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Cite as: [2002] EWCA Civ 75, [2002] 1 WLR 2971

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Henderson v Jaquen & Anor [2002] EWCA Civ 75 (1st February, 2002)

		Neutral Citation Number: [2002] EWCA Civ 75
		Case No: A2/2001/0684/QBENF

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN’S BENCH DIVISION
Senior Master Turner

Royal Courts of Justice
Strand,
London, WC2A 2LL

1 February 2002

B e f o r e :

LORD JUSTICE PETER GIBSON
LORD JUSTICE MANTELL
and
MR. JUSTICE WALL
____________________

HENDERSON
Claimant/ Respondents

- and -

JAOUEN AND ANOTHER
Defendant/ Appellant

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Mr. Adrian Brunner Q.C. and Mr. Patrick Green (instructed by Messrs Pierre Thomas and Partners of Hammersmith for the Appellant)
Mr. Michael Brooke Q.C. and Mr. Hugh Mercer (instructed by Messrs Teacher Stern Selby of London for the Respondents)
____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Mr. Justice Wall (giving the judgment of the court):

The issue

This appeal arises from the refusal by the Senior Master of the Queen’s Bench Division, in a judgment given on 9 March 2001, to strike out, for want of jurisdiction, an action for damages for personal injuries brought by John William Henderson (the claimant below and the respondent to the appeal in this court) against Michel Eugene Jaouen (M. Jaouen) and Mutuelle Assurance des Instituteurs de France (MAIF) (respectively the first and second defendants in the court below and the appellants in this court).

The case, which arises out of a traffic accident involving Mr. Henderson and M Jaouen in France in 1978, raises a short point under Article 5(3) of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters signed at Brussels on 27 September 1968 (the Convention) as incorporated into English law by the Civil Jurisdiction and Judgments Act 1982.

The relevant Articles of the Convention

For the purposes of this case, only two Articles of the Convention are directly relevant. Article 2 states the general rule: -

Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State.

Article 5 provides for exceptions to the general rule. The relevant Article is 5(3):

A person domiciled in a Contracting State may, in another Contracting State, be sued in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred.

The question we have to resolve is; what is meant in this case by the phrase “the place where the harmful event occurred”?

The facts

The facts are straightforward. On 8 July 1978, Mr. Henderson had the misfortune to be involved in a road traffic accident in the region of Cherbourg in France. He was seriously injured. M. Jaouen was the other driver. On 20 February 1979 the French criminal court, le Tribunal Correctionel de Cherbourg, found that M. Jaouen, who is a French national resident in France, was wholly responsible for the accident. In addition to imposing criminal penalties (including a two month suspended sentence of imprisonment) the court ordered M. Jaouen to make payments in respect of special damages to Mr. Henderson, who had been joined in the proceedings as partie civile.

On 27 April 1981, Mr. Henderson issued proceedings in a civil court, the Tribunal de Grande Instance de Cherbourg (the Tribunal) against both M. Jaouen and MAIF, which is a French insurance company and which insured M. Jaouen. Dr. Jacques Fresquet was appointed by the Tribunal as the court expert and he examined Mr. Henderson. On 14 March 1983 Mr. Henderson was awarded damages by the Tribunal. For present purposes, it is unnecessary for us consider the detail of either Mr. Henderson’s injuries, or the sum of damages awarded to him in 1983. Two points, however, need to be noted. The first is that under French law, damages for personal injuries are based on the court’s assessment of the victim’s disability at the date of the award. Thus it is common ground between the experts in French law in this case that the award made to Mr. Henderson by the Tribunal on 14 March 1983 was based on the degree of disability which Mr. Henderson had suffered as at that date, and was a final award in relation to that degree of disability.

However, the second point to be noted is that the judgment of the Tribunal expressly gave Mr. Henderson the right to return to the Tribunal to seek a further award in the event of a subsequent deterioration in his condition. In French Law this is a fresh cause of action designated en cas d’aggravation.

On 12 December 1995, Mr. Henderson, acting through French lawyers, issued fresh proceedings in the Tribunal, claiming aggravation and seeking, inter alia, an interim payment. On 26 February 1996, the Tribunal directed a further medical examination by Dr. Fresquet of Mr. Henderson (for which he was ordered to pay the fee of 4,200FF) and made a provisional award of damages of 4,000FF. This appears, somewhat surprisingly to English eyes, to have been less than the fee for the medical examination.

