Mr Justice Stuart-Smith:
- The Claimant ['Oak Leaf'] designs, manufactures, supplies and installs high quality wood framed glazed structures. It carries out its business from premises in York. The Defendants ['the Weirs'] live in Ayrshire and are domiciled in Scotland. By these proceedings Oak Leaf alleges that the Weirs 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 for the Weirs' Ayrshire home.
- By this application, which was issued on 4 September 2013, the Weirs apply for an order pursuant to CPR Part 11 declaring that the English court has no jurisdiction to try the claim or, alternatively, that it should not exercise any jurisdiction which it may have. They therefore apply to strike out the claim and do so on the basis that exclusive jurisdiction is vested in the courts of Scotland.
- The primary issue raised and submission made by the Weirs is that the case falls within Rule 8(2) under Schedule 4 of the Civil Jurisdiction and Judgments Act 1982 so that exclusive jurisdiction is vested in the courts of Scotland. If that primary submission were to fail the Weirs would maintain their application on two further grounds. The first is that the claim must be brought in Scotland pursuant to Rule 3 because Scotland is the place of performance of "the obligation in question" within the meaning of that rule. The second additional argument raised by the Weir's is a straightforward forum non conveniens argument.
- Having heard argument on the primary issue I ruled in favour of the Weirs, indicating that reasons would be given in writing later. It therefore becomes unnecessary to decide the two secondary issues, and I do not do so. This judgment sets out my reasons for finding in favour of the Weirs on the primary issue.
The Legal Framework
- Section 16 (1) of the Civil Jurisdiction and Judgments Act 1982 ["the Act"] provides that schedule 4 of the Act shall have effect for determining, for each part of the United Kingdom, whether the courts of law of that part, or any particular court of law in that part, have or has jurisdiction.
- Schedule 4 to the Act sets out the applicable rules for determining jurisdiction. Those rules include:
i) "Subject to the rules of this Schedule, persons domiciled in a part of the United Kingdom shall be sued in the courts of that part" (Rule 1);
ii) "Persons domiciled in a part of the United Kingdom may be sued in the courts of another part of the United Kingdom only by virtue of rules 3-13 of this Schedule." (Rule 2);
iii) "In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this rule and rules 8 and 9, …, if –
a)…; or
b)…; or
c) In all other cases, the contract had been concluded, with a person who pursues commercial or professional activities in the part of the United Kingdom in which the consumer is domiciled, or, by any means, directs such activities to that part or to other parts of the United Kingdom including that part and the contract falls within the scope of such activities." (Rule 7 (1));
iv) "Proceedings may be brought against a consumer by the other party to the contract only in the courts of the part of the United Kingdom in which the consumer is domiciled." (Rule 8(2)).
- It is accepted that the construction of the structures for the Weirs fell within the scope of Oak Leaf's normal and commercial activities. Also it is not in dispute that the Weirs are consumers within the meaning of these rules. It is therefore common ground that rule 8(2) would apply so as to vest exclusive jurisdiction in the courts of Scotland if Oak Leaf "pursues commercial or professional activities in [Scotland] or, by any means, directs such activities to [Scotland] or to other parts of the United Kingdom including [Scotland]." The issue between the parties is whether those activities are pursued in Scotland or, by any means, directed to Scotland.
- Both parties referred to Pammer v Reederei Karl Schlüter GmbH [2012] Bus LR 972 as setting out the applicable principles and guidance for the court. At [64] - [93] the ECJ considered the question whether it was necessary for a trader to intend to target one or more other member states and, if so, in what form such an intention must manifest itself.
- The discussion by the ECJ establishes the following principles and guidance:
i) The trader must have manifested its intention to establish commercial relations with consumers from one or more other member states including that of the consumer's domicile. Specifically, in the case of a contract between a trader and a given consumer, it must be determined (by reference to the trader's websites and overall activity), whether before any contract with that consumer was concluded, there was evidence demonstrating that the trader was envisaging 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[1];
ii) While the dissemination of traditional forms of advertising in other member states, such as by the press, radio, television or other medium, may of itself demonstrate an intention of the trader to direct its activities towards those states, the mere establishment of a website which is accessible in other member states will not of itself do so since use of the internet may automatically give worldwide reach without any intention on the part of the trader to target consumers outside of the state in which it is established[2];
iii) When considering advertising (whether by the use of the internet or by other media which may reach across borders without any necessary intention to target consumers in other member states) the Court should look for "clear expressions of the intention to solicit the custom of that state's consumers"[3]. Such clear expressions include mention that it is offering its services or its goods in one or more member states designated by name[4] or mention of an international clientele composed of customers domiciled in various states[5]; however, a finding that an activity is "directed to" other member states does not depend solely on the existence of such patent evidence[6].
Application of Principles to the Facts of the Present Case
- Oak Leaf submits that it does not pursue its activities in or direct its activities to Scotland. It points to the fact that its only office and workshop is in York and that it has no presence, employees or agents in Scotland. On the evidence, between 70% and 90% of its business is generated through printed media. While some of its print advertising is in publications that are specific to England (such as English Home or Yorkshire Life), with some being generic and available elsewhere, including in Scotland, (such as Country Life) it does not incur expenditure on any print media specifically targeted to Scotland. Its websites, to which I shall refer in greater details below, generate a modest proportion of its business and it submits that it only conducts business in Scotland if approached by potential customers based in Scotland. On the available evidence it had carried out two previous contracts in Scotland but none in the seven years before the Weirs' project. By contrast it has carried out many contracts in England, which in broad terms tend to be centred on Yorkshire and the surrounding areas.
