|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Harley & Ors v Smith & Anor  EWCA Civ 78 (17 February 2010)
Cite as:  CP Rep 33,  EWCA Civ 78
[New search] [Context] [View without highlighting] [Printable RTF version] [Help]
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE FOSKETT)
HQ06X02304, HQ06X02764, HQ06X02301
Strand, London, WC2A 2LL
B e f o r e :
PRESIDENT OF THE FAMILY DIVISION
LORD JUSTICE RIMER
SIR JOHN CHADWICK
| HARLEY and others
|- and -
|SMITH and another
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7404 1424
Official Shorthand Writers to the Court)
Mr Robert Weir (instructed by Thompsons, The McLaren Building, 35 Dale End, Birmingham B4 7LF and Bridge McFarland, 9 Lumley Avenue, Skegness, PE25 2AH) for the Respondents
Hearing date : 28 October 2009
Crown Copyright ©
Sir John Chadwick:
The Foreign Limitation Periods Act 1984
"1(1) Subject to the following provisions of this Act, where in any action or proceedings in a court in England and Wales the law of any other country falls (in accordance with rules of private international law applicable by any such court) to be taken into account in the determination of any matter —
(a) the law of that other country relating to limitation shall apply in respect of that matter for the purposes of the action or proceedings; and
(b) except where that matter falls within subsection (2) below,
the law of England and Wales relating to limitation shall not so apply.
. . .
2(1) In any case in which the application of section 1 above would to any extent conflict (whether under subsection (2) below or otherwise) with public policy, that section shall not apply to the extent that its application would so conflict.
(2) The application of section 1 above in relation to any action or proceedings shall conflict with public policy to the extent that its application would cause undue hardship to a person who is, or might be made, a party to the action or proceedings.
. . ."
The underlying facts
"In brief, the divers were undertaking a surface hose change on an SPM. They were working from a Client's vessel and the client was in charge of flushing the hoses. The chemicals were used by the Client. The task does not involve diving equipment other than a wet suit and/or coveralls and occasionally a face mask as the flanges are 90% out of the water. The divers worked in pairs disconnecting the three flanges and splitting the hose strings and then some hours later reconnecting the three hose strings. Whist disconnecting the last hose string a white/brown sludge was discharged into the sea. The divers did try to disperse it with a water hose. During and after reconnecting the hoses all 6 divers that had been in the water complained of breathing difficulties and a tightness of the chest. . . ."
In a letter dated 24 May 2003 to the First Secretary at the British Trade Office in Al Khobar, Mr Stonebanks explained that:
"These personnel suffered various reactions to the escaped substance, including rashes, nausea and temporary respiratory difficulties. Their initial treatment was on board the ARAMCO support vessel by the ARAMCO paramedic and when they did not recover fully, it was determined that they should be transferred to the Al Mana Hospital in Al Khobar for observation and treatment. Following a period of days in the hospital they were duly discharged . . ."
"Subject to medical clearance as to fitness to travel and Saudi coastguard permission, we are at present planning to arrange for the British divers to be repatriated so that their condition can be assessed by a specialist occupational health and offshore medical unit based in Aberdeen. We retain this unit on a long-term basis to provide advice and assistance in the event of an underwater injury or accident.
Subject to the outcome of that re-assessment of their present condition and any further treatment as prescribed, they will then undergo a full Diver Medical Examination under UK HSE regulations to ensure they are fit to return to diving work.
All costs (transport, medical etc) related to the foregoing will be borne by this Company and during this period these employees will receive their full salary as specified within their individual Contracts of Employment."
In letters dated 10 June 2003 Mr Stonebanks confirmed to the three claimants that ADAMS would pay the costs of medical assessment and further remedial treatment; and that:
"During this period of recuperation you will remain on full pay as per the terms of your Contract of employment".
" I am quite satisfied that ADAMS, for whatever reason it was, found the continued presence in the KSA of these three men, who wanted to seek compensation from them and/or from ARAMCO, an embarrassment. Whilst, as I have indicated, it would be impossible to conclude that ADAMS actively strove to prevent them seeing a lawyer, nothing was done to help them to do so in circumstances where, in my judgment, positive and active assistance should have been provided. The men were unwell in a way that must have been distressing physically and emotionally, they had no families to hand who could help and they were plainly unhappy that they were not getting the help and advice they wanted. Their employer was the only realistic source of practical assistance. . . ."
"During this period they were undergoing periodic medical examinations funded by ADAMS and the mutual hope, as I perceive it, was that they would one day be able to resume diving for ADAMS. In a sense, the payments were a kind of 'sick pay' . . ."
