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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Ramona ANG v Reliantco Investments Ltd  EWHC 879 (Comm) (12 April 2019)
Cite as:  EWHC 879 (Comm),  WLR(D) 248,  3 WLR 161
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN'S BENCH DIVISION
Rolls Building, Fetter Lane, London EC4A 1NL
B e f o r e :
| RAMONA ANG
|- and -
|RELIANTCO INVESTMENTS LIMITED
Matthew Bradley and Ian McDonald (instructed by Cooke, Young & Keidan LLP) for the Defendant
Hearing dates: 18, 21 February 2019
Crown Copyright ©
Mr Justice Andrew Baker :
"3.1 From the date on which your Account is activated we will, as authorized by our Regulator:
(a) Receive and transmit orders for you in Financial Instruments,
(b) Provide foreign currency services provided they are associated with the provision of the Investment Service of Section 3.1(a) herein,
(c) Provide for safekeeping and administration of financial instruments for the account of Clients, including custodianship and related services such as cash/collateral management,
(d) Investment research and financial analysis or other forms of general recommendations relating to transactions in financial instruments.
3.2 You acknowledge that our Services do not include the provision of investment advice. Any investment information as may be announced by the Company to you does not constitute investment advice but merely aims to assist you in investment decision making. It is also understood and accepted that we shall bear absolutely no responsibility, regardless of the circumstances, for any such investment strategy, transaction, investment or information.
3.3 We will not advise you about the merits of a particular Transaction and you alone will make trading and other decisions based on your own judgment for which you may wish to seek independent advice before entering into. In asking us to enter into any Transaction, you represent that you have been solely responsible for making your own independent appraisal and investigation into the risks of the Transaction. You represent that you have sufficient knowledge, market sophistication, professional advice and experience to make your own evaluation of the merits and risks of any Transaction. ( )"
ii) Secondly, a customer can deposit funds into their account. After making a first deposit, the customer is asked to provide information relating to their financial position, employment status and trading experience. Much of the information is provided by way of selection from dropdown lists. The customer must also tick a box indicating that they have read and understood Reliantco's standard terms, which are again hyperlinked on the page. Ms Ang completed the form and ticked the relevant box. She provided the following information:a) She was self-employed and earned more than US$250,000 per annum.b) She had work experience in the financial industry.c) She had academic experience in the financial services industry.d) She was familiar with investment products including: currencies; savings accounts; commodities; indices or diversified investment funds; shares; and "other".e) She had been trading for 3 to 12 months and was a frequent trader (75+ trades).Ms Ang's evidence is that she did not feel properly able to tailor the information in the form to fit her particular circumstances. She did not select "unemployed" for her employment status (although that was, in truth, her status at the time) because she had personal wealth, saw herself as substantially occupied by her role running the 'home office' (as she described it) and was not looking for paid work. As to her income, she chose more than US$250,000 per annum because she was wealthy and considered that the unrealised capital gains of her investments were in excess of that sum per annum. She overstated her trading knowledge and experience to avoid being hassled by Reliantco employees. Later, in a hard copy "source of wealth" form submitted to Reliantco dated 4 August 2017 that gave only a choice between 'Self Employed' and 'Employee', Ms Ang manually added an additional box for her employment status to describe herself as: "independent wealth".
iii) Thirdly, after depositing monies for the first time, the customer is required to submit certain "Know Your Client" documents. In Ms Ang's case, these were requested by Ms Constantin of UFX in an email to Ms Ang dated 10 January 2017. The email included a statement that "As per our terms and conditions you will be requested in the future to provide us with updated documents in case of their expiration", but did not contain a copy of or hyperlink to the standard terms. Ms Ang sent the required documents to Ms Constantin under cover of two emails dated 11 and 12 January 2017.
v) Fourthly, once the relevant documents have been collected by Reliantco, a final welcome email is sent to the customer. This email provides a hyperlink to the standard terms at the foot of the main body. Ms Ang received this final confirmation that her account had been approved on 17 January 2017.
