England and Wales Court of Appeal (Civil Division) Decisions

WATSON v. FIRST CHOICE HOLIDAYS AND FLIGHTS LIMITED and APARTA HOTELS CALEDONIA S.A. [2001] EWCA Civ 972 (25th June, 2001)

Case No: A2/2000/2690

Neutral Citation Number: [2001] EWCA Civ 972

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEN'S BENCH DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Monday 25^th June 2001

MR JUSTICE LLOYD:

1. This is the judgment of the court.

2. In the early hours of the morning on 4 July 1995 a series of events occurred at a holiday resort in Spain which led to two young Englishmen suffering serious injuries and, in turn, to litigation brought by each of them. One, Mr Barnshaw, sued the owner and operator of the accommodation at the holiday resort in Spain. He failed at first, but on appeal he was awarded damages for negligence. The other, Mr Watson, the present Appellant, brought proceedings in England. At first he sued only the tour operator who sold him the package holiday, First Choice Holidays and Flights Limited ("First Choice"), an English company. Later he joined the Respondent, Aparta Hotels Caledonia S.A. ("Aparta"), as an additional Defendant. Aparta applied to have the proceedings set aside, on the basis that the English courts have no jurisdiction over the claim against it, a Spanish company. Master Eyre dismissed the application, but on appeal Mr James Goudie Q.C., sitting as a Deputy Judge of the High Court, allowed the appeal. With permission granted by May LJ, Mr Watson appeals to this court.

3. The question turns on the application of the Brussels Convention to the particular circumstances of these proceedings. Mr Watson justifies suing Aparta in England on the basis of article 6(1) of the Convention. The learned deputy judge decided against Mr Watson in reliance on a passage in the judgment of the European Court of Justice in Réunion Européenne SA v. Spliethoff's Bevrachtingskantoor BV and the Master of the Vessel Alblasgracht V002 Case C-51/97 [1998] ECR I-6511 ("Réunion Européenne"). Mr Evans-Tovey for the Respondent submitted that the position was clear as a result of that passage, and the appeal should simply be dismissed. Mr Saggerson for the Appellant submitted first that, despite that passage, the appeal should be allowed and secondly, in the alternative, that the position needed to be clarified by a reference to the European Court of Justice. We have come to the conclusion that a reference is needed in order that the domestic courts can proceed properly with the matter, for reasons set out in this judgment.

The facts and the nature of the claim

4. We must start by describing the essential facts briefly, and then the nature of the claims made against each of the Defendants in the current proceedings. The facts as regards Mr Barnshaw are identical, and after describing Mr Watson's claims we will refer to Mr Barnshaw's proceedings. So far as Mr Watson is concerned, the facts have not yet been proved, and the summary below is based on what he alleges.

5. Mr Watson bought a package holiday from the First Defendant for a holiday in Tenerife, Spain, from 30 June to 15 July 1995. He was assigned accommodation in a block called Xanadu forming part of a large resort complex at Playa de las Americas. Another part of the resort was a block called Caledonia Park, owned and managed by Aparta. Early in the morning on 4 July 1995 Mr Watson visited Caledonia Park at the invitation of someone who was staying there. He was refused entry to the block, and the manager of the block summoned a security guard. Wielding a baton, the security guard chased Mr Watson away from Caledonia Park into the grounds of the resort. Mr Watson ran away, reached a low wall some 35 cm in height and jumped over it to escape. On the other side of the wall there was a drop of some 20 metres to a road. Mr Watson fell and was seriously injured.

6. Mr Watson's claim against First Choice is based on the contract by which he bought the package holiday. He alleges a term of the package holiday contract by which First Choice accepted responsibility for bodily injury caused to him as a result of the proven negligent acts or omissions of its employees, agents, suppliers and sub-contractors and their servants and agents whilst in the course of their employment.

7. He also alleges implied terms of the package holiday contract that:

i) staff throughout the resort complex, and in particular security staff, would be adequately trained and supervised, and would have adequate instructions in respect of their response to the behaviour of visitors throughout the complex; and

ii) the resort complex would be reasonably safe for visitors in that it would be free of obvious hazards likely to create an avoidable risk of accident or injury, or any such hazards would be the subject of suitable warnings.