"6. The claimant's exposure to the toxic chemicals was caused by the negligence of the first Defendant [Mr Smith]."
7 The claimant's exposure to the toxic chemicals was caused by the negligence of the second Defendant [ADAMS], its servants or agents."
Particulars of those allegations of negligence are set out. The particulars under paragraph 7 include the allegation that ADAMS is vicariously liable for the negligence of Mr Smith.
"4. The proper law governing the claim against Mr Smith and [ADAMS] is Saudi law.
5. Mr Smith and [ADAMS] will aver that the claim brought against either or both of them is, as a matter of Saudi law, time-barred."
No particulars are given as to the provisions of Saudi law which are said to lead to the conclusion that the claims against Mr Smith or ADAMS are time-barred.
"6. The claim has been brought within the limitation period applicable to the claim under English law. Insofar as the rules on limitation provided by the law of KSA apply to this case, the claimant contends that:
(a) Islamic law (Shari'a) is the primary source of law in KSA.
(b) Shari'a law does not recognise the concept of limitation.
(c) There are no specific statutes imposing limitation periods for a civil liability claim of this nature.
(d) Insofar as Shari'a precludes the bringing of civil liability claims of this nature, it is on the basis that the claim is forfeited if it is not brought during a period of 15 years.
(e) Accordingly this claim is not barred by limitation."
"7. If, which is denied, the limitation period under the law of KSA expired 12 months following the date of the accident as contended for by Mr Alissa, such a provision will not apply, by virtue of section 2 of the Foreign Limitation Periods Act 1984, as it conflicts with public policy. Such a short limitation period, coupled with no additional discretionary right to extend time, would cause undue hardship to the claimants especially in circumstances where the claimant was paid wages by the second defendant throughout the one year period and reasonably took no steps to sue the defendants during that period."
"Islamic law (Shari'ah) is the primary source of law in the Kingdom of Saudi Arabia (hereinafter referred to as 'KSA').
Unlike modern Arab legal systems, Shari'ah does not recognise the concept of time limitation. Therefore, were the instant case tried under Shari'ah law the present claims of the Claimants would not be time barred.
In principle, Shari'ah law is the governing law for civil liability (tort) claims.
The KSA's Shari'ah courts would enjoy a wide margin of discretion as to whether or not to hear the present claims of the Claimants.
However, if a Shari'ah court would decide to hear the claims of the Claimants, the present claims would not be time barred.
Article 222 of the KSA's Labour Law (promulgated by Royal Decree No. M/51, 23 Sha'ban, 1426 (27 September 2005)) limits the time during which to bring a claim before 'The Commissions for Settlement of Labour Disputes'".
(1) No case shall be accepted by the commission provided for in this law involving a claim of the rights provided for in this law or arising from a work contract after twelve months following termination of the work relation.
(2) No case involving a claim of the rights provided for in the previous labour Law shall be accepted after twelve months following the effective date of this Law.
(3) No complaint regarding violations of the provisions of this Law or the regulations and decisions issued hereunder shall be accepted after twelve months following the date of the occurrence of the violation."
Professor Amkhan and Mr Alissa disagreed (i) on the question whether article 222 of the KSA labour law applied to the claims made in the present case; and (ii) on the question whether, if the article did apply, the effect (on the facts in the present case) was that the claims were time-barred. Those issues were, as they said "critical" and gave rise to "marked differences" between them.
". . . first, are the claims time-barred by Saudi law and second, if so, should I hold, pursuant to section 2 of the Foreign Limitation Periods Act 1984, that the Saudi limitation period should not apply because to permit it to do so 'would cause undue hardship' to the Claimants?"
He answered both of those questions in favour of the claimants.
The judge's reasons
"ADAMS assert that there is a requirement in Saudi Arabia that any claim of the nature sought to be advanced by the Claimants must be lodged within one year from the date of the incident or, alternatively, from the termination of the work relationship which is either the date when they ceased working for ADAMS (which was effectively the same date as the incident) or no later than when their contracts ceased. If that is so, it is accepted that their claims would be out of time. However, it is argued on behalf of the Claimants that since the claims are claims in tort and that there is no limitation period under Shari'ah law in respect of such claims, then (irrespective of the tribunal that adjudicates on the claim . . .) the claims are not time-barred. The alternative argument on behalf of the Claimants is that the one-year period ends only upon the termination of the work relationship and, in the events that happened in this case, that work relationship did not end until June 2006 and, accordingly, the claims are well in time."
The contention that any claim of the nature sought to be advanced by the claimants must be lodged within one year was founded on article 222 of the Labour Law.
