Benatti v WPP Holdings Italy SRL & Ors

This is a battle over jurisdiction under Council Regulation (EC) No 44/2001 (“the Judgments Regulation”). The matters in dispute are also the subject of proceedings brought by Mr Benatti against the present claimants in Italy.

Mr Benatti’s challenge to the jurisdiction of the English court was rejected by Field J. His judgment [2006] EWHC 1641 (Comm), [2007] 1 All ER (Comm) 208, contains a detailed account of the factual background. For present purposes, a less detailed account will be sufficient.

Mr Benatti is an Italian businessman, domiciled in Italy, with interests in various companies active in the worlds of advertising, media buying and public relations.

The claimant companies all belong to the WPP Group (“the Group”), one of the world’s largest communications services groups with interests which include advertising, media buying and public relations. The Chief Executive Officer of the Group has at all relevant times been Sir Martin Sorrell.

The corporate structure of the Group has caused some confusion, which has a relevance as will appear. Until 25 October 2005 the parent company was WPP Group plc (registered number 01003653) but on that day it changed names, as part of an internal reconstruction, with a newly formed company called WPP 2005 plc. The upshot was that both before and after 25 October 2005 the parent company bore the name “WPP Group plc”, but they were different companies. On 9 November 2005 the company then called WPP 2005 plc (ie old WPP Group plc) changed its name and status to become WPP 2005 Limited. That company is the second claimant. The first claimant (“WPP Italy”) is incorporated in Italy and its operations are centred there. The third claimant (“BSH”) is a Dutch company used by the Group for the purposes of acquiring majority holdings in European companies.

On 4 March 2002 WPP Italy and Mr Benatti entered into a written agreement expressed to be a consultancy agreement. By clause 2 Mr Benatti was appointed as a consultant to old WPP Group plc (referred to in the agreement as WPP) and to WPP Italy, in respect of all their business activities in Italy, with the title of WPP Country Manager for Italy.

Mr Benatti’s duties were set out in clause 3. He was to assist WPP Italy and any other Group company in Italy in their business activities, when asked to do so by WPP Italy or WPP, and was to liaise with and report to the Chief Executive in relation to performance of his duties, subject at all times to the directions and instructions of WPP’s board of directors. In particular, he was to assist in identifying and negotiating business acquisitions in Italy and elsewhere as agreed with the Chief Executive; identifying key executives; developing client relationships in Italy; identifying and proposing network synergies for the Group Companies in Italy; and assisting the Chief Executive in formulating and implementing strategic objectives in Italy. He was to be free to have interests in other companies not forming part of the WPP Group, provided that those interests did not detract from or interfere with his ability to perform his duties under the consultancy agreement, and he was to keep the Chief Executive informed of his business activities which were not concerned with any WPP company. Clause 3 also provided that Mr Benatti was not required to work on average over any period of 90 days for more than one and a half days per week.

Clause 4 provided that Mr Benatti should be paid a base retainer fee equivalent to €198,000 per annum, plus VAT, and a commission of 1% of the value of any businesses acquired through his introduction or with his assistance. Clause 5 entitled him to reimbursement of expenses incurred in the performance of his duties and to the provision of a personal assistant, secretary and properly equipped office at the expense of WPP Italy.

Clause 8 contained post termination non-solicitation and non-competition covenants on the part of Mr Benatti in favour of WPP Italy and/or WPP and/or any of the Group companies.

Clause 11 provided:

“This agreement shall be governed by English Law and any controversies arising from or related to the interpretation or enforcement of this contract shall be exclusively submitted to the Courts of England.”

By a written amendment dated 12 May 2003 Mr Benatti’s base fee was increased to €500,000 with effect from 1 January 2003. It was increased again from 1 January 2005 to €850,000 per annum. On this occasion there was no written variation. It is Mr Benatti’s contention that the increase was in consideration of an increase in his working time up to 5 days a week. This is denied by Sir Martin Sorrell, who agreed to the increase at a meeting with Mr Benatti.

In November 2002 BSH acquired an Italian media buying agency called Media Club for a fixed payment to be followed by three “earn-out” payments, dependant on the profits of Media Club over the following years. The acquisition was recommended by Mr Benatti, and he received a commission on the amount of the initial payment. In the course of auditing the figures on which the second earn-out payment was to be calculated, the Group’s accountants drew Sir Martin Sorrell’s attention to what they regarded as a suspicious transaction involving the sale by Media Club of a receivable owed to it by a company in liquidation called OVT. The effect of the sale was to increase the amount of the earn-out payment, on which Mr Benatti would receive further commission. It is the Group’s case that investigations revealed that Mr Benatti had interests in Media Club and OVT, which placed him in a position to obtain secret profits from the Group’s dealings in relation to Media Club, but he wrongly failed to disclose those interests to Sir Martin Sorrell.

On 9 January 2006 Sir Martin Sorrell summarily terminated the agreement at a meeting with Mr Benatti. On the same day WPP Italy issued a letter of termination, which reminded him of his post termination covenants and asked him to confirm that he would observe his ongoing obligations to WPP Italy and to “WPP Group plc”.

The particulars of claim assert that Mr Benatti owed contractual and fiduciary duties to each of the claimants – contractual duties to WPP Italy as the contracting counterparty; contractual duties to WPP 2005 Limited and BSH by virtue of the terms of the contract and section 1 of the Contracts (Rights of Third Parties) Act 1999 (“the Third Parties Act”); and fiduciary duties towards the claimants by reason of the contractual obligations which he undertook towards them.

The allegations of wrongdoing are all denied, but Miss Dohmann QC accepted for jurisdictional purposes (but not otherwise) that each claimant has a good arguable case in respect of its contractual and equitable claims.

Section 1 contains general provisions. The general rule, set out in article 2, is that persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.

Section 2 is headed “Special jurisdiction”. Article 5 provides:

“A person domiciled in a Member State may, in another Member State, be sued:

1

(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;…

3.

in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur.”

Section 5 is headed “Jurisdiction over individual contracts of employment”. Article 20(1) provides that an employer may bring proceedings only in the courts of the Member State in which the employee is domiciled. Article 21 provides that this requirement can be departed from by an agreement on jurisdiction only in limited circumstances, which would not apply in this case.