8. The accident is alleged to have been caused by First Choice's breach of the contract, or by the negligence of the managers or proprietors of the complex or the security guard, for which First Choice is said to be responsible by reason of the term of the contract mentioned at paragraph 6 above. In summary the security guard's conduct is said to have been disproportionate, unnecessary and inappropriate, and the result of inadequate training or supervision, and the grounds of the complex are said not to have been reasonably safe for visitors because of inadequate lighting, and because of the absence of any fencing or warning of the 20 metre drop.

9. First Choice has put in a Defence, by which the contract and its alleged terms are not admitted, the security guard's conduct is said to have been proper, and Mr Watson is alleged to have contributed by his own negligence to any injuries he suffered.

10. His claim against Aparta is in tort, and is based on the allegation that Aparta was negligent in respect of the behaviour of the security guard and the manager, and in respect of the lack of lighting, fencing and warning.

11. Thus, apart from the contract between him and First Choice, the claim against the two defendants is based on identical facts. Equally, apart from different injuries, the same facts provided the basis for Mr Barnshaw's claim.

12. Mr Barnshaw sued in Spain. We have seen a translation of the judgment of the Audiencia Provincial of Santa Cruz de Tenerife given on 22 July 2000 by which an appeal was allowed from the dismissal of the claim by the lower court. We have not seen any other documents relating to the proceedings. According to the judgment, the Defendant in those proceedings was Complejo Hotelero Caledonia Park. Presumably that entity is in some way associated with the Respondent in this appeal, or it may be the Respondent under a different name. The appeal was allowed, essentially on the basis that the failure to take more effective measures against the risk presented by the low wall was negligent, though Mr Barnshaw was also regarded as having been negligent, and the compensation due to him was therefore reduced by half. He was awarded 7 million pesetas and just over £10,000 by way of damages, after this reduction.

The Brussels Convention

13. The basic principle under the Brussels Convention is set out in Article 2, namely that persons domiciled in a Contracting State shall be sued in the courts of that State. Other provisions of the Convention allow a different venue, in particular Articles 5 and 6, but these are exceptions to that principle, and are to be interpreted restrictively, and not so as to subvert the principle. Thus, Mr Watson has no difficulty suing First Choice in England, Mr Barnshaw was able to sue Complejo Hotelero Caledonia Park in Spain, and Mr Watson could sue (or could have sued) Aparta in Spain.

14. Articles 5 and 6 are headed Special Jurisdiction. In matters relating to a contract, under Article 5(1), a person domiciled in one Contracting State may be sued in another Contracting State in the courts for the place of performance of the obligation in question. In matters relating to tort, delict or quasi-delict, he may, under Article 5(3), be sued in the courts for the place where the harmful event occurred. Of more immediate relevance, under Article 6(1) and (2) a person domiciled in a Contracting State may also be sued:

"1. where he is one of a number of defendants in the courts for the place where any one of them is domiciled.

2. as a third party in an action on a warranty or guarantee or in any other third party proceedings, in the court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the court which would be competent in his case"

15. Because of reliance placed on it in argument, rather than because of any direct relevance, we also cite Article 22:

"Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings.

A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions.

For the purposes of this Article, actions are deemed to be related where that are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."

16. In Kalfelis v. Bankhaus Schröder, Münchmeyer Hengst & Co Case 189/87 [1988] ECR 5565 ("Kalfelis"), the European Court of Justice held that:

"(1) For Article 6(1) of the Convention to apply there must exist between the various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine the actions together in order to avoid a risk of irreconcilable judgments resulting from separate proceedings.

(2) (a) The terms "matters relating to tort delict and quasi- delict" used in article 5(3) of the Convention must be regarded as an independent concept covering all actions which seek to establish the liability of a defendant and which are not related to a contract within the meaning of article 5(1).

(b) A court which has jurisdiction under article 5(3) over an action insofar as it is based on tort or delict does not have jurisdiction over that action insofar as it is not so based."

