Dresser UK Ltd v Falcongate Freight Management Ltd (Sub nom Duke of Yare)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BINGHAM,LORD JUSTICE RALPH GIBSON,THE PRESIDENT |
| Judgment Date | 19 July 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0719-3 |
| Docket Number | 91/0762 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 July 1991 |
[1991] EWCA Civ J0719-3
The President
(Sir Stephen Brown)
Lord Justice Ralph Gibson
Lord Justice Bingham
91/0762
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
(MR. JUSTICE HOBHOUSE)
Royal Courts of Justice.
MR. GEORGE LEGGATT (instructed by Messrs. Clyde & Co.) appeared on behalf of the (First and Second Plaintiffs) Respondents.
MR. NICHOLAS HAMBLEN (instructed by Messrs. Norton Rose) appeared on behalf of the (Defendants) Appellants.
The question in this appeal is whether the English court is bound or entitled to decline jurisdiction in this action against the third and fourth defendants. That depends on the construction and application of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, enacted into English law by the Civil Jurisdiction and Judgments Act 1982.
The action arises from the loss at sea of a valuable consignment of electronic goods. The goods were carried on the deck of the vessel "The Duke of Yare" on a voyage from Scheveningen to Great Yarmouth and were swept overboard in the great gales of October 1987.
The goods were owed by the first or second plaintiffs. They are the only effective plaintiffs and it is unnecessary to distinguish between them. I shall refer to them as "the plaintiffs'.
The third defendants, Norfolk Line Limited, are an English company having its head office at Great Yarmouth. They were bareboat charterers of the vessel: as such they were the employers of its crew and bailees of its cargo. The fourth defendants, Norfolk Line BV, are a Dutch company having an office in Scheveningen. They appear to have acted as agents for the third defendants. It is these defendants who seek to stay this action against them so that the plaintiffs' claim against them may be determined by the court in Rotterdam.
The sea voyage from Scheveningen to Great Yarmouth during which the goods were lost was one leg of a longer journey which began at Bremen and would but for the loss have ended with delivery of the goods to the plaintiffs at Montrose. The first defendants in the action, Falcongate Freight Management Limited ("Falcongate"), contracted as principals with the plaintiffs to perform the whole of the carriage from West Germany to Scotland and sub-contracted the sea leg of the carriage to the third defendants. Falcongate have been sued here and have not in any way challenged the jurisdiction of the court.
Before Mr. Justice Hobhouse at first instance the plaintiffs sought to establish that the court was bound to accept jurisdiction to adjudicate upon their claim against the third defendants by virtue of the CMR Convention. The judge rejected that contention and there is no challenge by the plaintiffs to that decision. The judge, however, accepted the plaintiffs' alternative argument that under the Brussels Convention the court was bound to accept jurisdiction and had no discretion to decline jurisdiction in favour of the court in Rotterdam. But he held that if (contrary to his view) the court did have a discretion he would exercise it so as to stay these proceedings against the third and fourth defendants. On appeal these defendants argue that the learned judge should have held himself bound to decline jurisdiction in favour of the Rotterdam court. If that is wrong, they argue that he may (depending on more precise elucidation of the facts) have had a discretion to decline jurisdiction.
Article 2 of the Brussels Convention provides:
"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 6 of the Convention provides:
"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 …"
It is thus clear, as the judge held, that England is prima facie the proper jurisdiction in which the plaintiffs should sue the third defendants and a proper jurisdiction in which to sue the fourth defendants. But that is subject to the other provisions of the Convention. There are two other material provisions, Articles 17 and 22, which give rise to separate arguments on this appeal.
