Claim No. CFI-039-2018
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE COURT OF FIRST INSTANCE ON APPEAL FROM THE SMALL CLAIMS TRIBUNAL
BEFORE H.E. JUSTICE SHAMLAN AL SAWALEHI
CURRENCY MATTERS MIDDLE EAST
MICHAEL PAGE INTERNATIONAL (UAE) LIMITED
Hearing: 1 August 2018
Counsel: Jon Anderson for the Appellant (appearing as litigant in person)
Leith Ramsay for the Respondent (appearing as a litigant in person)
Judgment: 5 September 2018
JUDGMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI
UPON hearing the Appellant and the Respondent in person in a hearing on 1 August 2018
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT
1. The Appeal is dismissed.
2. The Appellant shall pay the Respondent the costs associated with this Application, to be assessed by the Registrar if not agreed by the parties within 30 days of the issuance of this Order.
Ayesha Bin Kalban
Date: 6 September 2018
1. This is an appeal by the Defendant, Michael Page International (UAE) Limited (hereon referred to as the “Appellant”) submitted to the Court of First Instance on 12 March 2018 seeking to set aside the SCT Judgment of SCT Judge Natasha Bakirci on 12 March 2018 (the “Judgment”) issued in favour of the Claimant, Currency Matters Middle East (hereon after referred to as the “Respondent”).
2. Permission to appeal to this Court was granted by SCT Judge Natasha Bakirci pursuant to RDC 44.19.
3. Both parties appeared before me on 1 August 2018 at an appeal hearing and made their respective oral submissions. The Appellant was represented by Leith Ramsay, an employee of the Appellant, appearing as a litigant in person. The Respondent was represented by Jon Anderson, the Chief Executive Officer of the Appellant’s company appearing as a litigant in person.
4. In accordance with Rule 44.119 the Court of First Instance may only grant an appeal where the decision of the Tribunal was; (1) wrong in relation to question of law, (2) unjust because of procedural unfairness or a miscarriage of justice and/or; (3) wrong in relation to any other matter provided for in or under DIFC Law.
5. The Appellant is a licensed company in the DIFC, specialized in financial services.
6. The Respondent is a licensed company in the DIFC, specialized in recruitment consultancies.
7. The Respondent claims that the Appellant owes it AED 220,039 in respect of 7 invoices arising from a contractual relationship it entered into with the Appellant to provide the Appellant with prospective candidates/employees to fill the role of sales executives. The Respondent submits it duly performed its duties under the contract and as per the contract, the Appellant now owes it AED 220,039.
8. The Respondent relies on a document entitled “Assignment Confirmation” (hereon referred to as the “Contract”) dated 01/02/2016 which it submits acts as the contractual agreement between the Respondent and the Appellant. The contract is signed by Mr J. Singh who the Respondent submits, held himself out at all times to be an employee of the Appellant with authority to sign on behalf of the Appellant. Next to the signature of Mr Singh there also appears to be a stamp of Currency Matters Limited, the Appellant’s company. The Respondent relies on this contract signed by Mr Singh and itself as the basis for its claim.
9. The Appellant submits that Mr Singh had no authority to enter into a contractual agreement with the Respondent on its behalf and that Mr Singh fraudulently misrepresented himself as having authority to enter into contract and that he committed theft of the Appellant’s company stamp. The Appellant further submit that Mr Singh is not an employee of the Appellant, rather he has his own company T Rex General which is under a separate contract to provide services to the Appellant.
10. The Respondent relies on e-mails sent by Mr Singh to them from the Appellant’s company Currency Matters Middle East e-mail address concerning the recruitment candidates required as proof that Mr Singh was an employee of the Appellant as he was using their e-mail identification and therefore submits that Mr Singh had authority. The Respondent also relies on a document entitled “Board Resolution” dated 11 January 2016 to prove that Mr Singh had authority to contract on behalf of the Appellant. The Board Resolution document appears to be a letter on the Appellant’s company letterhead addressed to Emirates Financial Towers. The Board Resolution document is signed by Mr Jon Anderson as CEO of the Appellant’s company and appears to authorize Mr Jaswinder Singh and Glenn Grant to act as present and future signatories on behalf of Mr Jon Anderson.
