England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION )

1. ON APPEAL FROM IPSWICH COUNTY COURT CCRTF 95/0700/C

( HIS HONOUR JUDGE BRANDT )

2. ON APPEAL FROM LIVERPOOL COUNTY COURT CCRTI 95/1603/G

( HIS HONOUR JUDGE HAMILTON )

3. ON APPEAL FROM BRISTOL COUNTY COURT CCRTI 96/0227/G

( HIS HONOUR JUDGE RAYMOND JACK QC )

Royal Courts of Justice

Strand

London W2A 2LL

Thursday 31st October 1996

B e f o r e

LORD JUSTICE MORRITT

LORD JUSTICE WARD

LORD JUSTICE POTTER

Case No. 1 JARRETT Appellant

v.

BARCLAYS BANK PLC

ROYAL BANK OF SCOTLAND PLC Respondents

Case No. 2 JONES Appellant

v.

FIRST NATIONAL BANK PLC Respondent

Case No. 3 PEACOCK Respondent

v.

FIRST NATIONAL BANK PLC Appellant

J U D G M E N T

(As approved by the court)

©Crown Copyright

Case No. 1

MR JOHN WILLIAMS (instructed by Messrs Carruthers & Co, Cambridge), appeared on behalf of the Appellant (Plaintiff).

MR SAM NEAMAN (instructed by Messrs Shoosmiths & Harison, Northampton) appeared on behalf of the 1st Respondent (1st Defendant).

MR FRED PHILPOTT and MISS JULIA SMITH (instructed by Messrs Manby & Steward, Wolverhampton) appeared on behalf of the 2nd Respondent (2nd Defendant).

Case No. 2

MR NEIL LEVY (instructed by Messrs Kennan Bell & Co, Merseyside) appeared on behalf of the Appellant (Plaintiff).

MR PETER SAYER (instructed by Messrs Davis & Co, Harrow, Middlesex) appeared on behalf of the Respondent (Defendant).

Case No. 3

MR PETER SAYER (instructed by Messrs Davis & Co, Harrow, Middlesex) appeared on behalf of the Appellant (Defendant).

MR NEIL LEVY (instructed by Messrs Kennan Bell & Co, Merseyside) appeared on behalf of the Respondent (Plaintiff).

(Handed down transcript of

Smith Bernal Reporting Limited, 180 Fleet Street

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

LORD JUSTICE MORRITT: Each of these appeals raises the question whether proceedings brought in the United Kingdom against a creditor pursuant to ss.56(2) or 75 Consumer Credit Act 1974 in consequence of misrepresentations or breaches of contract by the supplier to the debtor of "timeshares" in respect of land in another state party to the Brussels Convention are within the exclusive jurisdiction of the courts of that state pursuant to Article 16 of the Convention. It is not disputed that if the answer to the question is in the affirmative the Courts of the United Kingdom are obliged to stay such proceedings pursuant to Article 19 of the Convention.

The relevant provisions of the Consumer Credit Act 1974 are:

"56 Antecedent negotiations

(1) In this Act 'antecedent negotiations' means any negotiations with the debtor or hirer -

......

(c) conducted by the supplier in relation to a transaction financed or proposed to be financed by a debtor-creditor supplier agreement within section 12 (b) or (c),

and 'negotiator' means the person by whom negotiations are so conducted with the debtor or hirer.

(2) Negotiations with the debtor in a case falling within subsection (1) ... (c) shall be deemed to be conducted by the negotiator in the capacity of agent of the creditor as well as in his actual capacity.

.......

75 Liability of creditor for breaches by supplier

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12 (b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor."

The Brussels Convention was enacted as part of the domestic law of England and Wales by the Civil Jurisdiction and Judgments Act 1982 s.2. So far as relevant, Articles 16 (as amended) and 19 provide:

ARTICLE 16

"The following courts shall have exclusive jurisdiction, regardless of domicile:

(1) in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Contracting State in which the property is situated;

......

ARTICLE 19

Where a court of a Contracting State is seised of a claim which is principally concerned with a matter over which the courts of another Contracting State have exclusive jurisdiction by virtue of Article 16, it shall declare of its own motion that it has no jurisdiction."

The facts relevant to these appeals may be shortly stated.