1. Article 17
Article 17 of the Convention is (so far as material) in these terms:
"If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction. Such an agreement conferring jurisdiction shall be either in writing or evidenced in writing or, in international trade or commerce, in a form which accords with practices in that trade or commerce of which the parties are or ought to have been aware…"
The third and fourth defendants invoke this Article in reliance on a bill of lading issued (probably by the fourth defendants on behalf of the third) at Scheveningen on shipment of the goods on 15th October 1987. The named consignees were Falcongate and the document appears (as the judge held) to evidence a contract of carriage between these defendants and Falcongate. This document contained a number of printed clauses on its reverse. Among these was clause 12:
"JURISDICTION
This document shall be governed by Dutch law and all actions under this document shall be brought before the Court at Rotterdam and no other Court shall have jurisdiction with regard to any such action unless the Carrier appeals to another jurisdiction or voluntarily submits himself thereto."
The carrier (whether the third or fourth defendants) has not appealed or submitted himself to any jurisdiction other than the court at Rotterdam. But it is common ground that this exclusive jurisdiction clause did not form part of any contract between the plaintiffs and the third or fourth defendants because there was no such contract. These defendants (whom I shall hereafter call "the defendants", without distinguishing between them) accordingly argued
(1) that they held the goods as bailees on terms of the bill of lading, including the jurisdiction clause; and
(2) that that clause applied to any claim by the plaintiffs in tort against them.
The learned judge was sceptical as to (1) but rejected the argument at (2). The correctness of his decision is the first issue in this appeal.
Before this court Mr. Hamblen for the defendants advanced a clear and well constructed argument which proceeded by these steps:
1. The plaintiffs bailed their goods to Falcongate.
2. Falcongate sub-bailed the goods to the defendants on terms set out in the bill of lading.
3. On the facts, the plaintiffs must be taken to have consented expressly or impliedly to Falcongate making a sub-bailment of the goods on those terms.
4. The plaintiffs accordingly became bound by those terms vis-a-vis the defendants as sub-bailees despite the absence of a contract between them: Midland Silicones Ltd. v. Scruttons Ltd. [1962] A.C. 446 at 489–491 per Lord Denning; Morris v. C.W. Martin & Sons Ltd. [1966] 1 Q.B. 716 at pages 729–730, per Lord Denning M.R.; Johnson Matthey & Co. Ltd. v. Constantine Terminals Ltd. [1976] 2 Ll. 215; Singer Co. (UK) Ltd. v. Tees and Hartlepool Port Authority [1988] 2 Ll. 164.
5. Being bound by the terms of the sub-bailment the plaintiffs cannot circumvent those terms by suing in tort or otherwise than in bailment.
6. The terms by which the plaintiffs are bound include the jurisdiction clause quoted above.
7. On a proper construction the jurisdiction clause applies to any claim made by the plaintiffs against the defendants in respect of this carriage.
8. The jurisdiction clause satisfies the requirements of Article 17 of the Convention and the English court must accordingly decline jurisdiction in favour of the court at Rotterdam.
In his able argument for the plaintiffs Mr. Leggatt accepted the first two of these steps, and did not (I think) challenge the third. He did, however, argue, in reliance on the judgment of Mr. Justice Donaldson in Johnson Matthey, that the question whether or not a bailor was bound by the terms of his bailee's sub-bailment depended not on the consent of the bailor to the sub-bailment but on whether the bailor could advance a claim in tort against the sub-bailee (for example in negligence or trespass or conversion) without having to plead or rely on the bailment. Here, Mr. Leggatt argued, the plaintiffs could do so: they had pleaded a claim in negligence which did not depend on establishing a bailment. The plaintiffs could accordingly advance that claim, unrestricted by the terms of the sub-bailment. If, contrary to this argument, any of the sub-bailment terms bound the plaintiffs, the jurisdiction clause did not. In any event, the jurisdiction clause did not cover a claim by the plaintiffs and did not satisfy Article 17 of the Convention.
These competing submissions involved an interesting discussion of the doctrine of bailment on terms and of possible differences between the basis of the doctrine as explained by Lord Denning in Morris v. Martin and by Mr. Justice Donaldson in Johnson Matthey. I do...
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