Section 7 is headed “Prorogation of jurisdiction”. Article 23 provides:

“1.If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:

(a)

in writing or evidenced in writing;…

5.

Agreements…conferring jurisdiction shall have no legal force if they are contrary to Articles…21…”

Section 9 is headed “Lis pendens-related actions”. Article 27 provides that where proceedings involving the same cause of action between the same parties are brought in courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until the jurisdiction of the court first seised is established.

Article 28 provides that where related actions (as distinct from proceedings involving the same cause of action) are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings. Actions are related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of inconsistent judgments resulting from separate proceedings.

Article 30 provides:

“For the purposes of this Section, a court shall be deemed to be seised:

1.

at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or

2.

if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps that he was required to take to have the document lodged with the court.”

The two alternatives provided in Article 30 (1) and (2) reflect the existence of different procedures among different Member States. Article 30 (1) applies to proceedings in England and Wales because they are instituted by the court issuing a claim form, which has subsequently to be served on the defendant. Article 30 (2) applies to proceedings in Italy because the writ (as it has been referred to during the argument) has first to be lodged with an authority known as UNEP with a request for service on the defendant. When the defendant has signed an advice of receipt, the claimant’s lawyers will lodge the writ and advice of receipt with the court.

There are two distinct sets of issues: (a) whether the English court has a basis to accept jurisdiction over the WPP companies’ claims and (b) if so, whether it is the court first seised.

The WPP companies claim that the English court has jurisdiction by virtue of clause 11 of the contract and article 23. (WPP 2005 Limited and BSH rely in this regard on the Third Parties Act). If for one reason or another their arguments under article 23 fail, they rely on article 5. As to their contractual claims, they rely on article 5.1. They say that the “obligation in question” was an obligation to inform Sir Martin Sorrell about Mr Benatti’s undisclosed interests, and that the place of performance of that obligation was in London. As to their claims for breach of fiduciary duty, they argue that these could be seen as claims in matters relating to a contract, in which case the same argument would apply. Alternatively, the claims for breach of fiduciary duty fall within article 5.3 and the place of the harmful event (or in this case omission) was England.

Mr Benatti’s case is that the so-called consultancy agreement was by the time of his dismissal (if not before) a contract of employment and that any claims arising out of it must be brought in Italy. It is further submitted on his behalf that, whether he is right or wrong on that issue, the court should reject the arguments of WPP 2005 Limited and BSH founded on article 23 and article 5. It is submitted that the arguments by those companies under article 23 are bad as a matter of law, and that the arguments under article 5 are fallacious because the relevant place of performance was Italy and not England.

If proper grounds exist for the English court to accept jurisdiction over the claims under the Judgments Regulation, separate procedural questions arise about which court was first seised. Before Field J it was submitted that the service of proceedings in the English action should be set aside under CPR 3.10(a) because of various procedural defects. Field J rejected that argument. The notice of appeal challenges his decision but Miss Dohmann has not sought to take the matter further. The points were minor and the judge was entitled to reject them. There is, however, a more substantial question which concerns WPP 2005 Limited alone. The question is which court was first seised of an action between that company and Mr Benatti. For this purpose it is necessary to set out the relevant history of the proceedings in the two countries.

History of the litigation

The English court became seised of the claim of WPP 2005 Limited on 15 February 2006 when the company was made a party to the present proceedings. The critical question is when the Verona court became seised of Mr Benatti’s claim against it.

Mr Benatti’s case is that the Verona court became seised of his claim against WPP 2005 Limited for the purposes of article 30(2) of the Judgments Regulation when the writ was lodged with UNEP on 1 February 2006. WPP 2005 Limited’s case is that the provisions of article 30(2) have to be read with the requirements of the Service Regulation and that a court cannot be seised of a claim which has never been validly served on the defendant. It accepts that the writ lodged with UNEP on 30 March 2006 with a request for service through the Senior Master resulted in valid service on it, and accordingly the Verona court was seised of Mr Benatti’s claim against it for the purposes of article 30(2) of the Judgments Regulation on 30 March 2006, but that was after the commencement of WPP 2005 Limited’s claim against Mr Benatti in England. It denies that the lodgement of the writ with UNEP on 1 February 2006, with a request for service by post under Article 14 of the Service Regulation on “WPP Group plc”, and without a translation, led to valid service on WPP 2005 Limited under that article.

Article 14 of the Service Regulation provides that any Member State may specify the conditions under which it will accept service of judicial documents by post. The United Kingdom has specified as follows:

“Service of a document by post is acceptable by means of registered mail or recorded mail only. A signature must be obtained from the addressee, or any other person who is prepared to accept receipt on behalf of the addressee, as proof of delivery of a document.

The addressee may refuse to accept service of the principal document unless it is accompanied by a certified English translation or by a certified translation into a language which the addressee understands.”

WPP 2005 Limited’s case is that the writ lodged with UNEP on 1 February 2006 was never validly served on it both because the letter purporting to serve it was addressed to a different entity (WPP Group plc) and also because the addressee was entitled to refuse to accept it without a translation. The time for refusal is unspecified and it is submitted that it therefore remained open to the defendant (unless there had been a prior positive act of acceptance) to intimate its refusal as long as it remained open to it to contest the court’s jurisdiction under CPR 11.

On the issue whether the contract was an individual employment contract for the purposes of section 5 of the Judgments Regulation, the judge held that :

(a)

the burden of proof was on Mr Benatti,

(b)

the standard of proof was “the Canada Trust gloss”, that is, whether Mr Benatti had a much better argument on the material available (adopting Waller LJ’s formulation in Canada Trust Co v Stolzenburg (No 2) [1998] 1 WLR 547 at 555),

(c)

the assessment had to be made at the date of the termination of the contract, but having regard to the preceding life of the contract, and

(d)

the argument against regarding the contract as an individual contract of employment was much better on the material available than the argument the other way.

The judge further held that by reason of the contractual exclusive jurisdiction clause and Regulation 23 the English court had exclusive jurisdiction over all the claims of all the claimants. In relation to WPP 2005 Limited and BSH, there was a good arguable case that the Third Parties Act entitled them to enforce the exclusive jurisdiction clause in respect of their claims both for breach of contract and for breach of fiduciary duty, and in those circumstances article 23 gave exclusive jurisdiction over those claims to the English court.

