JUDGE McGONIGAL: [1] On 27 March 2002 the claimant issued a claim
form against the nine defendants alleging 'breach of duty and/or contract
and/or conspiracy'. The claim form stated that the High Court has power
to hear the claim under the Civil Jurisdiction and Judgments Act 1982 and
added: 'The third defendant is a British national residing in France and will
understand the contents of the claim.' The claim form and particulars of
claim were served on the third defendant (Mr F.) in France without any
leave of the court in reliance on CPR 6.19 and the statement on the claim
form quoted above was intended to comply with CPR 6.19(3).
[2] On 29 May 2002 Mr F. made an application for an order that the court
has no jurisdiction to try the claim against him because he is domiciled
in France, the claim relates to a contract of employment and, pursuant
to art 20 of Council Regulation (EC) 44/2001 (on jurisdiction in civil and
commercial matters) (OJ 2001 L12 p 1) (the Brussels Regulation), such
action may only be commenced in France. It is common ground that Mr
F. is domiciled in France. His application raises the issue of the scope of
section 5 of the Brussels Regulation.
[3] The claimant's case as set out in the particulars of claim is as follows.
(1) Until the claimant acquired the business and assets of S. from its
receivers in January 2000, that company had been owned, controlled and
run by the sixth defendant, Mr PK. and its E. division had been managed
by the fourth defendant, Mr JK. (a son of Mr PK.) and run by its Paris
depot manager, Mr F., and its sales executive, the first defendant (Mr
B.). After the claimant's acquisition of the E. division Mr JK, Mr F. and
Mr B. continued to run the E. division as employees of the claimant. (2)
The wholesale division of S. was managed by Mr SK (a son of Mr PK.).
Mr SK. continued to manage it as an employee of the claimant after its
acquisition by the claimant until 12 July 2001 when he ceased to be an
employee when the wholesale division was purchased by the second
defendant (B. Ltd) which is a company owned by Mr SK. and his parents.
(3) Another division of S. continued to be managed after January 2000
by another son of Mr PK, the fifth defendant, Mr NK., as an employee
of the claimant. The eighth (Mr N.) and ninth defendants (Mr T.) are
the former administration manager and chief executive respectively
of S. who became employees of the claimant in January 2000. Mr PK.
became a consultant with the claimant for 12 months from the time of the
acquisition in January 2000. (4) The claimant's case is that (a) the vast
majority of its potatoes were sourced from P., a French co-operative under
a 'joint business arrangement'; (b) by 27 April 2001 Mr JK and/or Mr T.
had created, during working hours and using the claimant's equipment, a
document to be used to solicit P. to become an investor in a joint venture
(known as the ETC project) which the employees of the E. division, Mr JK,
Mr F. and Mr B., would join; (c) Mr JK. and Mr PK. approached Mr B. to
solicit him to join the proposed joint venture; (d) by 12 September 2001
all the defendants, including Mr F., had combined with the intention of
unlawfully interfering with the claimant's contractual relationship with P.,
by soliciting P. to join the proposed joint venture; (e) P was to be solicited
to join by Mr JK. and Mr F. who would do this at a meeting organised with
P. on the claimant's business; (f) at that meeting on 14 September 2001
Mr JK and Mr F. solicited P to join the proposed joint venture; (g) the
defendants continued to develop the idea of the proposed joint venture
with P until they were found out by the claimant which investigated
what they had been doing, suspended those defendants who were its
employees and took the necessary security measures at a cost of about £
313,000 which it claims in damages from the defendants.
[4] The case against Mr F. is contained in the following three paragraphs
of the particulars of claim:
'22. By 12 September 2001, the defendants (B. acting through PK.
and SK. who also acted on their own behalves) had combined with
the intention of unlawfully interfering with the claimant's contractual
relationship with P and injuring the claimant, by soliciting P to join the
ETC project through JK. and/or F., who in breach of duty and/or contract
would take advantage of a meeting organised with P on the claimant's
business to propose the ETC project. The said combination (save in the
case of B., PK and SK) was also a breach of their duty of fidelity and in
particular those set out in sub-paras 9(i)-(ix) above...
'24. On 14 September 2001, JK. and F. met Mr L. of P on the claimant's
business in France and in breach of duty set out in sub-paras 9(i)-(viii)
above solicited P to join the ETC project...
