Scottish & Newcastle International Ltd v Othon Ghalanos Ltd
| Jurisdiction | England & Wales |
| Judge | LORD MANCE,LORD NEUBERGER OF ABBOTSBURY,LORD BROWN OF EATON-UNDER-HEYWOOD,LORD BINGHAM OF CORNHILL,LORD RODGER OF EARLSFERRY |
| Judgment Date | 20 February 2008 |
| Neutral Citation | [2008] UKHL 11 |
| Date | 20 February 2008 |
| Court | House of Lords |
[2008] UKHL 11
HOUSE OF LORDS
Appellate Committee
Lord Bingham of Cornhill
Lord Rodger of Earlsferry
Lord Brown of Eaton-under-Heywood
Lord Mance
Lord Neuberger of Abbotsbury
Appellants:
Richard Lord QC
(Instructed by Thomas Eggar LLP)
Respondents:
Michael Bools
(Instructed by Kimbells LLP)
My Lords,
In this action the seller (Scottish & Newcastle International Limited) seeks to recover the price of goods sold from the buyer (Othon Ghalanos Limited). S&N is a company based in Scotland, Ghalanos a company registered in Cyprus. The contract related to 11 consignments of cider shipped from Liverpool to Limassol in June-July 2004. The question before the House is whether the English court has jurisdiction to entertain the action. The answer to that question turns, by virtue of article 5(1)(b) of Council Regulation (EC) No 44/2001, on whether, as a matter of English law applied to the particular contract made between the parties, the goods were or should have been delivered by S&N to Ghalanos in England. Both Andrew Smith J ( [2006] EWHC 1039 (Comm)) and the Court of Appeal (Waller and Rix LJJ: [2006] EWCA Civ 1750, [2007] 1 All ER (Comm) 1027) held in favour of S&N that the English court does have jurisdiction, but Ghalanos challenges the correctness of that conclusion.
The general rule, expressed in article 2(1) of the Regulation referred to, is that persons domiciled in a member state must, irrespective of their nationality, be sued in the courts of their home state. That is the result Ghalanos seeks, and if article 2(1) were applicable, S&N would have to pursue its claim in the Cypriot court. But the general rule in article 2(1) is qualified by a special rule in article 5(1) of the Regulation, which provides:
"A person domiciled in a Member State may, in another Member State, be sued:
(1)(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:
- in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,
- in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided,
(c) if subparagraph (b) does not apply then subparagraph (a) applies…"
Thus in matters of contract a person domiciled in one member state need not be sued in the courts of that state but may be sued in the courts of another member state if one or other of the conditions in the article is satisfied.
Article 5(1)(a), applying to matters of contract quite generally and therefore very broad in its scope, focuses attention on the particular obligation in question in the particular action and permits a claimant to sue in a member state other than that of the defendant's domicile if the particular obligation in question was or should have been performed in that other member state. But in subparagraph (b) a more specific rule is laid down, not applicable to the whole field of contract, but only to contracts for the sale of goods or the provision of services. In each of these cases, in the absence of contrary agreement, the place of performance of the obligation in question must be taken to be the place where, under the particular contract between the parties, the goods were or should have been delivered or the services were or should have been provided, as the case may be. If subparagraph (b) does not apply, whether because the contract is not one for the sale of goods or the provision of services or because a contract of that character contains no term as to the place of delivery of goods or the place of provision of services, subparagraph (a) applies.
The sale of goods contract made between S&N and Ghalanos is, as they agree, governed by English law. Thus it is to that contract, interpreted according to the principles of English law, that we must look to ascertain whether, under the contract, the goods were or should have been delivered in England. This is made clear by the decision of the European Court of Justice in ( Case 12/76) Industrie Tessili Italiana Como v Dunlop AG [1976] ECR 1473, paras 13-15. Thus (as the parties rightly agree) the Regulation does not purport to impose a uniform concept of delivery on all member states but leaves member states to apply whatever, under their rules of private international law, is the law properly applicable to the particular contract, in this case English law.
I am grateful to my noble and learned friends Lord Rodger of Earlsferry and Lord Mance for their summaries of the terms of the contract upon which this appeal turns, which I need not repeat. The issue is whether, as held by the courts below, the goods were delivered to Ghalanos under the contract in Liverpool.
