Fs Cairo (Nile Plaza) LLC (Appellant) v Brownlie (Respondent)

Case

[2021] UKSC 45

No judgment structure available for this case.

Michaelmas Term

[2021] UKSC 45

On appeal from: [2020] EWCA Civ 996

JUDGMENT

FS Cairo (Nile Plaza) LLC (Appellant) v Lady Brownlie (as Dependant and Executrix of Professor Sir Ian Brownlie CBE QC) (Respondent)

before

Lord Reed, President


Lord Lloyd-Jones
Lord Briggs
Lord Leggatt
Lord Burrows

JUDGMENT GIVEN ON

20 October 2021

Heard on 13 and 14 January 2021
Appellant
Marie Louise Kinsler QC

Howard Palmer QC Alistair Mackenzie Benjamin Phelps

(Instructed by Kennedys Law LLP (London))

Respondent
Sarah Crowther QC

Daniel Clarke Joshua Cainer

(Instructed by Kingsley Napley LLP)

LORD REED:

1. This is a sad case with an unfortunate history. It arises out of a road accident in

Egypt in January 2010 in which the claimant, Lady Brownlie, was seriously injured, her
husband, Sir Ian Brownlie, was killed, Sir Ian’s daughter Rebecca was also killed, and
Rebecca’s two children were injured.

2. The nature and history of the proceedings are fully explained in the judgments

of Lord Lloyd-Jones and Lord Leggatt. In summary, the claimant seeks to recover
damages from the operator of the hotel in Egypt which provided the excursion during
which the accident occurred. She claims damages pursuant to Egyptian law, both in
contract and in tort, first, in her own right, for her personal injuries; secondly, as
executrix of Sir Ian’s estate and on behalf of the estate and its heirs, for his wrongful
death; and thirdly, for dependency for wrongful death.

3.          The claim form was issued in December 2012. Proceedings followed in which

the jurisdiction of the English courts was challenged. It ultimately emerged, during the hearing of an appeal to this court, that the claimant had named the wrong company in the Four Seasons group as the defendant, and that the operator of the hotel was FS

Cairo (Nile Plaza) LLC, an Egyptian company. The High Court subsequently permitted the claimant to amend the claim form so as to substitute that company as the defendant, and to serve the amended claim form on the defendant in Egypt.

4. The present appeal raises two issues. The first is whether the claims in tort pass

through the gateway in CPR PD 6B, paragraph 3.1(9), on which the claimant relies: that
is to say, whether they satisfy the requirement for suing a defendant who is outside
the territorial jurisdiction of the English courts that “damage was sustained … within
the jurisdiction”. The second issue is whether the claims, both in contract and in tort,
satisfy the requirement that they must have a reasonable prospect of success. That
issue arises because it is common ground that the only claims which can be advanced
are those available to the claimant under Egyptian law. The defendants maintain that
the claimant must therefore adduce evidence of Egyptian law, whereas she maintains
that she can rely on English law, on the basis that is applicable in the absence of
satisfactory evidence of foreign law.

5.          In relation to the first issue, concerning the tort gateway, Lord Briggs, Lord

Burrows and I agree with the judgment of Lord Lloyd-Jones, rejecting the defendant’s contentions. We respectfully differ from the view expressed by Lord Leggatt in his judgment, which dissents on that issue.

6. In relation to the second issue, concerning foreign law, the court is unanimous

in rejecting the defendant’s contentions. Lord Lloyd-Jones, Lord Briggs, Lord Burrows
and I all agree with the judgment of Lord Leggatt in relation to that issue.

7. It follows that the court, by a majority of four to one, concludes that the appeal should be dismissed on both issues.

LORD LLOYD-JONES: (with whom Lord Reed, Lord Briggs and Lord Burrows agree)

Factual background

8.          This action arises out of a tragic road traffic accident in Egypt in January 2010.

9. In March 2009, the claimant, Lady Brownlie, booked a holiday which included a the claimant made a telephone call direct to the hotel to book an excursion she had seen advertised in a brochure, signed by the hotel concierge which contained the Four Seasons marque and logo, that she had picked up in the hotel during a previous stay there the previous year. She booked a limousine “safari” excursion to Al-Fayoum and certain other desert locations outside Cairo, for the claimant, her husband, Sir Ian Brownlie, his daughter Rebecca, and Rebecca’s two children. stay at the Four Seasons Hotel Cairo at Nile Plaza (“the hotel”), commencing on 31

10. The tour took place on 3 January 2010. There was a guide and a driver. During

the tour the vehicle broke down and a replacement car and driver arrived to complete the tour. Towards the end of the tour the vehicle in which the party was travelling left the road and crashed. Sir Ian and Rebecca were killed. The claimant and the two

children were seriously injured.
The claims
11. The proceedings as originally constituted were issued in England on 19

December 2012. The claim form named Four Seasons Holdings Incorporated (“FSHI”), a company incorporated under the law of British Columbia, Canada, as first defendant. Nova Park SAE (“Nova Park”), an Egyptian company, was named as second defendant but, following further enquiries by the claimant’s solicitors, Nova Park was not served with the claim form and took no part in the proceedings. The claimant claimed damages in contract and tort (a) for her own personal injury, (b) in her capacity as her late husband’s executrix under the Law Reform (Miscellaneous Provisions) Act 1934 (“the 1934 Act”), and (c) for bereavement and loss of dependency under the Fatal Accidents Act 1976 (“the 1976 Act”) as Sir Ian’s widow.

12. The particulars of claim in their original form included pleaded claims in
contract and in tort against FSHI. The claimant maintained that the contract for the
provision of the excursion into which she had entered was made by FSHI as principal or
as agent for an undisclosed and unidentified principal with the result that it was liable
to be sued as if it were the principal to the contract. The claimant alleged that the
contract was subject to an implied term that the excursion be supplied with reasonable
care and skill so as to enable the claimant and her husband to be reasonably safe. The
particulars of claim alleged that the accident was caused by the negligence and/or
breach of contract of FSHI, its employees, suppliers, sub-contractors, their agents
and/or employees. Particulars were provided of the negligence of the driver of the
vehicle and of FSHI, its employees, suppliers, sub-contractors, their agents and/or
employees. It further alleged a failure to exercise reasonable care and skill with respect
to the planning, organisation, management and operation of the excursion and a
failure to exercise reasonable care and skill to ensure the reasonable safety of the
claimant and her husband. Particulars were provided of the claimant’s injury, losses
and expenses. The claim form then set out the claims in respect of the death of Sir Ian
on behalf of his estate and by the claimant as his dependant.

13. On 15 April 2013 Master Yoxall granted permission to serve the proceedings out

of the jurisdiction on FSHI. So far as the claim was founded on contract the application
was based on Practice Direction 6B, paragraph 3.1(6)(a) supplementing CPR Part 6,
(“the contract … was made within the jurisdiction”). So far as it was founded on tort, it
was based on Practice Direction 6B, paragraph 3.1(9)(a) (“damage was sustained …
within the jurisdiction”).

14. On an application by FSHI under CPR Part 11 to challenge the jurisdiction of the

English courts, Master Cook made an order dated 31 July 2013 which set aside the order of Master Yoxall and set aside the claim form and service of it on FSHI.