Jarrett v First National Bank PLC

On 7th November 1990 Mr and Mrs Jarrett entered into a written agreement with Sociedade Imobiladia Vale Navio Lda, the owner of a residential and leisure complex at Vale Navio, Albuferia, Algarve, Portugal for the purchase by them of an annual timeshare for week 47 in Villa 68 in the complex for the sum of £2,700. The price was paid as to £723-96 by the use by Mr Jarrett of his Barclaycard for which he subsequently reimbursed Barclays Bank PLC. The balance was paid to the vendor by the Royal Bank of Scotland pursuant to an loan agreement with Mr and Mrs Jarrett. Both the agreement under which Mr Jarrett had the use of a Barclaycard and the loan agreement are alleged to have been debtor-creditor-supplier agreements within s.12(b) Consumer Credit Act 1974. According to Mr and Mrs Jarrett the contract had been induced by representations made by an agent for the vendor that the complex would be registered with the relevant authorities in Portugal as a recognised time share complex and with an organisation called RCI thereby enabling Mr and Mrs Jarrett to obtain title deeds to their timeshare property and to participate in an exchange scheme operated by RCI. There were further representations as to the facilities and staff available at the complex. Mr and Mrs Jarrett allege that none of these representations was true.

In proceedings commenced by Mr and Mrs Jarrett in the Ipswich County Court on 26th December 1993 they claimed to be entitled against Barclays and the Royal Bank of Scotland to rescission of the relevant credit agreements, payment of such sum as was paid by each of them to the vendor of the timeshare and damages. They relied on ss 56 and 75 Consumer Credit Act 1974. The application of the Banks to strike out the action for want of jurisdiction came before HH Judge Brandt on 19th April 1995 and was allowed. The judge had every sympathy for Mr and Mrs Jarrett but he considered that the agreement with the vendor was a tenancy agreement and that the proceedings had as their object a tenancy of immoveable property within the meaning of Article 16. Accordingly he concluded that as a matter of law he had no jurisdiction to determine the claim because of the provisions of Arts. 16(1) and 19 of the Brussels Convention. Mr and Mrs Jarrett now appeal.

Jones v First National Bank

On 14th April 1989 Mr and Mrs Jones entered into a written agreement with Unit C31. La Cartuja Ltd for the purchase of a time share conferring the right of exclusive occupancy during week 45 in a ground floor two bedroomed apartment known as C31 La Cartuja, Sitio de Calahonda, Mijas Costa, Malaga, Spain for the sum of £4,300 by means of the purchase of two shares in the vendor. The contract provided that the Company would allow the purchaser exclusive occupancy of the apartment as specified and in accordance with the particulars specified in the contract in perpetuity. Mr and Mrs Jones paid the deposit of £300 out of their own resources but borrowed the balance of £4,000 and the sum of £421-24 required for an insurance premium from First National Bank PLC pursuant to an agreement they allege to have been a regulated debtor-creditor-supplier agreement within s.12(b) Consumer Credit Act 1974. Mr and Mrs Jones allege that they were induced to enter into the agreement with the vendor by its representation that the property existed. In fact, they allege, the property was never built and does not exist so that the vendor is in breach of contract thereby entitling them to rescind it.

On 1st September 1994 Mr and Mrs Jones commenced proceedings in the Liverpool County Court against First National Bank PLC claiming against them rescission of the contract and repayment of £4,300 with interest. They relied on s.75 Consumer Credit Act 1974. The application of the Bank to strike out the action for want of jurisdiction because of Article 16 of the Brussels Convention was refused by District Judge Wolfson on 16th December 1994 but granted by HH Judge Hamilton on 30th August 1995. HH Judge Hamilton considered that the agreement with the vendor was a tenancy and that the tenancy was the principal matter with which the action against the Bank was concerned. Mr and Mrs Jones now appeal.

Peacock v First National Bank PLC

On 20th September 1989 Mr and Mrs Peacock entered into a written agreement with Partners in Property Ltd for the purchase of a right of occupation for themselves and all persons authorised by them in respect of week 50 in an apartment known as Unit 50 La Orquedea, Calahonda, Spain for the sum of £4,800 and an annual and variable management and maintenance contribution. The contract provided that on payment of the purchase price the vendor, a company incorporated in England, would issue to Mr and Mrs Peacock a licence to occupy and allow them exclusive occupancy of the apartment during week 50 for the next 80 years. Mr and Mrs Peacock paid the deposit of £500 by cheque and the balance of £4,300 out of the proceeds of a loan from First National Bank PLC pursuant to a regulated debtor-creditor-supplier agreement within s.12(b) Consumer Credit Act 1974. The vendor failed to issue a licence to occupy the apartment and went into liquidation in August 1990.

