LORD GOFF OF CHIEVELEY
My Lords,
The question in this appeal arises in the wake of the decision of your
Lordships' House in Hazell v. Hammersmith and Fulham London Borough
Council [1992] 2 A.C.1. In that case, the House held that an interest
swap agreement to which a local authority was a party was ultra vires
the local authority and so void ab initio. Between 7 and 15 September
1982 the appellants, City of Glasgow Council ("G."), entered into seven
interest swap agreements with the respondents, K. Pursuant to the
agreements, on various dates between 9 March 1983 and 10 September
1987 K. made payments to G. totalling £807,230.31, and G. made
payments to K. totalling £79,152.41. Following the decision in Hazell, K.
on 6 September 1991 commenced proceedings in the English High Court
claiming restitution of the sums so paid by it to G. On 16 October 1991 G.
issued a summons claiming a declaration that the English High Court had
no jurisdiction over the claim, over which the Scottish courts alone had
jurisdiction. The appeal now before your Lordships' House relates to that
issue of jurisdiction.
Pursuant to sections 16 and 17 of the Civil Jurisdiction and Judgments
Act 1982, which incorporates the Brussels Convention on Jurisdiction and
Judgments of 1968 into the law of the United Kingdom, Schedules 4 and
5 to the Act make provision for the modification of Title II of the 1968
Convention for the allocation of jurisdiction within the United Kingdom. In
this appeal, your Lordships are concerned with three provisions of Title II
as so modified, viz. Article 2 which falls within Section 1, concerned with
General Provisions; and Article 5(1) and (3) which fall within Section 2,
concerned with Special Jurisdiction....
It was the case of G. that the English High Court had no jurisdiction
over K.'s claim because G. was domiciled in Scotland and so, by virtue
of Article 2, should have been sued in the Scottish courts. K. however
claimed that the English courts had jurisdiction by virtue of four provisions
including Article 5(1) and 5(3)--the only two provisions now relied on by
K.
The matter came before Hirst J. who held that none of the provisions
relied on by K. applied, and so granted the declaration asked for by G. K.
then appealed to the Court of Appeal. In relation to Article 5(1) and (3),
the Court of Appeal sought a preliminary ruling from the European Court
of Justice as to the interpretation of the corresponding provisions of the
Brussels Convention. Written submissions were submitted to the Court
not only by G. and K., but also by the European Commission, the United
Kingdom, and three other member States--France, Germany and Spain.
However Advocate General Tesauro expressed the opinion that the Court
had no jurisdiction to deal with the question referred by the Court of
Appeal, and his opinion was accepted by the Court. The Court concluded
that, although the national law was based on the Brussels Convention, the
Convention was not directly applicable.
…The case therefore returned to the Court of Appeal and was heard by
a reconstituted Court, none of the members of the previous Court being
available. On 25 January 1996, the Court by a majority (Roch and Millett
L.JJ., Leggatt L.J. dissenting) held, reversing the decision of Hirst J.,
that the claim fell within Article 5(1), and that on that basis the English
High Court had jurisdiction. In the circumstances, the Court expressed
no concluded view as to the application of Article 5(3). It is against that
decision that G. now appeals to your Lordships' House, with the leave of
the Court of Appeal.
The applicable principles
Before I consider the reasoning in the judgments delivered by the
members of the Court of Appeal, I feel that it is desirable first to set out
some of the basic principles which underly the provisions in question.
For this purpose I propose to put on one side Article 5(3), to which little
attention was paid in argument before the Appellate Committee, and to
concentrate on Articles 2 and 5(1).
(1) I wish first to stress that, although the European Court of Justice
declined to provide the guidance asked for by the Court of Appeal,
nevertheless it is clear that the courts of this country, in considering
questions which arise under Schedule 4 to the Act of 1982, must have
regard to the principles laid down by the Court of Justice in connection
with Title II of the Brussels Convention, and any relevant decisions of
the Court as to the meaning and effect of any provision of that Title:
see section 16(3) of the Act. A contrast is therefore drawn with section
3(1), which provides that any question as to the meaning or effect of the
Convention is to be determined "in accordance with the principles laid
down by and any relevant decisions of the European Court." …
(2) The first point which is clearly established in the European
jurisprudence is that the basic principle is to be found in Article 2. This
is the principle of domicile.. Article 5, which falls within Section 2, states
that a person domiciled in a part of the United Kingdom may be sued
in another part of the United Kingdom in the circumstances specified in
the paragraphs of the Article, including of course Article 5(1) with which
we are here concerned. But it is clearly recognised that Article 5 is in
derogation from the basic principle of domicile in Article 2 (see the Martin
Peters case--Martin Peters Bauunternehmung GmbH v. Zuid Nederlandse
Aannemers Vereniging Case 34/82 [1983] E.C.R. 987, 1001), and that as
a result the provisions of Article 5 are to be construed restrictively (see
Kalfelis v. Bankhaus Schröder Case 189/87 [1988] E.C.R. 5565, 5585,
para. 19). In this connection, it is not to be forgotten that the defendant
can always be sued in the courts of his domicile.
(3) Next, in considering the function of the various provisions of Article
5, it is to be remembered that these provisions exist "because of the
existence, in certain clearly defined situations, of a particularly close
connecting factor between a dispute and the court which may be
called upon to hear it, with a view to the efficacious conduct of the
proceedings": see the Martin Peters case at p. 1002 (para.11). In the
case of Article 5(1), the relevant court is specified as being the court
"for the place of performance of the obligation in question," which is
described in the Jenard Report as the court of the place of performance
of the obligation on which the claim is based. It is between the dispute
and that court that a particularly close connecting factor is recognised to
exist. Mr. Jenard, gives as an example proceedings for the recovery of
fees, particularly where the obligation to pay must be performed where
the services are provided.
(4) It follows that, in order to identify the relevant court, it is necessary
first to identify the obligation in question. This was made plain in the
case of de Bloos v. Bouyer (Ets. A. de Bloos S.P.R.L. v. Société en
commandite par actions Bouyer Case 14/76 [1976] E.C.R. 1497), in which
the European Court of Justice held that the word "obligation" in Article
5(1) refers to "the contractual obligation forming the basis of the legal
proceedings" (see p. 1508, para. 11). The Court of Justice subsequently
affirmed that "the obligation" "cannot be interpreted as referring to any
obligation whatsoever arising under the contract in question, but is rather
that which corresponds to the contractual right on which the plaintiff's
action is based": see Custom Made Commercial Ltd. v. Stawa Metallbau
GmbH Case C-288/92 [1994] E.C.R. I-2913, 2957 (para. 23).
