Lawtel has kindly provided us with a timely review of some key commercial decisions of 2004, focusing in this edition on contracts, banking and finance, insurance, shipping, competition and commercial leases. The June 2005 edition of the CLIG Newsletter will focus on civil procedure, arbitration, human rights, equity and damages.

Contracts, Banking and Finance
The Privy Council ruled that it was unconscionable that a bank had allowed two corporate clients’ overdrafts to increase whilst treating them as unauthorised overdrafts and charging a very high rate of interest: Financial Institutions Services Ltd v Negril Negril Holdings Ltd [2004] UKPC 40.

The House of Lords decided that the costs of the liquidator in a winding-up did not rank ahead of the claims of the holder of a floating charge and that Re Barleycorn Enterprises Ltd [1970] Ch 465 was wrongly decided: Buchler v Talbot [2004] UKHL 9, sub nom Re Leyland DAF Ltd.
The Court of Appeal discussed the correctness of the decision in Siebe Gorman & Co Ltd v Barclays Bank Ltd [1979] 2 Lloyd's Rep 142 in the course of considering the proper approach to determining whether a charge was fixed or floating in the context of a charge over book debts granted in a debenture: Re Spectrum Plus Ltd (In Liquidation) [2004] EWCA Civ 670, sub nom National Westminster Bank Plc v Spectrum Plus Ltd (In Creditors Voluntary Liquidation).
Barclays Bank was held to be under a duty of care to Customs not to allow sums to be paid out of an account that was subject to a freezing injunction where it had notice of the injunction: Customs and Excise Commissioners v Barclays Bank Plc [2004] EWCA Civ 1555.
A replacement or substitute mortgage with the same lender would be voidable if it was inseparably connected with an earlier mortgage that was voidable for undue influence and of which the lender had constructive notice: Yorkshire Bank Plc v Tinsley [2004] EWCA Civ 816.
Where a contract of agency expired by the passing of time, a principal was not deemed to have terminated the agency contract within the meaning of reg.18 Commercial Agents (Council Directive) Regulations 1993 so that payment of compensation to an agent was precluded: Cooper v Pure Fishing (UK) Ltd (formerly Outdoor Technology Group (UK) Ltd) [2004] EWCA Civ 375.
An assistant solicitor’s contract of employment providing for payment of a salary as an advance against anticipated commission earnings was not a contract for the provision of regulated credit within the Consumer Credit Act 1974: McMillan Williams (A Firm) v Range [2004] EWCA Civ 294.
Insurance
The Privy Council held that as a matter of precedent Jureidini v National British & Irish Millers Insurance Co Ltd [1915] AC 499 was not an authoritative decision on insurance law or general contract law and contract law could not and did not prevent an insurer from resisting a claim on alternative bases; one involving an allegation of fraud and the other, breaches of policy conditions: Super Chem Products Ltd v American Life & General Insurance Co Ltd [2004] UKPC 2.
The House of Lords decided that a retrocessionaire was not entitled to the proceeds of a letter of credit in an escrow account in light of a settlement contained in a Tomlin order: Sirius International Insurance Co (Publ) v FAI General Insurance Ltd [2004] UKHL 54.
The Court of Appeal considered waiver in the context of an insured’s objections to disclose material facts and affirmation of contracts by giving notice of cancellation: WISE Underwriting Agency Ltd v Grupo Nacional Provincial SA [2004] EWCA Civ 962.
A taxi driver who drove at passengers after he had set them down was driving his car for “social, domestic and pleasure purposes” within the coverage of the driver’s insurance policy: Keeley v Pashen [2004] EWCA Civ 1491.
The Commercial Court considered whether the clean-up costs of the 1989 Exxon Valdez oil spill incurred by the oil cargo owner and the oil tanker owner were covered by primary insurance policies: King v Brandywine Reinsurance Co (UK) Ltd (formerly Cigna RE Co (UK) Ltd) [2004] EWHC 1033.
The transfer of claims handling rights from an insured to the insurers on the insured's insolvency was held not to be an alteration of rights barred by the Third Parties (Rights against Insurers) Act 1930: Centre Reinsurance International Co v Curzon Insurance Ltd : Freakley v Centre Reinsurance International Co : Centre Reinsurance International Co v Freakley [2004] EWHC 200.
Shipping
The Privy Council considered how a damage limitation clause in a contract for carriage of goods by sea gave effect to a limitation of liability in the Hague Rules: The Tasman Discoverer [2004] UKPC 22, sub nom Dairy Containers Ltd v Tasman Orient Line CV.
The House of Lords declined to depart from its interpretation of the Hague and Hague-Visby Rules in GH Renton & Co Ltd v Palmyra Trading Corp [1957] AC 149 and ruled that a reallocation of risk for damage to cargo by agreement in a charterparty was not invalidated by the Hague-Visby Rules: Jindal Iron & Steel Co Ltd v Islamic Solidarity Shipping Co Jordan Inc [2004] UKHL 49.
The Court of Appeal considered a charterer’s entitlement, pursuant to the Merchant Shipping Act 1995, to limit their liability to indemnify a shipowner: CMA CGM SA v (The CMA Djakarta) [2004] EWCA Civ 114. Leave to appeal to the House of Lords has been granted.
The Court of Appeal considered the interpretation of demurrage provisions in sale contracts: Fal Oil Co Ltd v Petronas Trading Corp Sdn Bhd (The Devon) [2004] EWCA Civ 822.
Competition
For the first time a UK court awarded damages in a competition claim: Crehan v Inntrepreneur Pub Co (CPC) [2004] EWCA Civ 637. The beer tie agreement in the leases between the parties, under which the appellant was obliged to buy beer from a particular brewery, breached Art.81 EC Treaty.
The Court of Appeal ruled that the Office of Fair Trading was required to make a reference to the Competition Commission if it believed that it was or might be the case that a merger might be expected to result in a substantial lessening of competition: IBA Health Ltd v Office of Fair Trading [2004] EWCA Civ 142.
In the Court of Appeal it was held that the alleged anti-competitive conduct of a mobile telephone operator could not found a claim under Art.81: Unipart Group Ltd v O2 (UK) Ltd (formerly BT Cellnet Ltd) [2004] EWCA Civ 1034.
The Court of Appeal held that the alleged anti-competitive conduct of a mobile telephone operator could not found a claim under Art.81: Unipart Group Ltd v O2 (UK) Ltd (formerly BT Cellnet Ltd) [2004] EWCA Civ 1034.
Commercial leases
The Court of Appeal held that a provision in a lease that purported to limit the liability of the original lessor under the lessor's covenants so that the lease came to an end on disposal of the reversion fell foul of the anti-avoidance provision in s.25 Landlord and Tenant (Covenants) Act 1995: Avonridge Property Co Ltd v Mashru [2004] EWCA Civ 1306.
The Court of Appeal ruled that it was not open to a tenant to serve a second counternotice, in a different form to the first, in response to a landlord’s notice terminating its business tenancy: Pennycook v Shaws (EAL) Ltd [2004] EWCA Civ 100.
Many thanks to the Lawtel team, Jill Speed, Simon Manton, Jennie Bygrave and Karin Jones.
Don’t forget to look out for part II in the June 2005 newsletter!