On 6th December 1993 Mr and Mrs Peacock instituted proceedings against the Bank in the Bristol County Court for damages to compensate them for the loss of the purchase price and for mental distress, inconvenience, upset, disappointment and frustration by the loss of the holidays for themselves and their next of kin for up to the next 80 years. They rely on s.75 Consumer Credit Act 1974. The application of the Bank to strike out the action for want of jurisdiction by reason of Art. 16 of the Brussels Convention was dismissed by District Judge Daniel on 7th November 1995. HH Judge Jack dismissed the appeal of the Bank from the order of the District Judge on 1st February 1996. He considered that the agreement with the vendor, with which the action was primarily concerned, was not a tenancy so that Article 16 was not applicable. Thus in this case it is the Bank which appeals.

The arguments of Counsel revealed four principal issues, namely:

1. By reference to which system of law does this Court determine whether or not the Timeshare Agreements are tenancies (or, in the case of the Jones, the grant of rights in rem in immoveable property) within Article 16(1) of the Brussels Convention?

2. By reference to that system of law identified in answer to the first issue are these Timeshare Agreements tenancies (or, in the case of the Jones, the grant of rights in rem in immoveable property) within Article 16(1)?

3. If the Timeshare Agreements are such tenancies (or grant) are they the "object" of the respective proceedings within Article 16(1)?

4. Should any, and if so which, of these questions be referred to the European Court of Justice pursuant to The Protocol on the Interpretation of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters [1983] O.J.C97/1?

I propose to deal with these issues in the order in which I have set them out.

For the Jones and the Peacocks it was submitted that the question whether the Timeshare Agreements in their cases were tenancies should be determined by the lex situs of the property in respect of which the rights were to be exerciseable, namely Spain. They submit that it would not be right to apply English Law in the absence of any evidence as to what the relevant law of Spain is because the orders appealed from struck out the actions on a preliminary application and were not decisions reached after a full trial. The Jarretts adopted this argument but submitted in the alternative that the proper construction of the relevant words in Article 16(1) was that laid down by the European Court of Justice. The Banks submitted that the alternative argument for the Jarretts was the correct answer to this issue.

I have no hesitation in accepting the alternative argument for the Jarretts and the arguments for the Banks on this Issue. First, s.3(1) Civil Jurisdiction and Judgments Act 1982 requires the meaning and effect of the Brussels Convention, if not referred to the European Court of Justice "to be determined in accordance with the principles laid down by and any relevant decision of the European Court of Justice". By s.3(3) this Court is enjoined to consider the Reports specified in s.3(2), including that of Professor Schlosser on the Accession Convention, in ascertaining the meaning or effect of any provision of the Convention.

Those principles and decisions do not suggest that the lex situs of the property over which the rights are exerciseable should determine whether there is a tenancy or not. However our attention was drawn by counsel for the Jones and Peacocks to paragraph 168(c) of the Schlosser Report [O.J.1979 C59] in which it is stated

"If an action relating to immovable property is brought in a particular State and the question whether the action is concerned with a right in rem within the meaning of Article 16(1) arises, the answer can hardly be derived from any law other than that of the lex situs."

But this view has not been adopted by the European Court of Justice. Thus in Reichert v Dresdner Bank [1990] ECR 1 at page 41 the Court stated in paragraph 8 of its judgment:

"it is evident that in order to ensure that the rights and obligations arising out of the Convention for the Contracting States and for individuals concerned are as equal and uniform as possible, an independent definition must be given in Community Law to the phrase 'in proceedings which have as their object rights in rem in immovable property'..."

In the case of Hacker v Euro-Relais GMBH [1992] ECR 1111 the Advocate-General in his opinion at paragraphs 7 and 8 said:

"..the Court established the principle that the concept [tenancies of immovable property] should be interpreted independently on the basis of the Convention itself without reference to the law applicable under the conflict rules of the national court hearing the main proceedings.

