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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ennstone Building Products Limited v. Stanger Limited  EWCA Civ 916 (28 June 2002)
Cite as:  1 WLR 3059,  WLR 3059,  EWCA Civ 916,  2 All ER (Comm) 479
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
BIRMINGHAM DISTRICT REGISTRY
Royal Courts of Justice
London, WC2A 2LL
B e f o r e :
LORD JUSTICE KEENE
|Ennstone Building Products Limited(Formerly Natural Stone Products Limited||Appellant|
Stanger Limited(Formerly TBV Stanger Limited)
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr. M Raeside QC (instructed by Gateley Wareing, Birmingham B2 5JR.) for the respondent
AS APPROVED BY THE COURT
Crown Copyright ©
Lord Justice Keene:
Issue 1: What are the essential terms of the contract between the claimant and defendant and its characteristic performance?
Issue 2: What, if any, is the basis of any duty of care that the defendant may owe to the claimant?
Issue 3: What is the proper law of the contract and of any duty of care found in issue 1 and/or 2?
“1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.
2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or un-incorporate, its central administration. However, if the contract is entered into in the course of that party’s trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other that the principal place of business, the country in which that other place of business is situated.
5. Paragraph 2 shall not apply if the characteristic performance cannot be determined, and the presumptions in paragraphs 2, 3 and 4 shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country.”
“46. Performance of the contract by the claimant was payment of fees. That, however, is minor when considered against the performance required of the defendant. It is clear, as the claimant accepts, that the characteristic performance was the provision by the defendant of professional services. I accept that it is likely that the claimant wanted Mr Revie in particular to be involved with the work. The services were to be, and in fact were, undertaken substantially in Scotland. The fact that reports were to be sent to England carries little weight.
47. In the light of all the available evidence, in my judgment the performance which is characteristic of the contract is more closely connected with Scotland than with England. I conclude therefore that Article 4(2) applies and that the proper law of the contract is Scottish law. If I am wrong on the question of characteristic performance, then the position is that the contract is more closely connected with Scotland than with England so that Article 4(5) would apply.”
“The overall picture is that the necessary skill and care were to be exercised by the defendant substantially in Scotland. The defendant was properly to undertake a desk exercise, carry out laboratory tests and analysis, prepare reports, conduct cleaning trials, supervise the claimant’s contractors in carrying out remediation work. The investigations at the quarry and the delivering of reports to the claimant are a minor element of the whole. Weighing all relevant factors and following the dicta of Lord Slynn in Red Sea, in my judgement, Scotland is the country which has the most significant relationship with the occurrences said to give rise to the claims and with the parties. It follows that the proper law relating to the duty of care which the defendant owed to the claimant is Scottish.”
The claim in contract:
“Paragraph 2 must have been inserted to provide a ‘normal’ rule which is simple to apply. Giving wide effect to paragraph 5 will render the presumption of no value and represent a return to the English common law test of ascertaining the proper law, which places much less weight on the location of the performer and much more on the place of performance and the presumed intention of the parties.”
“In the interpretation and application of the preceding uniform rules, regard shall be had to their international character and to the desirability of achieving uniformity in their interpretation and application.”
“Anxious to continue in the field of private international law the work of unification of law which has already been done within the Community, in particular in the field of jurisdiction and enforcement of judgments,
wishing to establish uniform rules concerning the law applicable to contractual obligations.”
“To establish common rules for the purpose of ascertaining the system of law applicable to certain contractual obligations, thereby raising the level of predictability in international commercial transactions and contributing to the development of the Community’s internal market.” (para 2-02)
“... ou, si, selon le contrat, la prestation doit etre fournie par un etablissement outre que l ’etablissement principal, celui ou est situe cet autre etablissement.”
“greatly simplifies the problem of determining the law applicable to the contract in default of choice by the parties ... According to the last part of paragraph 2, if the contract prescribes performance by an establishment other than the principal place of business, it is presumed that the contract has the closest connection with the country of that other establishment ” (emphasis added)
The French version of the report uses the phrase:
“si le contrat prescrit que”,
which would normally be taken to mean “stipulates” or “prescribes”.
“shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country.”
“formally makes the presumption very weak.”
That is not generally how the relationship between Article 4(5) and the presumption in Article 4(2) has been approached. The view expressed by Dicey and Morris: Conflict of Laws (13th ed.) para. 32 – 123 is that:
“It is suggested that it would be inconsistent with the scheme and purpose of Article 4 for the presumptions to have no role except where other factors are evenly balanced, and that for the presumptions to be displaced, it must be shown (which probably means clearly) that the contract has a closer connection with some other country.”
“only be disregarded in circumstances which clearly demonstrate the existence of connecting factors justifying the disregarding of the presumption in Article 4(2).”
I agree. If the presumption is to be of any real effect, it must be taken to apply except where the evidence clearly shows that the contract is more closely connected with another country.
The claim in tort/delict:
“It is possible to remove the form of staining observed on the Standard Life building as it reacts readily with dilute organic acid. The acid indicated to be most successful in treating the stained stone is a dilute solution of oxalic acid.”
“The general rule must apply unless clear and satisfying grounds are shown why it should be departed from and what solution, derived from what other rule, should be preferred.”
Lord Justice Potter: