LORD JUSTICE MORRITT: Each of these appeals raises the question
whether proceedings brought in the United Kingdom against a creditor
pursuant to ss.56(2) or 75 Consumer Credit Act 1974 in consequence of
misrepresentations or breaches of contract by the supplier to the debtor
of "timeshares" in respect of land in another state party to the Brussels
Convention are within the exclusive jurisdiction of the courts of that
state pursuant to Article 16 of the Convention. It is not disputed that if
the answer to the question is in the affirmative the Courts of the United
Kingdom are obliged to stay such proceedings pursuant to Article 19 of
the Convention.
The relevant provisions of the Consumer Credit Act 1974 are:
"56 Antecedent negotiations
(1) In this Act 'antecedent negotiations' means any negotiations with the
debtor or hirer -
(c) conducted by the supplier in relation to a transaction financed or
proposed to be financed by a debtor-creditor supplier agreement within
section 12 (b) or (c),
and 'negotiator' means the person by whom negotiations are so
conducted with the debtor or hirer.
(2) Negotiations with the debtor in a case falling within subsection (1) ...
(c) shall be deemed to be conducted by the negotiator in the capacity of
agent of the creditor as well as in his actual capacity.
75 Liability of creditor for breaches by supplier
(1) If the debtor under a debtor-creditor-supplier agreement falling
within section 12 (b) or (c) has, in relation to a transaction financed
by the agreement, any claim against the supplier in respect of a
misrepresentation or breach of contract, he shall have a like claim against
the creditor, who, with the supplier, shall accordingly be jointly and
severally liable to the debtor.
(2) Subject to any agreement between them, the creditor shall be entitled
to be indemnified by the supplier for loss suffered by the creditor in
satisfying his liability under subsection (1), including costs reasonably
incurred by him in defending proceedings instituted by the debtor."
The Brussels Convention was enacted as part of the domestic law of
England and Wales by the Civil Jurisdiction and Judgments Act 1982 s.2.
So far as relevant, Articles 16 (as amended) and 19 provide:
ARTICLE 16
"The following courts shall have exclusive jurisdiction, regardless of
domicile:
(1) in proceedings which have as their object rights in rem in immovable
property or tenancies of immovable property, the courts of the
Contracting State in which the property is situated;
ARTICLE 19
Where a court of a Contracting State is seised of a claim which is
principally concerned with a matter over which the courts of another
Contracting State have exclusive jurisdiction by virtue of Article 16, it
shall declare of its own motion that it has no jurisdiction."
The facts relevant to these appeals may be shortly stated.
Jarrett v First National Bank PLC
On 7th November 1990 Mr and Mrs Jarrett entered into a written
agreement with Sociedade Imobiladia Vale Navio Lda, the owner of a
residential and leisure complex at Vale Navio, Albuferia, Algarve, Portugal
for the purchase by them of an annual timeshare for week 47 in Villa 68
in the complex for the sum of £2,700. The price was paid as to £723-96
by the use by Mr Jarrett of his Barclaycard for which he subsequently
reimbursed Barclays Bank PLC. The balance was paid to the vendor
by the Royal Bank of Scotland pursuant to an loan agreement with Mr
and Mrs Jarrett. Both the agreement under which Mr Jarrett had the
use of a Barclaycard and the loan agreement are alleged to have been
debtor-creditor-supplier agreements within s.12(b) Consumer Credit Act
1974. According to Mr and Mrs Jarrett the contract had been induced by
representations made by an agent for the vendor that the complex would
be registered with the relevant authorities in Portugal as a recognised
time share complex and with an organisation called RCI thereby enabling
Mr and Mrs Jarrett to obtain title deeds to their timeshare property and to
participate in an exchange scheme operated by RCI. There were further
representations as to the facilities and staff available at the complex. Mr
and Mrs Jarrett allege that none of these representations was true.
In proceedings commenced by Mr and Mrs Jarrett in the Ipswich County
Court on 26th December 1993 they claimed to be entitled against
Barclays and the Royal Bank of Scotland to rescission of the relevant
credit agreements, payment of such sum as was paid by each of them
to the vendor of the timeshare and damages. They relied on ss 56 and
75 Consumer Credit Act 1974. The application of the Banks to strike
out the action for want of jurisdiction came before HH Judge Brandt on
19th April 1995 and was allowed. The judge had every sympathy for Mr
and Mrs Jarrett but he considered that the agreement with the vendor
was a tenancy agreement and that the proceedings had as their object
a tenancy of immoveable property within the meaning of Article 16.