8. Only if there is uniformity of interpretation will uniform application of the Convention in all the Contracting States be ensured in this area and the free movement of decisions which constitutes the primary objective of the Convention guaranteed."

Counsel for the Jones and the Peacocks submitted that the uniformity of interpretation required was in relation to the ascertainment of the "object" of the proceedings, leaving the identification of rights in or tenancy of immoveable property to the lex situs. I do not accept that submission. It is inconsistent with the opinion of the Advocate-General in Hacker, just quoted, which was given in answer to a question asking specifically whether there was a tenancy agreement; that question did not ask what was the object of the proceedings. Moreover the need for uniformity arises at least as much in relation to the construction of the word "tenancy" as it does in relation to the word "object".

Accordingly in my judgment the questions whether the Timeshare Agreements in each of these three appeals were or are tenancies (or the grant of rights over immoveable property) must be determined by this court applying to the facts of the three cases the interpretation placed by the European Court on the relevant words in Article 16. It is not material to consider whether the Timeshare Agreements were or are tenancies or the grant of such rights by the domestic law of Spain or, in the absence of any evidence what that is, by the domestic law of England and Wales.

I turn then to the second question whether these timeshare agreements are tenancies or, in the case of the Jones, the grant of rights in rem over immoveable property. It is convenient to consider first the basis for the suggested distinction between the case of the Jones and that of the Peacocks and the Jarretts. It depends on the provision in the contractual conditions that the Company will allow the Jones exclusive occupancy "in perpetuity". It is suggested that such a perpetual right cannot be a tenancy. I do not agree. The right to occupy is still limited to week 45 in each year. I can discern nothing in the decisions of the European Court of Justice to suggest that there is a distinction between cases in which the weekly right of occupancy is expressed to endure for 80 years, in perpetuity or where, as in the case of the Jarretts, the agreement is silent as to the number of years. In my view either each of the timeshare agreements is a tenancy within Article 16 or none of them is.

The question of what is a tenancy for the purposes of Article 16 has been considered by the European Court of Justice in three cases. The first was Sanders v Van der Putte (1977) ECR 2383. In that case the agreement was for Sanders to take over from Van der Putte the running of a florist's shop in premises in Germany rented by the latter from third parties. Sanders failed to do so and was sued by Van der Putte in the Netherlands. Sanders contended that those courts had no jurisdiction as Article 16(1) applied and conferred exclusive jurisdiction on the courts of Germany. The first question referred to the European Court of Justice was whether a tenancy within Article 16(1) included an "agreement to rent under a usufructuary lease a retail business carried on in immovable property rented from a third party by the lessor". That question was answered in the negative for the reasons set out in paragraphs 11 to 19 of the judgment of the court which it is necessary to quote in full:

"11. As regards the matters listed under subparagraphs (2), (3), (4) and (5) of that article it is clear that the courts which are given exclusive jurisdiction are those which are best placed to deal with the disputes in question.

12. The same applies to the assignment of exclusive jurisdiction to the courts of the Contracting State in which the property is situated in matters relating to rights in rem in, or tenancies, of immovable property.

13. In fact, actions concerning rights in rem in immovable property are to be judged according to the rules of the State in which the immovable property is situated since the disputes which arise frequently in checks, inquiries and expert assessments which must be carried out on the spot, with the result that the assignment of exclusive jurisdiction satisfies the need for the proper administration of justice.

14. Tenancies of immovable property are generally governed by special rules and it is preferable in the light of their complexity, that they be applied only by the courts of the States in which they are in force.

15. The foregoing considerations explain the assignment of exclusive jurisdiction to the courts of the State in which the immovable property is situated in the case of disputes relating to tenancies of immovable property properly so-called, that is to say, in particular, disputes between lessors and tenants as to the existence or interpretation of leases or to compensation for damage caused by the tenant and to giving up possession of the premises.

16. The same consideration do not apply where the principal aim of the agreement is of a different nature, in particular, where it concerns the operation of a business.

17. Furthermore, the assignment, in the interests of the proper administration of justice, of exclusive jurisdiction to the courts of one Contracting State in accordance with Article 16 of the Convention results in depriving the parties of the choice of the forum which would otherwise be theirs and, in certain cases, results in their being brought before a court which is not that of the domicile of any of them.