17. As regards that last proposition, the Court recognised that disadvantages arise from different aspects of the same dispute being adjudicated on by different courts, but pointed out that the entire dispute against the one defendant can always be heard in one court if the plaintiff brings his proceedings in the court of domicile of the defendant. That part of the decision is concerned with combining different claims against the same defendant in one proceeding brought against him in a Contracting State other than that of his domicile, whereas the ruling on article 6(1) is directed at the different question of joining different claims against several defendants domiciled in different Contracting States in one proceeding brought in one of those Contracting States.

18. The facts in Kalfelis involved claims by the plaintiff brought in Germany against a bank established in Luxembourg and against its parent established in Germany, the claims being based on tort, contract and unjust enrichment. The Luxembourg bank objected to the jurisdiction of the German courts. The question referred to the Court, as regards article 6(1), asked whether a connection between the various claims was necessary for that article to apply and, if so, whether it was sufficient to show a simple connection, where the actions against the different defendants are essentially the same in fact and law, or whether a closer connection is required. Advocate-General Darmon, proposing an answer on article 6(1) in essentially the same terms as that given by the Court, considered a number of different formulations of the necessary connection. Having stated his preference for a rule related to the prevention of irreconcilable judgments resulting from separate proceedings, based on an analogy with article 22, he then referred to what he called "contradictory decisions". As an example he cited two actions brought separately against two persons allegedly responsible for an accident, giving rise to two judgments one upholding the claim and the other dismissing it "on the grounds that the characteristics of the damage are such that it cannot be repaired". He said "the decisions are certainly contradictory, if not irreconcilable." He argued in favour of using the phrase "contradictory decisions" so as to stress unequivocally that the choice made favours a solution of sufficient breadth, but neither he in the answer proposed, nor the Court, in fact used that phrase. It is therefore unclear whether the avoidance of two such decisions, contradictory as they would be, is to be regarded as being, or capable of being, a sufficient connection for the purposes of article 6(1).

19. The House of Lords has had to consider the question of irreconcilable decisions, albeit in the context of article 22, in Sarrio SA v. Kuwait Investment Authority [1999] 1 AC 32. With the benefit of the decision of the European Court of Justice on article 22 in The Tatry (Case C-406/92) [1994] ECR I-5439, they held that a broad approach was appropriate rather than one based on close legal analysis of the respective claims. In principle that seems appropriate under article 6(1) as well. On article 6(1) itself the Court of Appeal has held that inconsistent findings of fact are as much a matter of concern in this context as inconsistent conclusions of law: see Gascoine v. Pyrah [1994] IL Pr 82 at 93.

20. In Réunion Européenne the European Court of Justice had to consider articles 5(1) and (3) and article 6(1) again. Perishable goods (pears) were shipped from Australia to the plaintiff, a French company with its base at Rungis. The carriage was undertaken by an Australian company (RCC), first by sea to Rotterdam in a Dutch vessel operated by a Dutch company, and then by road from Rotterdam to Paris. The pears arrived damaged, the damage being said to be due to a failure of the refrigeration equipment during the journey. The claim was brought in France against RCC which had issued a bill of lading, and also against the master of the vessel and the Dutch company which operated it. The French courts accepted that they had jurisdiction against RCC, in relation to which no question arose under the Convention. They did not accept jurisdiction as regards the other defendants. The Cour de Cassation referred several questions to the European Court of Justice. The claimants contended that the claim against the Dutch defendants, the company and the master of the vessel, was based on tort, not on contract, so that the French courts had jurisdiction as those of the place where the harmful event occurred, and also contended that, since all three defendants had taken part in the same maritime transport operation, the dispute as against all three was indivisible, which should have justified jurisdiction under article 6(1). The first three questions referred dealt with article 5.