(5) Within the scope of these principles, we can see the Court of Justice
giving full effect to Article 5(1). For example:
(a) It was held in the Martin Peters case that membership of an
association creates between the members close links of the same kind
as those which are created between the parties to a contract, and that
the obligations between them may be regarded as contractual for the
purposes of Article 5(1). See [1983] E.C.R. 987, 1002, paras. 9, 10 and
13, applied in Powell Duffryn Plc. v. Wolfgang Petereit [1992] E.C.R.
I-1745, 1774, para. 15.
(b) In a case in which the plaintiff invokes the jurisdiction of the court
of the place of performance, if the defendant denies the existence of the
contract the court can consider the question whether there is a binding
contract as one of the essential preconditions of its jurisdiction. "If that
were not the case, Article 5(1) of the Convention would be in danger of
being deprived of its legal effect, since it would be accepted that, in order
to defeat the rule contained in that provision, it is sufficient for one of the
parties to claim that the contract does not exist." See Effer SpA v. Kantner
Case 38/81 [1982] E.C.R. 825, 834-835, para. 7.
(c) "In a case where the plaintiff asserts the right to be paid damages or
seeks a dissolution of the contract on the ground of the wrongful conduct
of the other party, the obligation referred to in Article 5(1) is still that
which arises under the contract and the non-performance of which is
relied upon to support such claims." See de Bloos v. Bouyer Case 14/76
[1976] E.C.R. 1497, 1508, para. 14. This is a point to which I shall have
to return later.
(6) However, attempts to broaden the scope of Article 5(1) beyond the
established principles have, with one notable exception, failed.
(a) The notable exception occurred in Ivenel v. Schwab Case 133/81
[1982] E.C.R. 1891. There the Court of Justice held, in a case concerned
with claims based on different obligations arising under a contract of
employment, that the obligation to be taken into account for the purposes
of the application of Article 5(1) of the Convention is the obligation which
characterises the contract: see p. 1901, para. 20.. The reasoning of the
Court most relevant for present purposes is to be found in paras. 16-19 of
the judgment, which read as follows:
"16. (…).
"18. On the other hand, no such uncertainty exists for most contracts
if regard is had solely to the contractual obligation whose performance
is sought in the judicial proceedings. The place in which that obligation
is to be performed usually constitutes the closest connecting factor
between the dispute and the court having jurisdiction over it, and it is
this connecting factor which explains why, in contractual matters, it is the
court of the place of performance of the obligation which has jurisdiction.
…I have taken the unusual course of quoting these paragraphs in full,
because they demonstrate that the Court of Justice has returned to, and
indeed has reinforced, the reasoning and conclusion in de Bloos v. Bouyer
that the "obligation" in Article 5(1) is the contractual obligation on which
the claim is based. It is the courts of the place of performance of that
obligation in which jurisdiction is vested under Article 5(1). It is in that
sense, if at all, that Article 5(1) is applicable in the present case.
(c) In Kalfelis v. Schröder Case 189/97 [1988] E.C.R. 5565, a case
concerned with Article 5(3) of the Convention, it was proposed by
Advocate General Darmon that, where there are overlapping (concurrent)
claims in contract and tort, only Article 5(1) will determine the jurisdiction
of the court, since the matters relating to contract will "channel" all the
aspects of the dispute.
The application of the principles in the present case
With these principles in mind, I turn to consider the question in the
present case. That question is whether the claim of K. to restitution of the
sums paid by it to G. under a contract accepted to be void ab initio falls
within Article 5(1).
..I find it very difficult to see how such a claim can fall within Article 5(1).
It can only do so if it can properly be said to be based upon a particular
contractual obligation, the place of performance of which is within the
jurisdiction of the court. Where however, as here, the claim is for the
recovery of money paid under a supposed contract which in law never
existed, it seems impossible to say that the claim for the recovery of the
money is based upon a particular contractual obligation.
.. the claim in the present case is simply a claim to restitution, which in
English law is based upon the principle of unjust enrichment; and claims
of this kind do not per se fall within Article 5(1).
It is not necessary for the purposes of the present case to hold that a
claim to restitution can never fall within Article 5(1). Very exceptionally,
there may be particular circumstances in which it can properly be said,
at least in cases arising under the Convention, that the claim in question,
although a claim to restitution, is nevertheless based on a contractual
obligation and so falls within the Article. This is a point to which I will
return at a later stage. But no such circumstances arise in the vast
majority of claims to restitution, which are founded simply upon the
principle of unjust enrichment. Such is, in my opinion, the present case.
No express provision is made in Article 5 in respect of claims for unjust
enrichment as such; and it is legitimate to infer that this omission is due
to the absence of any close connecting factor consistently linking such
claims to any jurisdiction other than the defendant's domicile. Article 2
therefore provides the appropriate jurisdiction for such claims.
The majority judgments were delivered by Roch and Millett L.JJ. Roch
L.J. relied strongly on the Martin Peters case as showing that Article
5(1) applies even where there is no contract according to the national
law. In my opinion, however, he sought to derive too much from that
case. Certainly, the case shows that the expression "matters relating
to a contract" must be construed in such a manner as to give effect to
the system and objectives of the Convention, so that an independent or
autonomous meaning must be given to the word "contract," which must
be read as wide enough to embrace other consensual arrangements even
though these may not be regarded as contractual under the national law
of the relevant Contracting State. But that decision provides no useful
guidance on the question whether, in the context of Article 5(1), the word
"contract" is to be construed as including a supposed contract which is
void ab initio, so that a claim to recover money paid under such a void
contract falls within the Article. Next Roch L.J. invoked Article 10(1) of
the Rome Convention, which expressly provides that the law applicable
to a contract shall govern in particular "the consequences of nullity of the
contract." However, the fact that such express provision is made in the
Rome Convention in relation to the governing law provides no guidance
on the scope of Article 5(1) forming part of the Brussels Convention which
is concerned with jurisdiction and which contains no such provision. It is
for that purpose entirely neutral, as was vividly illustrated by the fact that
it was relied upon by both parties to the present litigation. Lastly, Roch
L.J. asserted that the word "obligation" in Article 5(1) is not confined to
contractual obligations. Again, I am unable to agree; it is plain both from
de Bloos v. Bouyer and Shenavai v. Kreischer that the word does indeed
refer to the contractual obligation on which the claim is based, though
such a claim is not limited to a claim for the direct enforcement of the
obligation. For these among other reasons, I am unable to accept the
reasoning in Roch L.J.'s judgment.
