Ennstone Building Products Ltd v Stanger Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Keene,Lord Justice Potter |
| Judgment Date | 28 June 2002 |
| Neutral Citation | [2002] EWCA Civ 916 |
| Docket Number | Case No: A1/2002/0023 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 June 2002 |
[2002] EWCA Civ 916
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
BIRMINGHAM DISTRICT REGISTRY
Lord Justice Potter and
Lord Justice Keene
Case No: A1/2002/0023
Mr. G. Sampson (instructed by Beechcroft Wansbroughs, Birmingham B1 2HE) for the appellant
Mr. M Raeside QC (instructed by Gateley Wareing, Birmingham B2 5JR.) for the respondent
This is an appeal by the claimant in these proceedings from a decision by Her Honour Judge Kirkham sitting in the Technology and Construction Court in Birmingham. By her judgment dated 20 December 2001 the judge determined a number of preliminary issues, and it is against the determination of one of those issues that this appeal is brought.
The claimant was a supplier of stone for use in building work. The defendant provided testing and consultancy services. A problem had arisen in respect of stone supplied by the claimant for the Standard Life building in Edinburgh. The stone, which was sandstone quarried from Stainton Quarry in County Durham, was found to be becoming stained.
The parties contracted in May 1995 for the defendant to provide professional services, including investigation into the cause of the staining, testing of the stone and reporting on remedial action. The claimant subsequently alleged that the defendant was negligent and/or in breach of contract in the performance of its services. The defendant denied the allegations of negligence in respect of both the contractual and the tortious claims.
A trial of certain preliminary issues was ordered. It is only necessary to set out the terms of the first three of those issues:
Issue 1: What are the essential terms of the contract between the claimant and defendant and its characteristic performance?
Issue 2: What, if any, is the basis of any duty of care that the defendant may owe to the claimant?
Issue 3: What is the proper law of the contract and of any duty of care found in issue 1 and/or 2?
It is in respect of the judge's determination of that third issue that this appeal is brought. She concluded that the proper law of the contract was Scottish law and likewise that Scottish law was applicable to any duty of care owed by the defendant in tort. The claimant had contended that English law was the proper law of the contract and governed any duty of care owed. The significance of this dispute in practical terms was and is that under Scottish law it may well be that the claim is statute-barred because of the shorter limitation period applicable, whereas no limitation point arises under English law.
The defendant was part of the Tarmac Group and was registered, as were all the Tarmac Group companies, in England. The defendant had a number of offices in England, Scotland and Wales. It operated by way of regions, with each region centred around one of the main offices or laboratory complexes, such as the main laboratories and office at Elstree. Environmental services were handled out of an office in London. On-site services were handled from Wales, Birmingham, Manchester and the Scottish office in Glasgow. Each region had its own director and was responsible for its own client base and local operating structure, development, profitability and so on. The Scottish office was the defendant's main office in Scotland and all substantial orders placed in Scotland, excluding highways work, were placed with it. At all material times when contracting to carry out work for a client, the Scottish office did so directly out of the Scottish office.
The defendant's registered office is at Wolverhampton. It is thus an English company. Its principal or main office was at Elstree. The defendant's central administration was located in Elstree. Although the defendant's central laboratory was located at Elstree, the Glasgow laboratory was able to undertake all relevant testing except metallurgy. The claimant is also an English company.
The contract of May 1995 came about after a visit to the defendant's Scottish office by a representative of the claimant, Mr Marshall, who raised the problem of the staining of the stone used on the Standard Life building. He discussed this with Mr Revie of the defendant's Scottish office, with whom he had had previous dealings. Further discussions and correspondence followed.
In April 1995 Mr Marshall asked Mr Revie to provide a quotation for an investigation into the causes of and remedies for the staining. In response, Mr Revie sent a letter dated 27 April 1995, enclosing a proposed investigation programme and budget estimate. The letter was sent from the defendant's Scottish office and the programme covered investigation at the quarry in County Durham, a desk study of available information, and visits to sites including the Standard Life building itself and to another building in Scotland where similar stone had been used. Laboratory testing would be carried out. The defendant would then report to the claimant with its interpretation and recommendations. There were then to be site trials, including supervision by the defendant of cleaning trials at the Standard Life building.
