61977C0073
OPINION OF MR ADVOCATE-GENERAL MAYRAS
DELIVERED ON 23 NOVEMBER 1977 (
1
)
Mr President,
Members of the Court,
I —
The main action which has given rise to the present reference for a preliminary ruling arises out of settlement of accounts between Netherlands subjects who are florists in the Ruhr.
It emerges from the file that the action arose in the following way:
According to the statement made by Mr Van der Putte, a Netherlands national, residing at that time at Wuppertal-Barmen and already the apparent owner of two flower shops, one of which was situated at Solingen and the other at Wuppertal-Barmen, Mr Sanders, another Netherlands national also residing at that time in the Federal Republic of Germany, took over from the said Van der Putte in February 1973 with effect from 5 March 1973 a florist's business situated at Wuppertal-Elberfeld. The sum due under the usufructuary lease in respect of the occupation of the business premises was fixed at DM 750 per week. For ‘reasons of simplicity’ Sanders paid the rent due under the headlease, amounting to DM 1900 per month, directly to the actual owner of the immovable property, a German insurance company. In addition, Sanders was to pay DM or Hfl 25000 (that point remains obscure) in respect of the goodwill or key money. That agreement was, furthermore, to be governed by the provisions of an agreement concerning the taking over of another shop of the same type situated at Wuppertal-Barmen, which was executed before a notary on 21 August 1972 between Van der Putte, the lessor, and Sanders, the lessee, together with his wife.
Sanders was prepared to implement that agreement. However, he informed Van der Putte that the prior assent of his wife was necessary since she was also a party to the lease of the shop at Wuppertal-Barmen. She has not given her assent.
In fact, Sanders only implemented the agreement on 17 April 1973 and only began to run the business at Wuppertal-Elberfeld after the President of the Arrondissementsrechtbank (Regional Court), Arnhem, ordered him, by a judgment delivered in summary proceedings on 10 April 1973, to take possession of the said premises or to pay a fine of Hfl 300 for each day for which he was in default. However, the sums agreed by way of the rent due under the head-lease to the owner (DM 1900 per month) and under the usufructuary lease of the business (DM 750 per week), as well as the consideration for the goodwill, were not paid.
By a writ of 3 July 1973 Van der Putte claimed, in addition to the payment in respect of the goodwill and the aforementioned arrears of rent, the payment of a sum of Hfl 21794 agreed in writing in respect of the transfer of the stock and various goods. That sum was paid by Sanders up to the amount of Hfl 19635.94.
By judgment of 10 January 1974 the Arrondissementsrechtbank, Arnhem, suspended the proceedings and ordered the parties to appear before an examining magistrate for the purposes of an inquiry.
Van der Putte appealed against that judgment to the Gerechtshof (Regional Court of Appeal), Arnhem.
The owner of the premises situated at Solingen having subsequently terminated the lease to Van der Putte and having dealt directly with Sanders, it appears that Van der Putte requested the Landgericht Wuppertal to order Sanders to give up possession of the property. We have no further information concerning the outcome of those proceedings.
In an interim judgment of 3 December 1974 the Gerechtshof, Arnhem, awarded Van der Putte the balance owed to him by Sanders in respect of the transfer of the stock, that is, Hfl 2158.06. It considered that from the evidence put forward it was likely that an agreement existed but permitted Sanders to bring evidence to the contrary.
As no such evidence was brought by Sanders the Gerechtshof, Arnhem, gave a final ruling on 4 May 1976 on the heads of claim relating to the tenancy agreement and the goodwill. The claim for payment of the rents was held to be well founded up to 1 January 1976, the date on which Sanders gave notice to terminate the tenancy agreement in dispute and he was ordered to pay the sum of Hfl 25000 to Van der Putte in respect of the goodwill.