In a most impressive judgment, …, Millett L.J. developed a thesis which
led to the conclusion that the word "contract" in Article 5(1) includes
a void contract, i.e. a supposed contract which is void ab initio and so
has never had any existence in law, and that the expression "place
of performance of the obligation in question" includes the intended
place of performance of the supposed obligation under a void contract.
He therefore considered that a claim to recover money paid under a
"contract" which is ultra vires the recipient is a "matter relating to a
contract" within the opening words of Article 5(1). He went on to hold
that, provided the matter relates to a contract, the jurisdiction conferred
by Article 5(1) is available, and that the expression "matters relating
to a contract" is not to be equated with "contractual causes of action"
or "the enforcement of contractual obligations" or even "claims based
on contract". He concluded that, when parties act pursuant to such
a contract, the intended place of performance is no less relevant a
connecting factor because the contract is
.. in my opinion Millett L.J.'s thesis founders upon the terms of Article
5(1) as construed in the established jurisprudence of the European
Court of Justice. We know from de Bloos v. Bouyer that the reference
in Article 5(1) to the "obligation in question" is to "the contractual
obligation forming the basis of the legal proceedings", and is that
obligation "which corresponds to the contractual right on which the
plaintiff's action is based." It was that principle which was reaffirmed by
the Court in Shenavai v. Kreischer, where it was stated that uncertainty
was avoided "if regard is had solely to the contractual obligation whose
performance is sought in the judicial proceedings." Moreover, again in
de Bloos v. Bouyer, it was recognised that where the plaintiff asserts
the right to be paid damages or seeks a dissolution of the contract on
the ground of the wrongful conduct of the defendant, the obligation
referred to in Article 5(1) is "still that which arises under the contract
and the non-performance of which is relied upon to support such claims."
Furthermore, Article 5(1) specifies in clearly defined terms a particularly
close connecting factor between the dispute and the court which will
be called on to hear it, i.e. the place of performance of the contractual
obligation in question. No such close connecting factor can, in my opinion,
exist in a case where the contract is void ab initio and the only question
at issue relates to the recovery of money paid under it on the ground of
unjust enrichment.
In his judgment, Millett L.J. relied on two matters in particular as
providing support for his thesis.
(1) The first matter relied upon by him was that in most cases the
validity of the contract will be in issue; and it would not be consistent
with the objectives of the Convention if a court having jurisdiction
to decide the validity of the contract did not also have jurisdiction to
decide the consequences. But there must be serious doubt whether,
as a general rule, a court can have jurisdiction under Article 5(1) to
rule upon the validity of a contract. True it appears that, in France, the
Cour de Cassation has decided that jurisdiction may exist under Article
5(1) in the case of an action for the annulment of a contract (see ISI c.
Soc. de Promotion des Centres Privés Audiovisuels 25 January 1983).
…but, since the decision of the European Court of Justice in Shenevai
v. Kreischer Case 266/85 [1987] E.C.R. 239, it is as a general rule no
longer appropriate to invoke the characteristic obligation of the contract
in this context. Moreover it is striking that when, in Effer SpA v. Kantner
Case 38/81 [1982] E.C.R. 825, the Court of Justice held that a national
court could, in a case under Article 5(1), consider the question whether
the relevant contract was binding, this was only on the basis that the
court could do so as one of the essential preconditions of its jurisdiction
to adjudicate on the contractual claim before it. In these circumstances,
although the point does not fall to be decided in the present case, there
must be serious doubt whether the issue of the validity of a contract
alleged to be void ab initio would fall within Article 5(1).
(2) The second matter relied upon by Millett L.J. was this. He took the
example of a case of breach of contract in which the plaintiff can sue
the defendant either for damages for breach of contract or for recovery
of money paid to him under the contract, the claim for such recovery
being on the basis of failure of consideration. Millett L.J. suggested that,
on his thesis, the nature of the remedy chosen by the plaintiff does not
prevent the action from being tried in the place of performance of the
contractual obligation the breach of which has given rise to the relief
claimed...Nevertheless it was (as I have already recorded) established in
de Bloos v. Bouyer Case 14/76 [1976] E.C.R. 1497 at p. 1508, para. 14,
that the plaintiff's claim to be paid damages or to seek dissolution of a
contract on the ground of the defendant's default may fall within Article
5(1), the contractual obligation being the obligation the non-performance
of which is relied upon to support the claim.
More fundamentally,.. it seems to me that the whole basis of Millett
L.J.'s thesis is that Article 5(1) should be construed broadly so that any
matter relating to a contract should be held to fall within the Article;
and he seeks to justify this on the practical basis that all claims relating
to contracts should fall to be considered in the same jurisdiction, viz.
the jurisdiction of the courts for the place of performance, or intended
performance, of the contract, even where no such contract ever existed. I
feel bound to say, however, that the jurisprudence of the European Court
of Justice reveals an understanding that Article 5(1) has a more limited
purpose, an understanding which is moreover more consistent with the
words of the Article. This appears most clearly from the judgment of
the Court in Shenevai v. Kreischer, in para.18 (on p. 256) of which the
Court recommended that regard should be had "solely to the contractual
obligation whose performance is sought in the judicial proceedings." As
I have already recorded, the Court continued: "The place in which that
obligation is to be performed usually constitutes the closest connecting
factor between the dispute and the court having jurisdiction over it, and
it is this connecting factor which explains why, in contractual matters,
it is the court of the place of performance of the obligation which has
jurisdiction." The obligation is, of course, the "obligation in question." The
view of the court appears to be that, once this criterion is abandoned,
the justification for jurisdiction being vested in the court of the place of
performance of the obligation in question is destroyed. If that criterion
cannot be fulfilled, it must not be forgotten that (as the court pointed
out in a related context--see Kalfelis v. Schröder at para. 20 on p. 5586)
"a plaintiff is always entitled to bring his action in its entirety before the
courts for the domicile of the defendant."