11. The Appellant submits that the Board Resolution document only confers signatory authority to Mr Singh and Glenn Grant in relation to matters with Emirates Financial Towers as this was the entity to whom the Board Resolution document is addressed to. The Appellant submits the Board Resolution document does not give authority to Mr Singh to contract with the Respondent.
12. The Appellant submits that there was no valid agreement between itself and the Respondent and that it was not aware of such an agreement. The Appellant further submits that the Respondent ought reasonably to have known that Mr Singh did not have authority and was acting fraudulently as the Respondent knew that the CEO of the Appellant’s company was Mr Jon Anderson and when Mr Singh singed the Variation Agreement to the contract on 23 November 2015 he signed as the CEO of the Appellant’s company. The Appellant argue that this should have alerted the Respondent to suspicion and awareness that Mr Singh was acting fraudulently and it did not have authority to contract.
13. The Respondent submits that there was a valid agreement between itself and the Appellant and that Mr Jon Anderson from the Appellant’s company was aware and actively involved in the recruitment process of the candidates provided by the Respondent as he admits he participated in a few of the candidate’s interviews.
THE SCT JUDGMENT
14. In the Judgment issued 12 March 2018, the Judge decided in favour of the Respondent (Claimant). The Judge took the view there was a prima facie contract between the Respondent and Appellant (Defendant) and the test was to consider whether the contract was validly binding on the Appellant. The Judge considered the submissions of the Appellant regarding the lack of contracting authority by Mr Singh and allegations that he acted fraudulently when making use of the Appellant’s company stamp. The Judge decided that she could not accept the Appellant’s submission of Mr Singh’s criminal activity as they provided no evidence supporting their submissions.
15. The Judge made her decision in favour of the Respondent based on the material evidence in front of her, namely the signed agreement with the Appellant bearing the Appellant’s company stamp, the relevant e-mails emanating from the Appellant’s company e-mail address to the Respondent and Mr Jon Anderson’s participation in the candidate interviews. The Judge also commented that the Respondent should not be penalized for relying on the Board Resolution document signed by the Appellant’s CEO granting authority to Mr Singh and Mr Grant authority to sign on his behalf.
16. The Judge reasoned that she based her decision on the Respondent’s belief that it had contracted with the Defendant and she found the Defendant had failed to substantiate its allegations that Mr Singh had no such authority to enter into contractual agreement on behalf of the Appellant.
THE APPELLANT’S GROUNDS OF APPEAL
17. The Appellant submits that the SCT Judge erred in law as she relied on the Board Resolution document as a basis for her decision in favour of the Respondent.
18. The Appellant submits that the SCT Judge erred in law when she decided that there was a valid and binding contractual agreement between the Appellant and Respondent.
19. The Appellant submits that Article 130 and 131 of the DIFC Contract Law was misinterpreted by the SCT Judge.
20. The Appellant submit that the SCT Judge failed to consider all of the Appellant’s evidence and submissions.
21. I do not accept the Appellant’s submissions that the SCT Judge made an error at law when she made reference to the evidence of the Board Resolution document, as a basis in her decision in favour of the Respondent. I have carefully considered the Order and Judgment of the SCT Judge and find that the remarks of the SCT Judge in relation to the Board Resolution document to be appropriate. The SCT Judge reasoned;
“the Claimant could not be faulted for taking this document in good faith to be an authorization by the Defendant’s CEO for both Mr Sing and Mr Grant to act as signatories”
“the Claimant should not be penalized for relying on the Board Resolution”
22. I find that the above comments of the SCT Judge are in relation to what she found to be the Respondent’s (Claimant’s) understanding of the Board Resolution, not her own understanding. The SCT Judge has commented that she does not find it appropriate to penalize the Respondent (Claimant) for relying on the Board Resolution document. I find that the SCT Judge has not erred at law in her comments.
