MR JUSTICE SILBER:
I. Introduction
II. The Issues
"1. For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its:
(a) statutory seat, or
(b) central administration, or
(c) principal place of business.
2. For the purposes of the United Kingdom and Ireland "statutory seat" means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place."
"(1) The court may at any time order a party to –
clarify any matter which is in dispute in the proceedings; or give additional information in relation to any such matter, whether or not the matter is contained in or referred to in a statement of case."
"(1) The court may make an order for specific disclosure or inspection.
(2) An order for specific disclosure is an order that a party must do one or more of the following things –
(a) disclose documents or classes of documents specified in the order;
(b) carry out a search to the extent stated in the order;
(c) disclose any documents located as a result of that search …"
(a) Can the claimants show at this stage that their case on jurisdiction (viz. that they have a good arguable case that the defendant's central administration and/or its principal place of business is in England) is at least arguable?
(b) If so, are the orders sought reasonably necessary for the fair disposal of the jurisdiction issues (as described at (a) above)? In particular:
(i) Are the Part 18 Requests reasonably necessary and proportionate to enable the claimants to prepare their own cases and understand the case they have to meet?; and(ii) Is the request for disclosure necessary and proportionate, in all the circumstances of the case, and having regard to the overriding objective, to assist the claimants in their case?
"'Good arguable case' reflects in that context that one side has a much better argument on the material available".
III. First limb - Arguability of the Claimants' case on jurisdiction
The rival views on the interpretation of "central administration" and the "principal place of business"
"The notion 'central administration" …means the management and control centre (the 'real seat'). Although every company or legal person has a central administration, this notion is less easier to ascertain than the statutory seat".
"Central Administration means the place where the decisions are made and entrepreneurial management effectively takes place i.e. usually the place where the bodies of the company or firm are located".
"The place of central administration is determinative of the place where decisions are made and the "entrepreneurial" management of the company or other legal person or association of natural or legal persons takes place".
"One approach may be helpful would be to examine where those who have the serious responsibilities in the company have their places of work".
"The concept of central administration… appears equivalent to the place of central management and control used in section 42 [of the European Communities (Civil & Commercial) Judgments Regulations 2002] which was clarified by the Court of Appeal in The Rewia [1991] 2 Lloyds Reports 325".
"Principal place of business (or de facto seat) means the de facto centre of business, in the case of factory the central production site or any other place where the material human and tangible resources are concentrated".
"11…the administrative centre is the place where the decision-making and actual entrepreneurial management of the company occurs".
a) The tests of "central administration" and of "principal place of business" of a company are EU law concepts and their meaning is a matter of EU law, which is itself derived from continental civil law jurisprudence. The meaning of "central administration" is that it is concerned with the location of a company's decision-making bodies while the meaning of the "principal place of business" is concerned with the location of its economic activities;
b) The EU law test of "central administration" regards as irrelevant the relationship between a company (whether or not a member of the Group) and its controlling shareholders, save in wholly exceptional circumstances which do not apply in this case;
c) In this case, the decision-making body of AASA is its Board of Directors which is based in Johannesburg where it meets; and that
d) The location of AASA's economic activities is also in South Africa where it carries on its task as a holding company of the mining companies, which it owns.
"The central administration is located where the company organs take the decisions that are essential for the company's operations. In this connection only the organs of the company itself count; it is irrelevant whether the company depends on the decision of a parent company which has its domicile outside the Community. In most instances, the principal establishment and central administration are located at the same place; the principal establishment is located at the most crucial point of the company's economic activities which means primarily the situs of its most essential operational facilities."
"27…In seeking to determine where "central management and control" of a company incorporated outside the United Kingdom lies, it is essential to recognise the distinction between cases where management and control of the company is exercised through its own constitutional organs (the board of directors or the general meeting) and cases where the functions of those constitutional organs are "usurped" - in the sense that management and control is exercised independently of, or without regard to, those constitutional organs. And, in cases which fall within the former class, it is essential to recognise the distinction (in concept, at least) between the role of an "outsider" in proposing, advising and influencing the decisions which the constitutional organs take in fulfilling their functions and the role of an outsider who dictates the decisions which are to be taken. In that context an "outsider" is a person who is not, himself, a participant in the formal process (a board meeting or a general meeting) through which the relevant constitutional organ fulfils its function."
"Central administration means the place where the bodies of the company or firm are located which is, incidentally, not the place of the Group management in the case of the company or firm being part of a Group but the place of the bodies of the dependant undertaking which intends to exercise the right of establishment."