21. RCC, having issued a bill of lading, were sued in contract. However, the Dutch defendants were not parties to any contract with the plaintiff, whatever contract there might be between them and RCC. Accordingly the European Court of Justice held that the claim against them was not within article 5(1) as a matter relating to a contract, and that it followed that it was a matter relating to tort, delict or quasi-delict. The plaintiff then argued that the place of ultimate delivery in France was the place where the harmful event occurred (or, at least, one such place), so that the French courts had jurisdiction under article 5(3). The Court did not accept this. The Dutch defendants were only concerned with the maritime transport of the goods, and their task was complete once the vessel reached Rotterdam and the goods were unloaded there. The Court held that, in relation to a claim arising from such circumstances, the place where the damage arose can only be the place where the carrier was to deliver the goods, and that the fact that the plaintiff only discovered the damage on the completion of the subsequent carriage by land did not make the delivery address the (or a) place where the harmful event occurred so as to justify jurisdiction under article 5(3). Thus, proceedings in France against the Dutch defendants were not justified either under article 5(1) or under article 5(3). Proceedings in the Netherlands would of course have been possible as it was the country of domicile of the Dutch defendants, but it may be that RCC could not have been sued there.

22. The fourth question referred to the Court was concerned with article 6(1), in the following terms:

"May a defendant domiciled in the territory of a Contracting State be brought, in another Contracting State, before the court hearing an action against a co-defendant not domiciled in the territory of any Contracting State, on the ground that the dispute is indivisible rather than merely displaying a connection."

23. Given the terms of article 6(1), "in the courts for the place where any one of them is domiciled", and the clear requirement that the proceedings should have been brought in a Contracting State in which one of the defendants is domiciled, it seems a little surprising that any question was thought to arise under article 6(1) at all, since RCC was domiciled in Australia and no defendant was domiciled in the Contracting State in which the proceedings had been brought, namely France. The wording of the question, with its mention of the dispute being indivisible rather than merely showing a connection, does not explain why it was thought possible to argue in favour of jurisdiction under the Convention in the French courts, since the concept of indivisible claims does not appear in the Convention nor, so far as we are aware, in the jurisprudence relating to the Convention. Nor do the opinion of Advocate-General Cosmas or the judgment of the Court cast light on the perceived relevance of the indivisible nature of the claims, which as the Advocate-General says is a concept of national law. The Court's ruling was that a defendant domiciled in a Contracting State cannot be sued in another Contracting State before a court seised of an action against a co-defendant not domiciled in a Contracting State on the ground that the dispute is indivisible rather than merely displaying a connection.

24. In the course of the judgment, as well as of the opinion of the Advocate-General, reference was made to the nature of the connection that must exist under article 6(1). The Court referred to the decision in Kalfelis that such a connection was necessary, and continued as follows:

"49. In that connection the court also held in Kalfelis that a court which has jurisdiction under article 5(3) of the Convention over an action insofar as it is based on tort or delict does not have jurisdiction over that action in so far as it is not so based.

50. It follows that two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected."

25. That last paragraph is the foundation of the argument for Aparta for saying that it cannot be joined under article 6(1) in the same action as the claim against First Choice, and that was the basis for the judgment now under appeal.

Is there a sufficient connection for article 6(1)?

26. Mr Saggerson submitted that the claim against First Choice was not (in the language of paragraph 50 of Réunion Européenne) a claim based on contract, because it is based on the delictual liability of Aparta. We cannot accept that. We assume that the phrase "based on" in paragraph 50 of Réunion Européenne was used as an abbreviation for "a matter relating to" contract or tort, the phrase used in articles 5(1) and 5(3). In terms of the classification system of the Brussels Convention, the claim against First Choice is a matter relating to contract and the claim against Aparta is a matter relating to tort, delict or quasi-delict.

27. Mr Saggerson next submitted that paragraph 50 of the Court's judgment in Réunion Européenne is not necessary for the decision, and should not be followed. Mr Evans-Tovey, by contrast, submitted that the paragraph is clear and considered, and should be followed, as the judge below did, by holding that the two claims are not connected sufficiently for article 6(1).

28. It seems to us that, although paragraph 50 of Réunion Européenne is undoubtedly clear, the full implications of the position there set out may possibly not have been considered by the Court. It leads to what, from a national point of view, seem be some rather arbitrary distinctions, if it is to be understood as laying down a strict rule according to the legal basis of the respective claims.

