England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARLISLE COMBINED COURT
HIS HONOUR JUDGE PETER HUGHES QC
3YU23532 & A27YJ437

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/12/2015

Master of the Rolls:

1. In these proceedings, the claimants claim damages for personal injuries they alleged they sustained in accidents in Scotland as a result of the negligence and/or breach of statutory duty of the defendants. The claims were issued in the Northampton County Court. The registered offices of the defendants are situated in England and Wales. Both claimants are domiciled in Scotland. Liability has been admitted in the case of Cook, but denied in the case of McNeil. In the case of Cook, the defendant filed an acknowledgement of service indicating an intention to dispute jurisdiction. In the case of McNeil, the defendant filed an acknowledgement of service indicating an intention to defend the proceedings. In their defences, both defendants pleaded to the substantive claims and asserted that the Scottish courts were the correct courts to hear the claims.
2. Since the claims related to accidents in Scotland, the claims were allocated to Carlisle County Court, which is the court geographically closest to Scotland. DJ Park said: "we seem to be the county court for Scotland".
3. The files were considered by DJ Park who made orders of his own initiative on 4 March 2014 (in the case of Cook) and on 16 April 2014 (in the case of McNeil) staying both sets of proceedings on the basis that Scotland was the most convenient forum for the claims. He ordered each claimant to file evidence showing cause why the claims should proceed in England. By orders made on 2 May 2014 (in the case of Cook) and on 23 May 2014 (in the case of McNeil), he struck out both claims on the principal ground that they should have been brought in Scotland.
4. At a hearing held on 30 July 2014, the claimants applied to have the orders set aside. DJ Park dismissed these applications. He held that Scotland was the appropriate forum.
5. The claimants' appeals were dismissed by His Honour Judge Peter Hughes QC on 11 February 2015. In summary, he held that (i) the failure of the defendants to raise a jurisdictional challenge pursuant to CPR Part 11 did not prevent the court, exercising its case management powers, from striking out the claims on the basis that Scotland was the appropriate forum to deal with the cases; and (ii) the principle of forum non conveniens was not precluded by sections 16, 47 and 49 of the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act") and the relevant case law.
6. It was common ground that, if the doctrine of forum non conveniens did apply, the appropriate forum would be Scotland.
7. The most important issue that arises on these appeals (and the reason why Tomlinson LJ gave permission for a second appeal) is whether the doctrine of forum non conveniens can apply in a purely domestic context where the competing jurisdictions are England and Scotland. Put simply, the question is: does the English court have the power in such a case to stay or strike out a claim on the ground that the natural and more appropriate forum is Scotland? It is perhaps surprising that there appears to be no authority directly on the point.
8. There are two distinct sets of rules governing the question of jurisdiction in civil and commercial cases in this context. The first set of rules derived from various European instruments, culminating in the Brussels I Regulation (EC) 44/2001 ("the Regulation"). Since 10 January 2015, the recast form of the Brussels Regulation, Regulation 1215/2012, has applied. The predecessor of the Regulation was the Brussels Convention of 27 September 1968. The Regulation contains rules which directly determine whether the courts of a particular member state of the EU have international jurisdiction in a particular case.
9. The rules for allocation of jurisdiction within the UK are set out in Schedule 4 to the 1982 Act.
10. Section 16 of the 1982 Act provides, so far as material:

" (1) The provisions set out in Schedule 4 (which contains a modified version of Chapter II of the Regulation) shall have effect for determining, for each part of the United Kingdom, whether the courts of law of that part, or any particular court of law in that part, have or has jurisdiction in proceedings where—

(a) the subject-matter of the proceedings is within the scope of the Regulation as determined by Article 1 of the Regulation (whether or not the Regulation has effect in relation to the proceedings); and

………

(3) In determining any question as to the meaning or effect of any provision contained in Schedule 4—

(a) regard shall be had to any relevant principles laid down by the European Court in connection with Title II of the 1968 Convention or Chapter II of the Regulation and to any relevant decision of that court as to the meaning or effect of any provision of that Title or that Chapter; and

………

(4) The provisions of this section and Schedule 4 shall have effect subject to the Regulation, Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011 the 1968 Convention and the Lugano Convention and to the provisions of section 17."

11. Section 49 provides:

"Nothing in this Act shall prevent any court in the United Kingdom from staying, sisting, striking out or dismissing any proceedings before it, on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 Convention or, as the case may be, the Lugano Convention."