For reasons given by Lord Mance in paragraph 31 of his opinion, I would reject the primary argument of Ghalanos that Limassol was the contractually agreed place of delivery because that port was entered in box (iv), "Place of delivery", on the invoices. The courts below did not accept that argument, and nor would I.
For reasons given by Lord Rodger in paragraphs 10 to 17 of his opinion and by Lord Mance in paragraphs 36 to 48 of his opinion, I am of opinion that on a proper analysis of this contract in accordance with established principles of English commercial law the contractual agreed place of delivery was Liverpool and the goods were duly delivered there to Ghalanos. It follows that the English court has jurisdiction under article 5(1)(b) of the Regulation to entertain this claim, and Ghalanos' appeal must be dismissed. Like Lord Rodger, however, I would prefer to reserve my opinion on the points discussed in paragraphs 49 to 55 of Lord Mance's opinion, which do not arise for decision in this case.
My Lords,
In about April 2004 the appellants (Ghalanos), a company domiciled in Cyprus, agreed to buy 11 container loads of cider from the respondents (S & N), a company having its head office in Scotland. The contract was subject to English law. The cider was shipped at Liverpool and taken by Zim Line vessels to Limassol where Ghalanos took delivery. Ghalanos have not, however, paid for the cider and S & N now sue them for the price. It is common ground that, in terms of article 5(1)(b) of Council Regulation (EC) No 44/2001, the English courts do not have jurisdiction unless, according to English law, the cider was "delivered" in England - more particularly, on shipment at Liverpool.
For the reasons to be given by my noble and learned friend, Lord Mance, I would reject the appellants' primary argument, that Limassol was the contractually agreed place of delivery, because "Limassol" was written into box (iv), headed "Place of delivery", on the invoices. I concentrate on the appellants' alternative case.
So far as relevant, section 61(1) of the Sale of Goods Act 1979 ("the Act") provides that, in the Act, unless the context or subject matter otherwise requires, "delivery" means "voluntary transfer of possession from one person to another". Section 32(1) provides:
"Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier (whether named by the buyer or not) for the purpose of transmission to the buyer is prima facie deemed to be a delivery of the goods to the buyer."
From the definition of "delivery" in section 61(1) it follows that, in cases where section 32(1) applies, by voluntarily transferring possession of the goods to a carrier for the purpose of transmission to the buyer, the seller is prima facie deemed to have voluntarily transferred possession of the goods to the buyer. For purposes of article 5(1)(b) of the Regulation the place where the seller voluntarily transferred possession of the goods to the carrier would therefore be the place where the goods were "delivered" to the purchaser.
S & N say that section 32(1) applies and provides the answer in this case: the goods were delivered under the contract of sale when S & N shipped them on board the Zim Line vessels at Liverpool. Even where goods are delivered to a carrier, however, it does not automatically follow that they are deemed to have been delivered to the buyer. The subsection gives only a prima facie rule, which would have to yield if the terms of the contract between the parties indicated that the seller was to keep, rather than to transfer, possession of the goods. Similarly, it is accepted that where the carrier is the employee or agent of the seller, delivery to the carrier does not constitute delivery to the buyer.
The subsection reflects the position at common law. For example, in the (much discussed) case of Dunlop v Lambert (1839) 6 Cl & F 600, a puncheon of whisky, which merchants in Edinburgh had sold to a customer in England, was lost at sea during a voyage from Leith to Newcastle. The merchants, who had contracted with the carriers, sued them for the loss of the whisky. One of the questions which arose was whether the whisky had been delivered to the purchaser, so that the property or risk had passed to him, by the time it was lost. Lord Cottenham LC observed, at p 620:
"It is no doubt true as a general rule, that the delivery by the consignor to the carrier is a delivery to the consignee, and that the risk is after such delivery the risk of the consignee. This is so if, without designating the particular carrier, the...
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Scottish & Newcastle International Ltd. v. Othon Ghalanos Ltd., [2008] N.R. Uned. 145 (HL)
...#000000; font-size: 12.0000pt; font-weight: bold; font-family: 'Times New Roman'; } Scottish & Newcastle v. Othon Ghalanos, [2008] N.R. Uned. 145 (HL) MLB unedited judgment Scottish & Newcastle International Limited (respondents) v. Othon Ghalanos Limited (a company incorporated in ......
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