The medical report obtained pursuant to the direction of the Tribunal is dated 22 May 1996. Mr. Henderson does not, however, appear to have pursued his proceedings before the Tribunal. Rather, following unsuccessful negotiations between English solicitors instructed on his behalf and English solicitors instructed by MAIF, the present claim was issued in the Queen’s Bench Division of the High Court on 30 May 2000.

In paragraphs 11 and 12 of the Particulars of Claim, the case is pleaded as follows: -

11. As a matter of French law

(a) it is open to a claimant to return to [the Tribunal] following a judgment for damages to seek a further award if there has been a subsequent deterioration in his condition (aggravation);

(b) when a claimant makes a claim for (aggravation), this is by way of a new action based on the new fact, viz the deterioration in the claimant’s medical condition since the previous award;

(c) in accordance with Article L124-3 of the French Insurance Code, the claimant is entitled to sue the second defendant [the first defendant’s insurers] directly.

12. At all material times and, in particular, since 14 March 1983 the Claimant has been resident and domiciled in England. Since 1983, the Claimant’s condition has deteriorated to a significant extent. The symptoms of such deterioration are directly related to the accident in question and would not have arisen but for that accident.

Jurisdiction is then claimed under Article 5(3) of the Convention on the basis that the “harmful event” occurred in England.

None of the propositions pleaded in paragraphs 11 and 12 of the Particulars of Claim is, as we understand it, controversial. Furthermore, as this is an argument about jurisdiction, the case, of course, proceeds on the basis that the claimant has indeed suffered a deterioration in his medical condition, and thus has a valid action in French law en cas d’aggravation. The only question is whether or not he is entitled to bring that action in England.

Three points were argued before the Senior Master one of which is not now pursued. Firstly, the claimant argued that he was entitled to bring proceedings in England against MAIF pursuant to Article 5(5) of the Convention^[1]. The Senior Master rejected that argument; there is no cross appeal against his decision and we need say no more about it.

Secondly, M. Jaouen and MAIF argued that the proceedings before the Tribunal were lis pendens for the purposes of Articles 21 and 22 of the Convention. The Senior Master rejected that argument and his decision on the point is the subject of Amended Additional Grounds of Appeal. It was, however, common ground at the hearing before us that Articles 21 and 22 only became relevant if the appellants failed on the third point, namely the argument under Article 5(3). It is, accordingly, to that which we now turn.

The argument under Article 5(3)

We have already set out the terms of Article 5(3) and identified the critical phrase: “the place where the harmful event occurred”.

It is common ground that the term “harmful event” is an autonomous Convention concept, not to be determined by reference to national law. As we think is already apparent, Mr. Henderson’s case, in summary, is as follows. Self-evidently, the accident occurred in France, and the original action, which concluded in 1983, was properly brought in France. However, aggravation is a fresh cause of action under French law. Mr. Henderson has been domiciled and has lived in England throughout the period from 1983 to date. Therefore, the deterioration in his condition which founds the basis for his cause of action en cas d’aggravation occurred exclusively in England. Accordingly, the “harmful event” identified by Article 5(3) has occurred exclusively in England, and the English courts have jurisdiction to entertain his claim.

This is the reasoning which persuaded the Senior Master that the English courts had jurisdiction. He said:

“The defendant’s argument is that the harmful event took place solely in France in that the accident and the initial injuries occurred at the same time and that the deterioration is no more than a consequence of those initial injuries. In a sense that is true, but it ignores that the French law prescribes two separate causes of action to these two sets of injuries. The first certainly occurred in France and was properly dealt with there by the award of the French Court. At that stage there were no additional injuries for which the claimant could claim damages. It was only in later years that the deterioration occurred and this is the further harmful event on which the claimant relies.”

The Senior Master then considered a decision of the European Court of Justice Bier v Mines de Potasse d’Alsace [1976] ECR 1375 (hereinafter referred to as Bier) and continued: -

“Because I am bound to apply French substantive law and because of the agreement of the French lawyers that there are two causes of action and that the claimant must commence fresh proceedings in order to recover damages for the deterioration of his health since the original award in Cherbourg, I find that this case is on all fours [with] Bier, and the claimant has the option to commence proceedings in either France or in England, because the former was the place which gave rise to and was the origin or the damage and the latter was the place where the damage occurred.”

The Senior Master did not consider that any of the later cases in the European Court of Justice took the matter further. He regarded his conclusion as according with the official report on the Convention (the Jenard Report) which, he said, “supported the option of the choice of two possible jurisdictions in cross frontier torts and noted in particular that most such claims would result out of traffic accidents”.