18. Having regard to that consideration the provisions of Article 16 must not be given a wider interpretation than is required by their objective.

19. Therefore, the concept of 'matters relating to ... tenancies of immovable property' within the context of the Convention must not be interpreted as including an agreement to rent under a usufructuary lease a retail business (verpachting van een winkelbedrifj) carried on in immovable property rented from a third person by the lessor."

Thus Article 16(1) is not to be construed any wider than is necessary to achieve its object. The object is that the courts of the situs should have exclusive jurisdiction in those cases in which the complexities of local law or the needs in the interests of the proper administration of justice for local knowledge or assessments so require. The court concluded that those considerations did not require the categorisation of the agreement in that case as a tenancy for it was concerned with the operation of a business.

The second case was Rosler v Rottwinkel [1986] QB 33. That case was concerned with an agreement between two Germans for the letting by Rosler to Rottwinkel of a holiday villa in Italy for three weeks. Rosler commenced proceedings in Berlin claiming damages for breach of the agreement in respect of the number of permissible occupants, loss or damage to the contents of the villa and the failure of Rottwinkel to pay for the use of the various utilities such as electricity. The question for the European Court of Justice was whether the short term letting was a tenancy within Article 16(1). In its decision the court repeated the principles established in Sanders v. Van der Putte and continued:

"21. The question submitted by the Bundesgerichtshof is designed to ascertain whether exceptions may be made to the general rule laid down in article 16 owing to the special character of certain tenancies, such as short-term lettings of holiday homes, even though the wording of that article provides no indication in that respect.

22. It must be emphasised in this regard that, as the Italian Government has rightly pointed out, inherent in any exception to the general rule laid down in article 16(1) is the risk of further extensions which might call in question the application of national legislation governing the use of immovable property.

23. Account must also be taken of the uncertainty which would be created if the courts allowed exceptions to be made to the general rule laid down in article 16(1), which has the advantage of providing for a clear and certain attribution of jurisdiction covering all circumstances, thus fulfilling the purpose of the Convention, which is to assign jurisdiction in a certain and predictable way.

24. It follows that the provision in question applies to all tenancies of immovable property irrespective of their special characteristics.

25. The reply to the first question must therefore be that article 16(1) of the Convention applies to all lettings of immovable property, even for a short term and even where they relate only to the use and occupation of a holiday home."

Thus the court recognised the short term letting as a tenancy and concluded that there was no justification for any exceptions to the generality of Article 16(1) in its application to a "tenancy". Accordingly that decision throws no further light on what are the necessary features of a tenancy within Article 16(1). Article 16(1) was subsequently amended by the Lugano Convention so as to exclude short term lettings for private use between natural persons and this amendment was carried forward by the Treaty of Accession dealing with the admission of Spain and Portugal. Neither the fact of the amendment nor its form throws any further light on the meaning to be attributed to the word "tenancy".

The third case was Hacker v Euro-Relais GMBH [1992] ECR 1111 to which I have already referred. That case concerned the provision of a package holiday whereby in return for a single sum Euro-Relais agreed to provide for Mrs Hacker and her six travelling companions a holiday home in the Netherlands owned by a third party for the period of two weeks and to make the necessary booking for a ferry crossing. Mrs Hacker complained that the holiday home so provided did not live up to the description of it given by Euro-Relais thereby causing her additional expense and loss of amenity and enjoyment. She sued Euro-Relais in Germany. The question for the court was whether such a contract was a tenancy within Article 16(1) so as to confer exclusive jurisdiction on the courts of the Netherlands. The Court concluded that it was not. The principles to be applied in the construction of the Article laid down in Sanders v Van der Putte and repeated in Rosler v Rottwinkel were again emphasised. In paragraph 15 of the judgment the court stated in regard to the agreement with which the case was concerned that:

"A complex contract of that type, which concerns a range of services provided in return for a lump sum paid by the customer, is outside the scope within which the exclusive jurisdiction laid down by Article 16(1) finds its raison d'etre and cannot constitute a 'tenancy agreement' within the meaning of that article as interpreted in the judgment in Sanders v Van der Putte, cited above."

It appears to me from a consideration of those cases that though the need for a uniform interpretation of the word "tenancy" has been repeatedly recognised no such interpretation has yet emerged from the decisions of the European Court of Justice. Sanders and Hacker establish two classes of agreement which are not tenancies. Rosler demonstrated that there was no exclusion for short term lettings but went no further.

