Cornwall Renewable Developments Ltd v Wright, Johnston & Mackenzie LLP
| Jurisdiction | England & Wales |
| Judge | Mr Recorder Richard Smith |
| Judgment Date | 19 December 2022 |
| Neutral Citation | [2022] EWHC 3259 (Ch) |
| Docket Number | Appeal Ref: CH-2022-000060 |
| Court | Chancery Division |
[2022] EWHC 3259 (Ch)
Mr Recorder Richard Smith
(Sitting as a Judge of the Chancery Division)
Appeal Ref: CH-2022-000060
Claim No.: BL-2019-001341
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
Charles Phipps (instructed by Clyde & Co LLP) for the Defendant/ Appellant
Christopher Burdin (instructed by Stephens Scown LLP) for the Claimant/Respondent
APPROVED JUDGMENT
Hearing date: 8 December 2022
Draft judgment circulated: 19 December 2022
This judgment was handed down remotely by circulation to the parties' representatives by email and release to the National Archives. The date and time for hand-down is deemed to be 21 December 2022 at 10.30 am.
Introduction
This judgment concerns an appeal ( Appeal) against the Order of Chief Master Shuman dated 14 January 2022 ( Order) by which she dismissed the Defendant's application challenging the Court's jurisdiction to try this claim for the reasons set out in her judgment of the same date ( Judgment). On 7 June 2022, Leech J granted permission to appeal against the Order. The Claimant subsequently filed a Respondent's Notice, seeking to uphold the Judgment on additional grounds ( Cross-Appeal). I heard the Appeal and Cross-Appeal on 8 December 2022.
The Claimant is an English registered company engaged in the business of developing and operating sites for the production and sale of electricity from renewable sources. The Defendant is a firm of solicitors, registered in Scotland. In 2013, the Claimant instructed the Defendant to act in relation to the proposed development of two wind farms on two sites in Cornwall. The Claimant alleges that the Defendant was negligent in the performance of its retainer, as explained below, including by reference to the Particulars of Claim ( PoC).
The jurisdictional challenge concerned the allocation of jurisdiction within the UK, the Defendant asserting that the Claimant should have sued the Defendant (if at all) in Scotland, not England. In the Judgment, the Chief Master held that:-
(a) the Claimant could avail itself of the jurisdictional gateway under rule 3(a) of Schedule 4 to the Civil Jurisdiction and Judgments Act 1982 ( CJJA) for “ matters relating to a contract” ( Rule 3(a)). The Defendant appeals that finding;
(b) the Claimant could not avail itself of the jurisdictional gateway under rule 3(c) of Schedule 4 to the CJJA for “ matters relating to tort, delict or quasi-delict” ( Rule 3(c)). The Claimant cross-appeals that finding; and
(c) England was the natural and appropriate forum for the Claimant's claim. That finding is not challenged on the Appeal.
The Defendant advances one overarching ground on the Appeal, namely that the Chief Master was wrong to hold that England was the place of performance of the Defendant's relevant contractual obligation for the purpose of Rule 3(a) and therefore wrong to conclude that the Court had jurisdiction over the Claimant's claim. That overarching ground was broken down into four sub-issues, namely that the Chief Master was wrong to:-
(a) hold that England was the relevant place of performance despite the fact that the Defendant was in Scotland when it either performed or failed to perform its obligation to exercise reasonable care and skill ( Duty Argument);
(b) hold that England was the relevant place of performance despite the fact that the Defendant was in Scotland when it performed the work constituting its services, including its research, the formulation of the advice it provided to the Claimant and/ or the drafting of the documents it provided to the Claimant ( Services Argument);
(c) decline to apply the dicta of Gloster LJ and the Court of Appeal in Deutsche Bank AG v Petromena ASA [2013] EWHC 3065 (Comm) and [2015] 1 WLR 4225 and to distinguish that case on grounds which were invalid and/ or inadequate; and
(d) take into account matters irrelevant to identifying the place of performance of the Defendant's relevant contractual obligation.
Leech J gave permission to appeal on the basis that:-
“…. the Appellant has a real prospect of satisfying the Appeal Court that the Chief Master ought to have followed Petromena ASA even though it was a case under the Lugano Convention and characterised the obligation in question either by reference to the content of the Appellant's legal duty to exercise reasonable skill and care or by reference to the services which the Appellant provided. If she had done so, it is likely that she would have found that the place for performance of the obligation in question was Scotland.
………….. I respectfully consider that the appeal gives rise to an issue of law on which the Appellant has a real prospect of success.”