Accordingly he concluded that as a matter of law he had no jurisdiction to
determine the claim because of the provisions of Arts. 16(1) and 19 of the
Brussels Convention. Mr and Mrs Jarrett now appeal.
Jones v First National Bank
On 14th April 1989 Mr and Mrs Jones entered into a written agreement
with Unit C31. La Cartuja Ltd for the purchase of a time share conferring
the right of exclusive occupancy during week 45 in a ground floor two
bedroomed apartment known as C31 La Cartuja, Sitio de Calahonda,
Mijas Costa, Malaga, Spain for the sum of £4,300 by means of the
purchase of two shares in the vendor. The contract provided that
the Company would allow the purchaser exclusive occupancy of the
apartment as specified and in accordance with the particulars specified
in the contract in perpetuity. Mr and Mrs Jones paid the deposit of £300
out of their own resources but borrowed the balance of £4,000 and the
sum of £421-24 required for an insurance premium from First National
Bank PLC pursuant to an agreement they allege to have been a regulated
debtor-creditor-supplier agreement within s.12(b) Consumer Credit
Act 1974. Mr and Mrs Jones allege that they were induced to enter into
the agreement with the vendor by its representation that the property
existed. In fact, they allege, the property was never built and does not
exist so that the vendor is in breach of contract thereby entitling them to
rescind it.
On 1st September 1994 Mr and Mrs Jones commenced proceedings in the
Liverpool County Court against First National Bank PLC claiming against
them rescission of the contract and repayment of £4,300 with interest.
They relied on s.75 Consumer Credit Act 1974. The application of the
Bank to strike out the action for want of jurisdiction because of Article 16
of the Brussels Convention was refused by District Judge Wolfson on 16th
December 1994 but granted by HH Judge Hamilton on 30th August 1995.
HH Judge Hamilton considered that the agreement with the vendor was
a tenancy and that the tenancy was the principal matter with which the
action against the Bank was concerned. Mr and Mrs Jones now appeal.
Peacock v First National Bank PLC
On 20th September 1989 Mr and Mrs Peacock entered into a written
agreement with Partners in Property Ltd for the purchase of a right of
occupation for themselves and all persons authorised by them in respect
of week 50 in an apartment known as Unit 50 La Orquedea, Calahonda,
Spain for the sum of £4,800 and an annual and variable management
and maintenance contribution. The contract provided that on payment
of the purchase price the vendor, a company incorporated in England,
would issue to Mr and Mrs Peacock a licence to occupy and allow them
exclusive occupancy of the apartment during week 50 for the next 80
years. Mr and Mrs Peacock paid the deposit of £500 by cheque and the
balance of £4,300 out of the proceeds of a loan from First National Bank
PLC pursuant to a regulated debtor-creditor-supplier agreement within
s.12(b) Consumer Credit Act 1974. The vendor failed to issue a licence to
occupy the apartment and went into liquidation in August 1990.
On 6th December 1993 Mr and Mrs Peacock instituted proceedings against
the Bank in the Bristol County Court for damages to compensate them
for the loss of the purchase price and for mental distress, inconvenience,
upset, disappointment and frustration by the loss of the holidays for
themselves and their next of kin for up to the next 80 years. They
rely on s.75 Consumer Credit Act 1974. The application of the Bank
to strike out the action for want of jurisdiction by reason of Art. 16 of
the Brussels Convention was dismissed by District Judge Daniel on 7th
November 1995. HH Judge Jack dismissed the appeal of the Bank from
the order of the District Judge on 1st February 1996. He considered
that the agreement with the vendor, with which the action was primarily
concerned, was not a tenancy so that Article 16 was not applicable. Thus
in this case it is the Bank which appeals.
The arguments of Counsel revealed four principal issues, namely:
1. By reference to which system of law does this Court determine whether
or not the Timeshare Agreements are tenancies (or, in the case of the
Jones, the grant of rights in rem in immoveable property) within Article
16(1) of the Brussels Convention?