'31. Furthermore, JK. in breach of duty set out in sub-paras 9(i), (ii),
(x) and (xi) above failed to report to the directors of the claimant F's
breach of duty in discussing the ETC project with Mr L. during the meeting
on 14 September 2001 and F. in breach of duty (as set out against JK.
aforesaid) failed to report JK.'
The breaches of duty set out in para 9 are pleaded as specific aspects of
the duty of fidelity which, according to para 8, those defendants, including
Mr F., who were employees of the claimant owed to the claimant as its
employees. In the alternative those duties are pleaded as implied terms of
their contracts of employment.
[5] These paragraphs contain two claims against Mr F.: (a) a tort
claim on the basis that he conspired with the other defendants to
unlawfully interfere with the claimant's contractual relationship with P (the
conspiracy claim); and (b) a claim that he acted in breach of his duty of
fidelity as an employee in joining the conspiracy and carrying it out (the
employment claim). The conspiracy claim is contained in paras 22 and 24;
the employment claim is contained in paras 22, 24 and 31.
[6] The Brussels Regulation came into force on 1 March 2002 (art 76)
and applies only to legal proceedings instituted after that date (art 66);
it therefore applies to this action started on 27 March 2002. The Brussels
Regulation largely supersedes the Brussels Convention on Jurisdiction and
the Enforcement of Judgments in Civil and Commercial Matters 1968 (as
set out in Sch 1 to the 1982 Act) (art 69). The Brussels Regulation has
direct effect.
[7] The Brussels Regulation is in many respects very similar to the
Brussels Convention. Article 2(1) provides that 'subject to this Regulation,
persons domiciled in a Member State shall, whatever their nationality,
be sued in the courts of that Member State' and art 3(1) provides that
'Persons domiciled in a Member State may be sued in the courts of
another Member State only by virtue of the rules set out in Sections 2 to
7 of this Chapter'. It is common ground that Mr F. is domiciled in France.
Accordingly, Mr F. can only be sued in England if the rules in sections 2-7
allow it.
[8] Section 2 of the Brussels Regulation is headed 'Special Jurisdiction'.
Articles 5 and 6 of that section provide as follows:
'Article 5
A person domiciled in a Member State may, in another Member State, be
sued...
3. in matters relating to tort, delict or quasi-delict, in the courts for the
place where the harmful event occurred or may occur...
Article 6
A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the courts for the place
where any one of them is domiciled, provided the claims are so closely
connected that it is expedient to hear and determine them together
to avoid the risk of irreconcilable judgments resulting from separate
proceedings...'
[9] Subject to the question whether it is a matter 'relating to an individual
contract of employment' (see [11]-[26], below) the conspiracy claim is
within the jurisdiction of the English court if 'the harmful event occurred'
in England. The similar phrase in art 5(3) of the Brussels Convention has
been held to give a claimant the option to sue either in the country where
the damage occurred or in the country where the event giving rise to the
damage occurred (see Handelskwekerij GJ Bier BV v Mines de Potasse
d'Alsace SA Case 21/76 [1978] QB 708, [1977] 3 WLR 479, [1976] ECR
1735). The claimant seeks to recover the cost of an investigation (which
took place both in England and in France) of a conspiracy (which took
place in both countries). There is no allegation that Mr F. did anything
pursuant to the alleged conspiracy outside France but the harmful event is
the conspiracy, not the particular acts of individual conspirators, and the
investigation was of the conspiracy as a whole. In Shevill v Presse Alliance
SA [1992] 1 All ER 409, [1992] 2 WLR 1 the Court of Appeal held that the
English courts had jurisdiction under art 5(3) of the Brussels Convention
in relation to a libel claim where the libel concerned was published both
in France and in England. I find, therefore, that the English courts have
jurisdiction over the conspiracy claim by virtue of art 5(3) of the Brussels
Regulation unless section 5 applies to that claim.
[10] Even if I am wrong on that, the English courts have jurisdiction
(subject to section 5) over the conspiracy claim by virtue of art 6(1) of
the Brussels Regulation. The other defendants are domiciled in England
and the conspiracy claim against Mr F. is the same conspiracy claim
advanced against those other defendants. There could not be a closer
connection.
[11] However, Mr Michael James, counsel for Mr F., submitted that the
conspiracy claim (a) cannot be heard in the English courts because it
relates to Mr F.'s contract of employment so that only the French courts
have jurisdiction under art 20, and (b) cannot be heard under arts 5(3) or
6(1) because the only exceptions to the exclusive jurisdiction conferred in
this case on the French court by section 5 of the Brussels Regulation are
in arts 4 and 5(5) which are referred to in art 18(1); but (c) can only be
heard by the French courts. Mr Hugh Jory for the claimant submitted that
the jurisdiction conferred by section 5 applies only to claims brought qua
employer and that section 5 applies only to contract claims.