29. In terms of facts and of law, there appears to be a substantial connection between the claims by Mr Watson against First Choice and against Aparta. The facts to be investigated are the same, apart from the addition of the contract between Mr Watson and First Choice. The liability of First Choice, as alleged, is based on the fault of Aparta. Moreover, the contractual liability of a tour operator in these circumstances is bound to extend to cover the consequences of events which would give rise to tortious or delictual liability on the part of another, because of the requirements of the Directive on Package Travel, Package Holidays and Package Tours, 90/314/EEC, which was implemented in English law by the Package Travel, Package Holidays and Package Tours Regulations 1992, S.I. 1992/3288. These regulations include the following, by which effect is given to paragraph 1 of Article 5 of the Directive:

"15(1) The other party to the contract is liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by that other party or by other suppliers of services but this shall not affect any remedy or right of action which that other party may have against those other suppliers of services."

30. Terms at least as protective of the consumer, in this respect, are in any event required as a term of the ABTA Code of Conduct for Tour Operators.

31. Thus, it is inherently likely that there will be claims arising from package holidays brought against tour operators in contract as a result of the negligent supply of the holiday services for which a foreign supplier is responsible. That supplier's fault is likely to give rise to a direct claim in tort or delict by the consumer, in addition to the contractual claim by the consumer against the tour operator and, moreover, a possible contractual claim by way of indemnity by the tour operator against the local supplier, to cover the liability of the tour operator to the consumer. The factual basis of all those claims will be the same. If they cannot be brought in the same jurisdiction there is clearly a risk of irreconcilable, or at the very least of contradictory, results in different cases.

32. In the present case, Mr Watson clearly can sue First Choice in England, as he has done. Presumably, First Choice could, if it wanted to, proceed against Aparta for an indemnity in third party proceedings in England under article 6(2). The question is whether Mr Watson can also join Aparta in the main proceedings. He could sue Aparta in Spain. Could he proceed against First Choice in Spain? If Mr Evans-Tovey is right he could not do so in reliance on article 6(1). Possibly he could do so by justifying the claim against First Choice under article 5(1), on the basis that Spain was the place of performance of the obligation in question. However, it is necessary to identify the particular obligation and its place of performance, and there could be scope for argument as to whether the obligation, being to pay compensation for defective service by suppliers, might require performance in the UK, rather than in Spain. It may not be altogether clear, therefore, whether both parties could be sued in Spain, in reliance on article 5(1) rather than 6(1) as against First Choice.

33. Different factual situations might be envisaged in which, if what was said in paragraph 50 of Réunion Européenne is applied as an inflexible rule, anomalous distinctions would have to be drawn as regards jurisdiction. Suppose that an individual, A, based in England, purchases an item from a shop in England run by an English domiciled company, E, but which was made in Spain by a Spanish manufacturer, S. Suppose then that A travels to France taking this item with him, where, being defective, it causes him injury. A could sue E in England and S in Spain. His claim against E would be a matter relating to contract, but against S his claim would be in tort or delict. According to paragraph 50 of Réunion Européenne, therefore, he could not join the claim against S to his English proceedings against E on the basis of article 6(1), nor his claim against E to his Spanish proceedings against S. He could sue S in France, as the place where the harmful event occurred, in the sense of the damage being suffered, but he could not sue E in France on any basis. It seems unlikely that he could assert plausibly that he could sue S in England as the place where the wrongful act occurred - that is more likely to have been in Spain. Accordingly, on the basis of paragraph 50 of Réunion Européenne, there seems to be no single jurisdiction in which A could sue both E and S, despite the clear connection between the two claims.

34. If, to vary the example, the event by which the item in question injured A also resulted in an injury to a member of his family, B, as well, the anomaly becomes greater, because B has no claim in contract, and is therefore not affected by what is said in paragraph 50 of Réunion Européenne. B can sue E in England, and join S under article 6(1), or can sue S in Spain and join E to that claim on the same basis.