15. On the claimant’s appeal against the order of Master Cook, Tugendhat J allowed

the appeal and, by order dated 27 February 2014, set aside the order of Master Cook, restored the order of Master Yoxall and declared that the court had jurisdiction to try the claims: [2014] EWHC 273 (QB).

16. On FSHI’s appeal against the order of Tugendhat J and by order dated 6 July

2015, the Court of Appeal (Arden, Bean and King LJJ) affirmed the decision of
Tugendhat J, save that it held that the court did not have jurisdiction in respect of the
claimant’s tort claims for personal injury or pursuant to the Law Reform
(Miscellaneous Provisions) Act 1934: [2015] EWCA Civ 665; [2016] 1 WLR 1814.

17. FSHI was granted permission to appeal by the Supreme Court by order dated 14

January 2016. The Supreme Court, by order dated 21 June 2016, also granted the
claimant permission to cross-appeal on the issues of jurisdiction to try the tort claims
for personal injury and pursuant to the Law Reform (Miscellaneous Provisions) Act
1934. The Supreme Court (Lady Hale, Lord Wilson, Lord Sumption, Lord Hughes and
Lord Clarke) heard the appeal on 9 and 10 May 2017 and 20 July 2017.

18. During the hearing before the Supreme Court it emerged that FSHI was a non-

trading holding company which neither owned nor operated the hotel. The Supreme
Court, in its judgments handed down on 19 December 2017, (“Brownlie I”) allowed
FSHI’s appeal, holding that the evidence showed that there was no realistic prospect
that the claimant would be able to establish at trial that she had contracted with FSHI
or that FSHI was liable in negligence, and that therefore the courts of England and
Wales had no jurisdiction to try any of the claims against FSHI. The Supreme Court
granted the claimant permission to apply to correct the name of the defendant, to
substitute or to add a party to the proceedings, and remitted ancillary matters to the
High Court. In the judgments handed down on 19 December 2017, the members of the
Supreme Court expressed differing obiter views on the meaning of “damage” in
Practice Direction 6B, paragraph 3.1(9)(a): [2017] UKSC 80; [2018] 1 WLR 192.

19. The claimant subsequently applied to substitute FS Cairo (Nile Plaza) LLC, (“the

defendant”), a company incorporated under the laws of Egypt, for FSHI, to amend the
proceedings and for permission to serve the claim out of the jurisdiction against the
defendant. The present appeal concerns the application to serve the reconstituted
proceedings out of the jurisdiction.

20. On 29 October 2018, Foskett J made an order granting the claimant permission

to serve her application notice, for orders for the substitution of the defendant and to
amend the proceedings, out of the jurisdiction on the defendant.

21. On 6 February 2019, Stewart J made an order, by consent, giving directions for

the hearing of the claimant’s applications. The order included a direction for sequential
service with the claimant to serve her evidence first and the defendant to serve
evidence in response, with the claimant and the defendant having permission “to rely
on expert evidence in writing as to Egyptian law with respect to personal injury and
wrongful death claims in contract and tort/delict, including in particular the law of
limitation as it applies to such claims”.

22. By order dated 1 October 2019, Nicol J ordered that the defendant be
substituted as defendant, permitted the claimant to add the defendant as a party to
the claim and ordered that FSHI cease to be a party. He also granted the claimant
permission to amend the claim form and particulars of claim, and declared that the
court had jurisdiction to try the claimant’s claims in contract and in tort. He granted
the defendant permission to appeal to the Court of Appeal on two grounds: the scope
of the tort gateway and the requirement that there be a serious issue to try on the
merits: [2019] EWHC 2533 (QB). No permission to appeal was sought concerning the
order adding the defendant as a party to the claim. On 14 November 2019 Irwin LJ
refused the defendant’s application for permission to appeal on the contract gateway
and the approach to forum conveniens.
23. By order dated 29 July 2020, the Court of Appeal (McCombe, Underhill and

Arnold LJJ) affirmed the decision of Nicol J by a majority, Arnold LJ dissenting on both grounds: [2020] EWCA Civ 996; [2021] 2 All ER 605.

24. The Court of Appeal granted the defendant permission to appeal to the

Supreme Court on the scope of the tort gateway and the requirement that there be a serious issue to be tried on the merits. The claimant sought permission, insofar as the issue was not already within the scope of the appeal, to cross-appeal on whether she should be required, as the Court of Appeal ordered, to amend to plead “the content of

Egyptian law, including the relevant principles and sources on which she relies and upon which each of her claims are based” in her particulars of claim.

The issues on appeal

25. For the reasons given at para 29 below, the present proceedings are outside the

scope of the Brussels system for determining jurisdiction in civil and commercial
matters, so we are concerned with the domestic rules of England and Wales. These
require that in order to obtain permission to serve proceedings out of the jurisdiction
in a case to which the Brussels system does not apply, a claimant must establish

(1) a good arguable case that the claims fall within one of the gateways in CPR PD 6B, paragraph 3.1;

(2) a serious issue to be tried on the merits; and

(3) that England is the appropriate forum for trial and the court ought to exercise its discretion to permit service out of the jurisdiction.

In the present case Nicol J held that the claimant’s claims in contract passed through the relevant gateway. He also held that England is the most appropriate forum for the trial of all of the claims. There has been no appeal on these issues. Accordingly, issue (1) above is satisfied with regard to the claims in contract and issue (3) is satisfied with regard to all of the claims. However, the defendant objects that the claims in tort do not pass through the gateway in CPR PD 6B, paragraph 3.1(9) on which the claimant relies.

26.        Following the ruling of the Supreme Court in Brownlie I, the claimant accepts

that the only claims she can advance are those which are available to her under the defendant objects that the amended statements of case do not plead any Egyptian law, the only references to Egyptian law being in generic terms in the prayers of both the amended claim form and the amended particulars of claim. The defendant maintains that, in light of the rule that foreign law is treated as a matter of fact which must be both pleaded and proved, the failure of the claimant to do so means that the claim is fatally flawed and that there is, therefore, no serious issue to be tried on the merits.

27.        The issues on this appeal are therefore as follows:

(1) In relation to the claims in tort, namely
(a) a claim for damages for personal injury in her own right;
(b) a claim for damages in her capacity as executrix of the estate of

her late husband for wrongful death; and

(c) a claim for damages for bereavement and loss of dependency in

her capacity as her late husband’s widow;

29. In recent decades this system has operated in this jurisdiction in parallel to an

whether the claimant has established that the jurisdictional gateway at CPR PD
6B paragraph 3.1(9)(a) is satisfied in respect of those claims.

(2) Whether the claimant has established that she has reasonable prospects of success in respect of her claims:

(a) In contract; and
(b) In tort.

Issue 1: The tort gateway

28.        In the present case we are concerned directly with what may be described as

the domestic rules in England and Wales relating to service of civil proceedings on a defendant out of the jurisdiction. These rules are now set out in the Civil Procedure Rules and Practice Directions made under them and were previously to be found in the

Rules of the Supreme Court. These rules require the claim to pass through one of a number of statutory gateways and, in addition, require that there should be shown to be a serious issue to be tried and that this is the proper place to bring the claim. The inquiry as to the proper place to bring the claim is referred to as forum non conveniens. This requirement is reflected in CPR rule 6.37(3) and the applicable principles are stated by Lord Goff in Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460.