[12] The full text of section 5 is as follows:
'Jurisdiction over individual contracts of employment
Article 18
1. In matters relating to individual contracts of employment, jurisdiction
shall be determined by this Section, without prejudice to Article 4 and
point 5 of Article 5.
2. Where an employee enters into an individual contract of employment
with an employer who is not domiciled in a Member State but has a
branch, agency or other establishment in one of the Member States,
the employer shall, in disputes arising out the operations of the branch,
agency or establishment, be deemed to be domiciled in that Member
State.
Article 19
An employer domiciled in a Member State may be sued:
1. in the courts of the Member State where he is domiciled; or
2. in another Member State: (a) in the courts for the place where the
employee habitually carries out his work or in the courts for the last place
where he did so, or (b) if the employee does not or did not habitually
carry out his work in any one country, in the courts for the place where
the business which engaged the employee is or was situated.
Article 20
1. An employer may bring proceedings only in the courts of the Member
State in which the employee is domiciled.
2. The provisions of this Section shall not affect the right to bring a
counter-claim in the court in which, in accordance with this Section, the
original claim is pending.
Article 21
The provisions of this Section may be departed from only by an
agreement on jurisdiction:
1. which is entered into after the dispute has arisen; or
2. which allows the employee to bring proceedings in courts other than
those indicated in this Section.'
Section 5 includes provisions regarding jurisdiction in matters relating to
individual contracts of employment which were contained in arts 5(1) and
17 of the Brussels Convention.
[13] There are parts of the preamble to the Brussels Regulation which
must be taken into consideration. These are recitals (11)-(15) which read
as follows:
'(11) The rules of jurisdiction must be highly predictable and founded
on the principle that jurisdiction is generally based on the defendant's
domicile and jurisdiction must always be available on this ground save in
a few well-defined situations in which the subject-matter of the litigation
or the autonomy of the parties warrants a different linking factor. The
domicile of a legal person must be defined autonomously so as to make
the common rules more transparent and avoid conflicts of jurisdiction.
'(12) In addition to the defendant's domicile, there should be alternative
grounds of jurisdiction based on a close link between the court and the
action or in order to facilitate the sound administration of justice.
'(13) In relation to insurance, consumer contracts and employment, the
weaker party should be protected by rules of jurisdiction more favourable
to his interests than the general rules provide for.
'(14) The autonomy of the parties to a contract, other than an insurance,
consumer or employment contract, where only limited autonomy to
determine the courts having jurisdiction is allowed, must be respected
subject to the exclusive grounds of jurisdiction laid down in this
Regulation.
'(15) In the interests of the harmonious administration of justice it is
necessary to minimise the possibility of concurrent proceedings and to
ensure that irreconcilable judgments will not be given in two Member
States. There must be a clear and effective mechanism for resolving cases
of lis pendens and related actions and for obviating problems flowing from
national differences as to the determination of the time when a case is
regarded as pending. For the purposes of this Regulation that time should
be defined autonomously.'
[14] Where parties to an alleged tort, such as conspiracy, are domiciled in
different member states there is an obvious tension between the principle
that jurisdiction is generally based on the defendant's domicile (recital
(11)) and the need to minimise the possibility of concurrent proceedings
with the danger of irreconcilable judgments (recital (15)). In resolving
that tension when the defendant is an employee the court must have
regard to the policy set out in recital (13).
[15] Mr James for Mr F. submitted that the conspiracy claim relates to Mr
F.'s contract of employment and that in the phrase 'matters relating to
individual contracts of employment' one could read 'matters' as 'claims'.
He referred to recital (13) of the preamble and argued that, if tortious
claims connected with employment were outside section 5, employers
could get round section 5 by framing claims in tort rather than in contract.
He pointed out that in this case the same alleged facts found both a claim
in conspiracy and a claim for breach of Mr F.'s contract of employment.