During the proceedings before the Gerechtshof, Arnhem, Sanders had pleaded that that court had no jurisdiction: even supposing that an agreement had been validly concluded between the parties — which Sanders disputed — such an agreement would have included a clause giving jurisdiction to the court at Wuppertal, the place where the shop was situated. In its final judgment the Gerechtshof, Arnhem, rejected that plea on the basis of the first paragraph of Article 17 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, which entered into force on 1 February 1973: there was no agreement in writing or oral agreement confirmed in writing providing for such an extension of jurisdiction. In fact, Sanders did not appear solely in order to contest the jurisdiction of the Netherlands court and the question of jurisdiction was actually only raised at a subsequent stage of the proceedings. However, the Gerechtshof, Arnhem, added of its own motion, on the supposed basis of Article 19 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, a dictum relating to Article 16 of that Convention, which was worded as follows:
‘Particular attention must be paid to the provisions of Article 16 (1) of the Convention, to the effect that:
“The following courts shall have exclusive jurisdiction, regardless of domicile:
(1)
in matters relating to rights in rem in, or tenancies of, immovable property, the courts of the Contracting State in which the property is situated;”
(a)
In the opinion of the Gerechtshof, on the assumption that an agreement between the parties must be held to exist the emphasis falls less on the exploitation of certain immovable property against payment — which moreover Van der Putte himself merely rented — than on the exploitation of a complete business against payment which in the course of the proceedings was referred to as the usufructuary lease of the business;
(b)
In that respect the reasons which, according to the commentary to the Convention by Paul Jenard, formed the grounds for bringing claims relating to rights in rem in, or tenancies of, immovable property under the exclusive jurisdiction of the courts of the State where the property is situated do not apply, namely that in general tenancies of immovable property are governed by special legal provisions and it is preferable that the application of such provisions should be judged solely by the courts of the State in which such provisions are in force;
(c)
In those circumstances it is not a claim relating to tenancies within the meaning of Article 16 of the Convention which is at issue, with the result that there is no ground for holding that the Netherlands court lacks jurisdiction.’
It is those grounds which form the subject of an appeal brought by Sanders on a point of law and led the supreme Netherlands court, with the concurrent opinion of its Procureur Generaal, to refer certain questions to you for a preliminary ruling under Articles 2 and 3 of the Protocol of 3 June 1971. The Hoge Raad in fact considered that the exception laid down to the rule in Article 18 of the Convention found expression in Article 19 and that ‘agreements conferring jurisdiction shall have no legal force if … the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 16’ (second paragraph of Article 17). The exclusive jurisdiction based on Article 16 — which must be examined by the court even of its own motion when the recognition or the enforcement of a decision of a court is sought (first paragraph of Article 28 and second paragraph of Article 34) — does not depend on any particular conduct by the parties during or outside the proceedings.
It is in those circumstances that the Hoge Raad der Nederlanden requests you, by judgment of 10 June 1977, to give a preliminary ruling on the following questions:
1.
‘Must “tenancies of immovable property” within the meaning of Article 16 down to the end of subparagraph (1) of the Convention also include an agreement to rent under a usufructuary lease [verpachting] a retail business carried on in immovable property rented from a third person by the lessor?
2.
If so does the exclusive jurisdiction of the courts of the State where the immovable property is situated also apply to a claim on the basis of such an agreement for
(a)
payment of the rent of the retail premises under the usufructuary lease: or
b)
payment by the tenant under the usufructuary lease of the head-rent owed by the lessor to the owner of the immovable property; or
(c)
payment of consideration for the goodwill of the retail business?
3.
Is the answer to the questions set out above affected by the fact that in the proceedings the defendant (the tenant under the usufructuary lease) has contested the existence of the agreement?’
II —
The terms used by the authors of the Convention to express in the different official languages the French expression ‘en matière de droits reels immobiliers et de baux d'immeubles’ (‘in matters relating to rights in rem in, or tenancies of, immovable property’) betray some uncertainty, which is perhaps at the origin of the questions raised by the supreme Netherlands court.
It must be noted, first of all, that the French version nowhere rules out disputes relating to tenancies of immovable property having to be brought before the court of the State in which the property is situated, whether or not they relate to a right in rem and whether the lease in question is for residential or business purposes. Mr Bellet (JDI, 1965, p. 857) has already pointed out that it is rather strange that the text refers not only to disputes concerning rights in rem but also those concerning tenancies of immovable property.
The corresponding terms in the Dutch text, which are extremely wide, also appear not to rule out a priori the bringing of all disputes relating to rights (whether or not in rem) arising out of a lease of immovable property before the forum rei sitae.
For my part, I consider that the authors of the Convention intended to provide for exclusive jurisdiction both in matters relating to rights in rem and to rights, even those in personam, arising out of tenancies of immovable property for residential or business purposes.
On that point, it is possible to put forward, first of all an argument based on the text. Translated literally into French the German text of Article 16 (1) states: ‘Pour les recours qui ont pour objet des droits reels sur les biens immobiliers ainsi que le loyer ou le bail de biens immobiliers …’ (in actions relating to rights in rem in immovable property, as well to the rent or to the lease of immovable property).
What the authors of the Convention were concerned to do appears to be generally recognized: as Monsier Droz writes (Competence Judiciaire Internationale, p. 100), the exclusive nature of the jurisdiction in matters relating to rights in rem in immovable property ‘is easily justified. Disputes in matters relating to rights in rem in immovable property often involve checks, inquiries and expert assessments which must necessarily be carried out in the place where the property is situated … Furthermore, a judgment relating to immovable property will necessarily be enforced in the place where the property is situated.’