On the “first seised” issue, the judge held that

(a)

the burden was on Mr Benatti to prove that the Italian court was seised before the English court and the standard of proof was the Canada Trust gloss;

(b)

it was implicit in article 30(2) of the Judgments Regulation that, for the receipt of the document by the authority responsible for service to be the time that the court was seised of the proceedings, the document must subsequently have been served in compliance with the Service Regulation;

(c)

the fact that the purported letter of service of the Verona writ sent by UNEP on 2 February 2006 was addressed to WPP Group plc did not prevent the service from being valid on WPP 2005 Limited because the misnomer was curable under Italian law;

(d)

however, because the writ was served without a translation, WPP 2005 Limited was entitled to refuse to accept service of it and it had not lost its right to do so at the time of the hearing before the judge;

(e)

accordingly, the lodgement of the writ by Mr Benatti with UNEP on 1 February 2006 had not resulted in valid service of the proceedings on WPP 2005 Limited; and

(f)

the English court was therefore first seised of the issues between WPP 2005 Limited and Mr Benatti.

Miss Dohmann’s main arguments on behalf of Mr Benatti were that the judge was wrong:

1.

on the issue whether the contract was a contract of employment, both as to the burden of proof and as to which side had the better argument;

2.

on the entitlement of WPP 2005 Limited and BSH to rely on the Third Parties Act and article 23; and

3.

on the first seised issue in relation to WPP 2005 Limited.

Besides supporting the judge’s reasoning on all those matters, Mr Smouha QC submitted that:

1.

if the English court did not have jurisdiction over the claims of WPP 2005 Limited and BSH under article 23, it had jurisdiction under article 5; and

2.

the judge should have found that the lodgement of the Verona writ with UNEP on 1 February 2006 did not result in valid service of those proceedings on WPP 2005, not only because of the lack of a translation but also because of the difference of identity between WPP 2005 Limited and new WPP Group plc.

Questions of the burden and standard of proof under the Judgments Regulation and predecessor conventions have been discussed in a number of cases but there are good reasons for resisting the temptation to go back over them in the present case. First, counsel agreed that this issue was unlikely to make any difference to the outcome. Secondly, definitive guidance has recently been given by the Privy Council in Bols Distilleries BV v Superior Yacht Services Limited [2006] UKPC 45, [2007] 1 WLR 12.

In that case the claimant brought an action in Gibraltar relying on a jurisdiction agreement which it alleged was to be found in an exchange of correspondence. The Privy Council referred to decisions of the European Court of Justice to the effect that the policy underlying what is now article 23 of the Judgments Regulation requires that it be “clearly and precisely demonstrated” that the parties actually agreed to a clause conferring jurisdiction.

Lord Rodger of Earlsferry, at para 26, cited with approval the judgment of Waller LJ in Canada Trust, where he said at [1998] 1 WLR 547, 555:

“It is I believe important to recognise, as the language of their Lordships in Vitkovice Horni a Hutni Tezirstvo v Korner [1951] AC 869 demonstrated, that what the court was endeavouring to do is to find a concept not capable of very precise definition which reflects that the plaintiff must properly satisfy the court that it is right for the court to take jurisdiction. That may involve in some cases considering matters which go both to jurisdiction and to the very matter to be argued at the trial, e.g. the existence of a contract, but in other cases a matter which goes purely to jurisdiction, e.g. the domicile of a defendant. The concept also reflects that the question before the court is one which should be decided on affidavits from both sides and without full discovery and/or cross-examination, and in relation to which therefore to apply the language of the civil burden of proof applicable to issues after full trial is inapposite…It is also right to remember that the “good arguable case” test, although obviously applicable to the ex parte stage, becomes of most significance at the inter partes stage where two arguments are being weighed in the interlocutory context which, as I have stressed, must not become a “trial”. “Good arguable case” reflects in that context that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e. of the court being satisfied or as satisfied as it can be having regard to the limitations which an interlocutory process imposes that factors exist which to allow the court to take jurisdiction.”

Lord Rodger continued, at para 28:

“Despite the submissions of counsel for the defendants to the contrary, it appears to the Board that, if the standard of “a good arguable case” is properly understood and applied, there is no risk that the effectiveness of the Regulation would be impaired. The rule is that the court must be satisfied, or as satisfied as it can be having regard to the limitations which an interlocutory process imposes, that factors exist which allow the court to take jurisdiction. In practice, what amounts to a “good arguable case” depends on what requires to be shown in any particular case in order to establish jurisdiction. In the present case, as the case law of the Court of Justice emphasises, in order to establish that the usual rule in article 2(1) is ousted by article 23(1), the claimants must demonstrate “clearly and precisely” that the clause conferring jurisdiction on the court was in fact the subject of consensus between the parties. So, applying the “good arguable case” standard the claimants must show that they have a much better argument than the defendants that, on the material available at present, the requirements of form in article 23(1) are met and that it can be established, clearly and precisely, that the clause conferring jurisdiction on the court was the subject of consensus between the parties.” (Emphasis added).

In other words the requirement of a “good arguable case” is intended to encapsulate the critical rule that the court must be as satisfied as it can be, having regard to the limitations which the interlocutory process imposes, that factors exist which allow the court to take jurisdiction. The way in which the test so understood comes to be applied may vary from case to case, both in order to take account of any relevant policy underlying the Regulation and in order to take account of the particular limitations imposed by the interlocutory process in the relevant case.

Miss Dohmann argued that the principle applied by the Privy Council in Bols meant that in the present case the WPP companies had to show that they had a much better argument than Mr Benatti that he was a consultant rather than an employee, in order to establish that article 23 gave the court jurisdiction. I do not agree. In Bols the need for the claimants to show that they had a much better argument than the defendants was the practical effect of the policy of the legislation which required it to be clearly established that the parties had actually agreed on the clause alleged to confer jurisdiction. In the present case there is no dispute that the exclusive jurisdiction clause was part of a contract made between WPP Italy and Mr Benatti.

No European case law was cited to the effect that the Judgments Regulation (or its predecessor conventions) place a higher value on party autonomy (as reflected in article 23) than on putative employee protection (as reflected in section 5), or vice versa; and linguistically it seems to be rather sterile to debate whether section 5 ousts article 23 or vice versa. They are mutually exclusive. The court has to decide whether there is a “good arguable case” that article 23 applies, not section 5.