Article 5(3)
Before the Appellate Committee, Mr. Pollock Q.C. for K. advanced a brief
argument to the effect that Article 5(3), which is concerned with "matters
relating to tort, delict or quasi-delict" and places jurisdiction in the courts
for the place "where the harmful event occurred or in the case of a
threatened wrong is likely to occur" applied in cases of unjust enrichment,
and was therefore applicable in the present case. This argument is
impossible to reconcile with the words of Article 5(3), if only because
a claim based on unjust enrichment does not, apart from exceptional
circumstances, presuppose either a harmful event or a threatened wrong.
The argument was based on a misreading of paragraph 2(a) of the Ruling
of the Court of Justice in Kalfelis v. Schröder Case 189/87 [1988] E.C.R.
5565, 5587, a misreading which is plainly inconsistent with paragraph
2(b) of the same Ruling (which I have referred to earlier in this opinion).
There is, in my opinion, no substance in the point, which was rightly
rejected by Leggatt L.J. in the Court of Appeal.
Conclusion
For the reasons I have given, I find myself to be in agreement with
the conclusion reached by Hirst J., and by Leggatt L.J. in his dissenting
judgment in the Court of Appeal. I would, therefore, allow the appeal,
with costs before your Lordships' House and below, and restore the order
of Hirst J.
…
LORD NICHOLLS OF BIRKENHEAD
My Lords,
….
The proper approach to the interpretation of the Convention is well
established. The basic jurisdictional provision is article 2: persons
shall be sued in the courts of the contracting state where they are
domiciled. Article 5, like other articles conferring a special jurisdiction, is a
derogation from the basic provision and should be construed restrictively.
The rationale of article 5 is the existence, in "certain clearly defined
situations", of a particularly close connecting factor between a dispute
and the court called upon to hear it. In those situations the plaintiff
may opt to choose the special jurisdiction, with a view to the efficacious
conduct of the proceedings: see Bier v. Mines de Potasse d'Alsace, Case
21/76, paragraphs 10-11, [1976] E.C.R. 1735, 1745-46, and Peters v.
ZNAV, Case 34/82, paragraph 11, [1983] E.C.R. 987, 1002. In the case of
contractual matters, the place of performance of the obligation in question
usually constitutes the closest connecting factor between the dispute
and the court having jurisdiction over it: hence the terms of article 5(1).
When more than one contractual obligation is in issue, the principal issue
determines the jurisdiction: see Shenavai v. Kreischer, Case 266/85,
paragraphs 18-19, [1987] E.C.R. 239, 256.
The phrase "matters relating to a contract" in article 5(1) is an
independent Convention concept, but the European Court has not yet
given any basic definition of the concept or its scope. The article itself
gives little guidance. The second limb of article 5(1) identifies the close
connecting factor in these terms: "... in the courts for the place of
performance of the obligation in question". Bearing in mind the need to
construe the ambit of this special jurisdiction restrictively, this wording
might suggest that, despite the apparent width of the concept, to be
within article 5(1) the dispute must relate solely to the performance of a
contractual obligation, and that other contractual disputes are not within
the special jurisdiction because they would lack any connection with the
place of performance.
This beguilingly simple approach cannot withstand even the most
superficial examination. Not only would it cut down the ambit of article
5(1) by removing from its scope many disputes normally regarded as
contractual matters: for instance, a dispute over whether a contract
complied with prescribed formalities, such as the need for writing. This
construction would also produce capricious practical results inconsistent
with the underlying aims of the Convention and with the pragmatic
interpretation given to it by the European Court of Justice. The court has
emphasised the importance of certainty. In Custom Made Commercial v.
Stawa Metallbau, paragraph 15, Case C-288/92, [1994] E.C.R. I-2913,
2956, the court said:
"The place of performance of the obligation was chosen as the criterion of
jurisdiction because, being precise and clear, it fits into the general aim
of the Convention, which is to establish rules guaranteeing certainty as
to the allocation of jurisdiction among the various national courts before
which proceedings in matters relating to a contract may be brought."
The Court has also drawn attention to the desirability of the whole of
a single dispute being resolved by one court. In the Peters case, at
paragraph 17, the European Court observed:
"It should be noted that multiplication of the bases of jurisdiction in
one and the same type of case is not likely to encourage legal certainty
and effective protection throughout the territory of the Community. The
provisions of the Convention should therefore be interpreted in such a
way that the court seised is not required to declare that it has jurisdiction
to adjudicate upon certain applications but has no jurisdiction to hear
certain other applications, even though they are closely related."
Not surprisingly, the European Court has rejected the narrowest
interpretation of article 5(1). Article 5(1) is not confined to the
determination of disputes relating strictly to a performance obligation. The
jurisdiction is wider than this, because the jurisdiction under article 5(1)
is not ousted by a dispute between the parties over the existence of the
contract sought to be enforced: see Effer v. Kantner, Case 38/81, [1982]
E.C.R. 825.
This decision shows that, at least for the purpose of establishing
jurisdiction, the court of the place of performance of a contractual
obligation can also decide a dispute relating to the existence of a contract
even though this may raise issues having no particular connection with
the place of performance. (…).
Against this background I approach the question of construction arising
in the present case. I say at once that the feature which ultimately has
weighed heavily with me is the unattractive practical difficulties which
would result from the narrow interpretation urged by the appellant local
authority. I can illustrate these difficulties most easily by taking a simple
case where D agrees to carry out work for P. P makes part payments
in advance. Subsequently D asserts that the agreement was ultra vires
because he lacked legal capacity to enter into such a contract. He declines
to carry out the work and he refuses to return the part payments. Clearly,
if P sues D for damages for non-performance, article 5(1) would apply.
The jurisdiction of the court of the place where the work was to be
done would not be displaced by the ultra vires dispute. The court would
determine the ultra vires issue.
….To my mind it is really unthinkable that such an alternative claim
should lie outside article 5(1). The Convention is concerned to promote
the efficacious conduct of proceedings and to avoid multiplicity of
closely related proceedings in different contracting states. It would be
surprising and unfortunate if, having decided that the contract is null
and void, the same court cannot proceed to decide on the restitutionary
consequences following directly from this. What matters is not whether
the consequential relief is classified by English or Scottish law or the law
of some other contracting state as part of its national law of contract
or part of its national law of restitution. What matters is that, however
labelled, the relief is no more than part of the effective determination of a
dispute relating to a contract. It is one facet of a single dispute.
The application of article 5(1) in this situation would not take the article
beyond its underlying rationale. Contracts are consensual arrangements.