The importance attached by the authors of the Convention to the exclusive nature of the jurisdiction is shown by Article 19 (the Court shall declare of its own motion that it has no jurisdiction) and by Articles 28 and 34 (refusal of recognition and enforcement in the case of violation of the exclusive jurisdiction rule).
However, the magnetic attraction of the place where the immovable property is situated results in extending, on an international level, the rules of jurisdiction applied in internal law and, as Mr Droz says, ‘overflows the area of pure rights in rem and extends to tenancies of immovable property’. Mr Bellet also notes that ‘experts have considered that, whether it concerns a residence or the pursuit of an occupation, a tenancy in the six countries of the common market, has almost reached the point where it gives rise to rights in rem’. Tenancies of immovable property give rise not only to actions in rem concerning immovable property but also to mixed actions, that is to say, to actions which combine an action in personam arising out of an obligation with an action in rem. As regards that case, the internal law of four out of the six Contracting States allows the plaintiff to choose between the court of the domicile of the defendant and the court of the State in which the property is situated. For his part, Mr Battifol (Melanges Offerhaus-Kollewijn, p. 57) notes that English law also appears recently to have abandoned the maxim ‘personality has no locality’. He points to a tendency in France and in Italy to interpret rights in rem in respect of immovable property more widely than rights in rem in respect of movable property because the locality of movable property is more transitory and therefore less significant and likely to raise difficulties from the point of view of proof.
Mr Droz writes: ‘The position will not be the same in future by reason of the wording of Article 16. It has become clear that in the legislation of each of the Member States leases of dwellings or of premises used for the pursuit of an occupation, leases for business purposes and agricultural leases formed the subject of special rules … It is therefore reasonable for those special and complex provisions to be applied only by the judges of the countries in which they are in force …’. It is also possible that national rules or special local customs may apply to a lease for business purposes which is connected with a lease for residential purposes. All things considered, the fact that the lessor of business is himself only the tenant of the immovable property in which the business leased is carried on is only of secondary importance.
With the support of Mme Weser (Convention Communautaire, p. 303), Mr Droz concludes that ‘There is no doubt that disputes between lessors and tenants relating to the existence or interpretation of the lease, to giving up possession of the premises and to quitting them fall within the field of application of Article 16 (1).’
Thus, as regards actions which concern only payment of the rent Mr Droz considers, rightly in my opinion, although contrary to the view taken by Mr Jenard who drew up the Commentary on the Convention, that such an action cannot be separated from the immovable property rented. Among other relevant considerations Mr Droz refers to the fact that very often, if the tenant is ordered to pay, enforcement on an international level — which always raises difficult problems — will not even have to be considered. The judgment will also be directly enforceable against the movable property used to furnish the premises let. If it is accepted that the action for the payment of the rents may be brought in a country other than that in which the immovable property is situated, the tenant, assuming that he is domiciled in the first country, ‘cannot bring a counterclaim before the court of that first country for compensation for costs incurred in the maintenance of the immovable property, imposed by local rules and paid by the user of the premises on behalf of the owner … In the interests of the proper administration of justice one would therefore have to apply the provisions concerning related actions in order to allow the court other than the court first seised to stay its proceedings. It appears to be infinitely preferable to save time and money by concentrating all the problems in the country in which the immovable property is situated.’
That view was taken by the Landgericht Aachen, in its ruling of 24 October 1975 on the ground that an action for the payment of rent may call into question provisions of national law concerning the lease itself. The court considered that, even as regards claims for the payment of rent, the provisions of the national law on leases which concern the subject-matter of the lease may be conclusive.
On the other hand, in a decision of 25 November 1975 the Arrondissementsrechtbank, (Regional Court) Amsterdam, dismissed a plea of lack of jurisdiction raised before it in an action relating to the payment of a sum of money claimed under a penalty clause provided in respect of the fulfilment of a condition precedent. The immovable property was situated in France, the defendant was domiciled in the Netherlands and the court considered that the action did not concern a right in rem in immovable property.
On that point, let me add a further consideration, for purely practical purposes: although it may seem going too far to compel two litigants domiciled in the same State to seise the court of a third State or of another Member State in whose area the immovable property is situated, where the distance between the litigants and the seat of that court is considerable, that does not apply in this instance since Wuppertal is not much further from Arnhem than is the Hague.
