Snookes v Jani-King (GB) Ltd ; Little v Jani-King (GB) Ltd

JurisdictionEngland & Wales
CourtQueen's Bench Division
JudgeThe Honourable Mr Justice Silber
Judgment Date23 February 2006
Neutral Citation[2006] EWHC 289 (QB)
Date23 February 2006
Docket NumberCase No: 5SA 02043

[2006] EWHC 289 (QB)

IN THE HIGH COURT OF JUSTICE

SWANSEA DISTRICT REGISTRY

BEFORE THE HONOURABLE MR JUSTICE SILBER

QUEENS BENCH DIVISON

Before:

The Honourable Mr Justice Silber

Case No: 5SA 02043

Anthony Snookes
Claimant
and
Jani-King (GB) Limited
Defendant
Stephen Little
Claim No:5SA 1010 Claimant
and
Jani-King (GB) Limited
Defendant

Andrew Butler (instructed by Douglas-jones Mercer of Swansea) for the Claimant

Jason Evans-Tovey (instructed by Andrew Pena, Solicitor to Jani-King (GB) Limited) for the Defendant

Hearing dates: 30 November 2006

Further written submissions received on 9 December 2005, 16 January 2006 and 18 January 2006

The Honourable Mr Justice Silber

I. Introduction:

1

Jani-King (GB) Limited ("the defendants") grants franchises of commercial cleaning services. The claimant, Anthony Snookes, became a franchisee of the defendants on 24 June 1999 and 18 October 2000 while his fellow-claimant, Stephen Little, became a franchisee of the defendants on 16 May 2001 in both cases pursuant to written agreements ("the agreements").

2

All the claimants' franchise agreements are in the defendants' standard form and clause 27.14 of both these agreements under the heading "Interpretation" provides that:-

"Save as provided herein any proceedings arising out of or in connection with this Agreement shall be brought in a court of competent jurisdiction in London".

3

Both claimants commenced the present proceedings in the Swansea District Registry alleging misrepresentation and breach of contract against the defendants, who have now applied to strike out or stay each of the claims on the basis that because of the provisions of clause 27.14, "Swansea District Registry does not have jurisdiction to hear this claim". It is common ground that the claimants each have the same grounds for resisting the present applications and that the result of both the present applications against each claimant should be the same.

4

At the start of the hearing, I inquired why these applications were so keenly contested and I was told that if the defendant's applications were granted and if the claimants were then forced to commence proceedings afresh in London, the defendants might then be able to sustain a limitation argument against some part of the claim of Mr Snookes. I am still puzzled as to why Mr. Little is so concerned about whether his claims (which are independent of the claim of Mr Snookes) have to be bought in London or in Swansea bearing in mind that he, like Mr Snookes, lives in the Birmingham area and has it seems no connection with Swansea, except that he has instructed a firm of solicitors based there, who have instructed London counsel.

II. The Issues

5

It is common ground between counsel that:

(a) the claims made by each claimant in the present action fall within clause 27.14 of their respective franchise agreements as "arising out of or in connection with this agreement";

(b) there are no other contractual provisions on jurisdiction relevant to these claims brought by the franchisees and so in the light of the opening words in clause 27.14 ("save as provided herein"), there was no other relevant provisions contained in the franchise agreements .

6

Mr Andrew Butler, counsel for the claimant, and Mr Jason Evans-Tovey, counsel for the defendants, agree that the issues remaining for resolution on these applications are:

(a) Whether the claimants were obliged by clause 27.14 to institute those proceedings in a court of competent jurisdiction in London? ("The Proceeding Commencement Issue");

(b) If so, whether clause 27.14 is enforceable ("The Enforceability Issue");

(c) Whether Article 23 (1) of Council Regulation (EC) 44/2001("the Regulations") applies to clause 27.14 of the franchise agreements or Article 2 of those regulations or any other provision in the Regulations apply to clause 27.14 of the franchise agreements ("the Regulations Issue");

(d) What is the significance of section 16 of Civil Jurisdictions and judgment Act 1982 ("the 1982 Act") and paragraph 12 of the Civil Jurisdiction and judgments Order 2001 ("the Order") to the present dispute ("the UK Legislation Issue") and

(e) What remedies, if any, are the defendants entitled to ("The Remedy Issue")

III. The Proceeding Commencement Issue

7

In support of their summonses, the defendants contend that the wording of clause 27.14 means that the claimants should have brought their claim "in a court of competentjurisdiction in London" and not as they have done in Swansea District Registry.