Was Ms Ang a Consumer?
"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 Section, without prejudice to Article 6 and point 5 of Article 7, if:
(c) the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities. "
"A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled."
"The provisions of this Section may be departed from only by an agreement:
(1) which is entered into after the dispute has arisen;
(2) which allows the consumer to bring proceedings in courts other than those indicated in this Section; or
(3) which is entered into by the consumer and the other party to the contract, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which confers jurisdiction on the courts of that Member State, provided that such an agreement is not contrary to the law of that Member State."
i) the term 'consumer' had to be given an autonomous meaning independent of national law, ;
ii) special rules derogating from the general principle of suit in the defendant's domicile must be carefully confined to the cases envisaged by what was then the Brussels Convention, a fortiori special rules providing for jurisdiction in the domicile of the plaintiff, -;
iii) the consumer rule is inspired by concern "to protect the consumer as the party to the contract who is deemed to be economically weaker and legally less experienced than the other party" and must not be "extended to persons for whom such protection is not justified", -;
iv) the Convention "defines 'consumer' as a person acting 'for a purpose which can be regarded as being outside his trade or profession' ",  (my emphasis);
v) the consumer rule provisions thus "refer only to final consumers acting in a private capacity and not in the course of their trade or profession" who are themselves party to the proceedings in question, -.
"50. If the objective evidence in the file is not sufficient to demonstrate that the supply in respect to which a contract with a dual purpose was concluded had a non-negligible business purpose, that contract should, in principle, be regarded as having been concluded by a consumer within the meaning of Articles 13 to 15, in order not to deprive those provisions of their effectiveness.
51. However, having regard to the fact that the protective scheme put in place by Articles 13 to 15 of the Brussels Convention represents a derogation, the court seised must in that case also determine whether the other party to the contract could reasonably have been unaware of the private purpose of the supply because the supposed consumer had in fact, by his own conduct with respect to the other party, given the latter the impression that he was acting for business purposes.
52. That would be the case, for example, where an individual orders, without giving further information, items which could in fact be used for his business, or uses business stationery to do so, or has goods delivered to his business address, or mentions the possibility of recovering value added tax.
53. In such a case, the special rules of jurisdiction for matters relating to consumer contracts enshrined in Articles 13 to 15 of the Brussels Convention are not applicable even if the contract does not as such serve a non-negligible business purpose, and the individual must be regarded, in view of the impression he has given to the other party acting in good faith, as having renounced the protection afforded by those provisions."
"37. in accordance with the requirement to construe strictly the notion of 'consumer' within the meaning of Article 15 of Regulation No 44/2001, it is necessary, in particular, to take into account, as far as concerns services of a digital social network which are intended to be used over a long period of time, subsequent changes in the use which is made of those services.
38. This interpretation implies, in particular, that a user of such services may, in bringing an action, rely on his status as a consumer only if the predominately non-professional use of those services, for which the applicant initially concluded a contract, has not subsequently become predominately professional.
39. On the other hand, given that the notion of a 'consumer' is defined by contrast to that of an 'economic operator' (see, to that effect, Benincasa, , paragraph 16, and Gruber, , paragraph 36) and that it is distinct from the knowledge and information that the person concerned actually possesses ( Costea, C-110/14, EU:C:2015:538, paragraph 21), neither the expertise which that person may acquire in the field covered by those services nor his assurances given for the purposes of representing the rights and interests of the users of those services can deprive him of the status of a 'consumer' within the meaning of Article 15 of Regulation No 44/2001."