(1) If the option existed of commencing a claim such as that advanced by the claimants before the Shari'ah courts and there was no compulsion upon the Shari'ah court to transfer it to the labour courts, then there would be no basis for concluding that the claim would be defeated by limitation: paragraph  of the judgment.
(2) But, if the reality was that the claim would, notwithstanding that it was commenced before the Shari'ah courts, inevitably find its way to the labour courts, the "the question of limitation would have to be assessed by reference to the way in which the Labour courts would treat such a claim": paragraphs  and  of the judgment.
(3) The labour courts were "specialised courts" for the purposes of article 26 of "The Law of the Judiciary", promulgated by Royal Decree dated 15 December 2007. The effect of that article, read in conjunction with article 28 of that Law, was that the Shari'ah courts were "exempted" from having jurisdiction – and so effectively deprived of jurisdiction - in relation to matters within the jurisdiction of specialised courts: paragraph  of the judgment. The Shari'ah courts could be expected to act in accordance with the law as promulgated in the Royal Decree: paragraph .
(4) The Labour Law was intended to be a single code embracing all aspects of the relationship between employer, employee and fellow employees: paragraph  of the judgment. That was to be deduced from articles 5(1) and articles 214(1) and (2) of the law.
(5) It followed that any issue arising out of something that occurred within the working environment was potentially within the jurisdiction of the labour courts: paragraph  of the judgment.
" . . . . However the matter is analysed, in my judgment, the 'work relations' in respect of each claimant did not end until June 2006. If that conclusion is correct, it is accepted that the claims presently being advanced by the claimants are not defeated by limitation."
(1) He noted that the expression in article 222(1) of the 2005 Labour Law – "twelve months following termination of the work relation" - differed from that in the equivalent provision in the 1969 Labour Law – "twelve months from the termination of the contract".
(2) He noted the opinion of Mr Alissa that that change was made "to improve the drafting of the law" (paragraph (i) of his judgment).
(3) He noted that, "Although Professor Amkhan was not asked directly about these matters", it was plain that he did not accept the rationale for the change offered by Mr Alissa (paragraph  of his judgment).
(4) He went on to say this:
" . . . [Professor Amkhan] did reassert (which Article 4 and the general law of the KSA make plain) that the Labour law had to be interpreted and implemented in accordance with Shari'ah law. The logic of this, presumably, in relation to the first of the matters raised by Mr Alissa would be that the 2005 Labour law was phrased differently from the 1969 law in order to render less inflexible the starting point for the relevant limitation period, but that the flexibility should be seen as, in appropriate circumstances, postponing the commencement of that period until the true working relationship between the employer and employee is over. That would, in the context of a personal injury claim, liberalise what would otherwise be a strict limitation period and would be more consistent with the Shari'ah principles of there being no limitation period (or at least none as short as one year) in relation to ordinary personal injury claims."
"(i) That it is not sufficient to cross the 'undue hardship' threshold [posed by section 2(2) of the 1984 Act] by reason only of the fact that the foreign limitation period is less generous than that of the English jurisdiction.
(ii) That the claimant must satisfy the court that he or she will suffer greater hardship in the particular circumstances than would normally be the case.
(iii) That in considering (ii) the focus is on the interests of the individual claimant or claimants and is not upon a balancing exercise between the interests of the claimants on one hand and the defendant on the other."
" Applying these principles on the basis that the Saudi limitation period was either 12 months from the date of the incident or somewhat longer, but no longer than the expiration of the fixed term contracts that each claimant had, I would be satisfied that the 'undue hardship' threshold had been crossed in respect of each claimant in this case. On the premise to which I have referred the following factors would persuade me that this is so:
(i) Each claimant was impeded in obtaining local advice and representation in the KSA in the manner I referred to in paragraphs 33-35 above.
(ii) Had each of them obtained such advice or representation at the time, their respective interests would probably have been protected.
(iii) Each sought advice in the UK as soon as it was practicable to do so upon their return.
(iv) Each was misled by advice that was received to the effect that the limitation period did not begin until June 2006.
(v) Those giving the advice, whether in the UK or in the KSA, were disadvantaged because of the uncertainty of the legal position in the KSA and, as a result, the claimants were victims of that uncertainty.
(vi) Through no fault of their own they will be deprived of any opportunity of seeking any kind of redress as a result of the incident unless the limitation period is disapplied."
It may be said that none of those factors had been relied upon by the claimants in paragraph 7 of their amended replies; and that the judge did not find persuasive the factor which was advanced in that paragraph (the payment of wages throughout the one year period).