If the court arrives at a clear view that on the material available the argument on one side is better than the argument on the other, that is enough to resolve the issue. There might be a case in which, because of the limitations imposed by the interlocutory process, the court found it impossible to form a positive view which side had the better argument. This court discussed that hypothetical case in Konkola Copper Mines plc v Koromin Limited [2006] EWCA Civ 5, [2006] 1 Lloyd’s Rep 410, but did not consider it necessary to reach a final conclusion. Nor is it necessary to do so in this case. I would not exclude the possibility that application of the principle in Bols might lead a court to conclude that if the case for jurisdiction was as good as the case against jurisdiction, and that it was not possible to reach any firmer conclusion without conducting a mini trial, in those circumstances factors would exist which would allow the court to take jurisdiction. However, it is a point which would be much better considered on actual than on hypothetical facts.

It is important to remember that this is not a rehearing but a review. The fact that permission to appeal has been given does not mean that this court should therefore carry out a fresh examination of all the evidence in order to determine whether it would independently have arrived at the same conclusion as the judge. As Rix LJ emphasised in Royal and Sun Alliance Insurance plc v MK Digital FZE (Cyprus) Limited [2006] EWCA Civ 629, [2006] 2 Lloyd’s Rep 110, at para 52, the question is whether the judge erred.

Field J referred to European case law on the distinction between contracts of employment and contracts for work on a self-employed basis. He noted that the ECJ has not yet pronounced on the meaning of an “individual employment contract” in the context of section 5 of the Judgments Regulation, but that it has had to deal with the concept in other contexts, particularly article 5(1) of the Brussels Convention. From the ECJ decisions which he cited in his judgment, the judge concluded that the objective criteria of an employment contract for the purposes of section 5 of the Judgments Regulation are:

“(i)

the provision of services by one party over a period of time for which remuneration is paid;

(ii)

control and direction over the provision of the services by the counterparty; and

(iii)

integration to some extent of the provider of the services within the organisational framework of the counterparty.”

But these are not “hard edged” criteria which can be mechanistically applied. For example, in the case of a person with a non-executive role, there may be degrees of control and degrees of integration within the organisational framework of the company. As the judge rightly observed, in applying these broad criteria regard must be had particularly to the terms of the contract.

After a detailed review of the evidence, the judge concluded as follows:

“98.

As I observed at 69, above, the exercise I am engaged upon is one of fact and degree and it must be remembered that different relationships may share to a considerable extent some of the criteria propounded by the ECJ. Inevitably there will be cases that only just come within the category of a contract of employment and there will be cases that only just fall outside that category. Weighing all the factors present in this case I conclude that when the agreement was terminated on 9 January 2006 (alternatively when proceedings were started on 11 January 2006) it was not an individual contract of employment for the purposes of section 5. Although it was pretty close to being a contract of employment, it distinctly fell on the other side of the line.

99.

In my judgment, in substance Mr Benatti’s role under the agreement was in the nature of a self-employed management consultant who for a fee was engaged to come up with proposals and strategies to improve the performance of a corporate group. He could not implement strategies without Sir Martin Sorrell’s express authority and he was under an obligation to report to Sir Martin in detail and on a regular basis. But, as I have said, it is not unknown for management consultants to work under a detailed brief with an obligation to report regularly and in detail to the client and to accept instructions on how the engagement is to be executed. It is also not unknown for management consultants to carry out lengthy engagements which involve them becoming embedded to some extent in the client’s organisation.”

For Mr Benatti to succeed on this part of the appeal, it has to be shown that in coming to that conclusion the judge erred in principle, or made some demonstrable error of fact or was plainly wrong.

I can see no basis for saying that the judge erred in his approach to the matter in principle. Miss Dohmann attacked his conclusion by examining the evidence which went to the objective criteria identified by the judge and arguing that each was present, but the judge had to carry out an evaluative rather than a tick box exercise, looking at the terms of the contract aided by evidence about its operation in order to reach an overall view about its character. Miss Dohmann properly emphasised the points which went to support Mr Benatti’s case, but the fact remains that there were points which went the other way, and I am unpersuaded that the judge’s overall conclusion can be said to have been wrong. He was entitled to form the view from the evidence as a whole that Mr Benatti’s role with the Group appeared to have been non-executive. Moreover, it would be an unusual contract of employment which left the employee free to decide how many hours and days he worked, when, and what holidays he took; or to spend as much time as he liked on other business activities.

Miss Dohmann submitted that the judge should have found that the contract was amended with effect from 1 January 2005 to increase Mr Benatti’s annual fee to €850,000 in consideration of his increasing his working time to 5 days a week. The increase in fee was agreed at a meeting between Mr Benatti and Sir Martin Sorrell. Mr Benatti had put it to the WPP Group Compensation and Benefits Manager that he should have such an increase because he was now doing a full time job. Sir Martin Sorrell’s evidence was that he did not know how many days a week Mr Benatti was working, that the matter was not discussed between them and that the increase was not negotiated in return for an increase in Mr Benatti’s working time. He agreed to the increase for other reasons. The judge concluded that there was insufficient evidence to demonstrate that there was an amendment to the contract obliging Mr Benatti to work 5 days a week. In my judgment that conclusion was properly open to him. Miss Dohmann referred to a draft amendment to the contract prepared by the Group’s Italian lawyers in January 2005, which included a statement that Mr Benatti’s annual fee was to be increased to €850,000 “in consideration of the increase in the Consultant working time up to 5 days a week”. But that was only part of a document which cannot be said to have been agreed and which, if agreed, would have been two-edged. It also contained provision for Mr Benatti to be entitled to assign the agreement to a limited company, provided that Mr Benatti confirmed his personal engagement within the company which would be providing the consultancy services. This part of the draft amendment was plainly intended to preserve Mr Benatti’s status as an independent consultant.

Because the judge found that the English court had jurisdiction over the claims of WPP 2005 Limited and BSH by reason of the exclusive jurisdiction clause in the contract, it was not necessary for him to consider whether there was jurisdiction in respect of those claims under article 5. However, I would prefer to begin with the article 5 issues.