12. Schedule 4 provides, so far as material:

" 1. Subject to the rules of this Schedule, persons domiciled in a part of the United Kingdom shall be sued in the courts of that part.

2. Persons domiciled in a part of the United Kingdom may be sued in the courts of another part of the United Kingdom only by virtue of rules 3 to 13 of this Schedule."

13. Article 1 of the Regulation provides:

"1. This Regulation shall apply in civil and commercial

matters whatever the nature of the court or tribunal. It shall

not extend, in particular, to revenue, customs or administrative

matters".

14. Article 2 provides:

"1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State."

15. Article 24 provides:

"Apart from jurisdiction derived from other provisions of this

Regulation, a court of a Member State before which a

defendant enters an appearance shall have jurisdiction. This

rule shall not apply where appearance was entered to contest

the jurisdiction, or where another court has exclusive

jurisdiction by virtue of Article 22."

16. Article 60 provides:

"1. For the purposes of this Regulation, a company or other

legal person or association of natural or legal persons is

domiciled at the place where it has its:

(a) statutory seat, or

(b) central administration, or

(c) principal place of business.

2. For the purposes of the United Kingdom and Ireland

'statutory seat' means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place."

The issues

17. Mr Mead on behalf of the claimants submits that (i) there was no power to strike out (or indeed to stay) the proceedings on the ground of forum non conveniens in view of the mandatory effect of (a) articles 2 and 60, alternatively (b) article 24 of the Regulation, alternatively (c) section 16 and schedule 4 of the 1982 Act; alternatively (ii) if there was such a power, it should have been exercised under section 49 of the 1982 Act and could not have been exercised by the court using its case management powers under CPR 3(3).

Does the Regulation apply in the circumstances of these cases?

18. Ms Wyles and Mr Sweeting QC submit that the Regulation applies to civil and commercial cases where there is an international element, but not to cases which are solely internal to a member state. Since the present cases are solely internal to the UK, the Regulation does not apply to them. They say that this is fatal to Mr Mead's arguments based on articles 2 and 16 and article 24.
19. Mr Mead emphasises the mandatory effect of article 2 "persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State" and article 24 "a court of a Member State before which a person enters an appearance shall have jurisdiction" (emphasis added in both instances). He also draws attention to the fact that recital (11) of the Regulation states that the rules of jurisdiction "must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile". The importance of the principle of legal certainty as to the allocation of jurisdiction and the incompatibility of the forum non conveniens doctrine with the Brussels Convention (and therefore the Regulation) was also emphasised in Owusu v Jackson (Case C-281/02) [2005] QB 801 at paras 37 to 46.
20. Mr Mead places particular reliance on decisions of the CJEU such as Color Drack GmbH v Lexx International Vertriebs GmbH (Case C-386/05) [2010] 1 WLR 1909 and Rehder v Air Baltic Corporation (Case C-204/08) [2009] ILPr 44. It is sufficient to refer to the former. The proceedings concerned a claim by a company based in Austria against a company based in Germany. The question referred to the court was whether article 5(3)(b) of the Regulation means that a seller of goods domiciled in one member state who had delivered the goods to a purchaser domiciled in another member state, at various places within that other member state, could be sued by the purchaser in the court of one of those places of performance. The CJEU held that the court having jurisdiction to hear all of the claims was that for the principal place of delivery. Mr Mead draws attention to the fact that the court said:

"20 In that context, the regulation seeks to strengthen the legal protection of persons established in the Community, by enabling the plaintiff to identify easily the court in which he may sue and the defendant reasonably to foresee before which court he may be sued: see the Reisch Montage case, paras 24 and 25.

21 To that end the rules of jurisdiction set out in Regulation No 44/2001 are founded on the principle that jurisdiction is generally based on the defendant's domicile, as provided for in article 2 thereof, complemented by the rules of special jurisdiction: see the Reisch Montage case, para 22."