"the principal place of business… would have to be understood as the place where the majority of its activity is exercised in comparison with other places in which it is established".
"The concept of "principal place of business" means the centre of the business activities. This is the place where the most important centre of the economic, industrial or commercial activity of a company is situated and where most of its employees and business assets are deployed." [19]
"The most important centre of the economic, industrial or commercial activity of a company is situated and where most of its employees and business assets are deployed".
The factual inquiry as to the location of the "central administration" and the "principal place of business" of AASA
a) Company Secretarial services including those relating to Board and other meetings;
b) Executive Director services including certain South African specific issues such as transformation, government relations and regulatory affairs;
c) Finance and Performance Management services including those relating to finance and performance management function of AASA as well as providing advice and support in respect of financial accounting and statutory reporting;
d) Tax services including the completion of tax returns and the provision of tax regulatory advice;
e) Treasury services, including monitoring cash forecasts;
f) Corporate Communication services include the handling of media relations, internal and external communication processes, marketing and advertising, sponsorships, digital and social media and Group communications;
g) Corporate and Finance services and these services might include the execution of certain disposals, acquisitions and mergers and structure management such as formulating the dividend policy for AASA; and
h) Legal services, but they are not referred to in the agreement.
Conclusions
IV. Second limb- Are the orders sought in the Part 18 Request and for disclosure reasonably necessary for the fair disposal of the jurisdiction issue?
"I wish to stress that, as counsel for the plaintiffs himself accepts, the court will only exercise its powers under this heading very rarely, and will require the clearest possible demonstration from the party seeking discovery that it is necessary for the fair disposal of the application. I say this for two reasons. In the first place, the court is naturally reluctant to place such a burden on a defendant who disputes the basic jurisdiction of the court, for the reasons put forward by counsel for the defendant. Secondly, applications under Ord 12, r 8 are a fairly common feature of court business, most particularly in the Commercial Court when dealing with applications to set aside leave granted ex parte under Ord 11 for service out of the jurisdiction, and they are normally dealt with by a hearing on affidavit evidence (see The Supreme Court Practice 1988 vol 1, para 12/7–8/5). It would be most undesirable, and productive of extra delay and unnecessary expense, if applications for discovery were to become a common feature in such cases."
"It is well established under the previous procedural rules that the power to order disclosure for the purpose of interlocutory proceedings should be exercised sparingly and then only for such documents as can be shown to be necessary for the just disposal of the application: Rome v Punjab National Bank [1989] 2 All E.R. 136. There are good reasons for concluding that the same if not a stricter approach is appropriate under the provisions of CPR"
"A Request should be concise and strictly confined to matters which are reasonably necessary and proportionate to enable the first party to prepare his own case or to understand the case he has to meet."
What disclosure should be ordered?
AASA's last 3 annual accounts
AASA's Memorandum and Articles of Association
The document(s) that specify/specifies which powers and responsibilities are reserved or delegated by AA plc in respect of the business of AASA, including any delegation matrix.
The Authority policy manual of AASA
Policies, instructions and manuals produced by AA plc that apply to the business of AASA
Godfrey Gomwe's contract(s) with Anglo and his Job Description
Rene Moduri's job description
Minutes of ExCo meetings attended by Godfrey Gomwe - Minutes of meetings between Godfrey Gomwe & Cynthia Carroll and between Godfrey Gomwe and Rene Medori and between Godfrey Gomwe, Chris Griffiths, Norman Norman Mbazima and Neville Nicolau
Documents referred to in the AASA board minutes exhibited to the second witness statement of Godfrey Gregory Gomwe, namely (a) The Interim Report and the commentary by Mr Mayet on the interim results referred to in paragraph 1 of the Board Minutes dated 6 September 2010; (b) The section of the Report by Mr Gomwe dated 31 August 2010 referred to in paragraph 2 of the Board Minutes dated 23 September 2010, dealing with "structured business alignment; management meetings amongst GGG and CEOs of SA BU's"(c)The review submitted by the Anglo Business Assurance Services Department forming the basis of Mr Mayet's advice that "AASA has an effective system of control in all its managed businesses", referred to in paragraph 5.1 of the Board Minutes dated 23 September 2010; and (d)The Scenario Paper (review of AASA as a going concern) referred to in paragraph 6 of the Board Minutes dated 23 September 2010 and paragraph 1 of the Board Minutes dated 18 April 2011.
V. Conclusions