After a further meeting at the quarry, the claimant sent an order for the investigation, testing and reports. This was dated 15 May 1995. On the following day Mr Revie replied, thanking the claimant for the order and in effect accepting it. The letter from Mr Revie was on notepaper bearing the defendant's Glasgow address and it confirmed that a file had been opened where all matters relating to this job would be held. The letter also stated that the Project Manager responsible for the job was Mr Revie. The judge found that the essential terms of the contract were contained in the defendant's letter of 27 April 1995, the claimant's order of 15 May 1995 and the defendant's letter of 16 May 1995. That is not in dispute, save that the defendant emphasises the need to read those documents against the factual matrix of the relevant surrounding circumstances. None of the terms of the contract expressly identified the proper law of the contract.
The defendant proceeded with its investigation. A report by it in September 1995 suggested treating the Standard Life building stone with oxalic acid. It was, it seems, so cleaned in about January 1996, but by April of the same year staining had once again become apparent. The claimant then engaged a new adviser, whose view was that oxalic acid exacerbated the staining problem. In due course the claimant brought these proceedings alleging that negligently and in breach of contract the defendant had failed to exercise all due professional skill and care in the performance of its services.
On 5 October 2001 Judge Kirkham dealt with an issue as to jurisdiction and as to the proper forum. She concluded that the English courts had jurisdiction and that they were the appropriate forum both in contract and in tort. She emphasised in her judgment that she reached no conclusion as to the proper law of the contract, but she did hold that "from the limited evidence available at this stage" prime facie the place for performance of the contract would be England. She also noted that the detriment was experienced by the claimant in England, since that was where it would bear any financial loss, and so the judge held that the proper forum for any claim in tort was also England.
At the hearing of the preliminary issues in December 2001, it was admitted by the claimant that the characteristic performance of the contract was the supply of advice to the claimant by the defendant (see para. 35 of the judgment). It was also common ground that, since the contract was silent as to the choice of law, the proper law of the contract was to be determined in accordance with the Contracts (Applicable Law) Act 1990. It is convenient to set out at this stage the relevant provisions from Schedule 1 of the Act which contains the English text of the Rome Convention. Article 4 deals with the applicable law where the parties have not expressly or impliedly chosen the law applicable. Insofar as material for present purposes, Article 4 provides:
"1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.
2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or un-incorporate, its central administration. However, if the contract is entered into in the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other that the principal place of business, the country in which that other place of business is situated.
5. Paragraph 2 shall not apply if the characteristic performance cannot be determined, and the presumptions...
To continue reading
Request your trial
-
Ophthalmic Innovations International (UK) Ltd v Ophthalmic Innovations International Inc.
...[2002] CLC 533, para 45, adopting the approach in Dicey & Morris, para 32–123. That decision was applied in Ennstone Ltd v Stanger Ltd [2002] EWCA Civ 916; [2002] 1 WLR 3059, at (para 41), when Keene LJ said that if the presumption was to be of any real effect, it must be taken to apply e......
-
Athanasios Sophocleous & Others v The Secretary of State for Foreign and Commonwealth Affairs
...law of limitation. That is a surprising submission in view of the express terms of the 1984 Act. But Mr Douglas relied on Ennstone Building Products Ltd v Stranger Ltd [2002] 1 WLR 3059 where it does appear that this court was prepared to apply the flexible exception and disapply the forei......
-
GDE LLC (formerly Anglia Autoflow North America LLC) v Anglia Autoflow Ltd
...If there is no such contractual requirement, it is irrelevant what the parties might have anticipated would be the case: Ennstone Building Products Ltd v Stanger Ltd, [2002] EWCA Civ 916; [2002] 1 W.L.R. 3059 at [29]–[31]. Despite Professor Harris' submissions to the contrary, the authori......
-
Base Metal Trading Ltd v Shamurin
...GmbH [2001] 1 WLR 1745; Samcrete Eqypt Engineers & Contractors SAE v. Land Rover Exports Ltd [2002] EWCA Civ 2019; Ennstone Building Products Ltd v. Stranger Ltd [2002] 1 WLR 3059 (CA); Iran Continental Oil Shelf Co v. IRI [2002] EWCA Civ 1024, all of which cite Credit Lyonnaise v. New Hamp......