EU system relating to civil jurisdiction and judgments established originally by the Commercial Matters 1968 (“the Brussels Convention”) to which the United Kingdom acceded in 1978 and found more recently in Council Regulation (EC) No 44/2001 (“Brussels Regulation I”) and Parliament and Council Regulation (EU) No 1215/2012 (“the Brussels Recast Regulation”). Under the Brussels system the general rule is that a defendant domiciled in a member state of the European Union is to be sued in the state of his domicile, but this is subject to a series of limited exceptions in cases of “special jurisdiction”. Following the withdrawal of the United Kingdom from the European Union, the Brussels system no longer applies in this jurisdiction. The present proceedings are in any event outside the scope of the Brussels system because the defendant is not domiciled in a member state of the European Union. It will, however, be necessary to refer at various points to the Brussels system by way of comparison.

30.        CPR rules 6.36 and 6.37 provide in relevant part:

“Service of the claim form where the permission of the court
is required 6.36. In any proceedings to which rule 6.32 or
6.33 does not apply, the claimant may serve a claim form out
of the jurisdiction with the permission of the court if any of
the grounds set out in paragraph 3.1 of Practice Direction 6B

apply.”

“Application for permission to serve the claim form out of the
jurisdiction 6.37 … (3) The court will not give permission
unless satisfied that England and Wales is the proper place in

which to bring the claim.”

CPR PD 6B paragraph 3.1(9) provides:

“Service out of the jurisdiction where permission is required.
3.1 The claimant may serve a claim form out of the
jurisdiction with the permission of the court under rule 6.36

where -

Claims in tort

(9) A claim is made in tort where -
(a) damage was sustained, or will be sustained,
within the jurisdiction; or
(b) damage which has been or will be sustained
results from an act committed, or likely to be
committed, within the jurisdiction.”

In the present case the issue is whether each of the tort claims advanced is a claim where damage was sustained within the jurisdiction. It is common ground between the parties that sub-paragraph (b) cannot apply as the relevant conduct - the “act committed” - occurred entirely in Egypt and not in England.

31. The claimant must show a “good arguable case” that the claim enters one of the

jurisdictional gateways (Vitkovice Horni A Hutni Tezirstvo v Korner [1951] AC 869, 880
per Lord Simonds; Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1
AC 438, 453 per Lord Goff of Chieveley).

32. In the present case there are no factual disputes bearing on the applicability of

sub-paragraph 9(a). This ground of appeal turns on the question of law as to the
breadth of the gateway.

33. On behalf of the defendant it is submitted that the tort ground in sub-paragraph

(a) does not apply to the claimant’s claims as it only applies to found jurisdiction where
initial or direct damage was sustained in England and Wales. In particular, it does not


extend to any further consequences that the claimant may suffer as a result of the
initial damage. The defendant submits that in the specific context of a road traffic
accident, causing personal injury or death resulting from personal injury, the initial or
direct damage is that sustained by the injured person at the time and place of the
accident, ie, when the tortfeasor physically harms the injured person. On that basis it is
submitted that the ground does not apply to claims arising from road traffic accidents
which occurred outside England and Wales. The defendant submits that this
construction is clear when the relevant words are read in the context of the legislative
scheme and purpose of the jurisdictional grounds and in the light of the legislative
history of this particular ground.

34. On behalf of the claimant it is submitted that the narrow reading of the sub-

significant change in the law. Relying on the decision of the Court of Appeal in Metall
und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc [1990] 1 QB 391, it is submitted
that the relevant gateway is not qualified in the manner suggested by the defendant
and that what is required is that some significant damage is sustained in England and

paragraph for which the defendant contends lacks any basis and would represent a personal injury, it is submitted, is not sustained at a single point in time when the injury is initially suffered or when a legal cause of action is completed but extends to the continuing damage suffered thereafter.

Domestic and EU systems

35.        Before addressing these submissions in detail, it is necessary to say something

about the evolution of the domestic rule and its relationship to the Brussels system. C-21/76) [EU:C:1976:166]; [1978] QB 708, the European Court of Justice had held that article 5(3) should be read as referring to both the place where the tortious act occurred and the place where the damage occurred, where they are not identical. As a result, where the River Rhine was polluted in France and damage occurred downstream in the Netherlands, the claimant had the option of suing the tortfeasor in the courts of either state. It is likely that the amendment to the RSC to widen the tort gateway was effected because it was appreciated that it would otherwise have been narrower than the head of special jurisdiction in article 5(3) of the Brussels Convention.
Before the Civil Jurisdiction and Judgments Act 1982 (“the 1982 Act”) came into force,
the Rules of the Supreme Court Order 11, rule 1(1)(h) had permitted service out of the
jurisdiction “if the action begun by the writ is founded on a tort committed within the
jurisdiction”. The Rules of the Supreme Court (Amendment No 2) 1983 (SI 1983/1181
(L21)) amended this rule, with effect from the date when the 1982 Act came into force,
to apply to cases where “the claim is founded on a tort and the damage was sustained,
or resulted from an act committed, within the jurisdiction” (RSC Order 11, rule 1(1)(f)).
This change is likely to have been prompted by the fact that under the Brussels
Convention, to which the United Kingdom acceded in 1978 and which was given effect
in domestic law within the United Kingdom by the 1982 Act, article 5(3) created a rule
of special jurisdiction that a person domiciled in a contracting state could be sued in
another contracting state in matters relating to tort, delict or quasi-delict “in the courts
for the place where the harmful event occurred”. This rule was subsequently set out in
article 5(3) of the Brussels Regulation I and it now appears in article 7(2) of the Brussels

36.        In Metall und Rohstoff, the claimants sought permission to serve out of the

jurisdiction proceedings alleging, inter alia, torts of conspiracy and inducing breach of contract. The Court of Appeal referred (at p 437) to the change to rule 1(1)(f) which it said was in order to give effect to the Brussels Convention and the decision in Bier. The

Court of Appeal considered that under the domestic rule jurisdiction might be assumed only where the claim was founded on a tort and either the damage was sustained within the jurisdiction or the damage resulted from an act committed within the jurisdiction. The first limb raised the question of what damage was referred to. It had been submitted for one of the defendants that since the draftsman had used the definite article and had not simply referred to “damage”, it was necessary that all the damage should have been sustained within the jurisdiction. The court rejected the submission. It was not supported by authority and could lead to an absurd result if there were no one place in which all the claimant’s damage had been suffered. In the court’s view it was enough if some significant damage had been sustained in England.