Part payments made in advance in purported performance of a contractual
obligation are likewise made and accepted on an agreed, consensual
basis. They are made on the terms of that contract, and they are
explicable only by reference to those terms. This remains so, even
if subsequently the contract if found to be void in law. As Millett L.J.
observed in the Court of Appeal ([1996] 2 A.E.R. 257, 274), when parties
act pursuant to such a contract, the intended place of performance is no
less a relevant connecting factor because the contract is afterwards found
to be void.
The next step in this line of examples is to assume that P reverses the
order in which he makes his two claims in the proceedings. D is constantly
prevaricating, sometimes saying there is a contract, sometimes not. The
primary claim brought by P is for restitution on the footing that there is
no binding contract. His alternative claim is for damages for breach of
contract. Here again, to my mind it would be surprising if this reversal of
the order of presentation of the alternative claims affected the application
of article 5(1), so that the dispute would be within the article if the claims
were formulated in one order in the proceedings but not if the identical
claims were presented in a different order.
The penultimate step in this sequence is to consider whether the outcome
would be different if, in the previous example, the alternative claim for
damages for breach were omitted. The answer must surely be no. If a
claim for restitutionary relief in respect of payments made in purported
performance of a contract is a matter relating to a contract within the
meaning of article 5(1), this must be so irrespective of whether there is
also an alternative claim based on the existence of the contract.
One final step remains to be taken, having regard to the unusual facts
of the present case. After P has paid D in purported performance of the
contract, the nullity of the contract is established in other proceedings.
Thereafter there is no dispute between the parties over the nullity of the
contract. The dispute between the parties is confined to the consequences
directly flowing from the nullity. P claims to be entitled to repayment, by
way of restitution. D denies this. I find it difficult to see on what basis this
reduction in the ambit of the dispute can have the consequence of taking
outside article 5(1) a dispute otherwise within the article. If the whole
is within the article, so should be a part of that whole. There can be no
justification for distinguishing between repayment claims where nullity is
disputed and repayment claims where nullity is no longer in dispute.
For these reasons I would dismiss this appeal. The last of my examples
covers the present case. Article 5(1) is to be construed restrictively, but
it must also be construed with due regard to the underlying objectives of
the Convention. Disputes relating to the existence of a contract are to be
regarded as within the Convention concept of contractual matters, as also
are disputes on the restitution consequences flowing from a decision that
a contract is void.
On article 5(3) I agree with the views of my noble and learned friends
Lord Goff of Chieveley, Lord Clyde and Lord Hutton.
LORD CLYDE
My Lords,
…
The majority of the judges in the Court of Appeal held that the English
Court had jurisdiction under article 5(1) of Schedule 4 of the Act. The
respondent also argued before that court that in the alternative there was
jurisdiction under Article 5(3), but that argument did not prevail.
Schedule 4 prescribes the rules for the allocation of jurisdiction within
the United Kingdom. It is a modified form of Title II of the Brussels
Convention of 1968. The references in the opening passage of the Article
to the parts of the United Kingdom and in Article 5(3) to the case of
a threatened wrong are modifications of the text of the Convention.
That convention is set out in Schedule 1 and together with certain other
conventions is declared by section 2(1) of the Act to have the force of
law in the United Kingdom. In relation to the interpretation of these
conventions section 3(1) of the Act requires that any question as to their
meaning and effect is to be "determined in accordance with the principles
laid down by and any relevant decision of the European Court." The
corresponding provision in section 16 which requires effect to be given
to Schedule 4 for the purpose of allocating jurisdiction within the United
Kingdom in the civil proceedings to which it refers is in slightly different
terms. Section 16(3) provides that:
"In determining any question as to the meaning or effect of any provision
contained in Schedule 4
(a) regard shall be had to any relevant principles laid down by the
European Court in connection with Title II of the 1968 Convention and
to any relevant decision of that Court as to the meaning or effect of any
provision of that Title...."
Since the provisions in Schedule 4 comprise a modified version of the
1968 Convention it is understandable that they should not be interpreted
with the full rigour provided by section 3 of the Act for the construction of
the conventions.
In the present case the Court of Appeal referred to the European Court
of Justice the questions now raised in this appeal. But that Court has
held that it has no jurisdiction to give a preliminary ruling. It regarded
the issue as being one of the application not of the Convention but of the
national law. … But the Court has recognised that the effectiveness of that
protection may be reduced by the multiplication of bases of jurisdiction
in one and the same case. For that reason the Court in Somafer v. Saar-
Ferngas [1978] E.C.R. 2183 observed (p. 2191) "it is in accord with the
objective of the Convention to avoid a wide and multifarious interpretation
of the exceptions to the general rule of jurisdiction contained in Article 2."
Consistently with the aim of achieving a uniform application of the
Convention it is established that at least for the purposes of the
Convention the phrase "matters relating to a contract" should not
be given the technical meaning which it might have in the particular
national law of a member state, but should be seen as an independent
concept. That was the view expressed in Martin Peters v. Z.N.A.V. [1983]
E.C.R. 987, in Arcado v. Haviland and in Powell Duffryn Plc. v. Wolfgang
Petereit [1992] E.C.R. I-1745. … I proceed on the basis that this wider
interpretation should be followed.
It seems to me that one clear principle is that it is Article 2 of the
Convention which sets out the basic rule on jurisdiction, namely that
persons are to be sued in the courts of their domicile. It would seem that
that should also be the basic rule for the interpretation of Article 2 in
Schedule 4. The provisions of Article 5 then are to be seen as derogations
from the basic rule, although of course both Article 2 and Article 5(1)
may be equally available if their respective qualifications are met (Bank
of Scotland v. Seitz 1990 S.L.T. 584). It is sufficient to refer in this
connection to Somafer v. Saar-Ferngas [1978] E.C.R. 2183 at p. 2191
and to Arcado v. Haviland [1988] E.C.R. 1539 at p. 1554. It may also be
noted that Article 2 is in mandatory terms, while Article 5 is permissive.
It follows from all of this that the approach to the construction of Article
5 should be narrow rather than generous. As the European Court put it in
Kalfelis (at para.19):
"... the 'special jurisdictions' enumerated in Articles 5 and 6 of the
Convention constitute derogations from the principle that jurisdiction is
vested in the courts of the State where the defendant is domiciled and as
such must be interpreted restrictively."
This approach has been recognised and followed in relation to Article 5(3)
of Schedule 4 in Davenport v. Corinthian Motor Policies at Lloyds, 1991
S.L.T. 774.