" It follows that my essential conclusion is that, whilst a 12-month limitation period does apply to a case such as this, the period runs from the end of the 'work relations' between employer and employee which, in this case, did not come to an end until June 2006.
 If I was wrong about that, I would have held that the 'undue hardship' threshold was crossed in this case and that the more limited 12-month period than that referred to in paragraph 96 should be disapplied."
The order which he made on 28 January 2009 contains a recital of those determinations; and declaration that the claims of the claimants are not time-barred.
(1) That there was no factual basis upon which the judge could draw the conclusion (at paragraph  of his judgment) to which I have referred earlier in this judgment: that "the limitation period under Article 222(1) [of the Labour Law] does not end until the effective termination of the relationship of the employer and employee which does not necessarily mean the time at which the strict contractual period comes to an end".
(2) That, in holding that he would have disapplied the twelve month limitation period under article 222(1) of the Labour Law (had that period commenced at or earlier than the end of the strict contractual period), the judge was wrong, exercised his discretion on a wrong basis, or did not take into account (or did not attach any weight to) all relevant factors.
It is not said that the judge was wrong to reach the conclusion that article 222(3) of the Labour Law had no application to the claims in the present case.
The respondents' notice
"The Shari'ah courts are courts of general jurisdiction. This court may agree to hear the matter."
But he had gone on to add that:
"It is important to note that the court may refuse to hear the matter because it is one within the jurisdiction of another specialized court."
It was in the light of that evidence, the judge treated as "fundamental" the question whether the Shari'ah courts would retain jurisdiction over claims such as these (if commenced in those courts) rather than deferring to the Labour courts.
The provisions of this Law shall apply to:
(1) Any contract whereby a person commits himself to work for an employer and under his management and supervision for a wage.
. . ."
The Preliminary Commission shall have jurisdiction to:
(1) Render final decisions on:
(1.1) Labour disputes irrespective of their type, the value of which does not exceed 10,000 Riyals.
(1.2) Objection to the penalty imposed by the employer upon the worker.
(1.3) Imposition of the punishments provided for in this law for a violation of which the punishment does not exceed 5,000 Riyals and violations with a combined punishment not exceeding 5000 Riyals.
(2) Render preliminary decisions on:
(2.1) Labour disputes the value of which exceeds 10,000 Riyals.
(2.2) Disputes over compensations for work injuries, irrespective of the amount of compensation.
(2.3) Disputes over termination of service.
(2.4) Imposition of the punishments provided for in this law for a violation the punishment of which exceeds 5000 Riyals and violations with a combined punishment exceeding 5000 Riyals.
(2.5) Imposition of punishments on violations punishable by fines and consequential punishments."
" . . . He mentioned the 2005 Labour Law referred to in the Joint Statement and said that Articles 210-214 establish Preliminary and High Commissions to settle disputes under the Labour Law, depending on the amount of money involved. He drew attention to Article 219 which states that these Commissions 'solely have exclusive right to consider all disputes relating to this [Labour] Law and the disputes arising from work contracts'"
He went on to explain that:
" After the conclusion of the arguments and when reviewing the material for the purposes of drafting the judgment I noted the terms of Article 214 which, though mentioned in passing by Mr Alissa in his first report (see paragraph 54 above), was not referred to explicitly by either expert. I invited the assistance of Counsel on the question whether it was of relevance to the issues that fell to me to consider. They consulted the experts, made further submissions in writing and the experts furnished further brief reports. . . ."
The "further brief reports" are dated, respectively, 10 December 2008 (Professor Amkhan) and 30 December 2008 (Mr Alissa).
"8. The question . . . arises whether a Shari'ah court would dismiss the claims of the Claimants on the grounds that such claims fall under the jurisdiction of the Labour Commissions set up under the Labour Law. Unfortunately, the answer to this question cannot be stated with any degree of certainty. The reason for this is because Shari'ah courts in Saudi Arabia enjoy a significant judicial power combined with an extremely wide margin of discretion. The legal principle, however, remains that Shari'ah courts are the proper fora for tort claims."
Paragraph 1.1(c) of Mr Alissa's further report (in a letter dated 30 December 2008) contains a reference to article 214 of the Labour Law, in these terms:
"1.1 (c) Article 214 of the 2005 Labour Law provides that the Preliminary Commission shall have jurisdiction to render final decisions on three items and to render preliminary decisions on broadly speaking five items, Article 214 does not mention exclusive" [emphasis in text]
It is impossible to find any support in those passages for the judge's view, expressed at paragraph  of his judgment, that it can be deduced from articles 5(1) and 214(1) and (2) that the Labour law was intended to be a single code embracing all aspects of the relationship between employer, employee and fellow employees; including, in particular, claims arising from injuries suffered by an employee in consequence of the negligence of a co-employee.