The first question is whether these companies’ claims for breach of contractual duties owed to them by virtue of the terms of the contract and the Third Parties Act are claims “in matters relating to a contract” within the meaning of article 5.1.

Briggs and Rees on Civil Jurisdiction and Judgments, 4th ed, 2005, are in no doubt about the answer. They say at para 2.1.26:

“If an agreement entered into by two parties as a contract provides for a third party to have directly enforceable rights thereunder, it seems that this will not prevent the claim being seen for jurisdictional purposes as falling within Article 5(1). Such arrangements are familiar to a civilian lawyer, and are seen as contractual in nature. …[The authors refer in a footnote to the stipulation pour autrui of French law as being clearly contractual according to substantive French law.]

Likewise, the Contracts (Rights of Third Parties) Act 1999 now provides that two contracting parties may confer a benefit on a stranger to the contract, which that stranger may enforce in his own right, if that is their intention and they demonstrate it in the form required by section 1 of the 1999 Act. It is clear beyond doubt that the claim brought by the intended beneficiary is contractual for the jurisdictional purposes of the Regulation.”

I would agree.

The next question is what was the place of performance of the relevant obligation. The obligation alleged is that Mr Benatti ought to have disclosed his interest in Media Club and OVT to Sir Martin Sorrell before acting as a consultant to the Group in matters to which those interests were relevant. Sir Martin Sorrell was based in London and therefore the companies contend that the place of performance of the obligation was London. According to the evidence, Mr Benatti used to come to London about once a quarter for formal meetings with Sir Martin Sorrell, which would last for some hours. Mr Benatti’s evidence was that they had much more frequent meetings in Italy, but this was disputed by Sir Marin Sorrell, who also made the point that such occasions were not formal reporting meetings like their meetings in London.

I consider that on the material before the judge there was plainly a good arguable case that London was the place of performance of the obligation in question and that the English court therefore had jurisdiction in respect of the relevant contractual claims under article 5.1.

Under article 5.3, there would be jurisdiction in respect of the claims for breach of fiduciary duty in the courts for the place “where the harmful event occurred”.

In Handelskwekerij GJ Bier BV v Mines de Potasse d’Alsace SA [1976] ECR 1735, [1978] QB 708 at para 19, the ECJ held that the expression “place where the harmful event occurred” gives an option to the claimant to commence proceedings either at the place where the damage occurred or the place of the event giving rise to it.

Since there is a good arguable case that the place of the harmful event (or, in this case, omission) was London, it follows that the English court has jurisdiction in respect of the claims by WPP 2005 Limited and BSH both for breach of contract and for breach of fiduciary duty.

Since article 23, if applicable, would produce the same result in the present case as article 5, it is not necessary to determine whether these companies are entitled to rely on article 23. There is in my opinion good reason not to do so. During the argument issues arose regarding the proper interpretation and effect of the Third Parties Act which do not seem to have been directly addressed at the hearing before the judge and were not clearly addressed in the notice of appeal or in the parties’ skeleton arguments, particularly in relation to the claims for breach of fiduciary duty. The issues are of potential importance, and it would be better to leave them until such time as a case arises in which they are properly identified and need to be decided.

The first seised issue is a procedural issue of a quite different kind from the question whether the court otherwise has jurisdiction under the Judgments Regulation. The parties were agreed that Mr Benatti had the burden of showing a good arguable case that the Verona court was first seised. I am not sure that this is correct. Article 27 requires a court of its own motion to stay its proceedings if another court has been first seised of the same cause of action between the same parties. At first sight, this would seem to require a court, if it is aware that another court has arguably been first seised of the same cause of action between the same parties, to form its own view which court has been first seised under the test laid down in article 30. However, it makes no difference in the present case and I would reserve a final opinion on the point.

Mr Smouha’s argument that the Verona court was not seised of the claim between WPP 2005 Limited and Mr Benatti when the Verona writ was lodged with UNEP on 1 February 2006 is based on the proposition, which the judge accepted, that it is implicit in article 30(2) that, for the receipt of the document by the authority responsible for service to be the time that the court is seised of the proceedings, the document must subsequently have been served in compliance with the Service Regulation. But article 30(2) does not say that, and I do not believe that it has that effect.

In answer to a question from the Master of the Rolls during the argument, Mr Smouha accepted (in my view correctly) that in this respect article 30(1) and article 30(2) should be construed similarly.

Under article 30(1) a court is deemed to be seised at the time when the document instituting the proceedings is lodged with the court “provided that the plaintiff has not subsequently failed to take the steps that he was required to take to have service effected on the defendant”. All that this proviso requires is that the claimant should not have subsequently failed to take the steps he was required to take. It sometimes happens that the claimant at the time of issuing the claim form does not know the address of the defendant, possibly because the defendant is being elusive. (Indeed the Service Regulation does not apply where the address of the person to be served with the document is not known: article 1(2).) It would not be just that a defendant should be able, by preventing service under the Service Regulation, to prevent also the court which has issued the claim form from being seised of the action.

Similarly, all that article 30(2) requires of the claimant is that after lodging the document with the authority responsible for service he must not have failed to take the steps he was required to take to have the document lodged with the court (which no doubt might include steps to facilitate service as a pre-requisite to lodgement with the court). The document referred to in article 30(2) must obviously be a document which is capable of being served and lodged with the court so as to institute the proceedings against the relevant party. But Mr Smouha did not argue that the Verona writ failed to satisfy that requirement. Nor did he argue that there was a failure on the part of Mr Benatti to comply with the proviso to article 30(2). Accordingly, in my judgment it does not matter whether the service of the writ by UNEP by registered post was valid service on WPP 2005 Limited under the Service Regulation.

I can see no injustice to a defendant in adopting this construction of article 30(2), which accords with its natural meaning. Mr Smouha suggested that injustice might be caused to a defendant if a court is treated as seised of an action which had not been served on the defendant, because this might lead to judgment being entered against a defendant in default when the defendant had no knowledge of the proceedings. That does not follow. Article 30 is purely concerned with seisin for the purposes of the Judgments Regulation. If the rules of the court seised of the proceedings were to permit judgment to be entered against a defendant who had no opportunity of contesting the proceedings, such a result would no doubt be a violation of article 6 of the European Convention, but that is another matter.