However in the light of the Court's decision in Rosler v Rottwinkel I can see no reason for denying to the agreements in these cases the status of tenancies within Article 16(1). In each case one party is entitled to the exclusive occupation of immovable property assumed by the contract to be owned by the other for a specified period in return for a sum of money. It is true that the period is shorter than in Rosler, namely a week at a time, but I do not think that that can affect the question of principle particularly as the amendment to Article 16(1) subsequently made does not apply to this case as one of the parties is not a natural person. All the considerations which led to the Court construing Article 16(1) so as to include short term lettings apply as much to the agreements in these cases as to the short term letting in Rosler.

Counsel for the Jones and the Peacocks submitted that the agreements should be distinguished from the tenancy which might result from the subsequent grant of the licence to occupy. For this purpose he relied on para 172(c) of the Schlosser Report which states that:

"actions based on contracts for the transfer of ownership or other rights in rem affecting immovable property do not therefore have as their object rights in rem. Accordingly they may also be brought before courts outside the United Kingdom."

But that passage is dealing with the laws of the United Kingdom on the supposition earlier referred to in paragraph 168(c) that the lex situs would determine what was a tenancy for the purposes of Article 16(1). As I have already noted that view was not adopted by the European Court of Justice. In my judgment the distinction recognised by English Law between the grant of a right in rem and a contract for such a grant is not recognised as a valid distinction in relation to tenancies by any principle laid down by the European Court of Justice. Nor, bearing in mind the principles established by that Court to be observed in the construction of Article 16, do I see any logical reason why it should.

Accordingly for all these reasons I would answer the second question in the affirmative.

The Banks submit that once the second question is answered in the affirmative there is little choice but to answer the third question in the affirmative also. It is not disputed that when Article 16(1) refers to "proceedings which have as their object" rights in rem etc it is referring to the subject matter of the proceedings. Newtherapeutics Ltd v Katz [1991] Ch. 226, 243G. For the Banks reliance is placed on the words in s.75(1) Consumer Credit Act 1974 conferring on the debtor the like claim against the creditor as the debtor has against the supplier. They point to R v Surrey Justices (1869) LR 5 Q.B.D. 87 and Bradlaugh v Clarke (1883) 8 App. Cas. 354 as demonstrating that the use of the word "like" is apt to incorporate all the features of the principal subject. It is submitted that because the claim against the suppliers, the vendors of the rights, may only be brought in Spain or Portugal so claims against the creditors, the Banks, may only be brought there.

I do not accept these submissions. The reference to the like claim in s.75 Consumer Credit Act 1974 must refer to the like cause of action. Plainly the remedies cannot be the same, for the remedies available to the debtor against the supplier may include injunctions or orders for specific performance which could not lie against the creditor. Further the use of the words "the like" presupposes some differences. I can see no reason at all for supposing that Parliament intended to enact in relation to the statutory cause of action conferred by s.75 (or s.56) any jurisdictional requirement to be observed in proceedings against the supplier. But I do not think that the answer to the question lies in a consideration of the statute rather than the Brussels Convention and in the principles established by the European Court of Justice in the interpretation of the words "proceedings which have as their object.."

In Reichert v Dresdner Bank [1990] ECR 27 the court was concerned with a claim to set aside a gift of land in France on the ground that it was made in fraud of the creditors of the donor. The contention that Article 16(1) applied to the claim so as to give exclusive jurisdiction to the courts in France was rejected. At paragraph 11 the Court said:

"...Article 16(1) must be interpreted as meaning that the exclusive jurisdiction of the Contracting State in which the property is situated does not encompass all actions concerning rights in rem in immovable property but only those which both come within the scope of the Brussels Convention and are actions which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with the protection of the powers which attach to their interest."

