Kenburn Waste Management Ltd v Bergmann
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ALDOUS,Lord Justice Robert Walker,LORD JUSTICE ROBERT WALKER,LORD JUSTICE KEENE |
| Judgment Date | 30 January 2002 |
| Neutral Citation | [2002] EWCA Civ 98 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 January 2002 |
| Docket Number | A3/2001/1161 |
[2002] EWCA Civ 98
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Pumfrey)
Royal Courts of Justice
Strand
London WC2
Lord Justice Aldous
Lord Justice Robert Walker
Lord Justice Keene
A3/2001/1161
MR P PUNWAR (Instructed by Messrs Reid Minty, London W1K 4PS) appeared on behalf of the Appellant
MR M SILVERLEAF QC and MR G FERNANDO (Instructed by Messrs Bird & Bird, London EC4A 1JP) appeared on behalf of the Respondent
I invite Lord Justice Robert Walker to give the first judgment.
This is an appeal by Mr Heinz Bergmann from an order of Pumfrey J made in the Chancery Division on 11th May 2001. The judge's order was made on an application by Mr Bergmann, the defendant below, for a declaration that the court had no jurisdiction to hear the action commenced against Mr Bergmann by Kenburn Waste Management Ltd ("Kenburn"), the claimant below and the respondent in this court. By his order the judge dismissed that application. He also refused an application by Kenburn to adduce expert evidence from a German lawyer, Dr Christian Frank, in rebuttal of the expert evidence of another German lawyer, Dr Gerd Coeler, adduced by Mr Bergmann. That matter is raised in a respondent's notice.
The appeal raises questions on Article 5 of the Brussels Convention as incorporated into domestic law by the Civil Jurisdiction and Judgments Act 1982 and (as part of the inquiry called for under Article 5 of the Brussels Convention) on Article 4 of the Rome Convention as incorporated by the Contracts (Applicable Law) Act 1990.
The facts are reasonably simple and they are fully set out (in a manner which has not been challenged) in the judgment below. It is therefore possible to take them quite briefly.
Mr Bergmann is a businessman resident and established in Germany, where he trades on his own account manufacturing and supplying machines for the waste disposal industry. He holds European patent (UK) no 0,106,268 for a rotary waste compactor (which is referred to in the particulars of claim as a Bergmann Roto-Compactor). Kenburn is based at St Albans and carries on business as a distributor of waste compactors. It is the exclusive distributor of another type of rotary waste compactor (referred to in the particulars of claim as the Kenburn Roto-Compactor). There have been infringement proceedings in Germany between Mr Bergmann and Kenburn, though little is known about these except for a reference (in the compromise letter dated 7th December 1999 to be mentioned below) to proceedings in the Court of Appeal of Oldenburg.
On 1st November 1999 Mr Bergmann sent a letter (in the English language) to a customer of Kenburn, Aldi Stores Ltd (which is based in Warwickshire) threatening proceedings for patent infringement. This soon led to a letter dated 19th November 1999 to Mr Bergmann from Kenburn's solicitors, Bird & Bird, drawing attention to the possibility of an action against him for threats under section 70 of the Patents Act 1977, and asking for written undertakings (in a specific form) that the threats would not be repeated to anyone in the United Kingdom. The letter also asked for information about other communications which might have been sent. If the undertakings were not received by 9th December 1999 Kenburn would, the letter indicated, seek an injunction without further notice.
On 7th December 1999 Mr Bergmann responded in a letter (in the German language) which in the judge's view produced:
"… an exceedingly strongly arguable case that there is a concluded contract, at least in contemplation of English law, that Herr Bergmann will not do the acts, at least those acts specified in numbered paragraphs 1, 2 and 3 of his letter."
Those paragraphs followed very closely—although not with absolute precision, at any rate in literal translation—the undertakings and information which Bird & Bird had asked for. The negative undertakings in paragraphs 2 and 3 were in the general form (in translation):
"We will in the future neither make (nor allow to be made) any communication to any individual or company in the UK, in which [etc] …"
Bird & Bird acknowledged the letter with thanks and no threats action was commenced.