We are unable to accept the Senior Master’s conclusions for a number of reasons. First and foremost, we are satisfied that for the purposes of Article 5(3) of the Convention the “harmful event” in this case was the original “tort, delict or quasi-delict”, which occurred in France on 8 July 1978. The aggravation, in our judgment, is not a fresh wrong done to the claimant: it is a worsening of his condition deriving directly from the original wrong. The fact that in French law it constitutes a fresh cause of action is, in our judgment, at best procedural. We see nothing in this process which requires the court to equate the aggravation with a new and different “harmful event” for the purposes of Article 5(3).

Secondly, we do not agree with the Senior Master that the instant case is “on all fours” with Bier, nor do we think that the subsequent European jurisprudence is neutral on the point: in our view it supports a restrictive interpretation of Bier which is unhelpful to Mr. Henderson.

Thirdly, we think there is considerable force in the point made by the appellants that the Senior Master’s statement that he was “bound to apply French substantive law” led him to overlook the fact that “the place where the harmful event occurred” is an autonomous Convention concept, which is not to be identified by reference to national law.

Fourthly, the Senior Master was, in our judgment, mistaken in thinking that the Jenard Report, and in particular its reference to road traffic accidents, supported his conclusion.

The authorities

Mr. Brooke QC, in a well-structured argument, sought to persuade us that the Senior Master’s construction of Article 5(3) was supported by Bier and by several other decisions of the European Court of Justice; and that it accorded with the overarching objectives of the Convention, namely the sound administration of justice and the efficacious conduct of proceedings in member states. We turn, accordingly, to examine the authorities to see if there is anything in them which either requires or enables us to construe Article 5(3) in the manner for which Mr. Brooke argues.

The principal authority on which Mr. Brooke relied was Bier. In that case, a French industrial company unlawfully polluted the Rhine by discharging chlorides into it. When the river water was extracted downstream in Holland and used to irrigate a Dutch market garden, it caused serious damage to the garden’s seed and plant beds. The Dutch market gardener sought to sue the French company in Holland. The Dutch court of first instance held, under Article 5(3) of the Convention that it had no jurisdiction, as the event which had caused the damage had been the act of polluting the river, which had occurred in France. On appeal, the Dutch Gerechtshof stayed the proceedings until the European Court of Justice had given a preliminary ruling on the meaning of the phrase “the place where the harmful event occurred” in Article 5(3).

The European Court’s decision is neatly encapsulated in the headnote to the case: -

Where the place of the happening of the event which may give rise to liability in tort, delict or quasi-delict and the place where that event results in damage are not identical, the expression ‘place where the harmful event occurred’ in Article 5(3) of the [Convention] must be understood as being intended to cover both the place where the damage occurred and the place of the event giving rise to it. The result is that the defendant may be sued, at the option of the plaintiff, either in the courts for the place where the damage occurred or in the courts for the place of the event which gives rise to and is at the origin of that damage.

Paragraph 11 of the judgment states that the freedom of choice given to claimants by Article 5 and as exceptions to Article 2 was introduced:

……… having regard to the existence, in certain clearly defined situations, of a particularly close connecting factor between a dispute and the court which may be called upon to hear it, with a view to the efficacious conduct of the proceedings.

Paragraph 13 of the judgment gives a helpful insight into the type of situation, in the context of the Convention, in which the phrase “where the harmful event occurred” is unclear and in which, accordingly jurisdiction in either one of two places may be established. One such situation is: -

…… when the place of the event which is at the origin of the damage is situated in a State other than the one in which the place where the damage occurred is situated, as is the case inter alia with atmospheric or water pollution beyond the frontiers of a State.

In our judgment, what may be described as the Bier exception to Article 2 is plainly apt for situations in which the wrongful act committed in one State has an extra-territorial effect directly giving rise to a liability for the same act in another State. Bier is, of course, the classic example. The tortious act of polluting the river, which occurred in France, did not cause any damage until the water reached Holland. In such circumstances, “the place where the harmful event occurred” fits as easily with Holland as it does with France.

Another clear example is provided by Shevill v Presse Alliance [1995] ECR 1-415, in which the European Court decided that the victim of a libel published in various Contracting States was not restricted to an action against the publisher in the State in which the publisher was established, but could sue in each of the States in which the libellous publication had been distributed, albeit solely in relation to the damage suffered to his reputation in each of the States in question.