In Webb v Webb [1994] Q.B. 696 the European Court of Justice was concerned with a claim by a father that his son held a flat in France purchased by the son with funds provided by the father on a resulting trust for the father. The son submitted that only the courts of France had jurisdiction for the proceedings had as their object rights in rem in immovable property. The European Court of Justice rejected that submission. In paragraph 14 of the judgment of the Court it is stated:

"Article 16 confers exclusive jurisdiction in the matter of rights in rem in immovable property on the courts of the contracting state in which the property is situated. In the light of the court's judgment in Reichert v. Dresdner Bank A.G. (Case C-115/88) [1990] ECR I-27, where the court had to rule on the question whether the exclusive jurisdiction prescribed by that article applied in respect of an action by a creditor to have a disposition of immovable property declared ineffective as against him on the ground that it was in fraud of his rights by his debtor, it follows that it is not sufficient, for article 16(1) to apply, that a right in rem in immovable property be involved in the action or that action have a link with immovable property: the action must be based on a right in rem and not on a right in personam, save in the case of the exception concerning the tenancies of immovable property."

The court concluded that the claim by the father against his son was not an action in rem within the meaning of Article 16(1) but an action in personam. In my view it is clear that the exception concerning tenancies recognised by the last sentence of that paragraph relates to the status of tenancies in some member states as personalty and not to the requirement that the action must be based on, as opposed to having a link or connection with, rights in

rem or a tenancy. This distinction was emphasised by the decision of the Court in Lieber v Goebel [1994] ECR 2535 at 2550 para.13.

In my view, in the light of those statements of principle, these actions do not have as their object tenancies of immovable property. In each action the foundation for the claim against the Bank under s.75 (and in the case of the Jarretts s.56 also) is the debtor-creditor-supplier agreement. That contract has attached to it the personal statutory rights conferred by the Consumer Credit Act 1974 on the debtor. Of course the enforcement of those statutory rights is connected to or linked with the claims of the consumer against the supplier under the timeshare agreements but it is based on the debtor-creditor-supplier agreement not the timeshare agreement. The consumer does not seek the resolution of any of the disputes referred to by the European Court of Justice in Sanders v Van der Putte [1977] ECR 2383 at p.2391 para.15, in Rosler v Rottwinkel [1986] QB 33 at p.60 paras 28 and 29 or in Reichert v Dresdner Bank [1990] ECR 27 at p.41 para.11.

Moreover when one considers the principles established by the European Court of Justice which justify an interpretation sufficient to give effect to the object of Article 16(1) but no more, in my judgment one is driven to the same conclusion. There is no reason to suppose that it was the intention of the signatories to the Brussels Convention that rights conferred by the legislation in one contracting state for the protection of the consumer should, if those rights are linked to a dispute between the consumer and a third party concerning rights in rem or a tenancy, only be enforced in the courts of another contracting state.

For all these reasons I would answer the third question in the negative. It follows that I would allow the appeal in the case of the Jones and the Jarretts and dismiss it in the case of the Peacocks. But before reaching a final conclusion it is necessary to consider the fourth question.

The Protocol on the Interpretation of the Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters [1983] O.J. C97/1 entitles, but does not require, this court to request the European Court of Justice to give a ruling on a question of interpretation of the Convention raised in a case pending before it "if it considers that a decision on the question is necessary to enable it to give judgment".

The suggestion that there should be such a request was made by counsel for The Royal Bank of Scotland in the appeal of the Jarretts. The other Banks supported the suggestion but without any great enthusiasm. The Jones, Jarretts and Peacocks opposed the suggestion on grounds of cost, delay and the smallness of the amount at stake.

In my view a request is not necessary. In respect of each of the three questions involved it appears to me that the relevant principles are clearly established by the decisions of the European Court of Justice to which I have referred. The arguments are concerned with how those principles are to be applied. That is not a matter of interpretation of the Convention but a matter within the exclusive province of the courts of England and Wales.

In my judgment the appeals of the Jones and the Jarretts should be allowed and that of First National Bank in the action brought by the Peacocks should be dismissed. In each case the action should proceed to trial in the County Court in the usual way.

LORD JUSTICE WARD: I agree.

LORD JUSTICE POTTER: I also agree.

Order: Application for leave to appeal to the House of Lords dismissed.

Case of Jarrett

Appeal allowed with costs; costs in court below be paid by second defendant; costs be taxed and paid forthwith.

Case of Jones

Appeal allowed with costs; legal aid taxation of plaintiffs' costs up to 10.10.95; costs be taxed and paid forthwith.

Case of Peacock

Appeal dismissed with costs; legal aid taxation of plaintiff's costs; costs be taxed and paid forthwith.