37.        It is convenient to refer at this point to the decision of the Court of Justice in

Netherlands v Rüffer (Case C-814/79) [1980] ECR I-3807. In that case a barge, allegedly sunk by the negligence of its German domiciled owner, in a collision in the Ems estuary at a point which was deemed to be in Germany, was recovered and then disposed of
by the Dutch State in the Netherlands. The Dutch State sought to recover its loss in the Dutch courts on the basis that the harmful event had occurred in the Netherlands. It is hardly surprising that Advocate General Warner rejected this submission, explaining
that Bier did not support the contention that the place where the harmful event
occurred could be the place where the plaintiff company had its seat or the place
where the amount of the damage to its business was quantified. If the place where the
plaintiff had its seat could be regarded as the place where the harmful event occurred,
this would be tantamount to holding that under the Brussels Convention a plaintiff in
tort had the option of suing in the courts of his own domicile, which was inconsistent
with the scheme of article 2 of the Brussels Convention. Furthermore, the sale of the
wreck was not a harmful event but a means of mitigating the damage which had been
suffered.

38. In Societe Commerciale de Reassurance v Eras International Ltd (The Eras Eil

Actions) [1992] 1 Lloyd’s Rep 570, a case on the domestic rules of jurisdiction
concerning the financial consequences of a tort which itself was wholly economic in
nature, Mustill LJ, delivering the judgment of the Court of Appeal, considered the
reasoning of the Advocate General in Rüffer to be unanswerable and observed that it
could have been applied to that case if the claimants had been basing their claim solely
on the situs of the head office of their group. In the Eras Eil Actions, however, the claim
to jurisdiction was not founded simply on the situs of the claimants. Mustill LJ went on
to observe that the claimants could say more than that, for the damage of which they
complained was their exposure to claims which were being pursued in England and if
successful would result in judgments in England enforceable in England. In the court’s
view (at p 591) “in a real sense this amounts to the suffering of damage in England”. I
consider that the court was justified in taking this wider view of damage and in
addressing where in a real sense the damage was suffered. Moreover, it is significant
that the Court of Appeal did not concentrate its attention on the place where the
cause of action was completed.

39.        When the Rules of the Supreme Court were replaced by the Civil Procedure

Rules in 2000, the equivalent rule to RSC Order 11, rule 1(1)(f) was CPR rule 6.20(8) which permitted service out of the jurisdiction with the permission of the court if:

“… a claim is made in tort, where -

(a) damage was sustained within the jurisdiction;
or
(b) the damage sustained resulted from an act

committed within the jurisdiction; …” (The Civil
Procedure (Amendment) Rules 2000, 2000 No 221 (L1)
Schedule 1)

The omission of the definite article in sub-paragraph (a) was, no doubt, intended to reflect the decision in Metall und Rohstoff. The definite article is also omitted in the present formulation of the rule which now appears in the Practice Direction 6B to CPR

rule 6 (set out at para 30 above).

40.        More recently the case law of the Court of Justice in Luxembourg has restricted

Marinari v Lloyds Bank plc (Zubaidi Trading Co, Intervener) (Case C-364/94) [1996] QB 217 the Court of Justice limited it further by restricting special jurisdiction to the place where the immediate damage, as opposed to consequential damage, occurred.
the notion of the place where the damage occurred under article 5(3) of the Brussels 220/88) [1990] ECR I-49 it limited the concept to the place where damage was suffered by the primary and not a secondary victim. In
Convention (subsequently article 5(3) of Brussels Regulation I and article 7(2) of the

41.        In Dumez France SA v Hessische Landesbank French companies sought to

establish in proceedings in France quasi-delictual liability in respect of damage they
claimed to have suffered owing to the insolvency of their German subsidiaries brought
about by the cancellation by German banks of loans intended to finance a property
development project. The French claimants argued that the place where the harmful
event occurred was the place where their interests were adversely affected; the
financial loss which they suffered following the insolvency of their subsidiaries in
Germany was the place of their registered offices in France. In rejecting the
submission, the Court of Justice considered that the damage alleged was no more than
the indirect consequence of the harm initially suffered by other legal persons who
were the direct victims of damage, and that the expression “place where the damage
occurred” in Bier did not refer to the place where the indirect victims of the damage
suffer the repercussions on their own assets. The Court of Justice drew attention to the
general rule in article 2 of the Brussels Convention that the courts of the state of the
defendant’s domicile would have jurisdiction and to “the hostility of the Convention
towards the attribution of jurisdiction to the courts of the plaintiff’s domicile” as
demonstrated by article 3. It was only by way of exception to the general rule that
special jurisdiction was allowed in certain cases, including that envisaged by article
5(3). The Court of Justice emphasised that those cases of special jurisdiction, the
choice of which was a matter for the plaintiff, are based on the existence of a
particularly close connecting factor between the dispute and courts other than those
of the state of the defendant’s domicile. It explained that, in order to promote
recognition and enforcement of judgments in other states, it was necessary to avoid
the multiplication of courts of competent jurisdiction which would heighten the risk of
irreconcilable decisions. Accordingly, the concept of the place where the damage
occurred could be understood only as indicating “the place where the event giving rise
to the damage, and entailing tortious, delictual or quasi-delictual liability, directly
produced its harmful effects upon the person who is the immediate victim of that
event”.

42. In Marinari v Lloyds Bank plc the claimant had lodged promissory notes with the had occurred in England. The Grand Chamber reiterated its previous statements in Bier and Dumez that this head of special jurisdiction is exceptional in nature and is based on the existence of a particularly close connecting factor between the dispute and the courts other than those of the state of the defendant’s domicile. Article 5(3) could not be construed “so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere”. It could not be construed as including the place where the claimant claimed to have suffered financial damage consequential upon initial damage arising and suffered by him in another member state. In this way the Grand Chamber distinguished between direct and indirect damage. bank in Manchester. The bank was suspicious and informed the police and, as a result,

the claimant was arrested and the notes sequestrated. The claimant brought
proceedings in Italy alleging financial and reputational loss. The bank objected that the

43. Within the Brussels system, the distinction between direct and indirect damage

is, however, sometimes elusive. The approach of the Court of Justice to financial losses
allegedly caused by acting on negligent professional advice has varied. In Kolassa v
Barclays Bank Plc (Case C-375/13) EU:C:2015:37; [2016] 1 All ER (Comm) 733, the court
accepted that “[t]he courts where the claimant is domiciled have jurisdiction [under
article 5(3)] on the basis of the place where the loss occurred … in particular when that
loss occurred itself directly in the applicant’s bank account held with a bank
established within the area of jurisdiction of those courts” (at paras 55, 57). However,
in Universal Music International Holding BV v Schilling (Case C-12/15) EU:C:2016:449;
[2016] QB 967, where it was alleged that a negligently drafted share purchase option
had substantially increased the price payable, the Court of Justice held that the
damage occurred in the Czech Republic where the contract was negotiated and
entered into and where the damage became certain as a result of the compromise of
an arbitration between the parties to the contract (paras 30, 31). It considered that
“purely financial damage which occurs directly in the applicant’s bank account cannot,
in itself, be qualified as a ‘relevant connecting factor’, pursuant to article 5(3)” and
distinguished Kolassa on the basis that that decision was made “within the specific
context of the case which gave rise to that judgment, a distinctive feature of which was
the existence of circumstances contributing to attributing jurisdiction to those courts”
(para 37). (See Adrian Briggs, “Holiday Torts and Damage within the Jurisdiction”
[2018] LMCLQ 196, p 199; cf ABCI (formerly Arab Business Consortium International
Finance and Investment Co v Banque Franco-Tunsienne [2003] EWCA Civ 205; [2003] 2
Lloyd’s Rep 146, para 44 per Mance LJ, cited at para 72 below.)