[16] Mr Jory submitted that section 5 (including art 20) relates only
to jurisdiction over contractual claims under individual employment
contracts, that it relates only to proceedings brought qua employer
against a defendant qua employee and that it does not relate to any
claim on any basis where the claimant happens to be the defendant's
employer. As to recital (13) of the preamble he submitted that the words
'in relation to... employment' was a reference to section 5 and should not
be given a wider meaning than 'in matters relating to individual contracts
of employment'. He further submitted that the reference to the weaker
party's interests is consistent with the considerations in art 6 and does not
exclude them. The reference is not to the weaker party's preferences or
envisaged strategic advantages but to his legitimate interests which are
the same as the interests of justice which are the basis of art 6(1).
[17] The wording of section 5 indicates that it is concerned to protect
the employee as the weaker party (see recital (13) of the preamble)
in two ways. First it is concerned to prevent employers taking unfair
advantage of an employee when the terms of the employment contract
are negotiated or, more often, presented to the employee. Article 21
prevents the employer from obtaining the employee's agreement to
a different jurisdiction from that of the employee's domicile when the
contract of employment is being negotiated. Secondly section 5 is
concerned to give the employee jurisdictional advantage if a dispute
arises. Section 5 of the Brussels Regulation gives the employee a choice
of jurisdiction in which to sue the employer (arts 18(2) and 19) but
limits the employer to bringing proceedings only in the courts of the
member state in which the employee is domiciled (art 20). I accept Mr
Jory's submission that 'employment' in recital (13) of the preamble is a
reference to section 5 of the Brussels Regulation and does not enlarge
the meaning of the phrase 'in matters relating to individual contracts of
employment' in art 18(1).
[18] That phrase may well cover situations where there is no contract of
employment. Mr James drew my attention to the Giuliano and Lagarde
Report on the Rome Convention (OJ 1980 C282 p 1). Article 6 of the
Rome Convention on the Law Applicable to Contractual Obligations 1980
(as set out in Sch 1 to the Contracts (Applicable Law) Act 1990) uses
the same phrase 'individual contracts of employment' and prevents a
choice of governing law from depriving the employee of the protection
afforded by the mandatory rules of the law which would normally be
applicable in the absence of any such choice. In that report (at p 25)
the authors comment that the 'wording of Article 6 speaks of "contract
of employment" instead of "employment relationship" as in the original
preliminary draft' and express the view (at pp 25-26) that 'individual
contract of employment' covers void contracts and de facto employment
relationships.
[19] It appears from this that those who negotiated the Rome Convention
considered that 'employment relationship' was too broad a term and
that there was a decision to limit the provisions in that convention
to the narrower phrase of 'matters relating to individual contracts of
employment'. The extension of meaning suggested by Giuliano and
Lagarde is an extension to cover circumstances, other than the making
of an individual contract of employment, by which the relationship of
employment/employee was or may have been initially established. There
may be good policy reasons to construe 'matters relating to individual
contracts of employment' sufficiently widely to cover disputes where there
are disputes about the employment relationship but possibly no contract
of employment but I do not think it is permissible to construe it as if it
read 'matters relating to an individual employment relationship' when a
choice has been made to use a different phrase.
[20] The issue for decision here is whether a tort claim of conspiracy
against Mr F., founded on the allegation that he and Mr JK. took
advantage of a meeting with P, which they arranged and attended as
employees of the claimant, to solicit P to participate in the proposed joint
venture, is a matter related to an individual contract of employment. The
same facts are pleaded as the foundation for a claim that Mr F. was in
breach of his contract of employment. It could be said that, if Mr F. had
not been an employee holding the position he held, he would not have
been a conspirator since his value as a conspirator was, on the facts as
alleged, that he had an existing relationship with P in his capacity as an
employee of the claimant.
[21] Recital (11) of the preamble to the Brussels Regulation says that the
rules of jurisdiction should be 'highly predictable'. It would not be possible
to achieve that if the answer to the question whether a tort claim against
an employee did or did not fall within the exclusive jurisdiction conferred
by art 20 depended on the extent to which the fact that the defendant
was an employee of the claimant was a material element in the events
giving rise to the claim.
[22] The usual explanation for the reference to individual contracts of
employment is to exclude collective bargaining agreements. One reason
for this is that, if a collective bargaining agreement covers employees in
more than one jurisdiction, there would be a multiplicity of proceedings.
Recital (15) of the preamble makes it clear that the Brussels Regulation
is intended 'to minimise the possibility of concurrent proceedings and
to ensure that irreconcilable judgments will not be given in two Member
States'. If a claim is made under an individual contract of employment
there can only be one employee defendant and, therefore, no need for
concurrent proceedings with the possibility of irreconcilable judgments. If
a claim is made against an employee otherwise than under an individual
contract of employment, there is the possibility of co-defendants and,
therefore, the possibility of concurrent proceedings and irreconcilable
judgments.