2. By reference to that system of law identified in answer to the first issue
are these Timeshare Agreements tenancies (or, in the case of the Jones,
the grant of rights in rem in immoveable property) within Article 16(1)?
3. If the Timeshare Agreements are such tenancies (or grant) are they the
"object" of the respective proceedings within Article 16(1)?
4. Should any, and if so which, of these questions be referred to the
European Court of Justice pursuant to The Protocol on the Interpretation
of the Convention on Jurisdiction and the Enforcement of Judgments in
Civil and Commercial Matters [1983] O.J.C97/1?
I propose to deal with these issues in the order in which I have set them
out.
For the Jones and the Peacocks it was submitted that the question
whether the Timeshare Agreements in their cases were tenancies should
be determined by the lex situs of the property in respect of which
the rights were to be exerciseable, namely Spain. They submit that it
would not be right to apply English Law in the absence of any evidence
as to what the relevant law of Spain is because the orders appealed
from struck out the actions on a preliminary application and were not
decisions reached after a full trial. The Jarretts adopted this argument
but submitted in the alternative that the proper construction of the
relevant words in Article 16(1) was that laid down by the European Court
of Justice. The Banks submitted that the alternative argument for the
Jarretts was the correct answer to this issue.
I have no hesitation in accepting the alternative argument for the
Jarretts and the arguments for the Banks on this Issue. First, s.3(1) Civil
Jurisdiction and Judgments Act 1982 requires the meaning and effect of
the Brussels Convention, if not referred to the European Court of Justice
"to be determined in accordance with the principles laid down by and
any relevant decision of the European Court of Justice". By s.3(3) this
Court is enjoined to consider the Reports specified in s.3(2), including that
of Professor Schlosser on the Accession Convention, in ascertaining the
meaning or effect of any provision of the Convention.
Those principles and decisions do not suggest that the lex situs of the
property over which the rights are exerciseable should determine whether
there is a tenancy or not. However our attention was drawn by counsel
for the Jones and Peacocks to paragraph 168(c) of the Schlosser Report
[O.J.1979 C59] in which it is stated
"If an action relating to immovable property is brought in a particular
State and the question whether the action is concerned with a right in
rem within the meaning of Article 16(1) arises, the answer can hardly be
derived from any law other than that of the lex situs."
But this view has not been adopted by the European Court of Justice.
Thus in Reichert v Dresdner Bank [1990] ECR 1 at page 41 the Court
stated in paragraph 8 of its judgment:
"it is evident that in order to ensure that the rights and obligations arising
out of the Convention for the Contracting States and for individuals
concerned are as equal and uniform as possible, an independent definition
must be given in Community Law to the phrase 'in proceedings which
have as their object rights in rem in immovable property'..."
In the case of Hacker v Euro-Relais GMBH [1992] ECR 1111 the Advocate-
General in his opinion at paragraphs 7 and 8 said:
"..the Court established the principle that the concept [tenancies of
immovable property] should be interpreted independently on the basis
of the Convention itself without reference to the law applicable under the
conflict rules of the national court hearing the main proceedings.
8. Only if there is uniformity of interpretation will uniform application of
the Convention in all the Contracting States be ensured in this area and
the free movement of decisions which constitutes the primary objective of
the Convention guaranteed."
Counsel for the Jones and the Peacocks submitted that the uniformity
of interpretation required was in relation to the ascertainment of the
"object" of the proceedings, leaving the identification of rights in or
tenancy of immoveable property to the lex situs. I do not accept that
submission. It is inconsistent with the opinion of the Advocate-General
in Hacker, just quoted, which was given in answer to a question asking
specifically whether there was a tenancy agreement; that question did
not ask what was the object of the proceedings. Moreover the need for
uniformity arises at least as much in relation to the construction of the
word "tenancy" as it does in relation to the word "object".
Accordingly in my judgment the questions whether the Timeshare
Agreements in each of these three appeals were or are tenancies (or the
grant of rights over immoveable property) must be determined by this
court applying to the facts of the three cases the interpretation placed by
the European Court on the relevant words in Article 16. It is not material
to consider whether the Timeshare Agreements were or are tenancies or
the grant of such rights by the domestic law of Spain or, in the absence of
any evidence what that is, by the domestic law of England and Wales.