Although it is not material to the points of law raised in relation to article 30 of the Judgments Regulation, I would nevertheless note that the points raised by WPP 2005 Limited in relation to the service of the Verona writ were of a highly technical nature. The contents of the Verona writ make it perfectly plain that it was aimed at WPP Italy and the company referred to in the contract as WPP Group plc. It would be surprising indeed if the WPP Group was not well aware of this before the English writ was amended to add WPP 2005 Limited as a claimant, and there is no suggestion in the evidence that the Group was misled by the language of the writ or suffered any prejudice from the misnomer.

As to the absence of the translation, it is noteworthy that about two weeks after service of the Verona writ had been acknowledged by the advice of receipt signed by Vanessa Bryant, an affidavit was sworn by Lisa Mason, a solicitor in the firm then acting for the claimants, in support of an application for default judgment in the present action. She properly drew to the court’s attention that, before the claim form was amended to include claims by WPP 2005 Limited, a claim had been brought by Mr Benatti in Italy against “WPP Group plc”. She made the point that this was a different entity, in order to rebut the argument which she foresaw that Mr Benatti was likely to make about the Italian court being the first seised of the relevant issues. However, she made no suggestion that the service had also been ineffective for want of a translation. This point was not raised until some time later.

I would hold that the Verona court was first seised of the cause of action between WPP 2005 Limited and Mr Benatti.

For the reasons which I have given, I would allow Mr Benatti’s appeal in relation to WPP 2005 Limited but dismiss his appeal in relation to WPP Italy and BSH.

Mr Smouha suggested that it would be very unfortunate to have substantially identical claims proceeding in different jurisdictions. I agree, but that cannot determine the outcome of this appeal. Article 28 of the Judgments Regulation addresses the mischief of related actions proceeding in different courts with the risk of inconsistent judgments. It is plain in my view (1) that the actions between Mr Benatti and the various WPP companies are all related actions; (2) that the English court is the court first seised within the meaning of article 28(2); (3) that the English court has jurisdiction over the subject matter of the action between WPP 2005 Limited and Mr Benatti; and (4) that English law permits the consolidation of that action with the actions by WPP Italy and BSH. However, the English court has no power on those grounds to retain jurisdiction over the action against WPP 2005 Limited if, as I conclude, the Verona court is the court first seised of that action. Under the Regulation, it is a matter for the decision of the Verona court whether it should decline jurisdiction in those circumstances.

On 1 March 2002 Mr Benatti, a successful businessman who had the benefit of full legal advice, signed of his own free will an agreement which provided that all controversies arising from it should be submitted to the courts of this jurisdiction. The present proceedings occupied three days of the time of a Judge of the High Court, and involved the filing of more than 400 pages of evidence. Before this court the parties filed more than 150 pages of skeleton argument and 59 authorities, and addressed the court for a full three days. We were told that the costs of one of the parties alone, in respect only of the proceedings before Field J, were well in excess of £500,000. All of this effort and use of resources, public as well as private, has not been directed at deciding whether the complaints that WPP makes about Mr Benatti’s conduct under the agreement are valid; but rather at deciding whether those complaints should be adjudicated on in this jurisdiction, as Mr Benatti agreed, or in Italy. It would be supererogatory to say any more about how deplorable it is that the Judgments Regulation, which was supposed to provide an easy solution to jurisdictional issues involving two members of the European Union, can have spawned litigation on that scale.

It may also, therefore, be thought equally supererogatory for me to add anything to the judgment of Toulson LJ. I do so in respect of the argument about the legal status of the contract only to comment on some limited further aspects of the case. And I say a little more than that about the “first seised” issue, which I have found more difficult than have my Lords.

I would respectfully endorse the stress that my Lord places, in his §45, on the limited role of this court. The argument for the appellant did not respect that limitation, but sought to turn the case into a rehearing. That endeavour, and a fortiori any argument that the judge had relevantly erred in his approach, were hopeless. And lest that seem too dogmatic a conclusion, I would add that there were many features of the 2002 agreement that cried out that it was not a contract of employment: hours of work expressed in maximum, not minimum, terms; commission-based remuneration; continuation of an interest in a very wide range of activities in the same industry; and the very striking requirement in clause 4.1.1 that if Mr Benatti used any financial adviser or consultant “in the performance of his duties” he had to pay for them himself.

So far so good. However, in his §79 the judge said:

I turn to consider the parties’ conduct under the Agreement and the significance this has in determining the status of the contract. The evidence relevant to this enquiry is voluminous and to a considerable extent conflicting.

There then followed a detailed analysis of events during the currency of the contract, much of which was repeated before us. Before he was invited to embark on that exercise the judge should have been reminded that the agreement was in writing; it was not contested that, whatever the position about jurisdiction, the agreement itself was governed by English law; and therefore what was said and done by the parties after the signing of the agreement could only be relevant as demonstrating the making of a new contract or the amendment of the old contract, and not as demonstrating what were the terms or implications of the unamended contract: Whitworth Street Estates v Miller [1970] AC 583 at p 603D-E, per Lord Reid. On that approach, the crucial point is that the changes in remuneration and in time worked that occurred after 2002 all took place within the basic framework of the 2002 agreement, that was never amended to accommodate them. Indeed, the only formal amendment, in May 2003, changing the provisions for remuneration in clause 4.1.1, specifically retained the provision as to Mr Benatti paying for consultants and advisers used in the company’s business to which I have drawn attention in §75 above.

At the end of his review the judge correctly held that the agreement was never amended to become an employment contract, but in his §98, set out by my Lord in §48 above, he concluded that by January 2006, when WPP terminated the agreement, “Although it was pretty close to being a contract of employment, it distinctly fell on the other side of the line”. I have to disagree with that approach. Because the agreement was never amended, the contract was no more a contract of employment in 2006 than it had been in 2002. It was therefore no more appropriate for this court to be asked, as it was, to conclude that the contract fell on the other side of the judge’s line than it had been for that line to be drawn in the first place.

There is a further reason why Mr Benatti’s case on this point is not maintainable, which I feel obliged to go into because it achieved some prominence in the hearing before us.