However, in our judgment, the Bier exception does not apply where the harmful event is a traffic accident which self-evidently is an event occurring only in one jurisdiction at a particular time. In our view, the harmful event in this case was M. Jaouen’s negligence in causing the accident and injury to Mr. Henderson. That act had no extra-territorial effect. It gave Mr. Henderson no cause of action in England. He could not choose where to sue in 1981: his only cause of action was in France.

We do not think that the deterioration in Mr. Henderson’s condition can properly be described as a fresh “harmful event”. It is a most unfortunate consequence which flows directly from the original tort, delict or quasi-delict and is recognised as such by the French court, which provides a fresh cause of action to cater for it.

We find nothing in the jurisprudence of the European Court which supports the broad interpretation of Article 5(3) for which Mr. Brooke argues. To the contrary, the limited scope given by the European Court of Justice to the Bier exception to Article 2 is demonstrated in a number of the authorities, principal amongst which is Dumez France and Tracoba v Hessische Landesbank (Helaba) and Others [1990] ECR 1-49 (Dumez).

In Dumez, French companies brought an action in France against a German bank. They sought compensation for damage which they said they had suffered in France consequent upon the insolvency of one of their subsidiaries in Germany. This followed the German bank cancelling loans made to the prime contractor of the development project in Germany in which the subsidiary companies were involved. The claimants argued that in Bier the Court had not drawn any distinction in its interpretation of Article 5(3) between direct and indirect victims of damage, and that as a consequence, where an indirect victim claims to have suffered personal damage, the court of competent jurisdiction should be the place where the victim suffered that damage.

The European Court rejected that approach. Having reminded itself that Article 5(3) was an exception to the general rule contained in Article 2, the court continued:

17 …… those cases of special jurisdiction, the choice of which is a matter for the plaintiff, are based on the existence of a particularly close connecting factor between the dispute and courts other than those of the State of the defendant’s domicile, which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings.

18. In order to meet that objective, which is of fundamental importance in a convention which has essentially to promote the recognition and enforcement of judgments in States other than those in which they were delivered, it is necessary to avoid the multiplication of courts of competent jurisdiction which would heighten the risk of irreconcilable decisions, this being the reason for which recognition or an order for enforcement is withheld by virtue of Article 27(3) of the Convention.

19. Furthermore, that objective militates against any interpretation of the Convention which, otherwise than in the cases expressly provided for, might lead to recognition of the jurisdiction of the courts of the plaintiff’s domicile and would enable a plaintiff to determine the competent court by his choice of domicile.

20, It follows from the foregoing considerations that, although by virtue of [Bier], the expression 'place where the harmful event occurred' contained in Article 5(3) of the Convention may refer to the place where the damage occurred, the latter concept can be understood only as indicating the place where the event giving rise to the damage, and entailing tortious, delictual or quasi-delictual liability, directly produced its harmful effects upon the person who is the immediate victim of that event.

21. Moreover, whilst the place where the initial damage manifested itself is usually so closely related to the other components of the liability, in most cases the domicile of the indirect victim is not so related.

In Marinari v Lloyds Bank plc [1995] ECR 1-2719, Mr. Marinari lodged promissory notes with a face value in excess of $750million with a branch of Lloyds Bank in Manchester. The Bank refused to return them to Mr. Marinari and informed the police. This led to Mr. Marinari’s arrest and the sequestration of the promissory notes. Mr. Marinari brought an action against the bank in Italy seeking compensation for the damage caused to him in Italy by the bank.

Basing itself on its decisions in Bier, Dumez and Shevill, the European Court of Justice made clear that the rule which gave a claimant a choice of jurisdictions in which to sue was based on the existence of a particularly close connecting factor between the dispute and courts other than those of the State of the defendant’s domicile which justifies the attribution of jurisdiction to those courts for reasons relating to the sound administration of justice and the efficacious conduct of proceedings. The court continued:-

13 The choice thus available to the plaintiff cannot, however, be extended beyond the particular circumstances which justify it. Such extension would negate the general principle laid down in the first paragraph of Article 2 of the Convention that the courts of the Contracting State where the defendant is domiciled are to have jurisdiction. It would lead, in cases other than those expressly provided for, to recognition of the jurisdiction of the courts of the plaintiff’s domicile, a solution which the Convention does not favour since, in the second paragraph of Article 3, it excludes application of national provisions which make such jurisdiction available for proceedings against defendants domiciled in the territory of a Contracting State.

14 Whilst it has thus been recognized that the term ‘place where the harmful event occurred’ within the meaning of Article 5(3) of the Convention may cover both the place where the damage occurred and the place of the event giving rise to it, that term cannot be construed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere.

