Contract – Repudiation – Jurisdiction – English domiciled claimant carrying out design and construction work for Scottish domiciled defendants – Dispute arising relating to defendants’ alleged repudiation of contract – Defendants challenging jurisdiction of English court – Whether English court being appropriate forum – Application granted
The claimant company designed, supplied and installed high quality wood framed glazed structures. It carried out business from premises in York. It maintained three websites which stated a willingness to solicit business from the UK, and that it was willing to consider job applications from the UK, Europe and the United States. They also indicated the claimant’s stated willingness to deal with issues of planning permission across the UK. The defendants lived in Ayrshire and were domiciled in Scotland. The claimant alleged that the defendants had unlawfully repudiated contracts which had been concluded for the design, manufacture and installation of a greenhouse, a semi-circular garden room and a pool house at the defendants’ Ayrshire home.
The defendants applied for an order pursuant to CPR, part 11 declaring that the English court had no jurisdiction to try the claim or, alternatively, that it should not exercise any jurisdiction which it might have. They therefore applied to strike out the claim on the basis that exclusive jurisdiction was vested in the courts of Scotland.
The primary issue raised was whether the case fell within rule 8(2) under Schedule 4 to the Civil Jurisdiction and Judgments Act 1982, so that exclusive jurisdiction was vested in the courts of Scotland. It was accepted that the construction of the structures for the defendants fell within the scope of the claimant’s normal and commercial activities. Also, it was not disputed that the defendants were consumers within the meaning of those rules. It was therefore common ground that rule 8(2) would apply so as to vest exclusive jurisdiction in the courts of Scotland if the claimant pursued commercial or professional activities in Scotland or, by any means, directed such activities to Scotland or to other parts of the UK including Scotland. The question was whether the claimant’s activities had been pursued in Scotland or directed to Scotland.
Held: The application was granted.
In the case of a contract between a trader and a given consumer, it had to be determined, by reference to the trader’s websites and overall activity, whether before any contract with that consumer was concluded, there had been evidence demonstrating that the trader had envisaged doing business with consumers in other member states, including the member state of that consumer’s domicile, in the sense that it was minded to conclude a contract with those consumers. While the dissemination of traditional forms of advertising in other member states, such as by the press, radio, television or other medium, might of itself demonstrate an intention of the trader to direct its activities towards those states, the mere establishment of a website which was accessible in other member states would not of itself do so since use of the internet might automatically give worldwide reach without any intention on the part of the trader to target consumers outside of the state in which it was established. When considering advertising, whether by the use of the internet or by other media which might reach across borders without any necessary intention to target consumers in other member states, the court had to look for clear expressions of the intention to solicit the custom of that state’s consumers. Such clear expressions included mention that it was offering its services or its goods in one or more member states designated by name, or mention of an international clientele composed of customers domiciled in various states. However, a finding that an activity was directed to other member states did not depend solely on the existence of such patent evidence: Pammer v Reederei Karl Schluter GmbH & Co KG (Joined Cases C-585/08 and C-144/09) [2012] Bus LR 972 considered.
In the present case, extracts for the claimant’s websites showed beyond argument that the claimant had a willingness and ability to work in Scotland. They specifically stated that the claimant was willing to solicit the custom of consumers in all parts of the UK, including Scotland. Less weight could be placed on the fact that it sought to recruit from all over the UK, although that was not immaterial. More important was the clear indication that the claimant would become involved with obtaining consents and compliance with building regulations, which differed in different parts of the UK. There could be no purpose to that statement if it was not meant to induce potential customers in all parts of the UK to conclude that it was prepared and competent to advise on legislation and to build in all the disparate parts of the UK. Although the primary focus of the claimant’s business might be in England and most of the business it had obtained historically had been in England, it was apparent that it envisaged doing business with consumers domiciled in Scotland.
Accordingly, the claimant pursued commercial activities in Scotland and directed its activities there within the meaning of rule 7(1) so that rule 8(2) of schedule 4 was applicable and the proceedings could only be brought against the defendants in Scotland.
Jonathan Selby (instructed by Harrowells LLP, of York) appeared for the claimant; Ian Mitchell QC (instructed by Sibley Germain LLP) appeared for the defendants.
Eileen O’Grady, barrister