"Wherever the dividing line is to be drawn in the case of investors, the result is likely to be heavily dependent on the circumstances of each individual and the nature and pattern of investment. At one end of the scale may be the retired dentist who makes a single investment for a modest amount by way of pension provision. At the other may be an investment banker or asset manager who plays the markets widely, regularly and for substantial amounts, for his own account. In between there are many factors which might influence the result, including the profile of the investor, the nature and extent of the investment activity, and the tax treatment of any profits or losses. The issue is fact specific."
i) At , the court introduced the concept of a 'quasi-professional' who "does not correspond to the consumer profile that the legislator had in mind" because of the extent of her involvement in the investment sector in question. But on the language of Brussels (Recast) (as it now is, the Brussels Convention as it was for the Greek court), the question is not the knowledge, experience, skill or expertise of the putative consumer, but the purpose of the contract. An investor's knowledge, experience, skill or expertise in a particular investment market might be relevant in considering whether she was running some relevant business and, if so, whether the contract in question was entered into for the purpose of that business. But as I read its judgment, the Greek court went rather further than that, and I think that was erroneous.
ii) Also at , the Greek court seems to have thought that Article 281 of the Greek Civil Code had some relevant operation, contrary to the clear authority of Shearson Lehman Hutton Inc that 'consumer' here has an autonomous meaning, independent of rules of national law.
iii) At , from the premise that the aim of the consumer rule was to protect weaker parties, the Greek court appears to have formulated a rule requiring the financial means or sophistication of the putative consumer to be examined "to determine whether the contracting party in question is indeed in need of protection". To my mind there is no warrant in the language of the Brussels (Recast) for that approach.
iv) At -, it was concluded, informed by those errors of approach, that Mr and Mrs Apostolakis could not be consumers because they did not "follow the paradigm of the average saver" but were "adept at investment contracts" and therefore "not in need of the protection afforded to inexperienced and ignorant consumers".
v) At , the Greek court elevated the reference to private consumption needs in Benincasa to a separate requirement, not satisfied (in the view of the court) because Mr and Mrs Apostolakis were not buying and selling foreign currency to use it in their private lives (e.g. as spending money for foreign holidays). In my judgment, as I have already made clear, that is a misreading of Benincasa.
i) at , a person who buys foreign currency "not for the purpose of saving it or for spending it abroad so as to satisfy [a person's] living needs but for the purpose of immediately selling it and speculating on the fluctuation of international currency prices cannot be regarded as consumer . The same applies mutatis mutandis as regards the buying of stock market products.";
ii) at , immediately before the passage I quoted in the preceding paragraph, "The criterion of profit anticipation cannot take away the status of consumer. However, it is a different situation when the final user of the service or of the product does not enjoy the outcome of the banking transaction as a private individual but uses the same in order to fulfil his need for speculation."; and
iii) at , " to purchase financial products or foreign exchange not for the purpose of depositing or disposing the same in order to satisfy living needs but for the purpose of selling them at once and speculating on the fluctuation of the international securities' or foreign exchange prices" cannot be regarded as a consumer purpose.
"The view tentatively preferred here is that the approach of the Greek court accorded more closely with the purpose of the Regulation, and that if a contract is made by which an investor seeks to make financial gain which may or may not be used to make other contracts for the satisfaction of private needs, it is mercantile in nature, and is not itself a consumer contract. It is, in this sense, similar to the case of Mr Benincasa: the contract is entered into as a small or medium-sized business venture."
i) A contract to trade Bitcoin futures on an online platform can never amount to a consumer contract. Currency trading relies on a trader's knowledge and skill and is inherently a non-consumer activity not serving private consumption needs.
ii) In any event, as a matter of fact Ms Ang's trading activity amounted to the conduct of a business, trade or profession in the field of Bitcoin futures trading (whether or not she had another business, trade or profession).
iii) Standard Bank v Apostolakis was wrongly decided by Longmore J, in that he failed to give effect to Benincasa and Gruber. Alternatively, this case can be distinguished from Standard Bank v Apostolakis on the ground that Ms Ang invested directly on a trading platform without an intermediary advisor or asset manager. Reliantco argued that this position is consistent with Ghandour v Arab Bank and the two German judgments referred to in paragraph 51 above.