44. In Verein für Konsumenteninformation v Volkswagen AG (Case C-343/19) [2021]

association sued Volkswagen in Austria in tort, delict or quasi-delict on behalf of
persons who had purchased in Austria motor cars manufactured by Volkswagen in

1 WLR 40 the Court of Justice distinguished Dumez and Marinari. The claimant emissions readings. On a preliminary reference on the issue of jurisdiction under article 7(2) of the Brussels Recast Regulation, the Court of Justice noted that the damage alleged took the form of a loss in value of the vehicles stemming from the difference between the price paid and their actual value owing to the installation of the device. The court considered (at paras 30-35) that while those vehicles became defective as soon as that software had been installed, the damage asserted occurred only when those vehicles were purchased, as they were acquired for a price higher than their actual value. Such damage constituted initial damage and not an indirect consequence of the harm initially suffered by other persons. Moreover, such damage was not purely financial damage but material damage stemming from the fact that the purchaser received a defective vehicle. In the court’s view the damage suffered by the final purchaser was neither indirect nor purely financial and occurred when the vehicle was purchased in Austria. Similarly, in Tibor-Trans Fuvarozó és Kereskedelmi Kft v DAF Trucks NV (Case C-451/18) the Court of Justice held (at para 31) that the damage suffered by a Hungarian indirect purchaser of trucks, as a result of an infringement of article 101 TFEU by a cartel of manufacturers, was not merely a financial consequence of the damage that would be suffered by direct purchasers, such as dealerships, but was the immediate consequence of the infringement and was therefore direct damage within article 7(2).

Brownlie I
45. It is an unusual feature of the present appeal that in Brownlie I the Supreme

Court has already considered the precise issue with which we are now concerned in the context of the same litigation. The decision of the court in that earlier appeal was that there was no realistic prospect that the claimant would be able to succeed at trial against FSHI, which was at that time the defendant, and that accordingly the claim had no reasonable prospect of success. As a result, what was said on this issue in Brownlie I was entirely obiter, a fact stressed by the members of the court. Nevertheless, the present issue was addressed in considerable detail in the judgments delivered and, entirely understandably, the views expressed featured prominently in the submissions made on the present appeal.

46. The members of the court in Brownlie I were in agreement in rejecting an
argument based on the analogy of Parliament and Council Regulation (EC) 864/2007 on
the law applicable to non-contractual obligations (“the Rome II Regulation”). Article 4
provides that the applicable law shall be “the law of the country in which the damage
occurs, irrespective of the country in which the event giving rise to the damage
occurred and irrespective of the country or countries in which the indirect
consequences of that event occurred”. Although it draws a distinction between direct
and indirect damage, the Rome II Regulation is concerned with choice of law not with
jurisdiction. The two issues are distinct and are not analogous. There can only be one
applicable law, whereas under both the Brussels system and under our domestic rules
there can be more than one appropriate jurisdiction. The members of the Supreme
Court in Brownlie I were clearly correct in rejecting the suggested analogy.
47. That, however, was the full extent of the agreement in Brownlie I on the

breadth of the tort gateway. The majority (Lady Hale, Lord Wilson and Lord Clarke) considered that the word “damage” in paragraph 3.1(9)(a) was intended to bear its natural and ordinary meaning and that in the case of personal injury or wrongful death

that extended to actionable harm caused by the tortious act alleged, including all the bodily and consequential financial effects, which a claimant suffers as a result of the tortious conduct. In coming to this view, the majority rejected a narrower reading

which sought to distinguish between direct and indirect damage, founded on the
nature of a cause of action in tort or on the relationship of the tort gateway to the
special jurisdiction in tort within the Brussels system. Furthermore, the majority
considered that its reading would not permit claimants to bring proceedings wherever
they chose. There remained a requirement that there should be a substantial
connection between the claim and this jurisdiction and that would be protected by the
exercise of judicial discretion. In a dissenting judgment, with which Lord Hughes
agreed, Lord Sumption considered that “damage” in paragraph 3.1(9)(a) means direct
damage. A number of different lines of reasoning led him to this conclusion, in
particular (1) the nature of the duty broken in a personal injury action and the
character of the damage recoverable for the breach, (2) what he considered to be the
deliberate assimilation of the domestic rule in relation to tort claims to the
corresponding head of special jurisdiction in the Brussels system, and (3) the need to
identify some substantial and not merely casual or adventitious link between the cause
of action and this jurisdiction.
Damage
48. In support of his view that “damage” in paragraph 3.1(9)(a) is limited to direct

damage, Lord Sumption considered (at para 23) that there is a fundamental difference between the damage done to an interest protected by law and facts which are merely evidence of the financial value of that damage. The law of tort is primarily concerned

and, save in limited cases, does not protect pecuniary interests as such. Where the
interest in bodily integrity is deliberately or negligently injured, the tort is complete at
the time of injury, notwithstanding that damage is an essential element of it. In this
regard he pointed to the requirement that all the damage flowing from bodily injury or
damage to property must be claimed in one action which may be brought as soon as
the claimant has been injured or his or her property damaged and to the fact that,
although damage is an essential element of a cause of action in tort, the limitation
period in respect of any damage flowing from the breach will run from that time. While

with non-pecuniary interests such as bodily integrity, physical property and reputation necessarily limited to the damage which serves to complete a cause of action in tort, he maintained that the two concepts are clearly related. In his view “damage” within the rule does not extend to the financial or physical consequences of that damage.

49. To my mind, this approach is unduly restrictive. We are concerned here not with

the completion of a cause of action in tort, a matter of substantive law, but with the scope of a jurisdictional rule which is intended to identify the appropriate forum for the adjudication of the resulting claim. In my view there is no justification in principle

or in practice, for limiting “damage” in paragraph 3.1(9)(a) to damage which is
necessary to complete a cause of action in tort or, indeed, for according any special
significance to a place simply because it was where the cause of action was completed.
First, while damage is an essential element of many torts including negligence, many
other torts, including trespass to the person and trespass to goods, are actionable per
se, without proof of damage. There is therefore no warrant for reading paragraph
3.1(9)(a), which is a rule of general application to claims in tort, in such a restrictive
way.
50. Secondly, even in the case of those torts where actionability is conditional on

proof of damage, the suggested link between damage completing a cause of action and the identification of an appropriate jurisdiction is unconvincing. In Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458, Distillers had manufactured and sold in

its harmful effect on an unborn child. The claimant’s mother, when pregnant,
purchased and consumed the drug in New South Wales and the claimant was born
with disabilities. Section 18(4) of the Common Law Procedure Act, New South Wales (SI
1899/21) permitted a judge, in a case of non-appearance of the defendant, to enter
judgment if satisfied “that there is a cause of action which arose within the
jurisdiction”. In considering within this jurisdictional context where the cause of action
arose, the Judicial Committee of the Privy Council on an appeal from the Supreme

England to an Australian company a drug containing thalidomide without warning as to cause of action must have occurred within the jurisdiction, continued (at p 467E-G):

“No (ii) of the three possible theories - viz, that it is necessary jurisdiction to try the action, the approach should be different: the search is for the most appropriate court to try the action, and the degree of connection between the cause of action and the country concerned should be the determining factor.”

and sufficient that the last ingredient of the cause of action,
the event which completes it and brings it into being, has
occurred within the jurisdiction - seems to their Lordships to
be wrong as a theory. The last event might happen in a
particular case to be the determining factor on its own
merits, by reason of its inherent importance, but not because
it is the last event. Decisions under statutes of limitation are
not applicable. The question in that context being when did
the cause of action accrue so that the plaintiff became able
to sue, the answer is that the cause of action accrued when it
became complete, as the plaintiff could not sue before then.