I turn then to the second question whether these timeshare agreements
are tenancies or, in the case of the Jones, the grant of rights in rem over
immoveable property. It is convenient to consider first the basis for the
suggested distinction between the case of the Jones and that of the
Peacocks and the Jarretts. It depends on the provision in the contractual
conditions that the Company will allow the Jones exclusive occupancy
"in perpetuity". It is suggested that such a perpetual right cannot be a
tenancy. I do not agree. The right to occupy is still limited to week 45 in
each year. I can discern nothing in the decisions of the European Court
of Justice to suggest that there is a distinction between cases in which
the weekly right of occupancy is expressed to endure for 80 years, in
perpetuity or where, as in the case of the Jarretts, the agreement is
silent as to the number of years. In my view either each of the timeshare
agreements is a tenancy within Article 16 or none of them is.
The question of what is a tenancy for the purposes of Article 16 has been
considered by the European Court of Justice in three cases. The first was
Sanders v Van der Putte (1977) ECR 2383. In that case the agreement
was for Sanders to take over from Van der Putte the running of a florist's
shop in premises in Germany rented by the latter from third parties.
Sanders failed to do so and was sued by Van der Putte in the Netherlands.
Sanders contended that those courts had no jurisdiction as Article 16(1)
applied and conferred exclusive jurisdiction on the courts of Germany.
The first question referred to the European Court of Justice was whether
a tenancy within Article 16(1) included an "agreement to rent under a
usufructuary lease a retail business carried on in immovable property
rented from a third party by the lessor". That question was answered
in the negative for the reasons set out in paragraphs 11 to 19 of the
judgment of the court which it is necessary to quote in full:
"11. As regards the matters listed under subparagraphs (2), (3), (4) and
(5) of that article it is clear that the courts which are given exclusive
jurisdiction are those which are best placed to deal with the disputes in
question.
12. The same applies to the assignment of exclusive jurisdiction to
the courts of the Contracting State in which the property is situated in
matters relating to rights in rem in, or tenancies, of immovable property.
13. In fact, actions concerning rights in rem in immovable property are
to be judged according to the rules of the State in which the immovable
property is situated since the disputes which arise frequently in checks,
inquiries and expert assessments which must be carried out on the spot,
with the result that the assignment of exclusive jurisdiction satisfies the
need for the proper administration of justice.
14. Tenancies of immovable property are generally governed by special
rules and it is preferable in the light of their complexity, that they be
applied only by the courts of the States in which they are in force.
15. The foregoing considerations explain the assignment of exclusive
jurisdiction to the courts of the State in which the immovable property
is situated in the case of disputes relating to tenancies of immovable
property properly so-called, that is to say, in particular, disputes between
lessors and tenants as to the existence or interpretation of leases or
to compensation for damage caused by the tenant and to giving up
possession of the premises.
16. The same consideration do not apply where the principal aim of the
agreement is of a different nature, in particular, where it concerns the
operation of a business.
17. Furthermore, the assignment, in the interests of the proper
administration of justice, of exclusive jurisdiction to the courts of one
Contracting State in accordance with Article 16 of the Convention results
in depriving the parties of the choice of the forum which would otherwise
be theirs and, in certain cases, results in their being brought before a
court which is not that of the domicile of any of them.
18. Having regard to that consideration the provisions of Article 16 must
not be given a wider interpretation than is required by their objective.
19. Therefore, the concept of 'matters relating to ... tenancies of
immovable property' within the context of the Convention must not
be interpreted as including an agreement to rent under a usufructuary
lease a retail business (verpachting van een winkelbedrifj) carried on in
immovable property rented from a third person by the lessor."
Thus Article 16(1) is not to be construed any wider than is necessary to
achieve its object. The object is that the courts of the situs should have
exclusive jurisdiction in those cases in which the complexities of local
law or the needs in the interests of the proper administration of justice
for local knowledge or assessments so require. The court concluded that
those considerations did not require the categorisation of the agreement
in that case as a tenancy for it was concerned with the operation of a
business.