23. Indeed, it may be the case that the Board Resolution document does not confer authority on Mr Singh to sign on behalf of the Appellant in matters with the Respondent and only grants authority to Mr Singh to sign in matters related to Emirates Financial Towers, however the issue at hand is not whether the Board Resolution document actually granted Mr Singh authority to sign or not, rather it is an issue of whether the Respondent believed the Board Resolution document to grant Mr Singh authority to sign on behalf of the Appellant with themselves. To a reasonable lay person the words of the Board Resolution document ‘in future any momentous document that require signature from CEO of CMME can be signed by Mr Jaswinder Singh and Glenn Grant’ could be construed as a wide ranging authority for Mr Singh, particularly as there is nothing in the actual body of the letter that specifically limits the authority of Mr Singh.
24. I further find that the SCT Judge has not erred at law in making the observations she has in relation to the Board Resolution document as she does not appear to rely solely on these views in her decision. In fact the SCT Judge clearly states there is combination of evidence in favour of the Respondent which formed the basis of her decision. The SCT Judge states;
“together with the company stamp as evidence they had a contract with the Defendant (Appellant) company. I further note the relevant e-mails which emanated form the Defendant’s company e-mail address to the Claimant, Mr Anderson’s participation in the process as well as the invoice addressed to Currency Matters….I find that the Claimant operated in bona fide belief that it had contracted with the Defendant company and is justified in bringing a claim against them under that contract.”
25. I do not accept the Appellant’s arguments that the SCT Judge erred in law when she decided that there was a valid and binding contractual agreement between the Appellant and Respondent. I further do not accept that Article 130 and 131 of the DIFC Contract Law was misinterpreted by the SCT Judge.
26. The relevant law to be considered in this case is the law of agency. The question arises whether Mr Singh as the agent had authority from the Appellant to enter into a contract with the Respondent.
27. It is clear that Mr Singh did not have actual authority to sign the contract with the Respondent as the Service Provider Agreement between Mr Singh’s company T REX General Trading LLC and the Appellant specifically stipulates at clause 3.3.2 that the Service Provider (T REX General Trading LLC) shall not have any authority to incur any expenditure in the name of or for the account of the Company (the Appellant). However, the Court must also look to whether Mr Singh had apparent authority.
28. The DIFC Contract Law contains provisions for apparent authority at Article 128 to 131. Article 131 states clearly;
“Except for the conduct of transactions required by statute to be authorised in a particular way, apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him”
29. The law of apparent authority is also considered in detail at common law. To protect innocent parties and facilitate commercial trade, the law recognizes the doctrine of apparent authority. Apparent authority refers to the authority of an agent as it appears to others; it can operate both to enlarge actual authority and to create authority where none actually exists.
30. Claims under the doctrine of apparent authority are sometimes denied when the third party is found to have been “put on inquiry”, that is to say, if there were “red flags” that would lead a reasonable person to suspect that perhaps the agent did not have the requisite authority to make the deal.
31. However, the evidence provided by the Respondent by means of the e-mails the Respondent received from the Appellant’s company e-mail ID and the fact that the contract was stamped with the Appellant’s company stamp along with the acknowledgement by the Appellant that the Appellant’s CEO Mr Anderson participated in the interview process of the candidates is substantial evidence to prove that the Respondent reasonably believed Mr Singh had authority due to the conduct of the principal, the Appellant.
32. Agency by apparent authority is one that exists because the principal intentionally or negligently causes a third party to believe that another was his or her agent, even though that agent may not actually be employed by the principal. If the third party reasonably believes that the agent is employed by the principal, the principal may be bound by the act of his or her agent.
33. An agent possessing apparent authority has no express authority. If, however, the principal cloaks the agent with the appearance of authority, or negligently gives the agent the appearance of authority by failing to exercise proper control, the agency relationship arises. Declarations of the agent alone are not sufficient, and apparent authority arises only by the acts of the principal that create the apparent authority. In this case I find that the Appellant in its role as principal negligently allowed Mr Singh to have access to the Appellant’s company e-mails and company stamp. The Respondent received e-mails from the Appellant’s company address and obtained a signed contract stamped with the Appellant’s company stamp which give the appearance of authority.
