Handbridge Ltd v British Aerospace Communications Ltd

• Jurisdiction: Ireland
• Judgment Date: 01 January 1994
• Date: 01 January 1994
• Docket Number: [1991 No. 9570P]
• Court: Supreme Court

Handbridge Ltd. v. British Aerospace Communications Ltd.

Handbridge Limited

Plaintiff

and

British Aerospace Communications Ltd.

Defendant

[1991 No. 9570P]

High Court

Supreme Court

European Communities - Brussels Convention on jurisdiction and enforcement of judgments - Breach of contract - Sale of goods - Defendant domiciled abroad - Failure of defendant to place orders for goods - Alleged contract providing for delivery of goods abroad - Obligation in question - Place of performance - Whether courts of Ireland had jurisdiction over the plaintiff's claim - Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1968, art. 5 (1) - Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988 (No. 3).

The Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1968 ("the Convention") was incorporated into the law of the State by s. 3 of the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988. Article 2 of the Convention provides, inter alia:—

"Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State."

Article 5 of the Convention provides, inter alia:—

"A person domiciled in a Contracting State may, in another Contracting State, be sued:—

1. In matters relating to a contract, in the courts for the place of performance of the obligation in question . . ."

The plaintiff was a company domiciled within the State engaged in the business of designing and manufacturing computer systems. The plaintiff sued the defendant for damages for breach of an alleged contract for the supply by the plaintiff to the defendant of 8,000 personal computers. In its statement of claim the plaintiff alleged that the contract was made partly orally, partly in writing and partly by conduct, and that insofar as the contract was in writing, it was contained in a number of documents, including a document which had been submitted by the plaintiff to the defendant outlining the plaintiff's terms and conditions of supply and providing that the defendant would take delivery of the goods at Stevenage, in England.

The defendant brought a motion to stay the action on the grounds that the place of performance of the obligation upon which the plaintiff sued was England, and that in the premises, the courts of Ireland had no jurisdiction over the matter.

At the hearing of the motion before the High Court it was submitted on behalf of the plaintiff that the contractual obligation which characterised the alleged contract was the obligation upon the plaintiff to manufacture computers to the defendant's specification at its premises in Shannon, with an obligation upon the defendant to take delivery of the computers at those premises, and that the breach complained of was the defendant's failure to place orders in accordance with this contract. Accordingly, it was submitted, the courts of Ireland had jurisdiction over the plaintiff's claim pursuant to art. 5 (1) of the Convention.

On behalf of the defendant it was submitted that its principal obligation under the alleged contract was to take delivery of the goods at Stevenage, in England, and that in the premises, the courts of England, being the courts for the place of performance of the obligation in question, had jurisdiction over the plaintiff's claim.

Held by Lardner J., in refusing the motion, 1, that the word "obligation" in art. 5 (1) of the Convention referred to the contractual obligation the breach of which formed the basis of the plaintiff's action.

Olympia Productions Ltd. v. Mackintosh [1992] I.L.R.M. 204 and Unidare plc v. James Scott Ltd.[1991] 2 I.R. 88 considered; de Bloos v. Bouyer [1976] E.C.R. applied.

2. That in identifying the obligation in question within the meaning of art. 5 (1) of the Convention it was necessary to consider the manner in which the plaintiff's claim was formulated. The breach of the alleged contract relied upon by the plaintiff was the defendant's failure to place orders for the goods.

Olympia Productions Ltd. v. Mackintosh [1992] I.L.R.M. 204, Unidare plc v. James Scott Ltd.[1991] 2 I.R. 88 and Union Transport Group plc v. Continental Lines S.A.[1992] 1 All E.R. 161 considered.

3. That the defendant, in order to perform this obligation, was bound to place orders with the plaintiff at its premises in Shannon, County Clare.

4. That accordingly the courts of Ireland had jurisdiction over the plaintiff's claim pursuant to art. 5 (1) of the Convention.

On appeal by the defendant against the judgment and order of the High Court, it was

Held by the Supreme Court (Finlay C.J., O'Flaherty, Egan, Blayney and Denham JJ.), in allowing the appeal, 1, that the primary jurisdictional principle of the Convention was that a defendant domiciled within a contracting state should be sued in the courts of that state. Where a plaintiff sought to invoke one of the derogations from that principle contained in the Convention so as to litigate his claim in a jurisdiction other than that of the defendant's domicile, the onus was upon such plaintiff unequivocally to show that his claim fell within the scope of the derogation relied upon.