- The Weirs submit that Oak Leaf is redefining and misapplying the statutory test. The evidence of Mr Shaw, who was until recently Oak Leaf's general manager, is to the effect that Oak Leaf's advertising is focused on England. His position is summarised as being that "Oak Leaf does not proactively market and sell into Scotland. In fact it specifically doesn't target Scotland. It will sell there if approached by potential customers based in Scotland but it has no presence there, it has no offices, employees or agents in Scotland." The Weirs submit, correctly in the light of Pammer, that the mere fact that Oak Leaf's primary focus in advertising is on England does not correctly reflect the statutory test or determine the outcome of this application.
- The Weirs rely upon the following matters in particular:
a) It is accepted by Oak Leaf that it publishes advertisements in the magazines which are disseminated in Scotland, even if their advertising efforts are "focused" on England. Copies of such advertisements are not available to the court;
b) Oak Leaf admits that it will sell to customers from Scotland if approached as result of a customer having seen its advertising in Scotland;
c) Oak Leaf's websites refer to doing business throughout the United Kingdom in terms which, according to the Weirs, amount to clear expressions of an intent to solicit custom in Scotland, even if its attempts have not frequently been successful.
- Oak Leaf maintains a suite of three websites[7] each of which advertises business as designers and manufacturers of bespoke hardwood garden rooms in similar or identical terms. Under the heading, "Oak Leaf Conservatories, Ltd." The websites state "Oak Leaf is a specialist designer and manufacturer of elegant bespoke hardwood conservatories, Orangeries and garden rooms with projects undertaken throughout the UK, North America, and Continental Europe." Under the heading "Oak Leaf's Unsurpassed Excellence" they state "Oak Leaf provides a comprehensive in-house service from design conception to completion. This includes a full design service and taking your project through all planning consent procedures required in the UK, structural engineering to building regulations and pertinent standards and building codes for the respective location… ." Under the heading "An International Dimension" they state "While the trends in design, the building requirements and other aspects may vary by location, quality and craftsmanship are the common threads in each one of our hardwood structures wherever their location in the UK, Europe or the United States. Conservatory extensions and renovations to listed buildings in the UK must meet strict requirements. We co-ordinate consents with clients and local authorities for historically significant buildings… .Of late the trend in Great Britain favours an airy, spacious, uncomplicated, minimalist style."
- On a separate page Oak Leaf state "Oak Leaf is committed to creating a worldwide renaissance of these fantastic buildings with projects undertaken through the UK, US and continental Europe."
- On a separate website[8] Oak Leaf invites job applications, stating "there are opportunities for ambitious and talented individuals with the right aptitudes in the UK, Europe and the USA. We are especially interested in applicants from the North Eastern USA, Western Canada, and all over the UK, Europe and Channel Islands, but we welcome applications from any region. Oak Leaf is a leading manufacturer of bespoke hardwood Garden Rooms, Orangeries, and Conservatories installing in the UK, Europe and the USA, using the highest quality materials and traditional expertise." On a separate page, under the heading "Do Conservatories Need Planning Permission" Oak Leaf state "Please also note that there are differences in the appropriate legislation in England, Wales, Scotland and Northern Ireland. At Oak Leaf conservatories… we will be very happy to make initial enquiries on your behalf".
- In oral submissions Oak Leaf attempted to dismiss the content of its various websites as being a mere puff. In its written submissions it submitted "for a construction contractor to pursue its activities in or direct its activities to another city, let alone country, it needs to have actual presence in that area or the willingness and ability to work in that area." The extracts from the websites to which I have referred show beyond argument that Oak Leaf has a willingness and ability to work in Scotland. Its reference to "projects undertaken throughout the UK" is a statement of willingness to work in all parts of the UK and can only be read as an intention to solicit the custom of consumers in all parts of the UK, including Scotland. Less weight can be placed upon the recruiting advertisement although it is not immaterial that Oak Leaf seeks to recruit from all over the UK and states that its business involves installing "in the UK". This is at least consistent with Oak Leaf's intention to run its business across the whole of the UK if it is able to solicit custom. Much more important is the clear indication that Oak Leaf will become involved with the obtaining of consents and compliance with Building Regulations, which differ in different parts of the United Kingdom. This is expressly recognised by Oak Leaf when it states that "there are differences in the appropriate legislations in England, Wales, Scotland and Northern Ireland" and that it "will be very happy to make initial enquiries on your behalf". There could be no purpose to this statement if it was not meant to induce potential customers in all parts of the United Kingdom to conclude that Oak Leaf is prepared and competent to advise on legislation and to build in all the disparate parts of the United Kingdom.
- Thus while I accept that the primary focus of Oak Leaf's business may be in England and that most of the business it has obtained historically has been in England, it is apparent from its websites and its overall activity (including the acceptance of previous projects in Scotland as well as that of the Weirs) that Oak Leaf was envisaging doing business with consumers domiciled in Scotland. Adopting the test outlined in Oak Leaf's written submissions that I have set out at [16] above, the websites and previous dealings show that Oak Leaf has the willingness and the ability to work in Scotland.
- For the reasons set out above I therefore conclude that Oak Leaf pursues commercial activities in Scotland and directs its activities to Scotland within the meaning of rule 7(1) so that rule 8(2) of schedule 4 is applicable. These proceedings may therefore only be brought against the Weirs in the courts of Scotland.