Mr Benatti’s legal adviser at the time he signed the agreement in 2002 was an Avvocato Rossotto. During the judge’s review of post-agreement events he described, in his §81, that in 2004 there had been discussions as to how, if at all, to react to a change in Italian law. The judge described how that change “prompted discussions between Mr Benatti’s lawyer, Mr Rossotto, and WPP Italy”. Whether Mr Rossotto was “Mr Benatti’s lawyer” at the time is a matter of more general importance in the case, to which I return in §§ 81-82 below. Before us it was strongly argued that the judge had been unjustified in holding, without further explanation, that Mr Rossotto had been acting for Mr Benatti. The judge had taken that from a statement to that effect in §32 of the evidence of a Mr Calow, former group chief counsel of the WPP Group and a consultant with the firm of Hammonds, then solicitors to WPP, who had acted in the negotiations. By 2004 Mr Rossotto’s law office had merged with Hammonds. Mr Calow had exhibited an e-mail to him of 15 December 2004 from Mr Rossotto about reaction to the change in the law, which started:

as you might be aware of, we are currently drafting the legal documents necessary to amend the contractual terms and conditions for WPPHI management

In this frame work, I would like to address certain issues with particular reference to MB’s position

MB is currently under a personal consultancy agreement with WPPHI

However, in the body of his witness statement, §32, Mr Calow had set out the whole of the e-mail but with the omission of the first two sentences above. That led to the argument before us that those sentences demonstrated that “we”, including Mr Rossotto, were acting in drafting the agreement for WPP; Mr Calow’s statement that Mr Rossotto was acting for Mr Benatti had therefore been unjustified; and the judge had not been assisted by the omission of those two sentences from the body of Mr Calow’s statement.

Quite apart from any other consideration, it would have been a ground for serious criticism of the judge if he had simply repeated Mr Calow’s evidence knowing that it was subject to challenge of that order. We accordingly asked for a short note of how this matter had been handled below. That note, when eventually produced, mainly sought to relitigate the issue, but in doing so made it clear that the argument raised before us had never been put to the judge.

It was unfortunate that that was not made clear to us before the criticism was made of Field J; but the point goes further. Mr Benatti made his second statement two weeks after Mr Calow’s evidence, but did not refer to or correct this point. It was, however, referred to by Professor Avvocato Consolo, the expert witness on the part of Mr Benatti, in §11 of his second statement. He referred to the e-mail exhibited by Mr Calow, and said:

evidently this advice was given by Avv. Rossotto as lawyer both of Mr Benatti and of WPP.

It may be unusual for an expert witness to stray into this territory, but Mr Benatti’s advisers chose to put that evidence forward, and Mr Benatti is bound by it. It is a plain admission that in writing the e-mail Mr Rossotto was acting for Mr Benatti, however much he may also have been assisting WPP.

Accordingly, Mr Rossotto’s statement that

MB is currently under a personal consultancy agreement with WPPHI

not only was a correct statement of the contractual position but also is an admission, of fact, that binds his client as to the position in December 2004. In the face of that, much more cogent evidence than was available would have been needed to support the argument that the contract had in some way been renegotiated as an employment contract in the following month: see the exposition of the appellant’s case on that point in §51 above. And it is only fair to Mr Calow to add that, if and to the extent that it was suggested that he had misled the court, any such suggestion was unfounded.

Article 30(2) of the Judgments Regulation provides that

a court shall be deemed to be seised if the document [instituting the proceedings] has to be served before being lodged with the court, at the time when it is received by the authority responsible for service

As Toulson LJ records in §63 above, the judge, in his §52, accepted that for that receipt of the document to be effective as the time at which the court is seised for the purpose of the Judgments Regulation the document must subsequently have been served in compliance with the Service Regulation. I respectfully agree with my Lord that article 30(2) does not say that, but with equal respect that does not mean that the (stringent) provisions about service do not have to be taken into account when considering an issue of seisin.

When construing article 30(2) we still have to decide what for that purpose counts as the document instituting the proceedings. Whether a document is effective to institute proceedings in Italy is a question of Italian law. But, as Mr Smouha pointed out, the Service Regulation, in respect of the factual areas that it addresses, is directly applicable as part of Italian law. Under the Service Regulation, documents without a translation are vulnerable to refusal, that is, they will not be effectively served; and by article 5 the transmitting agency has to warn an applicant who does not provide a translation of that possibility. As recital (10) records, that is done for the protection of the addressee’s interests. Accordingly, if the document is refused for want of a translation, it will not have been effective in instituting proceedings against the foreign defendant. And, as my Lord points out in §67 above, it would raise serious questions under article 6 of the ECHR, and is certainly not a course that we should assume that the Italian court would take, to entertain proceedings against a foreign party who had not been effectively served.

However, the appellant argued, and my Lord accepts in §66 above, that under article 30(2) of the Judgments Regulation all that is required to secure seisin of the Italian court against a foreign defendant is the lodging with the transmitting agency in Italy of a document that would be effective to institute proceedings against an Italian defendant in Italian domesticlaw. Although, with respect, that approach has significant attractions in terms of finality, it is difficult to see that it sufficiently respects the specific safeguards of the Service Regulation in favour of a foreign defendant, that render such a document vulnerable to refusal when an attempt is made to effect actual service. Indeed, if the approach advocated by the appellant were correct, any refusal to accept service, as envisaged and permitted by the Service Regulation, would beat the air so far as the seisin of the Italian court was concerned, because seisin had already been achieved, not contingently but absolutely, by the lodging with the transmitting agency in Italy of documents that would be effective in an Italian domestic case: and even if the Italian proceedings could not in fact proceed because of the failure effectively to serve the foreign defendant.

What is the position in this case? My Lord has set out the various steps taken by the appellant in his §27, including the lodging with the transmission agency of a writ directed at “WPP 2005”, with a translation, on 30 March 2006. Was that step effective in terms of the Service Regulation to relate back to the original lodging of the writ on 1 February 2006, so as retrospectively to make the document then served a document instituting the Italian proceedings for the purpose of article 30(2)?

On the basis of the expert evidence on Italian [scil., Italian domestic] law that a defect as to the naming of a company could be cured retrospectively, I understand the judge to have held, in his §44, that the misnaming of WPP 2005 did not prevent the relevant date of the original Verona writ being, for the purpose of article 30(2), 1 February 2006: although he expresses the conclusion in terms of the date of receipt of that, yet to be retrospectively validated, writ by the transmitting agency.