35. Thus the two plaintiffs would each have claims against two defendants based on exactly the same facts. If the claims were brought in separate proceedings they would clearly give rise to risks of irreconcilable results. On the part of one plaintiff, both claims could be brought in either of two jurisdictions against both defendants. On the part of the other plaintiff, they would have to be brought against the two defendants separately in proceedings in different Contracting States, with potentially inconsistent results. The only relevant difference between the two is that the second plaintiff's remedy against one defendant lies in contract. This does not seem to be an adequate basis for the different position of the two plaintiffs.

36. One point on which Mr Evans-Tovey placed some emphasis is the risk of inconsistent findings if Mr Watson is allowed to proceed against Aparta here, that is to say of inconsistency between the result of the Spanish proceedings by Mr Barnshaw and the English proceedings by Mr Watson. That risk does arise where there are several plaintiffs with claims resulting from one set of events, and where they have a choice of jurisdictions in which to proceed. Aparta would not be entirely immune from this risk even if article 6(1) does not permit it to be sued by Mr Watson in England, because it might be faced with a third party claim by First Choice in the present proceedings, justified under article 6(2), whereby First Choice could seek recovery of any sums which it has to pay to Mr Watson if its liability to him is established.

37. But for what the Court said at paragraph 50 of the judgment in Réunion Européenne, we would hold that the fact that one claim is based on contract and the other on tort is, at most, only one factor to be considered in deciding whether the connection shown between different claims by one plaintiff against two or more defendants is sufficient, on the basis of whether it is expedient to allow the claims to be joined in order to avoid irreconcilable judgments.

38. We have to say also that we do not understand why the rigid distinction under article 6(1) follows from the finding of the court in Kalfelis under article 5(3). Of course, jurisdiction against one defendant under article 6(1) cannot be based on having established jurisdiction against another defendant under article 5(1) or (3), rather than under article 2. Equally, jurisdiction under article 5(1) does not justify jurisdiction against the same defendant for a claim under article 5(3), which has to be justified on its own terms. But it is not clear to us why the decision as to whether a sufficient connection is shown to justify proceeding under article 6(1) should depend on the characterisation of the respective claims, by itself, or on any analogy with the quite different rules for special jurisdiction under article 5. It seems to be a different type of test from that based on the need to avoid irreconcilable judgments which is the basis of the decision in Kalfelis on this point.

39. Despite our doubts about the underlying basis for the statement in paragraph 50 of Réunion Européenne, this court cannot ignore it. On the other hand, it seems to us that, in the light of those doubts, it would not be right simply to dismiss the appeal, on the basis that that paragraph does represent the law. It would, or might, be otherwise if the paragraph had found its way into the Court's ruling on the fourth question, or if it had been necessary as part of the reasoning leading to that ruling. However, the Court could have dealt with that question, as in its ruling it did in effect, by saying that, whatever the connection between two claims, one against a defendant domiciled in one Contracting State and the other against a defendant not domiciled in any Contracting State, it could not justify bringing proceedings in another Contracting State against the first of these defendants.

40. Mr Evans-Tovey argued that the fourth question referred to the Court in Réunion Européenne involved two elements, the second being the nature of the connection required under article 6(1), and that the Court therefore had to address that aspect of the question, and could not content itself by ruling on the basis that, without a defendant domiciled in a Contracting State and sued in that State, article 6(1) cannot apply at all. He therefore submitted that paragraph 50 was necessary for the Court's decision, and should be regarded as being as fully considered as any other aspect of the decision. Since this point does not feature in the ruling of the Court, it does not seem to us that the Court approached the question in this way. If the case were not to be referred to the European Court of Justice, there might be some doubt as to whether this passage from the judgment formed part of the "principles laid down" by the Court, in accordance with which, as well as with any relevant decision of the Court, this court is required to determine any question as to the meaning or effect of article 6(1): see section 3(1) of the Civil Jurisdiction and Judgments Act 1982.