21. In my view, cases such as Color Drack shed no light on the question whether the Regulation applies in a case which is solely internal to a member state. That is because it concerned a claim by a person domiciled in one member state against a person domiciled in a different member state. In other words, the requisite international element was present so as to engage the Regulation.
22. Owusu does not assist either. It is not in dispute that the provisions of article 2 are mandatory and promote the principle of certainty which lies at the heart of the Regulation. But none of this sheds any light on whether the Regulation applies to intra-member state claims. In so far as Owusu sheds light on the question which arises on these appeals, it supports the position of the defendants rather than that of the claimants. The claimant in that case was domiciled in the UK. He had hired from the first defendant (who was also domiciled in the UK) a holiday villa in Jamaica. He suffered injuries on diving from the beach onto a submerged sandbank and brought an action against the first defendant in England and other defendants (Jamaican companies) one of which owned and occupied the beach. The defendants sought a declaration that the court should not exercise its jurisdiction on the grounds that the Jamaican courts were a forum in which the case might be tried more suitably. The CJEU held that, since article 2 of the Brussels Convention was mandatory and contained no express exception relating to forum non conveniens, it was not open to a court of a member state to decline the jurisdiction conferred on it by article 2 on the grounds that a non-member state would be a more appropriate forum, even if the jurisdiction of no other member state was in issue or the proceedings had no connection with any other member state.
23. At para 25, the court said that it was clear from the Jenard report on the Brussels Convention (OJ 1979 C59, p1 at p8) that "for the jurisdiction rules of the Brussels Convention to apply at all the existence of an international element is required". At para 26, it said that the international nature of the legal relationship at issue need not necessarily derive from the involvement of a number of contracting states. Thus the involvement of a contracting state and a non-contracting state would also make the legal relationship at issue international in nature. It concluded at para 35:

"It follows from the foregoing that article 2 of the Brussels Convention applies to circumstances such as those in the main proceedings, involving relationships between the courts of a single contracting state and those of a non-contracting state rather than relationships between the courts of a number of contracting states."

24. Owusu was a Brussels Convention case. The same approach was applied by the CJEU to a Regulation case in Maletic v lastminute.com GmbH ) Case C-478/12) [2014] QB 424. The question there was whether, in the particular circumstances of that case, there was an international element capable of justifying the application of the Regulation (para 25). In so far as the Regulation replaced the Brussels Convention, the court said: "the interpretation provided by the courts in respect of the Convention is also valid for the Regulation whenever the provisions of those instruments may be regarded as equivalent" (para 27). The second contractual relationship could not be classified as "purely" domestic, since it was inseparably linked to the first contractual relationship which was made through the travel agency situated in another member state (para 29). In other words, if the second contractual relationship had not been made or linked with a person domiciled in another member state, it would have been purely domestic and the Regulation would not have applied.
25. The legal position has been well summarised in Civil Jurisdiction and Judgments by Professor Adrian Briggs (2015) 6^th ed at para 2.28 which is headed "International Scope". The whole section is relevant. But it is sufficient to refer to the last paragraph:

"The result is that if a matter is demonstrably wholly internal to the United Kingdom, so that the only jurisdictional question which may arise is as to the part of or a place within the United Kingdom which has jurisdiction, it is not one in which the Regulation is designed to have any role. The point may be illustrated this way. Suppose a defamatory statement is made by a person domiciled in the United Kingdom about another such person, and is published in newspapers in England and Scotland. If the question is whether the claimant may or must sue in England or Scotland, or whether the courts of England and Scotland may stay proceedings on grounds of forum non conveniens in favour of the other jurisdiction, the Regulation has no role in answering the question, for the matter before the court is wholly internal to a single Member State. But as soon as the claim is broadened to include complaint of publication by a person outside the United Kingdom, whether the defendant or another, it appears that the Regulation would then apply to all aspects of the jurisdiction of the court."

26. For all these reasons, I accept the submissions of Ms Wyles and Mr Sweeting that the Regulation does not apply to these proceedings which were issued in England against companies domiciled in the UK arising from accidents that took place in a different part of the UK, namely Scotland. These proceedings are "purely" domestic. I can now deal with the first two issues quite shortly.

Articles 2 and 60

27. Since the Regulation does not apply, articles 2 and 60 cannot apply. I accept that, if the Regulation did apply, articles 2 and 60 would preclude the operation of the doctrine of forum non conveniens. That is clear from Owusu and, as I understand it, is common ground. I should mention for completeness that Mr Mead contended that he could rely on article 60 because of its reference to the "place" of domicile. But even if the Regulation applied, this would not avail him. Article 60 is no more than a definitional provision which provides the means by which to identify the member state in which "a company or other legal person or association of natural or legal persons" is domiciled.

Article 24

28. Mr Mead submits that this provision has the mandatory effect of obliging the court of a member state before which a defendant enters an appearance to assume jurisdiction unless the appearance was entered to contest the jurisdiction or another court has exclusive jurisdiction by virtue of article 22. But if the Regulation does not apply, article 24 cannot apply.