What of the effect of later service of a translation, which was said to cure that defect in the original writ in terms of the Service Regulation? The appellant contended, contrary to the view of the judge, that guidance was to be found in Case C-445/03 Leffler. I agree with that argument, that the principles stated in Leffler apply to a case arising under article 14 of the Judgments Regulation, as does the present case, as well as to article 8. Leffler on this point is not so unequivocally favourable to the appellant as he sought to contend. The Court of Justice indeed held that lack of a translation did not make the document a nullity, but could be cured by the subsequent service of a translation. Recognising in its §§ 67-68 that retrospective validation of a writ could be important both for the applicant and for his addressee, the court then concluded, in its §69, that it was for the national court to resolve problems of priority, while giving full weight to the terms and objectives of the Service Regulation.

We have no evidence of Italian law, whether domestic or informed by Community law, on that point. However, for the reason set out by my Lord in §62 above, the issue is not to be determined by the burden of proof. In addressing the issue as best I can, I would give particular weight to two points. First, as we have seen the absence of a translation does not make a writ a nullity. Second, the Court of Justice appears, in its §53, to have seen the need for promptitude in curing the defect as only arising on the refusal of the writ for want of translation. In our case, no such refusal had even occurred before the amending translation was lodged on 30 March 2006.

I would therefore hold that the Italian court was effectively seised on 1 February 2006. That was because, but only because, the writ that was lodged on that day became capable of instituting the Italian proceedings when a corrective translation was included with the copy of that writ that was relodged on 30 March 2006.

The unfortunate effect of that conclusion is that substantially identical claims will, at least initially, be effective in different jurisdictions. However, that possibility is inherent in the scheme of the Judgments Regulation; and as to the longer-term future, I would not be so disrespectful of the Verona court as to assume that it will not see the overall implications of the actions in the terms set out by my Lord in §72 above.

I agree that Mr Benatti’s appeal should be allowed in relation to WPP 2005 and dismissed in relation to WPP Italy and BSH. In so far as there is a difference between the reasoning of Toulson LJ on the one hand and Buxton LJ on the other, I respectfully prefer that of Toulson LJ. I add a few words on two points where that reasoning to some extent differs and on a third point of no great importance.

It will be recalled that article 30 of the Judgments Regulation provides:

“For the purposes of this Section, a court shall be deemed to be seised:

1.

at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or

2.

if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court.”

As Toulson LJ has explained, the following is common ground:

In my opinion, it follows from that common ground that, if article 30(2) is given its ordinary and natural meaning, the court in Verona was indeed seised with the proceedings on 1 February and was the court first seised. That is because the document, viz the Verona writ, was received by the authority responsible, viz UNEP, on that date and the proviso was satisfied because Mr Benatti has not subsequently failed to take the steps he was required to take to have the document lodged with the court. There is nothing in the language of article 30 to defeat seisin on that date. It is important to note in this regard that Mr Smouha does not contend that the Italian writ was not ‘the document instituting the proceedings’ for want of an English translation.

For my part, I see no reason not to give the article its ordinary and natural meaning. Article 30 is concerned with seisin and not service. If the draftsman had intended to provide that seisin depended upon actual service he could readily have done so. I agree with the reasoning of Toulson LJ in his §§66 and 67.

I would, however, add that, if (contrary to my view and that of Toulson LJ) the Italian court was not seised when the writ was lodged without a translation, I agree with the view expressed by Buxton LJ in §90 above that the Italian court was nevertheless seised on 1 February 2006 because the writ lodged on that day became capable of retrospectively instituting proceedings when the copy of the writ was relodged on 30 March 2006 with an English translation. On either analysis the Italian court was the court first seised and these proceedings by WPP 2005 must be stayed under article 27.

I agree with Toulson and Buxton LJJ that the judge was not wrong to hold that Mr Benatti’s contract was not an employment contract, or at least that the respondents had a good arguable case to that effect. In his §50, Toulson LJ says that the judge had to carry out an evaluative rather than a tick box exercise, looking at the terms of the contract aided by evidence about its operation in order to reach an overall view about its character. This was an exercise which the judge had carried out.

By way of contrast, Buxton LJ has expressed the view that, given that the contract was governed by English law and that under the Judgments Regulation the question is whether the contract is a contract of employment, that question must be determined by English law and that therefore what was said and done by the parties under the contract is irrelevant. He refers to the well-known speech of Lord Reid n Whitworth Street Estates v Miller [1970] AC 583 at 603B-D. I see the force of the point Buxton LJ makes and, on the assumption that Lord Reid’s approach is to be applied, I entirely agree with his analysis. However, on the assumption that it is permissible to carry out the kind of exercise referred to by Toulson LJ and in fact carried out by the judge, I entirely agree with Toulson LJ’s analysis.

I only wish to add that I am not at present persuaded that such an analysis is impermissible in this context. The question is whether the contract is a contract of employment within the meaning of the Judgments Regulation. The correct approach to that question seems to me to be a matter of European Community law. So far as I am aware, the Court of Justice has not so far considered the correct approach. The court might apply the principles which would be applied by the law governing the contract if it were an entirely domestic question or it might apply somewhat different and perhaps wider criteria. Because the appeal fails on either footing, it is not necessary for us to express a view one way or the other in order to determine the appeal. I would only go so far as to say that it seems to me that it is not unlikely that the Court of Justice will prefer a somewhat wider view than that traditionally adopted at common law.

My third and last point relates to Buxton LJ’s discussion of the position of Avvocato Rossotto. I entirely agree with him that, on the evidence and argument put before the judge, the judge was entitled to find that Mr Rossotto was, at least in part, ‘Mr Benatti’s lawyer’. He was entitled to do so on the basis of Mr Calow’s evidence. I would only enter this reservation in relation to one aspect of Buxton LJ’s reasoning. I agree that Mr Rossotto’s statement that Mr Benatti was ‘under a consultancy agreement’ is evidence against Mr Benatti to that effect but I am not sure that I would go so far as to say that the statement is binding on him.

However that may be, I agree that the judge was entitled to reach the conclusion in respect of the contract which he did and that this part of the appeal must be dismissed.