Timeshare agreements relating to villas in Portugal and Spain – Claims for recovery of money paid in advance – Whether court deprived of jurisdiction by article 4, Brussels Convention 1968 – Relevant law for determining whether claim of proprietary character – Whether Convention applying where aggrieved customer seeking recourse against lending bank under Consumer Credit Act 1974 – Applications to strike out dismissed
In 1990 Mr and Mrs Jarrett paid the sum of £2,700 under a written agreement with a Portuguese real estate company for the purchase of a timeshare entitling them to exclusive use of a holiday villa for week 47 in each year. Some £700 was paid by Barclaycard and the rest was paid to the vendor by the Royal Bank of Scotland under a loan agreement. Having concluded that they were victims of serious pre-contract misrepresentations Mr and Mrs Jarrett sought to recover their loss from the defendant banks sections 56 and 75 of the Consumer Credit Act 1974. It was common ground that the use of the Barclaycard and the loan agreement were debtor-creditor-supplier agreements within the meaning of the Act. Two concurrently heard appeals related to similar claims brought against First National Bank by Mr and Mrs Jones and Mr and Mrs Peacock following the failure of two Spanish companies to provide the time-shares for which they had been paid.
In each case the defendant banks applied to strike out the action on the ground that the court had no jurisdiction (Brussels Convention1968, article 16, and the Civil Jurisdiction and Judgments Act 1982, section 2.) Article 16 gave exclusive jurisdiction to the courts of the country in which the property in question was situated in cases where proceedings “have as their object rights in rem in immovable property or tenancies of immovable property”. In the courts below the application to strike out was successfully resisted by Mr and Mrs Peacock but not by the other plaintiffs and the three appeals were heard together.
Held The court had jurisdiction to entertain the claims under the 1974 Act
1. Applying section 3(1) of the Act , the question whether the timeshare agreements created tenancies or rights in rem of immovable property had to be determined, like any other question on the meaning and effect of the Convention, “in accordance with the principles laid down . . . by the European Court of Justice”. It could be deduced from Hacker v Euro-Relais GMBH (1992) ECR 1111( where the court ruled that the concept of a tenancy of immovable property should, in the interest of uniformity, should be defined in terms of Community law rather than the lex situs), and from the earlier decision of the same court in Roesler v Rottwinkel [1986] QB 33 that a holiday letting, no matter how short, would be such a tenancy unless forming part of a wider range of services paid for in a lump sum by the customer. The timeshare agreements in issue purported to grant such tenancies, thus the Convention would have applied had the actions been brought to enforce the contracts directly.
2. However the proceedings in the courts below had had as their true “object” not the assertion of a property right but the enforcement of a personal right , such right being linked to the timeshare agreement solely by operation of the 1974 Act: (see Reichert v Dresdner Bank [1990] ECR 27 and Webb v Webb [1994] QB 696.
A John Williams (instructed by Carruthers & Co, of Cambridge) appeared for Mr and Mrs Jarrett; Sam Neaman (instructed by Shoesmiths & Harrison, of Northampton) appeared for Barclays Bank; Frederick Philpott and Julia Smith (instructed by Manby & Stewart, of Wolverhampton) appeared for Royal Bank of Scotland.
Neil Levy (instructed by Kennan Gribble & Bell, of Cosby) appeared for Mr and Mrs Jones; Peter Sayer instructed by Davis & Co, of Harrow) appeared for First National Bank.
Peter Sayer (instructed by Davis & Co, of Harrow) appeared for First National Bank;
Neil Levy (instructed by Moriarty Westlake, Bristol) appeared for Mr and Mrs Peacock.