Gannon v. British and Irish Steampacket Co. Ltd. [1993] 2 I.R. 359 and Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst & Co. [1988] E.C.R. 5565 applied.

2. That accordingly, in order to establish the jurisdiction of the Irish courts over a claim pursuant to art. 5 (1) of the Convention, the plaintiff was required to show that the obligation in question was one which must, by virtue of the terms of the contract or by operation of law, be performed within the State.

Unidare plc v. James Scott Ltd. [1991] 2 I.R. 88, Gannon v. British and Irish Steampacket Co. Ltd.[1993] 2 I.R. 359 and Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst & Co. [1988] E.C.R. 5565 considered.

3. That the onus of proof upon the plaintiff so to show that the obligation in question was one which must be performed within the State was not discharged where evidence was tendered by the plaintiff establishing the possibility of performance within the State.

Gannon v. British and Irish Steampacket Co. Ltd. [1993] 2 I.R. 359 and Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst & Co. [1988] E.C.R. 5565 considered.

4. That the trial judge was correct in concluding that the obligation the alleged breach of which formed the basis of the plaintiff's claim was the obligation upon the defendant to place orders for the goods.

5. That the plaintiff had not established with the degree of particularity required by the Convention that it was a term of the alleged contract that performance of the obligation in question must take place within the State. Nor was there any presumption of law to that effect.

Unidare plc v. James Scott Ltd. [1991] 2 I.R. 88, Gannon v. British and Irish Steampacket Co. Ltd.[1993] 2 I.R. 359 and Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst & Co. [1988] E.C.R. 5565 considered.

6. That accordingly the Irish courts had no jurisdiction over the plaintiff's claim against the defendant.

Cases mentioned in this report:—

de Bloos v. Bouyer (Case 14/76) [1976] 3 E.C.R. 1497; [1978] 1 C.M.L.R. 511.

Gannon v. British and Irish Steampacket Co. Ltd. [1993] 2 I.R. 359.

Ivenel v. Schwab (Case 133/81) [1982] E.C.R. 1891; [1983] 1 C.M.L.R. 583.

Athanasios Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst & Co. (Case 189/87) [1988] E.C.R. 5565.

Olympia Productions Ltd. v. Cameron Mackintosh [1992] I.L.R.M. 204.

Shenavai v. Kreischer (Case 266/85) [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.

Unidare plc v. James Scott Ltd. [1991] 2 I.R. 88.

Union Transport Group plc v. Continental Lines S.A. [1992] 1 All E.R. 161.

Motion on notice.

The facts have been summarised in the headnote and are fully set out in the judgments, infra.

By plenary summons dated the 28th June, 1991, the plaintiff instituted proceedings against the defendant, a company registered and domiciled outside the State, claiming damages for breach of contract and containing an indorsement for the purposes of O. 4, r. 1 (a) and O. 5 of the Rules of the Superior Courts, 1986, to the effect that the courts of Ireland had power pursuant to the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988, to hear and determine the plaintiff's claim and that no proceedings concerning the same cause of action were pending between the parties in another contracting state.

By notice of motion dated the 22nd November, 1991, the defendant applied for an order striking out the proceedings for want of jurisdiction, or alternatively, an order staying the proceedings as an abuse of the process of the court.

The motion was heard by the High Court (Lardner J.) on the 18th, 19th and 20th February, 1992.

The defendant appealed the judgment and order of the High Court by notice of appeal dated the 31st March, 1992.

The appeal was heard by the Supreme Court (Finlay C.J., O'Flaherty, Egan, Blayney and Denham JJ.) on the 28th January, 1993.

Cur. adv. vult.

Lardner J.

This is a motion by the defendant brought under the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988, to stay the present action by the plaintiff, which is for damages for breach of contract, on the ground that within the meaning of art. 5 (1) of the Brussels Convention, 1968, "the obligation in question", that is, the obligation upon which the plaintiff is suing, is a contractual one, whose place of performance is England. In these circumstances, the defendant submits, the courts in England are the appropriate forum and this court does not have jurisdiction.

The defendant is engaged inter alia in the business of developing communication systems and was concerned in a project known as the Spacetalk...