The characteristic of the special jurisdictions which explains and justifies
the provision for them is, as the Court put it in Somafer (p. 2191):
"... the existence, in certain clearly-defined situations, of a particularly
close connecting factor between a dispute and the court which may
be called upon to hear it, with a view to the efficacious conduct of the
proceedings."
This same view was expressed in the later case of Dumez France v.
Hessische Landesbank (Helaba) and Others [1990] E.C.R. I-49 at p.
80. The point was made with greater particularity in Handte v. T.M.C.S.
[1992] E.C.R. I-3967 at p. 3994
It is thus not enough for the invocation of jurisdiction under Article 5(1)
that some remote connection can be found between the point in dispute
and a contractual relationship. The question then is where the line is to be
drawn.
The language of the Article should provide the solution. …But however
that may be the later words of Article 5(1) "in the courts for the place of
performance of the obligation in question" are of considerable importance.
The use of the definite article shows that there is a particular obligation to
be performed. Moreover the reference is to "the obligation in question."
That is a reference not to the contract but to the obligation which is at the
heart of the dispute. That obligation is the obligation on which the claim
is based. There must be an obligation to be performed and the obligation
must be in dispute. I can see no other obligation which could here be
intended than an obligation based on contract. The "question" concerns
a contractual obligation. The existence of a contract then becomes an
essential element.
That view seems to accord with the decision of the court in de Bloos v.
Bouyer [1976] E.C.R. 1497 …
Accordingly it is necessary to be able to identify "the obligation in
question," that is the obligation which forms the basis of the particular
proceedings. It must be an obligation under a contract. It is here that a
difference appears in the analyses adopted by the majority of the judges
in the Court of Appeal. Roch L.J. considered that an "obligation" could
include something other than a contractual obligation. That could open
the way to regarding the word as capable of including an obligation to
make restitution. Millett L.J. considered that the "place of performance of
the obligation in question" could mean the "intended place of performance
of the supposed obligation." On this analysis the obligation is consensual
but the contract is non-existent. Neither of these two solutions seem to
me to be consonant with the decisions to which I have referred.
But cases may well arise where there is a dispute about the existence
of the contract. Where one party is claiming that there is a contract
and is seeking some remedy in respect of the performance or the non-
performance of its obligations and the other party is resisting the claim
on the ground that there has never been a contractual relationship
between them Article 5(1) should be available. In such a case if the court
holds that there never has been a contract its jurisdiction will not extend
beyond the decision on that point. If on the other hand it holds that a
valid contract has been constituted its jurisdiction to entertain the dispute
will be affirmed. In that kind of situation the court is inquiring into its
own jurisdiction and such a preliminary issue can properly be brought
within the scope of Article 5(1). In the case of Effer SpA v. Hans-Joachim
Kantner [1982] E.C.R. 825 it was held that jurisdiction for that initial issue
could be found under Article 5(1). The basic dispute was whether it was
against Effer or against a bankrupt undertaking called Hykra that Kantner
should enforce the contract in question. Kantner had sued Effer. The case
was one of enforcement of the performance of a contract. The preliminary
problem of determining whether there was a contract between the parties
in such circumstances falls within the scope of Article 5(1). The Court
reasoned that the power to determine questions relating to a contract
included the power to consider the constituent parts of the contract itself,
since that was indispensable for the determination of its jurisdiction. Once
there is a dispute as to the existence of a contract the performance of
which the one party is seeking to enforce or for the non-performance
of which he is seeking a remedy, then it should not matter whether
procedurally it is the defendant or the plaintiff who raises the issue of the
existence of the contract. In Boss Group Ltd. v. Boss France S.A. where
an alleged breach of contract was in issue the English Court accepted
jurisdiction under Article 5(1) in proceedings whereby declarations were
sought denying the existence or the continued existence of the contract in
question.
Where on the other hand there undoubtedly has been a contract
constituted and the Court has jurisdiction under Article 5(1) the Court
should be able to deal not only with such issues as whether the obligation
is still enforceable or indeed whether the contract is still extant but also
with any claims which arise consequentially on the determination of
any issue about performance, such as damages or an award quantum
meruit. When the defendant challenges the continued existence of the
contract and seeks some remedy on the basis that it has terminated, that
could procedurally be brought within the scope of Article 6(3) whereby
the court of the place of performance is given jurisdiction to entertain a
counterclaim arising from the same contract or facts on which the original
claim was based. Where the remedy is sought by the plaintiff that should
be competent under the principle expressed in the maxim accessorium
sequitur principale. That principle was recognised in Shenevai v. Kreischer
[1987] E.C.R. 239 as an applicable guide where several obligations arise
under the same contract are in issue. That approach was adopted in this
House in Union Transport Plc. v. Continental Lines S.A. [1992] 1 W.L.R.
15. But the obligation in such cases will still be the contractual obligation
which formed the basis of the proceedings. It will not be any separate
obligation, such as an obligation to pay damages or an obligation to make
a quantum meruit payment. As was stated in de Bloos at paragraph 14 of
the judgment:
"In a case where the plaintiff asserts the right to be paid damages or
seeks a dissolution of the contract on the ground of the wrongful conduct
of the other party, the obligation referred to in Article 5(1) is still that
which arises under the contract and the non-performance of which is
relied upon to support such claims."
But in order for the Court to entertain the accessory or consequential
matters the principal matter must be within the jurisdiction
The claim which is being made by the respondent in the present case
is simply and solely a claim for restitution. That is not a claim based on
a contract but a claim based on the principle of undue enrichment. The
remedy of restitution is in a category distinct from that of contractual
remedies. That appears to be the position not only in England and
Scotland but also in at least a number of the other states in Europe. That
the parties purported to enter into a contract which turned out to be void
ab initio is matter of background history, too remote from the claim now
made to be related to a contract in the sense intended by Article 5(1),
even if what is now agreed to be a void contract can properly be called a
contract at all. In the present case the plaintiffs do not seek to found on
any contract; indeed their claim is one which is pursued in the absence of
any contract. There is no contractual obligation forming the basis of their
claim. There is no clear place of performance such as can establish the
close connection between the dispute and the courts of that place. In my
view there is no jurisdiction available under Article 5(1) for the purposes
of the present case.
For the reasons which I have given I consider that the order granted by
Hirst J. was correct and I would allow the appeal.