A reference is necessary

41. In the light of those considerations, we reject both Mr Evans-Tovey's submission that the appeal should be dismissed, and Mr Saggerson's submission that it should be allowed. In our judgment this court needs guidance from the European Court of Justice, before determining the appeal, as to whether the statement in paragraph 50 of the judgment in Réunion Européenne is a rule applying to article 6(1) or whether the fact that one claim relates to contract and the other to tort, delict or quasi-delict is no more than one of the factors to be taken into account by the national court in deciding whether a sufficient connection exists between the respective claims to justify adding as a party to proceedings brought in one Contracting State against a party domiciled in that State, another party domiciled in a different Contracting State.

42. For those reasons, we shall order that the matter be referred to the European Court of Justice for preliminary rulings. We set out below the four questions to be referred. The third and fourth questions deal, in a general and a more specific way respectively, with the issue of the impact of the statement at paragraph 50 of the Court's judgment in Réunion Européenne on these proceedings. The need for rulings on this issue is explained earlier in this judgment.

43. The first question arises from the considerations mentioned in paragraph 36 of this judgment. The application of article 6(1) to proceedings by Mr Watson against both First Choice and Aparta can avoid the risk of irreconcilable judgments as between Mr Watson, on the one hand, and each of the two Defendants on the other, but it cannot avoid the risk of irreconcilable judgments against Aparta in claims by, on the one hand, Mr Watson and, on the other, Mr Barnshaw. It seems to us that it should be sufficient, in accordance with Kalfelis, to justify the application of article 6(1) that the court can thereby avoid the risk as between claims by one Claimant against two different Defendants. To permit the use of article 6(1) only where this can eliminate all risks of irreconcilable judgments as between different Claimants as well as different Defendants would limit the scope of the article too narrowly. However, since the European Court of Justice is to be asked to provide clarification about the connection which is necessary according to Kalfelis for article 6(1) to apply, it would be helpful for this question, which arises from the facts of this case and could therefore affect the result of the appeal, to be clarified at the same time.

44. The same is true of question (2), as to whether judgments would be irreconcilable for this purpose if they would be based on inconsistent findings of fact, or only if they would be based on inconsistent conclusions of law. In this court that point is concluded by Gascoine v. Pyrah, as noted at paragraph 19 above. The reasoning in that judgment seems to us persuasive. However since the point has been argued, and relates to the characteristics of the connection needed for article 6(1) to apply, and could be relevant on the facts of this case, it seems appropriate to ask the European Court of Justice for its ruling on this point as well.

45. The questions to be referred are as follows:

(1) Is there a connection between claims which is sufficient to justify the application of Article 6(1) of the Convention only where the risk of irreconcilable judgments can be avoided altogether, or may it exist where it is possible by means of Article 6(1) to avoid that risk as regards judgments affecting the parties to the proceedings to which Article 6(1) would apply although some risk of irreconcilable judgments would remain as between those proceedings, on the one hand, and a claim or claims involving one or some of those parties and one or more other parties, on the other hand?

(2) May a connection between claims which is sufficient to justify the application of Article 6(1) exist where the risk of irreconcilable judgments arises from possible inconsistent findings of fact, or can it only be based on possible incompatible holdings of law?

(3) If proceedings have been brought in the courts of a Contracting State against a Defendant domiciled in that State for a claim in a matter relating to contract, does Article 6(1) permit the Claimant to join as an additional Defendant a person domiciled in another Contracting State against whom his claim amounts to a matter relating to tort, delict or quasi-delict and not a matter relating to contract, where (unless such a conclusion is precluded by the different legal nature of the two claims) the national court is satisfied that the connection between the claims against the two Defendants is of such a kind that it is expedient to determine the claims together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings?

(4) May the Claimant join the Second Defendant in reliance on Article 6(1) in the circumstances described in question (3) above, where

(a) the first claim is under a contract for a package holiday under which the First Defendant, the organiser or provider of the holiday, accepts responsibility for bodily injury to the Claimant caused by negligent acts or omissions of its agents, suppliers and sub-contractors and their servants and agents whilst in the course of their employment, and

(b) the second claim is a claim in the tort of negligence against the Second Defendant, who is one of the First Defendant's agents suppliers or sub-contractors, and the claim is based upon the negligence of one or more of the Second Defendant's employees or agents in the course of their employment?