15 Consequently, that term cannot be construed as including the place where, as in the present case, the victim claims to have suffered financial damage following upon initial damage arising and suffered by him in another Contracting State.

Although Marinari is dealing with economic loss, it seems to us that the reasoning in paragraphs 14 and 15 of the judgment is apt to cover the instant case, where Mr. Henderson has suffered a deterioration in his condition whilst living in England following upon initial damage caused in France.

Although we were referred to other cases, including Réunion Européene v Spliethoff’s Bevrachtingskantoor [1998] ECR 1-6511 and Domicrest v Swiss Bank Corporation [1999] QB 548, we do not feel these cases either advance Mr. Brooke’s argument or shed any further light on the question. There is, accordingly, in our judgment, nothing in the European jurisprudence which supports Mr. Brooke’s attempt to render Article 5(3) applicable to the facts of this case, and the passages which we have cited from Marinari in particular are against it. We see nothing in the authorities, therefore, which causes us to change the view which we expressed earlier in this judgment.

As to Mr. Brooke’s reliance on the official report on the Convention (the Jenard Report), we do not think that this assists him. The relevant passage, headed Forum delicti commissi, deals with both Articles 5(3) and 5(4)^[2], and is largely taken up in setting out the countries and bi-lateral treaties in which the jurisdiction was recognised before the Convention came into force. The fact that the jurisdiction was so widely recognised, M. Jenard states, was “a ground for including it in the Convention, especially in view of the high number of road accidents”.

The only paragraph dealing specifically with Article 5(3) reads: -

Article 5(3) uses the expression “the place where the harmful event occurred.” The Committee did not think it should specify whether that place is the place where the event which resulted in damage or injury occurred, or whether it is the place where the damage or injury was sustained. The Committee preferred to keep to a formula which has already been adopted by a number of legal systems (Germany, France).

This is plainly a formulation into which Bier fits neatly, but, in our judgment it is no more than that. It simply provides a template for the court to use when examining the facts of a given case to see if they fit within Article 5(3). It cannot, we think, add anything to, or detract from the jurisprudence of the European Court of Justice to which we have referred.

Accordingly, if and to the extent that the Senior Master prayed the Jenard Report in aid in reaching his conclusion, he was wrong to do so.

Mr. Brooke frankly acknowledged, in argument, that one of the reasons Mr. Henderson had been advised to bring proceedings in England was that the award he was likely to receive in this jurisdiction would be greater than the award he would receive in France. At the same time he acknowledged that were there to be still further aggravation and were the French law to change to produce more generous awards, Mr. Henderson might well be advised to return to the Tribunal.

Whilst we cannot but have sympathy for Mr. Henderson, whose life has been blighted by his injuries sustained in the accident, we think there is some force in the submission made by the Appellants that the definition of ‘harmful event’ for which Mr. Brooke argues could result in forum shopping at will simply by a claimant moving to live in a different jurisdiction. Were a choice of jurisdictions genuinely open to Mr. Henderson, he would plainly be well advised to choose that which was likely to give him the greater award. The fact that he would get more in England than in France cannot otherwise, however, be a good reason for conferring jurisdiction on England.

For all these reasons, the Senior Master was in our judgment wrong to find that the English courts had jurisdiction to entertain Mr. Henderson’s claim. His order must, accordingly, be set aside and the proceedings dismissed.

It also follows that we do not need to address the additional grounds of appeal in relation to lis pendens and Articles 21 and 22 of the Convention.

For completeness we should add that we were invited by Mr. Brooke, if we felt it necessary, to adjourn the proceedings for a reference to be made to the European Court of Justice on the applicability of Article 5(3) of the Convention to the facts of this case. Mr. Brooke helpfully produced draft questions to be put to the court. In the event, we think that the European jurisprudence on the issue is clear, and that the view which we have formed is consistent with it. We do not, accordingly, think it necessary to make such a reference.

Order: Appeal allowed with costs. Section 11 order. Application to appeal to House of Lords refused.

(Order does not form part of the approved judgment)

Note 1 A person domiciled in a Contracting State may, in another Contracting State, be sued as regards a dispute arising out of the operations of a branch, agency, or other establishment in the courts for the place in which the branch, agency or other establishment is situated. [Back]

Note 2 A person domiciled in a Contracting State may, in another Contracting State, be sued as regards a civil claim for damages or restitution which is based on an act giving rise to criminal proceedings, in the court seised of those proceedings, to the extent that that court has jurisdiction under its own law to entertain civil proceedings. [Back]