"MR JUSTICE FOSKETT: . . . Imagine that I am a nurse . . . working in a hospital and I suffer some injury as a result of the negligence of one of my colleagues – perhaps someone accidentally stabs me with some scissors or something like that – something that causes me an injury. It is in my work setting, it is in the place that I work in a hospital, and I want to pursue some compensation against the person who accidentally stabbed me with the scissors. First of all, can I claim compensation?
A. You can claim on the Shari'ah Court because there is a relationship between the nurse and the guy that was working with her.
. . .
It's not between the nurse and the hospital.
MR JUSTICE FOSKETT: No, but if the guy whose scissors caused the injury has got no money –
A. He will be sent to jail till he pays the money.
MR JUSTICE FOSKETT: Oh. Right. That is a claim against an individual. I am just trying to think of an example where, if the nurse has got some claim against the hospital because the hospital – the systems have all gone wrong –
A. If it is a labour case – something like between the nurse and the hospital, like sexual harassment, it goes to the Shari'ah court.
MR JUSTICE FOSKETT: That goes to the Shari'ah Court.
A. You sub-divide these things."
Mr Alissa's answer to the first of the judge's questions provides support for the view that a claim by one employee against a co-employee in respect of an incident in the work-place would be brought in the Shari'ah court. The answer directly contradicts the conclusion that the judge reached in his judgment: that the labour courts would have exclusive jurisdiction over such a claim. The answer to the second of the judge's questions was, perhaps, unexpected. In the light of Mr Alissa's other evidence he might have been expected to say that the claim against the hospital should be brought in the labour courts. But the judge gave him the opportunity to do so; and he did not take it.
Each of these Commissions shall solely have exclusive right to consider all disputes relating to this Law and the disputes arising from work contracts. It may summon any person for interrogation or assign one of its members to conduct such interrogation. It may also require submission of documents and evidence and take any other measures it may deem fit. The Commission shall also have the right of access to any premises of the firm for the purpose of conducting the investigation and reviewing all books records and documents it deems necessary."
"Article 219 states that these Commissions 'solely have exclusive right to consider all disputes relating to this [Labour] Law and disputes arising from work contracts". [emphasis in text]
But that was followed immediately by his observation (in paragraph 220.127.116.11), to which I have referred earlier in this judgment, that:
"The Shari'ah courts are courts of general jurisdiction. This court may agree to hear the matter. It is important to note that the court may refuse to hear the matter because it is one within the jurisdiction of another specialized court."
As I have said, Mr Alissa affirmed in his oral evidence that that was the position; and we were not taken to any passage in his oral evidence where he suggested that that position was inconsistent with article 219. The judge set out the terms of article 219 in his judgment and (at paragraph ) described as "the essential issue for this purpose . . . whether the dispute concerning the circumstances of the incident 'related to' the labour law and/or arose 'from [a] work contract' (see Article 219 . . .)". But he said nothing to indicate that he placed reliance on that article in resolving that issue: that is to say, in reaching his conclusion (at paragraph  of his judgment) that the claims in the present case would be subject to the exclusive jurisdiction of the Labour courts.
"1.1(b) Article 219 of the 2005 Labour Law provides that 'Each of those Commissions shall solely have exclusive right to consider all disputes relating to this Law and the disputes arising from work contracts'. The reference to 'this law' is to the 2005 Labour Law which includes claims in respect of 'work injuries'. The claims here are in respect of work injuries and also are disputes arising from work contracts. Article 219 is (i) much broader than Articles 174 and 179 of the 1969 Labour Law, and (ii) specifically states 'solely have exclusive right'. It is my view that this was clearly deliberate and intended to prevent any arguments arising as to what the exclusive jurisdiction extends to. In addition and equally important, Article 219 of the 2005 Labour Law further puts the matter of exclusivity beyond any doubt by referring to 'all disputes arising from work contracts'. The Arabic in Article 219 that refers to exclusivity is exactly like Article 179 of the 1969 Labour Law."
The judge did not refer to that paragraph of Mr Alissa's letter of 30 December 2008. There is nothing explicit in his judgment to suggest that he relied upon it. He would have been wrong to do so: in that the passage went well beyond Mr Alissa's previous evidence and there was no opportunity for the claimants to challenge it at the trial. I have referred to the passage in this judgment for completeness only: I am satisfied that the appellants cannot rely upon it on this appeal.
The appellants' grounds of appeal
The first ground
The second ground
Lord Justice Rimer:
Sir Mark Potter, President