The 1982 Act

29. Mr Mead points to the provisions of schedule 4 of the 1982 Act "which contains a modified version of Chapter II of the Regulation": see section 16(1) and the heading to schedule 4 "Chapter II of the regulation as modified: rules for allocation of jurisdiction within UK". He therefore submits that, where the Regulation has no application, a regime parallel to the Regulation is imported by schedule 4 into UK domestic law for the purposes of jurisdiction within the UK. He also relies on the fact that section 16(3) provides that, in determining any question as to the meaning or effect of any provision contained in schedule 4, "regard shall be had to any relevant principles laid down by the European Court in connection with….Chapter II of the Regulation". It follows that, if the doctrine of forum non conveniens would have no application in an international case, the effect of section 16 and schedule 4 is that the doctrine has no application in a purely domestic case. Mr Mead submits that section 49 presents no obstacle to his argument because to stay, strike out or dismiss proceedings on the ground of forum non conveniens would be "inconsistent with the 1968 Convention", and therefore inconsistent with the Regulation.
30. I cannot accept these submissions for the reasons advanced by Ms Wyles and Mr Sweeting. Schedule 4 rules are not a mirror of Chapter II of the Regulation. They reproduce the provisions of the Regulation with modifications. The provisions have been tailored to make them appropriate to UK domestic law. The domestic nature of the schedule 4 rules was emphasised by the ECJ in Kleinwort Benson v City of Glasgow DC (Case C-346/93) [1995] ECR I-615. In that case, the court said that the principal purpose of the 1982 Act was "to render the Convention applicable in the United Kingdom"; but "it also provides for the allocation of civil jurisdiction as between the separate jurisdictions within the United Kingdom (England and Wales, Scotland, Northern Ireland)". As Professor Briggs said at para 2.312 (loc cit), the rules set out in schedule 4 apply in relation to the international jurisdiction of the UK courts as well as where there is no international question of jurisdiction, but simply a question as between the national jurisdictions of England, Scotland and Northern Ireland.
31. In Kleinwort Benson, the court said that it did not have jurisdiction to give a preliminary ruling on the interpretation of articles 5(1) and (3) of the Brussels Convention where the issue was the true interpretation of the 1982 Act in an intra-UK jurisdiction case to which the Convention did not apply. The 1982 Act did not require the UK courts to decide disputes before them "by applying absolutely and unconditionally the interpretation of the Convention provided to them by the [ECJ]" (para 20). In a case where the Convention did not apply, the court of the member state in question was "free to decide whether the interpretation given by the ECJ was equally valid for the purposes of the application of the national law based on the Convention" (para 22).
32. The insuperable stumbling block for the argument advanced by Mr Mead is the express statutory preservation of the forum non conveniens doctrine in domestic cases by section 49 of the 1982 Act. He seeks to escape from section 49 by saying that it is subject to the requirement that section 49 permits the doctrine to be applied where to do so is not inconsistent with the Regulation. But the application of the doctrine cannot be inconsistent with the Regulation in a purely domestic case to which the Regulation does not apply. The qualifying words "where to do so is not inconsistent with the 1968 Convention or, as the case may be, the Lugano Convention or the 2005 Hague Convention" have no application in a purely domestic case.
33. It follows that section 49 provides a complete answer to the claimant's case in relation to the 1982 Act. If the position were otherwise and, as Mr Mead contends, the Owusu jurisprudence were imported into the 1982 Act by section 16 and schedule 4 for the purposes of both international and domestic jurisdiction, it is difficult to see what scope there would be for the application of the doctrine at all. But by making express provision in section 49 for the preservation of the power to stay, strike out and dismiss proceedings on the ground of forum non conveniens, Parliament plainly intended that this important power should remain in being. If it had intended to exclude the power from both international and domestic jurisdiction, Parliament would surely have so provided expressly. It would not have sought to achieve this by expressly preserving the power, but then, in effect, removing it by providing that it can only be exercised where to do so is not inconsistent with the relevant international instruments.

