1677 and all that

By | 15th March 2012

One of the endearing characteristics of the law in this country is the concept of precedence. In civil law countries reference is made to the relevant Code and often scant attention is paid to previous experiences and decisions. Under the common law system, earlier decisions of superior courts are the very lifeblood of the law even if or precisely because lawyers love to winkle out ways of interpreting those decisions in ways which fit the cases they seek to argue.

It is, therefore, with some pleasure that I have the opportunity to write about that old friend The Statute of Frauds 1677: “An Act for prevention of Frauds and Perjuries. For prevention of any fraudulent Practices which are commonly endeavoured to be upheld by Perjury and Subornation of Perjury”.

335 years old and still going strong!

I am indebted to His Honour Judge Simon Brown QC for drawing my attention to the case of Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and Anil V Salgaocar where the Court of Appeal (Tomlinson and Rix LJJ and Sir Mark Waller) dismissed an appeal against an earlier decision by Mr Justice Christopher Clarke.

As Lord Justice Tomlinson said at the start of his judgment:

“The principal question which falls for decision in this case is whether a contract of guarantee is enforceable where contained not in a single document signed by the guarantor but in a series of documents duly authenticated by the signature of the guarantor. It is common in commercial transactions for a contract of guarantee to be contained in a single document, and it is no doubt convenient that a guarantee should be evidenced in this way. The question however which arises in this appeal is whether it must. Christopher Clarke J, in the Commercial Court, held that it need not – [2011] EWHC 56 (Comm); [2011] 1 WLR 2575. He held that an enforceable contract of guarantee may indeed be found in a properly authenticated series of documents. His decision is said to have been unorthodox and contrary to the understanding of commercial men. It is said to have caused alarm.”

The case turned on whether a number of documents including emails constituted a sufficient memorandum or note in writing to make a guarantee enforceable as required by section 4 of the Statute of Frauds. The appellants had argued that the guarantee was not in a single document (and was therefore unenforceable as it did not comply with the Statute) but the judge at first instance decided that an enforceable guarantee could be in a properly authenticated series of documents, including emails. The Court of Appeal agreed.

If there had been any doubt about the importance of emails in the context of contractual arrangements, it is surely dispelled by this decision.

Further, the case demonstrates that lawyers must treat emails with the same degree of respect as they accord(ed) paper documents.

It is of vital importance, therefore, that litigation lawyers collect all the pertinent documents at the outset of a claim and that they are well versed in the ways of handling electronic documents and electronic disclosure.

Case note: Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd and Anil V Salgaocar