A writ was issued within the limitation period applicable to the cause of action. However, the authority of the nominal plaintiff was not obtained within the limitation period.
Held: The adoption by a plaintiff of proceedings issued without his authorisation by his solicitor was acceptable where this occurred within the appropriate limitation period. The raising of proceedings was held not to be a nullity.
Roch LJ considered whether the validity of the ratification of the unauthorised act of commencing proceedings was governed by English law or Panamanian law. Counsel for PMSA had submitted that the question of Mr Van Walsum’s authority was governed by Panamanian law and under that law the acts of the liquidators in May 1991 had put the company and Mr Van Walsum in the position they would have been in had Mr Van Walsum had actual authority to commence proceedings in 1988. Roch LJ disagreed: ‘I do not doubt that if the issue had been whether Mr. Van Walsum had actual authority to instruct Goodman Derrick and Co. to issue proceedings in April 1988, that question could only have been resolved by the court examining the law relating to corporate bodies in the Republic of Panama and, probably, the constitution of the plaintiff company. In the present case there is no dispute, for the purposes of resolving the preliminary issue, that Mr. Van Walsum did not have actual authority in April 1988.
What has to be considered, in my view, is first the effect of the contract apparently entered into between the plaintiff company and Goodman Derrick and of the act of Goodman Derrick in issuing proceedings against the defendants. The law which should apply to that contract and to that act, in my opinion, is the law which has the closest connection with that contract and with that act, namely English law. Dicey and Morris, The Conflict of Laws, 12th ed. (1993), p. 1459, under the heading ‘English Conflicts Rules’ says: ‘Where the agent lacks actual authority from the principal, it seems right in principle, that the law applicable to the contract between the agent and a third party, should determine whether the principal is bound or entitled. In effect in this situation one is asking whether the agent had apparent or ostensible authority to bind the principal . . As between the principal and the agent, the scope of the agent’s authority to bind the principal and to confer rights upon him is necessarily determined by the law which governs their relationship, but third parties must be able to assume, at least where the agent has no actual authority from the principal, that the agents’ authority covers everything which would be covered by the authority of an agent appointed under the law applicable to the contract made between the agent and the third party.’
The correct analysis of the facts of this case, in my judgment, is that the agents whose authority really has to be considered are Goodman Derrick and the act, the validity of which has to be considered is their act of commencing proceedings. Goodman Derrick are English solicitors retained, ostensibly on behalf of a Panamanian company, to perform legal services for that company in England. On that analysis the validating of the act of commencing proceedings by later ratification by those who clearly have authority under Panamanian law to do so on behalf of the plaintiffs must be a matter for English law.
. . Once it is shown by the law of Panama that neither Mr. Van Walsum nor Goodman Derrick were authorised to act, the consequences of that lack of authority are matters for the law of the place where the unauthorised act was performed. Thus . . I conclude that the issue of ratification is governed by English law.’
Dillon LJ said: ‘It is well recognised law that where a solicitor starts proceedings in the name of a plaintiff – be it a company or an individual – without authority, the plaintiff may ratify the act of the solicitor and adopt the proceedings. In that event, in accordance with the ordinary law of principal and agent and the ordinary doctrine of ratification the defect in the proceedings as originally constituted is cured . . The reason is that by English law ratification relates back to the unauthorised act of the agent which is ratified . . ‘
Judges:
Roch LJ, Dillon LJ
Citations:
Gazette 12-Jan-1994, Times 29-Nov-1993, [1995] EMLR 118, [1994] 2 All ER 737, [1994] Ch 271, [1994] 2 WLR 660
Jurisdiction:
England and Wales
Cited by:
Applied – Adams and Others v Ford and Others CA 26-Apr-2012
The several claimants had invested in a technology based investment scheme, which they now said was fraudulent. The defendants said that the original, large number of claimants had been reduced, but the lawyers acting for the claimants had issued . .
Lists of cited by and citing cases may be incomplete.
Agency, Litigation Practice
Updated: 28 April 2022; Ref: scu.85022