The CPR issue

34. CPR 11 makes provision for the procedure for a defendant to dispute the court's jurisdiction to try a claim. Rule 11(1) provides that a defendant who wishes to dispute the court's jurisdiction to try the claim or to argue that the court should not exercise any jurisdiction which it may have "may apply to the court for an order declaring that it has not such jurisdiction or should not exercise any jurisdiction which it may have". A defendant who wishes to make such an application must first file an acknowledgement of service (rule 11(2)) and an application under rule 11(1) must be made within 14 days after filing an acknowledgement of service and be supported by evidence (rule 11(4)). If the defendant (a) files an acknowledgement of service and (b) does not make an application within the 14 day period, "he is to be treated as having accepted that the court has jurisdiction to the try the claim" (rule 11(5)).
35. No application was made by either defendant under rule 11(1). Having considered the papers in both cases, DJ Park ordered of his own initiative that the claims be stayed on the grounds that Scotland was the most convenient forum. He gave the claimants time to show cause why their claims should proceed in England. Having considered the statements subsequently filed on behalf of the claimants, he remained of the view that the claims should be issued in Scotland and struck out both of them. He gave written reasons for concluding that England was not the forum conveniens and that Scotland was.
36. The claimants applied to DJ Park for an order setting aside his decision. He gave a full judgment on 30 July 2014. He said that he did not consider that the fact that the defendant in the case of Cook had admitted liability made any difference to the decision that he had to make. He explained in some detail why he considered that the power to stay or strike out on the ground of forum non conveniens was available notwithstanding the European jurisprudence contained in authorities such as Owusu. At para 15 of his judgment, he said:

"Finally, I should stress, I think, that I am not making this decision under Part 11 of the CPR. No application has been made by either Defendant under Part 11 for the court to decline jurisdiction. This decision is being made by the court of its own motion. It is being made because we now under the CPR must actively case manage cases and that includes making sure that they are dealt with for the convenience of all, including the undoubted greater convenience to all the witnesses, lay and expert, if the case is heard in Scotland but also because of the number of Scottish cases which now appear in Carlisle County Court. We seem to be the county court for Scotland. There are a lot of claims coming out of Scotland, both accidents on the road and in factories and in places like Tesco, where proceedings are issued in England."

37. Although he did not refer in terms to CPR r 3, it clear that DJ Park was purporting to exercise the wide general case management powers conferred on the court by that rule. Of particular relevance is rule 3.1(2)(m) which gives the court the power to "take any other step or make any other order for the purposes of managing the case and furthering the overriding objective". The overriding objective, which is defined in rule 1.1, includes dealing with cases justly and proportionately. The court is required by rule 1.1(2)(e) to allot an appropriate share of the court's resources, while taking into account the need to allot resources to other cases. Rule 3.3 (1) provides that, except where a rule or some other enactment provides otherwise, the court may exercise its powers on an application or on its own initiative.
38. Mr Mead submits that DJ Park had no jurisdiction to stay or strike out the claim on the ground of forum non conveniens. The defendants' failure to contest jurisdiction by availing themselves of the rule 11 procedure precluded the court from subsequently invoking the doctrine of forum non conveniens, (whether pursuant to an application by the defendants or of its own initiative). Mr Mead relies on the decision of this court in Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA 1203, [2008] 1 WLR 806 in support of his argument. In that case, the court held that, if a defendant does not make an application under rule 11(1)(b), he will be treated as having accepted that the court has and should exercise its jurisdiction to try the claim.
39. I shall assume that, in the circumstances that occurred in the present cases, where the conditions stated in rule 11(5)(a) and (b) were satisfied, it was not open to the defendants to apply for an order staying, striking out or dismissing the claims on the ground of forum non conveniens. But the reasoning in Hoddinott does not touch the question whether the court, acting of its own initiative and exercising its case management powers in accordance with the overriding objective, was prevented by reason of the defendants' failure to make an application under rule 11(1) from exercising jurisdiction which it would otherwise have been able to exercise to try the claims. What DJ Park said about this at para 15 of his judgment (and upheld by HH Judge Hughes QC) was correct.
40. This aspect of the appeals is limited to the question whether the court had and could exercise the power to invoke the doctrine of forum non conveniens where the defendants had failed to make an application under rule 11(1) within the 14 day period (or at all). There is no distinct ground of appeal that the court was wrong to exercise its power to strike out the claim where (as occurred in the case of Cook) the defendant had admitted liability. I accept that the court had the power to make such an order. But in my judgment, to strike out a claim on jurisdictional grounds after a defendant has admitted liability is undesirable. The better course in both cases would have been to stay the proceedings under rule 3.1(2)(f). But as I have said, the decision of the district judge to strike out, rather than stay, the claim is not the subject of the appeals to this court.

Conclusion

41. For the reasons that I have given, I would dismiss both appeals.

Lord Justice Floyd:

42. I agree.

Lord Justice Simon:

43. I also agree.