On the Cross-Appeal, the Claimant's principal additional ground for seeking to uphold the Judgment was that the Chief Master was wrong to rely on Source Ltd v T U V Rheinland AG Holding [1998] QB 54 to hold that the Claimant could not avail itself of the Rule 3(c) jurisdictional gateway in respect of its claim based on the Defendant's alleged concurrent tortious liability, the holding in Source on that issue having been superseded by the effect of later EU jurisprudence.
Factual background
As the Chief Master identified (Judgment at [5]–[20]), certain facts were agreed for the purposes of the jurisdiction challenge, as now summarised again below.
The Defendant has no place of business outside Scotland. It employs 72 solicitors, of which half are member partners. There are 6 dual qualified solicitors able to practise law in both Scotland and in England and Wales.
Mr Brian Henderson ( Mr Henderson), a director of NMS Financial Renewables Ltd, acted as an intermediary between the Claimant and the Defendant, introducing them through his connection with Mr Kenneth Long, one of the Defendant's members. Mr Long, in turn, introduced Ms Donna Kelly–Gilmour ( Ms Kelly-Gilmour) to Mr Henderson. Ms Kelly-Gilmour was a partner at the Defendant firm between April 2002 and March 2014. She practised in property law and was dual qualified in Scotland and in England and Wales.
On or around 14 June 2012, the Claimant entered heads of terms with the owners of two sites in Cornwall, known as Tremaine Farm ( Tremaine) and Tresawson Farm ( Tresawson), for which it proposed to obtain planning permission for the construction and operation of wind farms to generate and sell electricity.
On 18 March 2013, a planning application was made to the local planning authority, Cornwall Council, relating to developing wind farms on Tremaine.
On 5 June 2013, Mr Henderson contacted the Defendant on behalf of the Claimant for fee estimates in connection with work in respect of Tremaine and two other sites.
On 6 June 2013, Ms Kelly-Gilmour emailed Mr Henderson setting out the scope of the work and providing fee estimates. The Defendant's standard terms of business contain a Scottish governing law clause and are subject to the exclusive jurisdiction of the Scottish courts. However, for the purposes of the jurisdiction challenge, it was accepted that there is no evidence that a retainer letter was sent by the Defendant to the Claimant or that the Claimant was aware of the exclusive jurisdiction clause.
On 18 July 2013, Mr Henderson sent the Defendant heads of terms for the sites, prepared by the Claimant.
On 19 July 2013, Ms Kelly-Gilmour provided initial advice on the documentation required and raised certain queries. Mr Dart, sole director of the Claimant, provided responses to those queries within the email, including setting out an extract on “ financial involvement”. Mr Henderson forwarded this to Ms Kelly-Gilmour on 25 July 2013, indicating that the matter was becoming time critical.
On 26 July 2013, Ms Kelly-Gilmour forwarded separately to Mr Dart and Mr Henderson a draft agreement between the Claimant and the owner of Tresawson. On the same day, the Defendant issued its invoice addressed to Phenix Renewable Energy.
On 30 July 2013, Mr Dart e-mailed Ms Kelly-Gilmour, raising a query about the confidentiality clause in the draft agreement and saying that the reference to the Scottish Institution had been corrected to the Office for National statistics. Ms Kelly-Gilmour replied the same day. On 31 July 2013, the Defendant re-issued its invoice, now addressed to the Claimant at Mr Dart's Cornwall address.
On 2 August 2013, the Claimant executed the agreement in four parts. On 8 August 2013, these were submitted to Cornwall Council in support of the planning application.
On 23 October 2013, Cornwall Council refused planning permission. On 29 October 2013, Mr Henderson emailed Ms Kelly-Gilmour stating that “ the council have rejected the documentation saying that it did not fit their criteria” and that Mr Dart was keen to understand this and whether it could be challenged. Mr Henderson sent a further email that day with a ‘bullet point’ made by Mr James Patrick of Cornwall Council about the financial arrangements not falling within the scope of “ financial involvement.”
On 17 April 2014, grounds of appeal were filed against Cornwall Council's refusal of planning permission. These were later withdrawn.
On 22 July 2019, the Claimant issued the Claim Form. The PoC are dated 9 November 2019. The postmark on the envelope serving the proceedings is dated 21 November. These were received at the Defendant's offices the next day.
The Claimant's pleaded case
At the hearing, the Claimant highlighted its needs and objectives in the arrangements to be concluded with the Defendant's legal assistance, both parties referring to the related correspondence in which these were communicated (see PoC [6]–[13]). These included the need...
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