Which court should hear a claim where the parties in dispute are based in different countries?
Charlotte Clayson reviews at a recent appeal relating to the jurisdiction of the courts and looks at the interesting questions raised around the place of performance of a cross-border contract.
Dispute Resolution analysis: This is an appeal against the dismissal of a defendant's application to challenge jurisdiction in a claim for negligence brought against a Scottish law firm in the English courts.
The judgment considers the application of the relevant jurisdictional gateways under Schedule 4 to the Civil Jurisdiction and Judgments Act 1982 (CJJA 1982), in particular gateway 3(a) in relation to the place of performance of a contract. The court analyses previous caselaw on the issues and how those relate to the specific facts of the case. In addition, the judgment reconfirms the way in which the court should conduct its analysis on an appeal, namely that it should be a review of the decision and not a rehearing. The court dismissed the appeal and agreed that the English courts had jurisdiction to hear the claim. Written by Charlotte Clayson, partner at Trowers & Hamlins LLP.
Cornwall Renewable Developments Ltd v Wright, Johnston & Mackenzie LLP  EWHC 3259 (Ch)
What are the practical implications of this case?
This is a useful case for all those practitioners involved in cross-jurisdictional matters, whether on a transactional or litigation basis, to understand the key considerations when grappling with jurisdictional issues. In respect of negligence claims, the judgment sets out the key issues to be considered under the relevant jurisdictional gateways of contract and tort. The judgment helpfully sets out and summarises a run of recent case law on the issues and how those should be read with the specific facts of a particular case. It also highlights the importance of how a case is pleaded in the particulars of claim.
The judgment also takes a brief look at the similarities and differences between jurisdictional regimes, including CJJA 1982, the Brussels Regime (comprising Brussels Convention, Regulation (EU) 44/2001, Brussels I and Regulation (EU) 1215/2012, Brussels I (recast)) and the 1998 and 2007 Lugano Convention.
What was the background?
Cornwall Renewable Developments Ltd (CRDL), was an English company seeking to obtain planning permission at a site in Cornwall for the purpose of developing a windfarm. It engaged the defendant law firm, Wright Johnston Mackenzie LLP (WJM), to advise on the proposals and to draft agreements in support of the planning application. While WJM has no place of business outside of Scotland, the solicitor dealing with the matter was dual qualified in both Scotland and England. No governing law and jurisdiction clauses were agreed.
The planning application was rejected by the local planning authority as it did not meet local planning criteria. CRDL issued proceedings in negligence against WJM arguing that it failed to fulfil CRDL's instructions and objectives to draft agreements satisfying the relevant planning requirements. The claim was brought in the English courts.
The Chief Master dismissed WJM's initial jurisdiction challenge, agreeing that the appropriate forum was the English courts under gateway 3(a) of the CJJA 1982 which permits, in contractual matters, for claims to be brought in the courts of the place 'of performance of the obligation in question'. That decision is the subject of this appeal.
On appeal, the court had to consider whether the Chief Master was wrong to:
- hold that England was the relevant place of performance, despite the fact that WJM was in Scotland when it performed (or failed to perform) its obligations to exercise reasonable care and skill, and when it performed the work constituting its services (including drafting the agreements)
- distinguish this case from the first instance and appeal decisions in Deutsche Bank AG v Petromena ASA  EWHC 3065 (Comm),  EWCA Civ 226, and decline to apply the dicta of Lady Justice Gloster, at first instance
- take into account irrelevant matters in identifying the place of performance
What did the court decide?
It was common ground that the Chief Master's finding of the 'place of performance of the obligation in question' in accordance with Rule 3(a) was an evaluative decision. In accordance with Re Sprintroom Ltd  EWCA Civ 932, 'the appeal court does not carry out a balancing task afresh but must ask whether the decision of the judge was wrong by reason of some identifiable flaw in the judge's treatment of the question to be decided'. That was the relevant starting point. While authorities each turn on their own unique facts, they could be of limited assistance.
England was the relevant place of performance. The relevant 'obligation in question' was 'squarely' WJM's provision of an agreement for negotiation and execution by parties in England, in accordance with CRDL's instructions to meet the relevant criteria for planning permission in England. The Chief Master was entitled to conclude that and did so after careful evaluation of the facts and the pleaded case. There was no legal error in that regard.
The remarks of Gloster LJ in Deutsche Bank AG, that 'the focus is where the relevant work was done by the provider of the service. The location of the recipient of the service is insignificant', were obiter and clearly distinguishable on the facts, not only because of the way in which the relevant service was provided in the circumstances, but because Petromena concerned the 2007 Lugano Convention which used different drafting to that in Rule 3(a). The Chief Master did not fall into error by concluding this on careful evaluation of the facts and the pleaded case.
Finally, WJM's complaint about the Chief Master taking into account irrelevant matters was really directed at the weight attached to those matters. It was not the role of the appeal court to intervene in that: the Chief Master's evaluation of 'the place of performance' was undertaken with 'appropriate care and without falling into error'.
The court dismissed the appeal.
- Court: Chancery Appeals (ChD), Business and Property Courts of England and Wales, High Court of Justice
- Judge: Mr Recorder Richard Smith (sitting as a judge of the Chancery Division)
- Date of judgment: 21 December 2022