The Privy Council in Distillers concluded that, in the context of the applicable legislation, the correct approach was, when the tort was complete, to look back over the series of events constituting it and ask the question where in substance did the cause of action arise (at p 468E). The importance of the decision for present purposes is that, notwithstanding that in Distillers the statute expressly founded jurisdiction on where the cause of action arose, the Privy Council rejected as wrong in law an approach based on where the act which completed the cause of action occurred.

51. Thirdly, damage is likely to be relevant to the identification of an appropriate

jurisdiction for the adjudication of a claim in tort not because it may complete a cause
of action but, more generally, because the damage actually suffered by the victim may,
depending on all the circumstances of the case, serve to link the wrongdoing to a
particular jurisdiction. In my view, therefore, there is no reason to read “damage” in
paragraph 3.1(9)(a) as limited to the damage which violates the claimant’s right and
which completes the cause of action. On the contrary, the word in its ordinary and
natural meaning and when considered in the light of the purpose of the provision
extends to the physical and financial damage caused by the wrongdoing,
considerations which are apt to link a tort to the jurisdiction where such damage is
suffered. Moreover, this reading is supported by the omission of the definite article in
the current article of the rule, an amendment which was intended to reflect the
decision in Metall und Rohstoff that it is sufficient that some significant damage has
been sustained in the jurisdiction. (See Brownlie I per Lord Wilson at para 64, per Lord
Clarke at para 68.)

The analogy of article 5(3)/7(2)

52. A second line of argument favoured by the minority in Brownlie I is founded on

by article 5(3) of the Brussels Convention (subsequently article 5(3) of Brussels

the history of the tort gateway and its relationship with the special jurisdiction created domiciled in a contracting state could be sued in another contracting state in matters relating to tort, delict or quasi-delict “in the courts for the place where the harmful event occurred”.

53.        I am unable to agree with Lord Sumption’s statement in Brownlie I that:

“in its current form, the jurisdictional gateway in the English
rules for claims in tort was deliberately drafted so as to
assimilate the tests for asserting jurisdiction over persons
domiciled in an EU member state and persons domiciled

elsewhere.” (para 30)

While there are general statements in a number of cases in this jurisdiction to the
effect that the addition of the reference to damage sustained was intended to give
effect to article 5(2) of the Brussels Convention as interpreted by the Court of Justice in
Bier (see Metall und Rohstoff at p 437A, B-D; the Eras Eil Actions [1992] 1 Lloyd’s Rep
570, 589; ABCI v Banque Franco-Tunisienne [2003] EWCA Civ 205, para 41), this is to
my mind an over-generalisation.

54. As I have explained, the amendment to the domestic rule in respect of tort

within the jurisdiction a gateway applicable where “the damage was sustained or
resulted from an act committed within the jurisdiction”. This amendment occurred at
the same time as the introduction into our domestic law of the parallel but distinct

claims substituted for a jurisdictional gateway applicable where a tort was committed an EU member state. It seems clear that it was appreciated at that time that it was necessary to amend the domestic rule for tort cases in this way, for otherwise the exceptional special jurisdiction in tort in the Brussels system would have been wider than the domestic tort gateway. The intention was to widen the domestic gateway so as to encompass the cases covered by the Brussels Convention. (See Brownlie I per Lady Hale at para 50; per Lord Wilson at paras 61, 63.) However, it does not follow that what was effected at that time was an assimilation of the two tests. Had that been the intention, it could have been achieved by the use of the same terminology; in fact the language employed in the amended rule was and has remained very different from that of the Brussels Convention. Nor is there any basis for an assumption that, following the amendment to the RSC, the domestic gateway was thereafter to be tied to EU law on the scope of article 5(3) as that was developed by later decisions of the Court of Justice. In this regard it is highly significant that the decisions of the Court of Justice in Dumez and Marinari, which restricted the scope of the special jurisdiction in tort under the Brussels system, were made some years after the amendment of the domestic rule.

55. On the contrary, fundamental differences between the two systems would have

made such an assimilation totally inappropriate. The Brussels system seeks to facilitate
the free movement of judgments by providing for a clear and certain attribution of
jurisdiction (Marinari at para 40). To that end, it establishes in article 2 a basic rule that
a defendant domiciled in an EU state should be sued in its state of domicile. Heads of
special jurisdiction, including the tort head, are limited exceptions and are to be
interpreted narrowly in order to protect the basic rule in article 2 and to avoid a
proliferation of possible jurisdictions which might pose a threat to the enforceability of
judgments. These points are emphasised in decisions of the Court of Justice such as
Dumez and Marinari and the results of those cases have to be read in this light. There
is no corresponding reason to approach the gateways of the domestic law test in such
a restrictive way. Furthermore, the allocation of jurisdiction under the Brussels system
is mandatory and notions of discretion and forum non conveniens play no part (Owusu
v Jackson [2005] ECR I-01383; cf Verein für Konsumenteninformation v Volkswagen AG
(Case C-343/19), para 38; Tibor-Trans Fuvarozó és Kereskedelmi Kft v DAF Trucks NV
(Case C-451/18), para 31). By contrast, within our domestic system the requirement of
passing through one of the jurisdictional gateways is only one element of the test to be
satisfied; in addition it must be demonstrated that England and Wales is the proper
place in which to bring the claim and forum non conveniens and discretion play a vital
part in the decision as to whether to accept jurisdiction. Within the Brussels system the
notion of direct damage, as developed by the Court of Justice in Dumez and Marinari is
an autonomous EU law concept which determines whether the particular kind of loss
sustained has sufficient connection to displace the article 2 general rule. Within our
domestic system the function of determining whether this is the appropriate
jurisdiction is not performed simply by the breadth of the gateway but in addition by
the forum non conveniens discretion. There is, therefore, no sound basis for seeking to
assimilate the limited, exceptional jurisdiction under article 5(3)/7(2) of the Brussels
system with the tort gateway in our domestic system. In particular, the scope of the
exceptional special jurisdiction under the Brussels system cannot be the defining
consideration for the scope of the tort gateway in our domestic system.

56. Furthermore, it seems clear that special jurisdiction in cases of tort under article

paragraph 3(1)(9)(a) of Practice Direction 6B. It follows from Marinari that in the

5(3)/7(2) is narrower, in at least one important respect, than under the tort gateway in there will not be jurisdiction in the courts of a second state even if significant further damage was sustained there. Professor Adrian Briggs explains in “Holiday Torts and Damage within the Jurisdiction” [2018] LMCLQ 196, 199:

“The imperative to try to concentrate the jurisdictionally
significant damage in one place is driven by the need to
confine special jurisdiction to its properly subordinate place
within the overall scheme of the Regulation.”