34. Furthermore, the test for agency by estoppel seems to have been satisfied;
(a) the principal represented by conduct that the agent had authority when it allowed the agent to have access to its company e-mails and the company e-mail was used by the agent to communicate to the Respondent. Further the principal allowed the agent to have access to the company stamp which the agent used to sign the agreement with the Respondent
(b) the Respondent relied on the representation made by the ‘agent’ Mr Singh believing that the agent had authority
(c) the Respondent altered his position by entering into contract with the principal.
35. Whilst the Court heard submissions from the Appellant that his agent Mr Singh acted fraudulently and without authority, the doctrine of apparent authority applies even though the agent effects a forgery Uxbridge Permanent Benefit Building Society v Pickard  2 K.B. 248;if the act in the course of which the forgery occurred was within his apparent authority and the third party was unaware of the forgery Ruben v Great Fingall Consolidated  A.C. 439 . The same is true where the agent is fraudulent, or acts illegally in some other way Navarro v Moregrand  2 T.L.R. 674; cf. Barker v Levinson  1 K.B. 342.
36. Furthermore, the Appellant failed to provide evidence of the criminal case allegedly brought against Mr Singh for theft of the Appellant’s company stamp, an issue correctly noted and reasoned by the SCT Judge.
37. Therefore, I find that the SCT Judge did not make any error in law in her understanding and application of the relevant contract law. Furthermore, for the reasons set out above, I find the law of agency through apparent authority applies and thereby, I find the Respondent to have a valid and binding contract with the Appellant.
38. I do not accept the Appellant’s submissions that the SCT Judge failed to consider all of the Appellant’s evidence and submissions.
39. I find that the SCT Judge considered all the evidence put before her and decided on the balance of evidence in front of her to rule in favour of the Respondent. It is not a requirement for the Judge to discuss in detail every aspect of the evidence in their written Judgment, it is enough to demonstrate they have considered all evidence put to them. I am satisfied that the SCT Judge has considered all the evidence and therefore has not erred in law.
40. The Appellant submitted that there was lack of consideration of the Service Agreement evidence. I find that whilst the Service Agreement is clear that Mr Singh did not have authority to enter into contracts that require expenditure in the name of the Appellant’s company, the Respondent was not aware of this and they innocently contracted on what was apparent authority to them.
41. I also find that whilst the Appellant may have proved that Mr Singh had no actual authority to sign and contract on behalf of the Appellant, the Appellant has not proved beyond reasonable doubt that the Respondent knew Mr Singh did not have actual authority.
42. Furthermore, the Appellant emphasizes the evidence of the employment contracts for the recruited candidates and submit they were bearing the logo of T Rex and not the Appellant’s company. The Appellant also insists that the recruited candidates were for the benefit of the company T Rex and not the Appellant’s company. I find I am not convinced by the evidence that the Appellant’s company received no benefit from the recruited employees as I find it unusual that Mr Anderson, by his own admission, would participate and attend the interviews of candidates that he would have no benefit of.
43. The Appellant also submits that the SCT Judge failed to consider its key argument explaining the past relation of the Respondent with Mr Singh and that the Variation Agreement was signed prior to the Appellant’s company being registered and the evidence of Mr Singh signing the Variation Agreement as CEO. I find that whilst this all may amount to lack of due diligence on the Respondent’s part this is not evidence enough to prove the Respondent believed Mr Singh to have authority. The evidence that the contract was stamped with the Appellant’s company stamp and subsequent e-mails were received by the Respondent from the Appellant’s company e-mail are substantial evidence to prove that a reasonable individual would believe they had contracted with the Appellant. Further, if Mr Singh had access to the Appellant’s company stamp and e-mails and makes himself out as having authority and demonstrates this with the Board Resolution document (despite it being addressed to another entity) all this combined evidence is enough to convince a reasonable person that Mr Singh had authority. The Respondent cannot be at fault for the alleged fraudulent actions of Mr Singh and the negligence of the Appellant in providing Mr Singh access to certain items of company property that they submit he should not have access to.
44. The relevant legal test is whether the Respondent truly believed Mr Singh had authority and the SCT Judge found correctly, on the balance of evidence put to her that the Respondent did believe Mr Singh to have authority. Thus, I find that the SCT Judge made no error in her Judgment and as such I dismiss this appeal to set aside the SCT Judgment.
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