i) The consumer test under Brussels (Recast) is purposive. The question is simply whether an individual enters into a contract for a private purpose or a business (trade or professional) purpose.
ii) The decisions of the Greek courts in Apostolakis and Ghandour are flawed in so far as they suggest that in referring to private consumption needs the CJEU was adding a separate requirement or narrowing the concept of consumer. In particular, Prof. Harris QC criticised the references by the Greek courts to criteria that might be important under Greek national law but which are irrelevant under Brussels (Recast).
iii) Ms Ang did not carry out a trade or profession trading in Bitcoin or any other currency. Therefore, she could not have contracted for such a purpose. Whether Ms Ang's home office (unpaid PA) role amounts to a profession does not matter. On any view the contract with Reliantco was not for the purpose of any business (trade or profession) of hers.
iv) The arguments made by Reliantco in relation to Ms Ang's husband are irrelevant, as they have no bearing on the question of whether Ms Ang was acting as a consumer. In any event, Ms Ang's husband is a scientist, and does not trade in Bitcoin as his profession (even if as part of his profession he is, as he has claimed to be, an individual behind the block-chain technology by which Bitcoin was created and through which it exists, something on which I am not in a position to express any conclusion).
Was there an effective jurisdiction clause?
"If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing;
(b) in a form which accords with practices which the parties have established between themselves; or
(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned."
"40. Article 23(2) of the Brussels I Regulation must be interpreted as meaning that the method of accepting the general terms and conditions of a contract for sale by 'click-wrapping', such as that at issue in the main proceedings, concluded by electronic means, which contains an agreement conferring jurisdiction, constitutes a communication by electronic means which provides a durable record of the agreement, within the meaning of that provision, where that method makes it possible to print and save the text of those terms and conditions before the conclusion of the contract."
i) She claimed in her witness statement to recall attempting to click the link to access the standard terms on multiple occasions without success, because doing so took her either to an "Error 404" message or to a blank page.
ii) She relied on evidence from a portal called Web Archive, claiming that it demonstrates that the standard terms web page was not available on the UFX website as at various relevant dates.
ii) The fact that the Web Archive material does not show what Ms Ang claimed it to show is again demonstrated by the fact that, on Ms Ang's case, it shows the standard terms web page to be inaccessible not only in January 2017, when Ms Ang wants it to have been inaccessible, but also in September 2017 when Ms Ang (must have) obtained the copy of the standard terms she enclosed with her letter before claim.
iii) The standard terms were updated during the relevant period, which required interaction with the standard terms web page. It is not credible that those updating the terms would have failed to notice they were missing from the website.
iv) A signed letter by Complaudit (Reliantco's internal auditors) confirms that the standard terms were visible and publicly available on the standard terms web page during the inspection periods of 24-25 January 2017 and 9-10 January 2018.
v) A report by Google Analytics, showing the traffic to the standard terms web page between 3 and 17 January 2017 shows that the average amount of time spent by users on the relevant page was 1 minute 53 seconds, and that there were 3,346 unique page views (i.e. disregarding repeat views by the same viewer during the same session) during this period, which strongly suggests that there was meaningful content to read, not just a blank page or an "Error 404" message.
vi) A message from a prospective customer to Reliantco dated 17 January 2017, opening with "I have been reading your terms", suggests that the standard terms web page was accessible on that date.
vii) Ms Ang's evidence is also that, after opening the account, she received emails and telephone calls from Reliantco over a period of months advising on trades and asking for further funds to be deposited, in sufficient volume that after a time she blocked them. The obvious point is that if Ms Ang was keen to read the standard terms, and had tried but failed to access them, as she now claims, she was repeatedly presented with the opportunity to mention the problem and ask for a copy but did not do so.
viii) When Ms Ang was informed by Reliantco that her UFX account had been terminated, by email of 10 August 2017, she was referred to a number of clauses in the standard terms. She responded to the substance of Reliantco's email without asking for a copy of the standard terms or suggesting she had previously tried but failed to access them.