LORD HUTTON
My Lords,
…
The appellant, City of Glasgow District Council (G.), is domiciled in
Scotland and the first issue for determination on this appeal is whether
in the action brought in the High Court of Justice in England by the
respondent, K. for restitution of moneys paid under interest rate swap
agreements which were void ab initio, G. is being sued pursuant to Article
5(1):
"in matters relating to a contract, in the courts for the place of
performance of the obligation in question."
The claim of K. in its writ of summons is for restitution and there is no
claim in contract. In English law it is clear that a claim for restitution is a
separate and distinct cause of action from a claim in contract. In Fibrosa
Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [1943] A.C. 32 at
61 Lord Wright stated:
"It is clear that any civilised system of law is bound to provide remedies
for cases of what has been called unjust enrichment or unjust benefit,
that is to prevent a man from retaining the money of or some benefit
derived from another which it is against conscience that he should keep.
Such remedies in English law are generically different from remedies in
contract or in tort, and are now recognised to fall within a third category
of the common law which has been called quasi-contract or restitution."
In Westdeutsche Bank v. Islington L.B.C. [1996] A.C. 669, 710E Lord
Browne-Wilkinson stated:
"The common law restitutionary claim is based not on implied contract
but on unjust enrichment: in the circumstances the law imposes an
obligation to repay rather than implying an entirely fictitious agreement
to repay: Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd.
[1943] A.C. 32, 63-64, per Lord Wright; Pavey & Matthews Pty. Ltd. v.
Paul (1987) 162 C.L.R. 221, 227, 255; Lipkin Gorman v. Karpnale Ltd.
[1991] 2 A.C. 548, 578C; Woolwich Equitable Building Society v. Inland
Revenue Commissioners [1993] A.C. 70. In my judgment, your Lordships
should now unequivocally and finally reject the concept that the claim
for moneys had and received is based on an implied contract. I would
overrule Sinclair v. Brougham on this point."
Therefore in English law the action brought by K. against G. is not a claim
in contract.
However, in my opinion, the consideration that the action brought by K.
is not in English law a claim in contract is not decisive, for two reasons,
in favour of G. on the question whether, within the meaning of Article
5(1), it is being sued "in matters relating to a contract." First, the words
"may... be sued in matters relating to a contract" are wider than the
words "may be sued on a contract." Secondly, pursuant to section 16(3)
(a) the meaning of Article 5(1) is to be determined having regard to "any
relevant principles laid down by the European Court in connection with
Title II of the 1968 Convention and to any relevant decision of that court
as to the meaning or effect of any provision of that Title."
…
The primary submission advanced on behalf of the appellant, G., by
Mr. Burton QC was that as the contract between G. and K. Benson was
void ab initio and as K. is suing, not in contract, but for restitution, the
present action is not one in which G. is being sued "in matters relating to
a contract."
The primary submissions advanced on behalf of K. Benson by Mr.
Pollock QC can be briefly summarised as follows. First, Article 5(1) does
not distinguish between contracts which, in accordance with differing
domestic systems of law, are treated as valid, voidable, unenforceable or
void. Secondly, where two parties have come together for the purpose of
entering into a contractual relationship, have fulfilled the requirements of
certainty and finality necessary to conclude an agreement, intend to enter
into a contract and believe that they have in fact done so, it is intelligible
and sensible to treat the resolution of the consequences of their acts,
having proved ineffective in law, as falling within the concept of "matters
relating to a contract." Thirdly, an important objective of the Brussels
Convention is that a national court should be able to rule upon the issue
of its own jurisdiction by applying a relatively simple test without being
compelled to consider the substance of the case, and that a purposive
interpretation of Article 5(1) leads to the conclusion that the present claim
arose from "matters relating to a contract."
My Lords, whilst there is no decision of the European Court directly
on the point which arises for decision in this appeal, consideration
of the judgments of that Court has led me to the conclusion that the
submissions on behalf of G. should be accepted and that its appeal should
succeed. The judgments relied on by Mr. Burton which have caused me to
form this opinion are the following. In Kalfelis v. Schröder [1988] E.C.R.
5565 the Court treated a claim for unjust enrichment as a cause of action
separate and distinct from a cause of action in contract and a cause of
action in tort, and the judgment states at page 5581:
"The object of Mr. Kalfelis's action is to obtain an order that the
defendants, as jointly and severally liable for the debt, should pay him
DM 463 019.08 together with interest. His claim is based on contractual
liability for breach of the obligation to provide information, on tort,
pursuant to Paragraph 823 (2) of the Bürgerliches Gesetzbuch (Civil
Code) in conjunction with Paragraph 263 of the Strafgesetzbuch (Criminal
Code) and Paragraph 826 of the Bürgerliches Gesetzbuch, since the
defendants caused him to suffer loss as a result of their conduct contra
bonos mores. He also alleges unjust enrichment, on the ground that
futures stock-exchange contracts, such as futures transactions in silver
bullion, are not binding on the parties by virtue of mandatory provisions
of German law and therefore reclaims the sums which he paid over."
Moreover in Kalfelis v. Schröder the court observed at pp. 5585, 5586 that
Articles 5 and 6 should be interpreted restrictively and that a plaintiff is
always entitled to bring his action in its entirety before the courts of the
domicile of the defendant:
"With respect to the second part of the question, it must be observed,
as already indicated above, that the 'special jurisdictions' enumerated
in Articles 5 and 6 of the Convention constitute derogations from the
principle that jurisdiction is vested in the courts of the State where the
defendant is domiciled and as such must be interpreted restrictively. It
must therefore be recognized that a court which has jurisdiction under
Article 5(3) over an action in so far as it is based on tort or delict does not
have jurisdiction over that action in so far as it is not so based. …."
In Somafer v. Saar-Ferngas [1978] E.C.R. 2183, in referring to the words
of Article 5(5) of the Brussels Convention the European Court also stated
that in interpreting Article 5 a wide and multifarious interpretation of the
exceptions to the general rule of jurisdiction contained in Article 2 must
be avoided
The second limb of Article 5(1) is worded "in the courts for the place
of performance of the obligation in question." I consider that these
words help to define the meaning of the words "in matters relating to a
contract". The European Court has held that "the obligation in question"
is a contractual obligation; it is an obligation arising under the contract
which the plaintiff is seeking to enforce. Accordingly the wording of the
second limb as interpreted by the European Court leads to the conclusion
that it is only where a party is seeking to enforce the performance of
an obligation contained in a contract (or of an obligation arising from
a relationship closely akin to a contract such as membership of an
association: see Peters v. ZNAV [1983] E.C.R. 987 referred to later in this
judgment) that the action can be brought in the place of performance of
that obligation, rather than in the domicile of the defendant. In de Bloos
v. Bouyer [1976] E.C.R. 1497 the European court stated at pp. 1508,
1509:
…"It follows that for the purposes of determining the place of performance
within the meaning of Article 5, quoted above, the obligation to be taken
into account is that which corresponds to the contractual right on which
the plaintiff's action is based.
"In a case where the plaintiff asserts the right to be paid damages or
seeks a dissolution of the contract on the ground of the wrongful conduct
of the other party, the obligation referred to in Article 5(1) is still that
which arises under the contract and the non-performance of which is
relied upon to support such claims.
…
In Handte v. Traitements Mécano-Chimiques des Surfaces [1992] E.C.R.
I-3967 the Court stated at pages 3994, 3995:
"…It follows that the phrase 'matters relating to a contract', as used in
Article 5(1) of the Convention, is not to be understood as covering a
situation in which there is no obligation freely assumed by one party
towards another.
In Custom Made Commercial v. Stawa Metallbau [1994] E.C.R. I-2913 the
Court stated at page 2957:
"It follows that under Article 5(1), in matters relating to a contract, a
defendant may be sued in the courts for the place of performance of the
obligation in question, even where the court thus designated is not that
which has the closest connection with the dispute.
"It is accordingly necessary to identify the 'obligation' referred to in Article
5(1) of the Convention and to determine its 'place of performance'.
"The Court has ruled that the obligation cannot be interpreted as referring
to any obligation whatsoever arising under the contract in question, but
is rather that which corresponds to the contractual right on which the
plaintiff's action is based (see Case 14/76 de Bloos v. Bouyer [1976] ECR
1497, paragraphs 10 and 13). “
… the European Court has held that the national court has jurisdiction
under Article 5(1) to decide a dispute relating to the repudiation of a
contract or a dispute as to the existence or non-existence of a contract.
In Tesam Distribution Ltd. v. Schuh Mode Team GmbH [1990] I.L.Pr. 149,
where the defendants claimed that no contract had been entered into,
the Court of Appeal applied the decision of the European Court in Effer v.
Kantner and held:
"The court may determine a dispute whether a contract was entered
into by the parties in exercise of its Article 5 (1) jurisdiction. Where the
existence of the contract is in dispute, the court's jurisdiction to hear and
determine a claim under Article 5(1) does not depend upon the court first
satisfying itself that the contract does exist. That is the subject matter of
the dispute."
... Accordingly, in my opinion, the judgments of the European Court give
guidance in three respects to a national court considering the ambit of
Article 5(1) of the Brussels Convention, and therefore to a court of the
United Kingdom considering the ambit of Article 5(1) of Schedule 4 to the
1982 Act. First, the special jurisdiction given by Article 5(1) constitutes
a derogation from the general rule contained in Article 2 that jurisdiction
is vested in the courts of the State where the defendant is domiciled,
and accordingly a wide interpretation of Article 5(1) should be avoided.
Secondly, whilst, as in the Peters case, the words "in matters relating to
a contract" can apply to a consensual obligation similar to that created
by a contract, nevertheless when read with the words "in the courts for
the place of performance of the obligation in question," the jurisdiction
under Article 5(1) only arises when the claim is to enforce an obligation
arising under a contract or a relationship akin to a contract such as
membership of an association. Thirdly, the reason for the national court
having jurisdiction is that there is a close connecting factor between
the dispute giving rise to the claim and that court. Having regard to
these considerations, and to the further consideration that in Kalfelis
v. Schröder the European Court treated a claim for unjust enrichment
as a cause of action separate and distinct from a claim in contract. I
consider that the present action for restitution does not come within
Article 5(1). Accordingly I am in agreement with the decision of Hirst J. at
first instance and the conclusion of Leggatt L.J. in his dissenting judgment
in the Court of Appeal. As I consider that the claim must be to enforce
an obligation arising under a contract or a relationship akin to a contract
I respectfully differ from the view of Roch L.J. that in Article 5(1) the
word "contract" embraces a contract that is a nullity, and from the view
of Millett L.J. that the word "contract" in Article 5(1) can include "void
contract" and that the expression "place of performance of the obligation
in question" can mean "intended place of performance of the supposed
obligation."
K. submitted, in the alternative, that the claim fell within Article 5(3) of
Schedule 4. As the claim is one based on unjust enrichment, and not on
tort or delict, I consider that it does not come within Article 5(3). In my
opinion it would be inappropriate to apply the words "where the harmful
event occurred" to a claim for unjust enrichment. I further consider that
the judgment of the European Court in Kalfelis v. Schröder operates to
strengthen the submission of G. that Article 5 (3) is inapplicable rather
than to assist the argument of the respondent. In that case question 2
referred to the court for a preliminary ruling was in these terms:
"(a) Must the term 'tort' in Article 5(3) of the EEC Convention be
construed independently of the Convention or must it be construed
according to the law applicable in the individual case (lex causae), which
is determined by the private international law of the court applied to?
"(b) Does Article 5(3) of the EEC Convention confer, in respect of an
action based on claims in tort and contract and for unjust enrichment,
accessory jurisdiction on account of factual connection even in respect of
the claims not based on tort?" (emphasis added)
The court considered that question in paragraphs 14 to 21 of its judgment
and answered the question as follows:
"(a) The term 'matters relating to tort, delict or quasi-delict' used in
Article 5(3) of the Convention must be regarded as an independent
concept covering all actions which seek to establish the liability of a
defendant and which are not related to a 'contract' within the meaning of
Article 5(1);
"(b) A court which has jurisdiction under Article 5(3) over an action in
so far as it is based on tort or delict does not have jurisdiction over that
action in so far as it is not so based." I agree with Hirst J. that the word
"liability" in answer 2(a) must be interpreted as meaning liability within
the scope of Article 5(3), namely, liability in tort, delict or quasi-delict.
Accordingly, in my opinion, the court in its answer to question 2(b) is
stating that a court which has jurisdiction under Article 5(3) over an
action in so far as it is based on tort or delict does not have jurisdiction
over an action in so far as it is not based on tort or delict but is based on
unjust enrichment.
Accordingly I consider, for the reasons which I have given, that the
decision of Hirst J. was correct and I would allow this appeal