[23] Mr James relied on the express references to arts 4 and 5(5) in
art 18(1) as an indication that art 6 cannot apply 'in matters relating to
individual contracts of employment'. If that phrase is limited to claims
based on such contracts then there is little need for art 6. A single claim
cannot be brought against more than one employee or against employees
and non-employees. The danger of irreconcilable judgments is confined
to situations where the same facts are the basis for a series of claims
against a number of employees domiciled in more than one member
state. The lack of a reference to art 6 supports the narrow interpretation
of 'matters relating to individual contracts of employment'.
[24] The policy behind section 5 is based on the probability that the
employer is financially stronger than the employee. Therefore, if one
or other of them has to take proceedings in a foreign court, it should
be the employer who has to bear the additional cost and inconvenience
involved to ensure, so far as practicable, that the parties are on an equal
footing so far as jurisdiction is concerned. The advantage is given to the
employee as a member of a class, namely employees, and that advantage
should be confined to cases where his status as an employee is legally
relevant. Section 5 should not be construed as conferring jurisdictional
advantages on a poor defendant sued by a rich claimant if they happen
to be employee and employer. The reference to 'individual contracts of
employment', rather than to the employment relationship generally,
indicates that what is relevant is the contract of employment rather than
the relationship generally. The contract of employment is relevant, and
there is a matter relating to an individual contract of employment, only if
the employer is seeking to rely on that contract of employment in order to
bring his claim against the employee.
[25] I can see no justification of policy for conspirators, or any other
tortfeasors, who are employees of the claimant being given jurisdictional
advantages not enjoyed by conspirators or other tortfeasors who are not
employees of the claimant. I accept Mr Jory's submission that section
5 is limited to claims in contract. Article 5 of the Brussels Regulation
draws a distinction between 'matters relating to a contract' and 'matters
relating to tort' and the heading of section 5 is 'Jurisdiction over individual
contracts of employment'.
[26] Accordingly, in my view the phrase 'in matters relating to individual
contracts of employment' effectively means 'where claims are made under
individual contracts of employment'. I express no view on the question
whether it bears an extended meaning as suggested in [19], above. If a
claimant brings to the court a claim against a defendant who is or was his
employee which is made independently of the contract of employment,
prima facie he should be permitted to bring it in that court if the court
would have jurisdiction over that claim if the defendant was not the
claimant's employer. If an employer sought to dress up a claim under an
employment contract as one not made under such a contract no doubt
the courts would be astute to prevent him. But that is not this case. To
interpret the phrase in this way provides a clear test and leads to high
predictability regarding jurisdiction.
[27] I turn, therefore, to the employment claim. This is expressly based
on breaches by Mr F, of implied terms of his contact of employment.
Those breaches are pleaded as breaches of the duty of fidelity owed
otherwise than under an implied term of the contract. If the pleading
were amended to remove the claim based on the implied term this
would, in my view, be a case where the court would regard the claim
as an employment contract claim dressed up as one made outside the
contract of employment. As presently pleaded the employment claim is a
claim which falls clearly within section 5 of the Brussels Regulation and,
therefore, a claim which can only be brought against Mr F, in a French
court as provided by art 20 of the Brussels Regulation. Mr Jory conceded
that, if a claim falls within section 5, then the claimant cannot rely on art
6(1) in order to found jurisdiction.
[28] The application as framed is that this court has no jurisdiction, as
suggested by the wording of CPR Pt 11. I have found that it does have
jurisdiction over the conspiracy claim but not over the employment claim.
I will treat the application as it had been drafted as an application to set
aside service of the claim form and particulars of claim.
[29] Mr James relied on CPR 6.19(1A) which permits service of the claim
form out of the jurisdiction without permission of the court only 'where
each claim included in the claim form made against the defendant to
be served is a claim which the court has power to determine under the
Judgments Regulation' which is a reference to what I have termed 'the
Brussels Regulation'. The claim form and the particulars of claim in this
action which the claimant purported to serve on Mr F, in France contained
the employment claim against Mr F, which the court has no power to
determine under the Brussels Regulation. The permission of the court
was, therefore, required for service of the claim form and particulars of
claim on Mr F,. No permission was obtained. Service of those documents
on Mr F, was, therefore, ineffective and must be set aside.