ix) In her detailed letter before claim dated 17 April 2018, Ms Ang addressed clause 27 of the standard terms in anticipation of reliance on it by Reliantco. She set out her position that as a consumer she was entitled to assert her claims in the English court under Articles 17 to 19 of Brussels (Recast). But as to the factual position, her case was this: "Ms Ang does not recall being provided with, or asked to confirm her agreement to, detailed terms upon opening her account." I find that plausible, but it is not what would have been said if Ms Ang had a recollection of trying but failing to access the standard terms, more than once, during the account opening process, as she now claims (unless, perhaps, she only remembered about that after sending the letter before claim, but she has given no evidence to that effect).
x) Lastly, Ms Ang's subsequent account (of trying but failing to access the standard terms) changed over time. In her Particulars of Claim, she only said she encountered a "404 Error"; but by the time she provided her witness statement resisting this jurisdiction application the problem was said to have manifested itself as "an "Error 404" message or simply a blank page". That seemingly subtle shift is in fact significant, because by the time of her witness statement Ms Ang had obtained the Web Archive material, and in that statement she made her claim that it supported her recollection. But if it might support any claim, the Web Archive material could only support a claim of encountering blank pages, not a claim to have encountered an Error 404 message. Thus, her evidence appears to have been tailored to (try to) fit later-acquired material. (In fact, as I have said, the Web Archive does not support any claim that the standard terms web page was inaccessible or broken at any material time, so there is a 'double whammy' for the credibility of Ms Ang's factual account about the standard terms.)
Data Protection Claims
i) Article 79 of the GDPR is unqualified, on its terms, by reference to any possible question of a jurisdiction agreement (or other 'prorogation of jurisdiction' governed by Section 7 of Brussels (Recast) of which Article 25 forms part).
ii) Article 67 of Brussels (Recast) provides that Brussels (Recast) "shall not prejudice the application of provisions governing jurisdiction in specific matters which are contained in instruments of the Union ".
iii) Article 79 of the GDPR is a jurisdiction provision within Article 67 of Brussels (Recast). Therefore, by Article 67 of Brussels (Recast), Article 79 of the GDPR, if it applies on its own terms, cannot be 'trumped' by, in fact is wholly unaffected by, Article 25 of Brussels (Recast).
iv) Recital (147) to the GDPR says that rules on jurisdiction in the GDPR (such as Article 79) should not be prejudiced by "general jurisdiction rules such as those of [Brussels (Recast)]". In my judgment, that does not draw a distinction between Section 1 of Brussels (Recast) ('General provisions') and Sections 2 to 7, as Mr Bradley argued. Rather, as I read it, Recital (147) to the GDPR identifies Brussels (Recast), in its entirety, as the exemplar of a set of "general jurisdiction rules" that are not to prejudice the jurisdiction provisions of the GDPR; and that reading fits exactly with Article 67 of Brussels (Recast).
v) Mr Bradley's argument fails on its own terms anyway. On the reading of Recital (147) for which he contended, the effect is only that it does not say that the jurisdiction rules in Sections 2 to 7 of Brussels (Recast) are not to prejudice Article 79 of the GDPR. That does not mean they do so as that will still depend on their own terms and, when reading Brussels (Recast), Article 25 cannot properly be read without reference to Article 67. Thus, for the purpose of the present case, in respect of the one (very limited) claim pleaded that is governed by the GDPR, the special rule of jurisdiction under Article 25 (read properly with Article 67) is that the courts of a Member State chosen by a jurisdiction agreement satisfying Article 25 have jurisdiction, which jurisdiction is exclusive unless the parties have agreed otherwise or such jurisdiction would prejudice Article 79 of the GDPR. The chosen jurisdiction here is Cyprus; but treating that as exclusive would prejudice Article 79 of the GDPR, since it gives Ms Ang a right to sue here.