By a claim form issued on 2nd August 2000 Kenburn complained that in breach of the undertakings in the written agreement constituted by the exchange of correspondence Mr Bergmann had by letters dated 12th and 19th June 2000 made further threats, both to a company called LIDL UK based in Wimbledon and to another Aldi group company (incorporated in Germany but trading from a branch at Darlington). These threats were made either by Mr Bergmann himself or by his United Kingdom distributor, a company then fairly recently renamed as Bergmann Direct Ltd (as to whose management Mr Bergmann rather implausibly denied any knowledge). On 8th December 2000 Mr Bergmann made his application challenging the court's jurisdiction.
The judge correctly observed that Article 5 of the Brussels Convention provides exceptions to the general rule that a defendant is to be sued in the courts of the state where he is domiciled and that it is therefore to receive a relatively restrictive interpretation. Article 5(1) provides that a person domiciled in one contracting state may be sued in the courts of another state:
"in matters relating to a contract, in the courts for the place of performance of the obligation in question."
It is not seriously challenged, on this appeal, that the action does relate to a contract. It is agreed that the judge had three main issues to address:
(1) What was "the obligation in question" (that to be decided as a matter of English domestic law)?
(2) What was the law governing the obligation in question (to be decided by English conflict of laws principles, including the Contracts (Applicable Law) Act 1990)?
(3) What was the place of performance of the obligation in question (to be decided under the governing law as ascertained in answer to the second question)?
In his judgment the judge began his discussion of the matter by referring to two questions (that is, identifying the obligation in question and the place of its performance) but there is to my mind no possible doubt but that the judge also recognised the importance of identifying the governing law (or as it used to be called the proper law): indeed the major part of his legal reasoning is devoted to that topic. The judge identified the obligation in question as a negative obligation whose nature could be ascertained from the words which I have already quoted:
"… neither make (nor allow to be made) any communication to any individual or company in the UK …"
Mr Philip Punwar (appearing in this court, as he did below, for Mr Bergmann) has in his written and oral submissions criticised the judge for answering the first question by repeating the words of the contractual document without elucidating their exact meaning. Mr Punwar has submitted that there is a question of construction to be decided. He has pointed out that the particulars of claim complain of letters being written and sent, and (as he rightly said) for the most part written and sent from Germany, not of letters being received in the United Kingdom. Mr Punwar has also drawn attention to some small (and to my mind insignificant) differences between Bird & Bird's letter seeking the undertakings and the English translation of Mr Bergmann's letter giving those undertakings.
In the respondent's written skeleton argument (prepared by Mr Giles Fernando, who appeared below and has also appeared in this court, although in this court led by Mr Michael Silverleaf QC) it is pointed out that the word "communication" (or indeed "communications" in the plural) plainly imports that information is not only sent, but also received: as Mr Fernando has put it, you may shout as loud as you like, but if you are not heard you have not succeeded in communicating anything. I am not persuaded by Mr Punwar's criticisms of the judge's answer to the first question. I see that the wording of the pleading in the particulars of claim is open to criticism, and in due course it may be amended. As a question of substance, however, it seems to me that the judge correctly identified the obligation in question.
The second question (the ascertainment of the governing law) sent the judge to Article 4 of the Rome Convention, and in particular to paragraphs (1), (2) and (5). Neither side argued in this court for an express or implied choice of law under Article 3. Article 4 paragraphs (1), (2) and (5) are in the following terms:
"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 unincorporate, 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...
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...EWCA Civ 98" class="content__heading content__heading--depth1"> [2002] EWCA Civ 98 Court of Appeal (Civil Division). Aldous, Robert Walker and Keene L JJ. Kenburn Waste Management Ltd and Bergmann Philip Punwar (instructed by Reid Minty) for the Michael Silverleaf QC and Giles Fernando (ins......