Our domestic system is not subject to any such constraint. As Lord Wilson pointed out in Brownlie I (at para 63), Marinari is inconsistent with the decision of the Court of Appeal in Metall und Rohstoff and demonstrates that our domestic rules create a gateway potentially wider than the Brussels system would permit.

Authorities

57.        The wider reading of the tort gateway which was adopted by the majority in

Brownlie I, is supported by a line of first instance decisions in personal injury cases. In Booth v Phillips [2004] EWHC 1437 (Comm); [2004] 1 WLR 3292 the claimant’s husband died while working as chief engineer on board a vessel in Egypt. She brought proceedings in negligence in England in her own right for the loss of her dependency and as executrix of her husband’s estate for funeral expenses against, inter alia, the owners and managers of the vessel. Mr Nigel Teare QC refused an application to set aside service out of the jurisdiction, rejecting a submission that “damage” in the rule referred to damage which completes the cause of action in tort and that that damage was the death of the claimant’s husband which had occurred in Egypt. In the judge’s view the word should be given its ordinary and natural meaning, namely harm which had been sustained by the claimant, whether physical or economic. Furthermore, the absence of the definite article in what was then CPR rule 6.20(8)(a) suggested that it was sufficient for the purposes of that sub-paragraph that some damage (not all of the damage) was sustained within the jurisdiction. In the judge’s view this was not an improbably wide construction because before jurisdiction was exercised the court had to be satisfied that it was appropriate to exercise that jurisdiction which involved considering whether England was the forum in which the case could most suitably be tried for the interests of all the parties and for the ends of justice (at paras 35-37). The claimant’s loss of financial dependency was damage sustained in England where she lived, as were the funeral expenses (at para 44).

60. In Wink v Croatio Osiguranje DD [2013] EWHC 1118 (QB) the claimant, who was

domiciled in England, was seriously injured in a road accident while on holiday in jurisdictional issue was governed by domestic rules and not the Brussels system. Haddon-Cave J rejected a submission that “damage” in gateway 9(a) was limited to direct damage only (at paras 32-35). First, there were no limiting words which would justify such a narrow meaning and exclude indirect damage. The ordinary and natural meaning of “damage” was any damage flowing from the tort. Secondly, the suggested construction was tantamount to saying that damage was sustained only where the injury occurred. However, that was plainly not the case in many instances including that case where the sequelae flowing from the original accident or injury in Croatia continued to be suffered long afterwards in England in the form of substantial pain and suffering and economic loss. Thirdly, he considered that the defendant’s submission involved re-writing sub-paragraph 9(a) so as to read “the injury was sustained within the jurisdiction”. Moreover, he considered (at para 37) that the fact that a tort may be complete on proof of loss or damage did not mean that jurisdiction could not properly be founded by proof that some of that loss or damage occurred in the jurisdiction in question.

61. In Stylianou v Toyoshima [2013] EWHC 2188 (QB) the claimant had been
repatriated to England after being seriously injured in a road accident in Western
Australia. Sir Robert Nelson rejected a submission that the CPR should be interpreted
in accordance with article 4(1) of the Rome II Regulation which had come into force
since the decisions in Booth and Cooley. Rome II did not concern jurisdiction and did
not override the CPR rule. Furthermore, the Brussels scheme differed from the
domestic rules in that the discretion under the CPR as to service out of the jurisdiction
was a valuable safety valve and rendered unnecessary a narrow definition of “damage”
under the CPR.

62. Erste Group Bank AG (London Branch) v JSC “VMZ Red October” is not a personal injury case but it may conveniently be considered at this point. At first instance ([2013] EWHC 2926 (Comm); [2014] BPIR 81, paras 141-148) Flaux J rejected a submission that the domestic tort gateway should be construed in accordance with article 5(3) and the case law under that article. In particular he rejected as “hopeless” a submission that

Cooley and Wink could be distinguished because the judges in those cases failed to appreciate that when the Rules Committee altered the wording of the gateway it was intending to mirror the meaning and effect of article 5(3) as interpreted by Professor Jenard in his report. In both Cooley and Wink the reason for rejecting the attempt to equate paragraph 3.1(9) with article 5(3) was that the terms of the domestic rule are wider and the English court retains a discretion as to jurisdiction absent from the Brussels Convention. Professor Jenard’s report was only concerned with the position under the Convention. Flaux J agreed with Tugendhat J in Cooley and Haddon-Cave J in Wink that the correct approach to the meaning of paragraph 3.1(9) was that adopted by Mr Teare QC in Booth. On appeal to the Court of Appeal [2015] EWCA Civ 379; [2015] 1 CLC 706, that court observed (at para 103) that but for the string of first instance authorities to the contrary, it would have regarded as very attractive the submission that the tort gateway was intended to reflect the European jurisprudence. It was, however, unnecessary to decide the point.

63. In Pike v The Indian Hotels Co Ltd [2013] EWHC 4096 (QB) the first claimant

brought proceedings in negligence in respect of injuries suffered when he attempted to escape from a terrorist attack on the Taj Mahal Palace hotel in Mumbai. Stewart J considered each of the battery of arguments deployed in previous cases in favour of limiting “damage” in ground 9(a) to direct damage and rejected each in turn.

64. In Brownlie I Lady Hale surveyed this line of authority in detail and concluded (at

the decisions were correct. I agree. This is an impressive and coherent line of authority.

para 48) that, despite the increasingly sophisticated arguments made against them, Brussels system and the domestic rules of jurisdiction applicable in this country and demonstrates that within the latter system there is no need to adopt an unnaturally narrow meaning of “damage” because concerns as to the possibility of an inappropriate exercise of jurisdiction are met by judicial discretion. In my view, the analogy of EU law has never required or justified the narrow reading of the domestic provision for which the defendant contends.

65. That “damage” in paragraph 3.1(9)(a) extends to the harm which has been
sustained by the claimant is also supported by decisions in other common law
jurisdictions.
66. In Flaherty v Girgis (1985) 63 ALR 466, the claimant, a resident of New South

Wales, was injured in a road accident in Queensland. She was treated in Queensland and in New South Wales. She brought proceedings in New South Wales which were served on the defendant in Queensland. The applicable rule permitted service outside the state “where the proceedings are founded on, or are for the recovery of, damage suffered wholly or partly in the State caused by a tortious act or omission wherever occurring”. On behalf of the defendant it was submitted that “damage” within the rule was limited to the immediate consequences of the proposed defendant’s tort, ie, the immediate physical injuries and losses which occurred in Queensland as distinct from the longer term physical and financial consequences which occurred in New South Wales. It was further submitted that “damage” within the rule was limited to that damage which constituted the necessary element in the cause of action in tort which, once established in another jurisdiction, rendered the rule inoperative in respect of damage and losses additionally suffered in New South Wales. The Supreme Court of New South Wales, Court of Appeal (Kirby P, Samuels and McHugh JJA) rejected these submissions. McHugh JA, with whom the other members of the court agreed on this issue, observed (at p 482):