The second case was Rosler v Rottwinkel [1986] Q.B. 33. That case was
concerned with an agreement between two Germans for the letting by
Rosler to Rottwinkel of a holiday villa in Italy for three weeks. Rosler
commenced proceedings in Berlin claiming damages for breach of the
agreement in respect of the number of permissible occupants, loss or
damage to the contents of the villa and the failure of Rottwinkel to pay
for the use of the various utilities such as electricity. The question for
the European Court of Justice was whether the short term letting was
a tenancy within Article 16(1). In its decision the court repeated the
principles established in Sanders v. Van der Putte and continued:
"21. The question submitted by the Bundesgerichtshof is designed to
ascertain whether exceptions may be made to the general rule laid down
in article 16 owing to the special character of certain tenancies, such as
short-term lettings of holiday homes, even though the wording of that
article provides no indication in that respect.
22. It must be emphasised in this regard that, as the Italian Government
has rightly pointed out, inherent in any exception to the general rule laid
down in article 16(1) is the risk of further extensions which might call
in question the application of national legislation governing the use of
immovable property.
23. Account must also be taken of the uncertainty which would be created
if the courts allowed exceptions to be made to the general rule laid down
in article 16(1), which has the advantage of providing for a clear and
certain attribution of jurisdiction covering all circumstances, thus fulfilling
the purpose of the Convention, which is to assign jurisdiction in a certain
and predictable way.
24. It follows that the provision in question applies to all tenancies of
immovable property irrespective of their special characteristics.
25. The reply to the first question must therefore be that article 16(1) of
the Convention applies to all lettings of immovable property, even for a
short term and even where they relate only to the use and occupation of a
holiday home."
Thus the court recognised the short term letting as a tenancy and
concluded that there was no justification for any exceptions to the
generality of Article 16(1) in its application to a "tenancy". Accordingly
that decision throws no further light on what are the necessary features of
a tenancy within Article 16(1). Article 16(1) was subsequently amended
by the Lugano Convention so as to exclude short term lettings for private
use between natural persons and this amendment was carried forward by
the Treaty of Accession dealing with the admission of Spain and Portugal.
Neither the fact of the amendment nor its form throws any further light
on the meaning to be attributed to the word "tenancy".
The third case was Hacker v Euro-Relais GMBH [1992] ECR 1111 to which
I have already referred. That case concerned the provision of a package
holiday whereby in return for a single sum Euro-Relais agreed to provide
for Mrs Hacker and her six travelling companions a holiday home in the
Netherlands owned by a third party for the period of two weeks and to
make the necessary booking for a ferry crossing. Mrs Hacker complained
that the holiday home so provided did not live up to the description
of it given by Euro-Relais thereby causing her additional expense and
loss of amenity and enjoyment. She sued Euro-Relais in Germany. The
question for the court was whether such a contract was a tenancy within
Article 16(1) so as to confer exclusive jurisdiction on the courts of the
Netherlands. The Court concluded that it was not. The principles to be
applied in the construction of the Article laid down in Sanders v Van der
Putte and repeated in Rosler v Rottwinkel were again emphasised. In
paragraph 15 of the judgment the court stated in regard to the agreement
with which the case was concerned that:
"A complex contract of that type, which concerns a range of services
provided in return for a lump sum paid by the customer, is outside the
scope within which the exclusive jurisdiction laid down by Article 16(1)
finds its raison d'etre and cannot constitute a 'tenancy agreement' within
the meaning of that article as interpreted in the judgment in Sanders v
Van der Putte, cited above."
It appears to me from a consideration of those cases that though
the need for a uniform interpretation of the word "tenancy" has been
repeatedly recognised no such interpretation has yet emerged from the
decisions of the European Court of Justice. Sanders and Hacker establish
two classes of agreement which are not tenancies. Rosler demonstrated
that there was no exclusion for short term lettings but went no further.
However in the light of the Court's decision in Rosler v Rottwinkel I can
see no reason for denying to the agreements in these cases the status
of tenancies within Article 16(1). In each case one party is entitled to
the exclusive occupation of immovable property assumed by the contract
to be owned by the other for a specified period in return for a sum of
money. It is true that the period is shorter than in Rosler, namely a week
at a time, but I do not think that that can affect the question of principle
particularly as the amendment to Article 16(1) subsequently made does
not apply to this case as one of the parties is not a natural person. All
the considerations which led to the Court construing Article 16(1) so as
to include short term lettings apply as much to the agreements in these
cases as to the short term letting in Rosler.