8

Mr Butler submits that the words "any proceedings shall be brought in a court ofcompetent jurisdiction in London" in clause 27.14 of the agreements refer to matters which occur after the issue of proceedings. He contends that it is significant that whereas clause 27.14 refers to "anyproceedings should be brought", clause 24.2 of the same agreement states that "thefranchisor shall be entitled to institute proceedings". His submission is that whereas the words in clause 24.2 ("institute proceedings") are appropriate to deal with the commencement of proceedings, the words in clause 27.14 ("any proceedings shall bebrought") must refer to something different and that must mean the post-issue stage.

9

In my view, I have to ascertain the ordinary meaning of the words used in clause 27.14 and that leads to the conclusion that proceedings are "brought" when they are actually commenced. Therefore the claimants were obliged by clause 27.14 to commence their present proceedings "in a court of competent jurisdiction in London". I am fortified in reaching that conclusion by two matters of which the first is that in the Limitation Act 1980, there are repeated references to the date by which proceedings should be "brought" (see for example sections 2, 3, 4A, 5, 7, 8 and 9) and that date clearly means the date when they should have been commenced.

10

Second, this approach is supported by the fact when considering the Lugano Convention, Lord Steyn explained in Canada Trust Co and others v Stolzenbeorg and others (No 2) [2002] 1 AC 1,9, that:-

"the words "to bring proceedings" in the context of the Convention appear to point to the initiation of the proceedings"

11

It is convenient at this stage to consider Mr Butler's submission that Swansea District Registry is first part of the High Court and second that it is to be regarded as part of the High Court in London. I am unable to accept the second part of that submission if it means that Swansea District Registry is in the words of clause 27.14 " a court of competent jurisdiction in London". Mr Butler contends that the High Court is a single unified court, which has jurisdiction in this case and that means that this claim can be brought in any part of the High Court which is a unified court. This submission ignores the crucial factor that in this case the parties have not agreed that claims have to be brought in the Royal Courts of Justice but instead they have agreed in clause 27.14 that proceedings "shall be brought in a court of competent jurisdiction in London".

12

It is clear that the terms of clause 27.14 are mandatory requiring that "any proceedings shall be brought in "a court of competent jurisdiction in London". Accordingly, the claimants were obliged to issue proceedings in a court of competent jurisdiction in London unless they can succeed on any of the other issues to which I now turn.

IV. The Enforceability Issue

(i) Introduction

13

Mr Butler contends that clause 27.14 is unenforceable because of the terms of the Unfair Contract Terms Act 1977 ("the 1977 Act") as it purports to limit the geographical area in which a contract breaker can be sued and he relies on sections 3 of the 1977 Act and section 13 of the 1977 Act as a gloss on it. He also submits that clause 27.14 is too uncertain to be enforceable. Mr Evans—Tovey contends that neither sections 3 nor 13 of the 1977 Act are relevant to clause 27.14 but that in any event, clause 27.14 "satisfies the requirement of reasonableness". He also contends that clause 27.14 is sufficiently certain as to be enforceable.

(ii) Section 3 of the 1977 Act

14

Mr Butler bases his claim first on section 3 of the 1977 Act, which provides that:

"(1) This section applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business.

(2) As against that party, the other cannot by reference to any contract term-

(a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or

(b) claim to be entitled-

(i) to render a contractual performance substantially different from that which was reasonably expected of him, or

(ii) in respect of the whole or any part of his contractual obligation, to render no performance at all,

except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness".

15

It is common ground the agreements were entered into on the defendants' "written standard terms of business" and so section 3 is relevant.

16

Section 3 of the 1977 Act however does not help the claimants because clause 27.14 "satisfies the requirement of reasonableness" referred to in section 3(2) of the 1977 Act.

17

Section 11 of the 1977 Act explains the requirement of reasonableness in this way:

"(1) In relation to a contract term, the requirement of reasonableness for the purposes of this Part of this Act, section 3 of the Misrepresentation Act 1967 and section 3 of the Misrepresentation Act (Northern Ireland) 1967is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made ……

(5) It is for...

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