58.        In Cooley v Ramsey [2008] EWHC 129 (QB); [2008] IL Pr 27 the claimant was

Booth v Phillips was inconsistent with the cases under article 5(3) of the Brussels I Regulation. Tugendhat J rejected the application. In his view Parliament had not fully assimilated the domestic rules with the Brussels system. The significant difference which had been left in being was that under the Brussels system the court retained no discretion, whereas discretion was retained under the domestic rules. Citing Professor Adrian Briggs, he concluded, at para 36, that “there is no compelling reason to apply this line of Convention and, probably, Regulation authority outside the field of application of the Convention or Regulation itself”. The claimant was able to bring his proceedings in England.
severely disabled as a result of a road accident in New South Wales which, it was not support and medical attention and that he had no residual earning capacity. He issued proceedings in England against the defendant and obtained permission to serve them out of the jurisdiction. The defendant sought to set aside the order for service out of the jurisdiction, arguing that the reasoning in
disputed, had been caused by the defendant’s negligence. He was repatriated to

59.        Similarly, in Harty v Sabre International Security Ltd (formerly SIS Iraq Ltd)

[2011] EWHC 852 (QB) (Macduff J) the claimant who had been injured in a road
accident in Iraq was permitted to serve proceedings out of the jurisdiction. On this
occasion the relevant argument seems to have been limited to the exercise of the

court’s discretion.

“In Crofter Handwoven Harris Tweed Co v Veitch [1942] AC
435 at 442 Viscount Simon LC pointed out that ‘“injury” is
limited to actionable wrong, while “damage”, in contrast with
injury, means loss or harm occurring in fact, whether
actionable as an injury or not’. Damage, therefore, is to be
contrasted with the element necessary to complete a cause
of action; it includes all the detriment, physical, financial and
social which the plaintiff suffers as the result of the tortious

conduct of the defendant.”

Ltd v Carriere Technical Industries Ltd (1979) 102 DLR (3d) 323; Vile v Von Wendt (1979)
103 DLR (3d) 356.) Flaherty and the other cases referred to above are decisions from
federal jurisdictions, and it is sometimes suggested that different considerations may
apply to the allocation of jurisdiction between different jurisdictions within a single
State. (See, for example, Spiliada Maritime Corpn v Cansulex Ltd [1987] 1 AC 460 at pp
476H-477A per Lord Goff). In Flaherty, however, Kirby P expressly drew attention (at p
468) to the fact that the rule also contemplated service beyond the Australian

(See also, to similar effect Challenor v Douglas, Cross J, [1983] 2 NSWLR 405; Skyrotors applications.

67. In Hong Kong, Order 11 of the Rules of the High Court provides, in terms

identical to the pre-2000 English domestic gateway, that permission may be given to serve a writ out of the jurisdiction if “the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction”. The Hong

Kong courts have followed Metall und Rohstoff in concluding that, in considering whether damage is sustained in Hong Kong, it is sufficient if some significant damage has been sustained there (Dynasty Line Ltd v Sukamto Sia [2009] HKCA 198, para 33). In Fong Chak Kwan v Ascentic Ltd [2020] HKCFI 679 the claimant had been seriously injured in an industrial accident while working at a site in Ningbo City, Mainland China. Ng J, after examining the authorities in great detail, followed the majority view in Brownlie I. In particular she concluded (at paras 255-260) that the claim was not founded on the mere fact that the claimant was resident in Hong Kong; in her view the claimant had incurred damage, albeit secondary or consequential damage, in Hong Kong. Furthermore, she considered that any concern that a wide interpretation of “damage” would confer a universal jurisdiction to entertain claims by local residents in respect of personal injuries suffered anywhere in the world, was sufficiently addressed by the discretion as to forum non conveniens.

68. These authorities strongly support the conclusion that in the present case
damage was sustained within the jurisdiction within gateway 9(a).
69. It is convenient to deal at this point with another line of authority which
concerns torts resulting in pure economic loss which is not consequent on personal
injury or damage to property.
70. The Eras Eil Actions have been referred to at para 38 above. They concerned a

the instigation of an English group of companies (Clarksons) and managed by an

reinsurance pool arrangement operating in the United States which had been set up at brought in England and Wales against Clarksons which, in turn, sought to make claims over against Howdens by separate writs issued in this jurisdiction which they sought to serve in the United States. Clarksons maintained that they had suffered damage in their pocket in London and that therefore damage had been sustained in England and Wales. Mustill LJ considered (at p 590) that the conclusion in Bier was precisely in accord with the provisions of our rules of court “but advances the present controversy not at all since it is not concerned with the financial consequences of a tort which itself is wholly economic in nature”. As we have seen, he further considered that the reasoning of Advocate General Warner in Rüffer was unanswerable and that, for the same reasons, had Clarksons’ claim been based solely on the situs of the head office of their group, there would have been no jurisdiction under the domestic tort gateway. However, their claim was not so limited. The damage for which Clarksons claimed was their exposure to claims by reinsurers which were being pursued in England and Wales and which, if successful, would result in judgments enforceable here. That was considered to amount, “in a real sense”, to the suffering of damage in England (at p 591). The decision is concerned only with pure economic loss and casts no light on a case like the present where physical and other damage were suffered sequentially first outside and then inside the jurisdiction.

71. In Bastone & Firminger Ltd v Nasima Enterprises (Nigeria) Ltd [1996] CLC 1902

goods exported by the English claimant to Nigeria were not paid for. The claimant
sought to amend the proceedings to bring new claims for conversion of or wrongful
interference with the consignments or documents against a Nigerian bank. Rix J
rejected a submission that the damage had been sustained in England and Wales for
the purposes of the domestic tort gateway. He concluded that the damage was
sustained in Nigeria where the documents and goods were lost and only the financial
consequences were felt in England.

72. In ABCI the claimants (“ABCI”) agreed to buy a proportion of the shares in

Banque Franco-Tunisienne (“BFT”). It was alleged that the purchase had been induced by fraudulent misrepresentations which were the result of a conspiracy between BFT and the other defendants to defraud ABCI. The jurisdiction of the courts of England and Wales was challenged on the basis that no relevant act or damage had been sustained in England and Wales. The Court of Appeal considered that the damage had been sustained where the investment had been made and rejected a submission that the claimants could be regarded as having sustained damage within the domestic tort gateway “both in the place where they purported to make or hold a board meeting ratifying the share subscription contract and the place where they made their investment”. Mance LJ, applying the approach adopted under the Brussels system, continued:


appeal. The parties were given an opportunity to file written submissions after the
hearing on the applicability of ground (4A). No doubt for good reason, the claimant
took the position that she does not seek to rely upon ground (4A) at this stage of the

proceedings, having not done so in the courts below.

Conclusion

217. As the claimant has eschewed reliance on ground (4A), I would hold that she

cannot bring her claims in tort in England. Considered independently of the claims in
contract, the facts giving rise to those claims are insufficiently connected with England
to pass through the gateway for claims in tort. I would accordingly allow the appeal on
this issue, whilst dismissing the appeal in relation to the claims for breach of contract.