Counsel for the Jones and the Peacocks submitted that the agreements
should be distinguished from the tenancy which might result from the
subsequent grant of the licence to occupy. For this purpose he relied on
para 172(c) of the Schlosser Report which states that:
"actions based on contracts for the transfer of ownership or other rights
in rem affecting immovable property do not therefore have as their object
rights in rem. Accordingly they may also be brought before courts outside
the United Kingdom."
But that passage is dealing with the laws of the United Kingdom on the
supposition earlier referred to in paragraph 168(c) that the lex situs would
determine what was a tenancy for the purposes of Article 16(1). As I
have already noted that view was not adopted by the European Court
of Justice. In my judgment the distinction recognised by English Law
between the grant of a right in rem and a contract for such a grant is not
recognised as a valid distinction in relation to tenancies by any principle
laid down by the European Court of Justice. Nor, bearing in mind the
principles established by that Court to be observed in the construction of
Article 16, do I see any logical reason why it should.
Accordingly for all these reasons I would answer the second question in
the affirmative.
The Banks submit that once the second question is answered in the
affirmative there is little choice but to answer the third question in the
affirmative also. It is not disputed that when Article 16(1) refers to
"proceedings which have as their object" rights in rem etc it is referring
to the subject matter of the proceedings. Newtherapeutics Ltd v Katz
[1991] Ch. 226, 243G. For the Banks reliance is placed on the words in
s.75(1) Consumer Credit Act 1974 conferring on the debtor the like claim
against the creditor as the debtor has against the supplier. They point to
R v Surrey Justices (1869) LR 5 Q.B.D. 87 and Bradlaugh v Clarke (1883)
8 App. Cas. 354 as demonstrating that the use of the word "like" is apt to
incorporate all the features of the principal subject. It is submitted that
because the claim against the suppliers, the vendors of the rights, may
only be brought in Spain or Portugal so claims against the creditors, the
Banks, may only be brought there.
I do not accept these submissions. The reference to the like claim in
s.75 Consumer Credit Act 1974 must refer to the like cause of action.
Plainly the remedies cannot be the same, for the remedies available to the
debtor against the supplier may include injunctions or orders for specific
performance which could not lie against the creditor. Further the use of
the words "the like" presupposes some differences. I can see no reason
at all for supposing that Parliament intended to enact in relation to the
statutory cause of action conferred by s.75 (or s.56) any jurisdictional
requirement to be observed in proceedings against the supplier. But I
do not think that the answer to the question lies in a consideration of
the statute rather than the Brussels Convention and in the principles
established by the European Court of Justice in the interpretation of the
words "proceedings which have as their object.."
In Reichert v Dresdner Bank [1990] ECR 27 the court was concerned
with a claim to set aside a gift of land in France on the ground that it was
made in fraud of the creditors of the donor. The contention that Article
16(1) applied to the claim so as to give exclusive jurisdiction to the courts
in France was rejected. At paragraph 11 the Court said:
"...Article 16(1) must be interpreted as meaning that the exclusive
jurisdiction of the Contracting State in which the property is situated
does not encompass all actions concerning rights in rem in immovable
property but only those which both come within the scope of the Brussels
Convention and are actions which seek to determine the extent, content,
ownership or possession of immovable property or the existence of other
rights in rem therein and to provide the holders of those rights with the
protection of the powers which attach to their interest."
In Webb v Webb [1994] Q.B. 696 the European Court of Justice was
concerned with a claim by a father that his son held a flat in France
purchased by the son with funds provided by the father on a resulting
trust for the father. The son submitted that only the courts of France
had jurisdiction for the proceedings had as their object rights in rem
in immovable property. The European Court of Justice rejected that
submission. In paragraph 14 of the judgment of the Court it is stated:
"Article 16 confers exclusive jurisdiction in the matter of rights in rem in
immovable property on the courts of the contracting state in which the
property is situated. In the light of the court's judgment in Reichert v.