III —
Even if, on that first point, one was inclined to say that it is for the national court to decide whether the action with which it is seised is only vaguely connected with a lease of immovable property or, on the other hand, whether the question raised before it cannot be separated from the problem of the lease of the immovable property, consideration of the remainder of the questions referred to the Court by the Hoge Raad of the Netherlands leads one to take the contrary view.
In fact, the questions referred by that court under No 2 help towards a better understanding of the problem before it. It is clear therefrom that the dispute concerns a series of obligations related to a lease of retail premises, that is, to the rent which, under the terms of an alleged agreement, was to be paid directly by the tenant of the retail premises to the owner of the premises in which the business was carried on, to the usufructuary lease of the business itself as well as to payment of consideration for the goodwill, or key money.
The action by which Van der Putte claims simultaneously payment of the sum for which he is himself liable to the owner, of the sum due under the usufructuary lease and of consideration for the goodwill is mixed: it is action in personam in so far as it seeks recognition of an obligation to take certain action but it is also an action in rem concerning immovable property in so far as it seeks to assert rights conferred upon him by his capacity as lessor or holder of the immovable property.
Furthermore, if the existence of such an agreement were to be acknowledged — and I shall say in reply to the third query that the existence of a question on that subject is a further reason for acknowledging the exclusive nature of jurisdiction within the meaning of Article 16 (1) — such agreement would have to be interpreted in the same way as the usufructuary lease of the shop situated at Wuppertal-Barmen. Paragraph 2 (2) of that written agreement states that ‘a copy of the lease (entered into between the insurance company, owner of the premises, and Van der Putte) is annexed to the notarial act (usufructuary lease of the business between Sanders and Van der Putte) and forms an integral part thereof.’Thus, the dispute ipso facto concerns that first lease of the immovable property.
Still on the same model, the parties declared German law to be applicable to the transaction (paragraph 14 (1)) and they had agreed to an extension of jurisdiction in favour of the court at Wuppertal (paragraph 14 (2)). Furthermore, the parties to the action were originally domiciled in the Federal Republic of Germany and only moved subsequently. All the factors seem therefore to point to the jurisdiction of the court at Wuppertal as being the most appropriate. Finally, it appears that by reason of the debts owed by Van der Putte by way of tax, the finance administration of Wuppertal-Barmen made several orders for sequestration and, knowing that Sanders had entered into the subtenancy agreement with Van der Putte, proceeded to sequester the debts owed by Sanders to Van der Putte both under the head-laease and under the usufructuary lease.
I am sorry to go into all those details but I wish to provide all the necessary criteria for the national court. Of course, it is for that court to consider whether, despite the terms used by Van der Putte in his initiating summons, it is properly seised of the principal question of the existence of a tenancy agreement, in which case it will have to apply Article 19.
As regards the consideration in respect of goodwill, it is a property right relating to intangible assets and, therefore, movable in nature but although the action of which it forms the subject may be regarded as an action in personam, it is mixed and concerns immovable property in so far as the right in question is claimed in relation to and in implementation of a lease of immovable property: jurisdiction to deal with the action must therefore follow the rule set out above.
IV —
The third question referred by the Hoge Raad of the Netherlands confirms the opinion which I have just expressed. The question itself acknowledges that at a given moment in the proceedings there was a dispute between the plaintiff, the lessor, and the defendant, the tenant, as to the existence of the lease and the interpretation of its clauses. When the summons to appear was issued by Van der Putte the action concerned chiefly payment of the rents and fulfilment of the other undertakings entered into when the lease was concluded. However, the very existence of a ‘lease’ is seriously contested by Sanders. It is in fact always possible to contest the title to payment when a claim payment is made. An action for the payment of arrears of rent becomes an action in rem when title to the arrears is contested; that is sufficient to make the action before the Netherlands court ‘mixed’ in nature and to justify the application of the rule in Article 16 (1). Jurisdiction under that article is based on public policy even at the stage of recognition and enforcement, and cannot be dependent solely on the conduct of the parties during or outside the proceedings.
In the light of all of the foregoing I consider that you should rule that:
1.
Tenancies of immovable property within the meaning of Article 16 (1) of the Convention of 1968 must be understood to mean, in particular, an agreement relating to the lease of a business carried on in immovable property which is itself rented from a third party by the lessor;
2.
The exclusive jurisdiction laid down by that provision applies, in particular, to a claim submitted on the basis of such an agreement, which seeks:
—
payment of the amount due under the usufructuary lease of the retail premises;
—
payment of the head-rent for which the lessor is himself liable to the owner of the immovable property;
—
payment of consideration for the goodwill.
3.
The fact that during the course of the proceedings the tenant under the usufructuary lease has contested the existence of such an agreement in no way affects the foregoing.
(
1
)	Translated from the French.