Knauf UK GmbH v British Gypsum Ltd and another
| Jurisdiction | England & Wales |
| Judge | Mr Justice David Steel |
| Judgment Date | 23 April 2002 |
| Neutral Citation | [2002] EWHC 739 (Comm) |
| Date | 23 April 2002 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2000 / 771 |
[2002] EWHC 739 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
The Honourable Mr Justice David Steel
Case No: 2000 / 771
HOWARD PALMER QC and TIMOTHY OTTY (instructed by FISHBURN MORGAN COLE) for the Applicant
AKHIL SHAH (instructed by FREETH CARTWRIGHT) for the First Defendant
Hearing date: 20th March 2002
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice David Steel
INTRODUCTION
This is the second round of a series of jurisdictional battles between the parties to this action. The outcome of the first round, between the claimant and the second defendant, is to be found in the decision of the Court of Appeal reported in [2002] 1 Lloyd's Rep. 191. This new bout is between the two defendants themselves and focuses upon a purported claim for contribution made by the first defendant against the second defendant. In brief, the second defendant applies to strike the contribution claim out. The first defendant counters with an application seeking an order for service of the defence.
BACKGROUND
The claimant ("Knauf UK") and the first defendant ("British Gypsum") each manufacture plaster board and gypsum building plasters. The second defendant ("Peters") manufactures and provides paper liner for use in the production of plasterboard.
This plasterboard is used to construct the internal walls and ceilings of houses. It is the practice in certain areas of the United Kingdom to apply a skim plaster finish to the exposed surface of plasterboard after installation.
Between about October 1997 and September 1998, plaster board manufactured by Knauf UK, using paper liner manufactured and supplied by Peters, was used in the construction of a large number of houses in the UK. The plaster used to skim the exterior surface of the plasterboard included both British Gypsum plaster and Knauf UK's own plaster.
From December 1997, Knauf UK and British Gypsum received complaints that finished plaster board (manufactured by Knauf UK with Peters paper liner and then installed in homes after being skim plastered) was delaminating—that is to say that the skim plaster was shelling off the surface of the plaster board.
Claims were made for reimbursement of the cost of the remedial work and other associated costs. It appeared either that the plasterboard or the plaster or both were at fault and, ultimately, either Knauf UK or British Gypsum (or both in some proportion) would be liable to pay compensation to claimants. Knauf UK and British Gypsum were unable to agree where fault lay.
In these circumstances, in order to enable compensation to be paid without delay pending resolution of the dispute, Knauf UK and British Gypsum entered into an agreement under the auspices of the Gypsum Products Development Association (the GPDA agreement) to offer to settle claims where de-lamination occurred to plaster board manufactured by Knauf UK and applied with plaster manufactured by British Gypsum on a 50:50 basis without admission of liability and without prejudice to their respective liability (if any) to each other.
THE CLAIMS
In these proceedings, Knauf UK claimed against Peters that Peters paper caused or contributed to the de-lamination of the plaster from Knauf UK plaster board. It was claimed that variable and abnormally high levels of starch on the paper caused the problem. Knauf UK claimed from Peters damages of over £600,000 in respect of de-lamination of Knauf UK plaster from Knauf UK plaster board and some £2.6 million in respect of de-lamination of British Gypsum plaster from Knauf UK plaster board. In respect of these claims, Peters challenged the jurisdiction and sought to set aside Knauf UK's claim.
Knauf UK and British Gypsum claim from each other the whole, or a proportionate part, of sums paid out by them pursuant to the GPDA agreement alleging that delamination was caused or contributed to by the defect in and/or failure of the other's product. However, notably, no claim is made by Knauf UK against British Gypsum to the extent of the losses suffered by Knauf UK arising from instances of delamination in Knauf UK plaster from Knauf UK plasterboard.
In January 2001, British Gypsum served a Part 20 claim for contribution against Peters claiming in essence that, if British Gypsum is held liable to Knauf UK, then Peters is liable to British Gypsum to pay contribution under the Civil Liability (Contribution) Act 1978.
Peters does not accept that the English Court has jurisdiction in respect of British Gypsum's claim for contribution and in April 2001 took steps to join British Gypsum to an action by Peters in Germany brought against Knauf UK (and Knauf Germany) for a declaration of non-liability.
As already recorded, British Gypsum has applied for an order that a defence to the contribution claim be served and Peters has applied for an order that the contribution proceedings be struck out, or alternatively stayed. It is these applications on which I am to rule.
THE PROCEDURAL HISTORY
The claim form was issued on the 11th July 2000 and served on British Gypsum on the 22nd July. In the meantime, Knauf UK obtained a without notice order from Aikens J permitting service by an alternative method on Peters, namely by service on Peters' solicitors in England. This was expressly for the purpose of ensuring that service of these proceedings on Peters should precede any service of German proceedings brought by Peters against Knauf UK.
On 22nd August 2000, proceedings for negative declaratory relief were commenced by Peters in Germany and were served there on both Knauf UK and its parent, Knauf Germany, on 18th September 2000. In the meantime, Peters had applied to set aside the order of Aikens J and the service effected pursuant to it. They further sought a declaration that the Court had no jurisdiction to entertain the claim because any contract between the claimant and Peters was governed by an exclusive jurisdiction agreement in favour of the German Courts within the meaning of Article 17 of the 1968 Brussels Convention.
British Gypsum served a defence and counterclaim in the British proceedings on the...
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