Dresdner Bank A.G. (Case C-115/88) [1990] E.C.R. I-27, where the court
had to rule on the question whether the exclusive jurisdiction prescribed
by that article applied in respect of an action by a creditor to have a
disposition of immovable property declared ineffective as against him
on the ground that it was in fraud of his rights by his debtor, it follows
that it is not sufficient, for article 16(1) to apply, that a right in rem in
immovable property be involved in the action or that action have a link
with immovable property: the action must be based on a right in rem and
not on a right in personam, save in the case of the exception concerning
the tenancies of immovable property."
The court concluded that the claim by the father against his son was
not an action in rem within the meaning of Article 16(1) but an action in
personam. In my view it is clear that the exception concerning tenancies
recognised by the last sentence of that paragraph relates to the status
of tenancies in some member states as personalty and not to the
requirement that the action must be based on, as opposed to having a
link or connection with, rights in
rem or a tenancy. This distinction was emphasised by the decision of the
Court in Lieber v Goebel [1994] ECR 2535 at 2550 para.13.
In my view, in the light of those statements of principle, these actions do
not have as their object tenancies of immovable property. In each action
the foundation for the claim against the Bank under s.75 (and in the case
of the Jarretts s.56 also) is the debtor-creditor-supplier agreement. That
contract has attached to it the personal statutory rights conferred by the
Consumer Credit Act 1974 on the debtor. Of course the enforcement of
those statutory rights is connected to or linked with the claims of the
consumer against the supplier under the timeshare agreements but it
is based on the debtor-creditor-supplier agreement not the timeshare
agreement. The consumer does not seek the resolution of any of the
disputes referred to by the European Court of Justice in Sanders v Van der
Putte [1977] ECR 2383 at p.2391 para.15, in Rosler v Rottwinkel [1986]
Q.B. 33 at p.60 paras 28 and 29 or in Reichert v Dresdner Bank [1990]
ECR 27 at p.41 para.11.
Moreover when one considers the principles established by the European
Court of Justice which justify an interpretation sufficient to give effect
to the object of Article 16(1) but no more, in my judgment one is driven
to the same conclusion. There is no reason to suppose that it was
the intention of the signatories to the Brussels Convention that rights
conferred by the legislation in one contracting state for the protection of
the consumer should, if those rights are linked to a dispute between the
consumer and a third party concerning rights in rem or a tenancy, only be
enforced in the courts of another contracting state.
For all these reasons I would answer the third question in the negative.
It follows that I would allow the appeal in the case of the Jones and the
Jarretts and dismiss it in the case of the Peacocks. But before reaching a
final conclusion it is necessary to consider the fourth question.
The Protocol on the Interpretation of the Convention on Jurisdiction and
Enforcement of Judgments in Civil and Commercial Matters [1983] O.J.
C97/1 entitles, but does not require, this court to request the European
Court of Justice to give a ruling on a question of interpretation of the
Convention raised in a case pending before it "if it considers that a
decision on the question is necessary to enable it to give judgment".
The suggestion that there should be such a request was made by counsel
for The Royal Bank of Scotland in the appeal of the Jarretts. The other
Banks supported the suggestion but without any great enthusiasm. The
Jones, Jarretts and Peacocks opposed the suggestion on grounds of cost,
delay and the smallness of the amount at stake.
In my view a request is not necessary. In respect of each of the three
questions involved it appears to me that the relevant principles are clearly
established by the decisions of the European Court of Justice to which I
have referred. The arguments are concerned with how those principles
are to be applied. That is not a matter of interpretation of the Convention
but a matter within the exclusive province of the courts of England and
Wales.
In my judgment the appeals of the Jones and the Jarretts should be
allowed and that of First National Bank in the action brought by the
Peacocks should be dismissed. In each case the action should proceed to
trial in the County Court in the usual way.
LORD JUSTICE WARD: I agree.
LORD JUSTICE POTTER: I also agree.
Order: Application for leave to appeal to the House of Lords dismissed.
Case of Jarrett
Appeal allowed with costs; costs in court below be paid by second
defendant; costs be taxed and paid forthwith.
Case of Jones
Appeal allowed with costs; legal aid taxation of plaintiffs' costs up to
10.10.95; costs be taxed and paid forthwith.
Case of Peacock
Appeal dismissed with costs; legal aid taxation of plaintiff's costs; costs be
taxed and paid forthwith.