Jarrett v Barclays Bank Plc (Jones v First National Bank Plc, Peacock v First National Bank Plc)

The meaning of “tenancies of immovable property” in article 16(1) of the Brussels Convention is autonomous and does not depend upon the law of the place where the property is situated. An agreement granting recurring exclusive occupation of identified property for money may constitute a tenancy even where occupation is limited to one week each year.

Article 16(1) nevertheless applies only where the proceedings are based upon, and have as their subject matter, the tenancy or relevant proprietary right. A statutory consumer-credit claim against a creditor is based upon the debtor-creditor-supplier agreement. Its connection with a foreign timeshare tenancy does not make that tenancy the object of the proceedings.

Three conjoined appeals concerned consumer-credit claims arising from timeshare agreements relating to property in Portugal or Spain. The consumers alleged misrepresentation or breach of contract by the suppliers and pursued the financing banks under sections 56 or 75 of the Consumer Credit Act 1974.

The Ipswich and Liverpool County Courts held that article 16(1) of the Brussels Convention gave exclusive jurisdiction to the courts where the properties were situated. The Bristol County Court reached the opposite conclusion. The consumers appealed in Jarrett and Jones, while the bank appealed in Peacock.

The Court of Appeal considered which law determined whether the agreements were tenancies, whether the agreements were tenancies or grants of rights in rem, whether those rights were the object of the proceedings, and whether a reference to the European Court of Justice was required.

1. Disposition. The Jarrett and Jones appeals were allowed, and the bank’s appeal in Peacock was dismissed. Morritt LJ delivered the judgment, with which Ward and Potter LJJ agreed. Each action was to proceed to trial in the County Court. Leave to appeal to the House of Lords was refused.

2. The characterisation of a timeshare agreement under article 16(1) of the Brussels Convention was governed by the autonomous meaning established through the principles and decisions of the European Court of Justice. It did not depend upon Spanish or Portuguese domestic law. Section 3 of the Civil Jurisdiction and Judgments Act 1982 required the Convention’s meaning and effect to be determined consistently with those principles and relevant decisions.

3. Each timeshare agreement was a tenancy for the purposes of article 16(1). Each conferred exclusive occupation of identified immovable property, assumed by the contract to belong to the other party, for a specified recurring period in return for money. The duration of the arrangement, whether 80 years, in perpetuity, or unstated, did not alter that conclusion. Nor was it material that a formal licence to occupy might subsequently be granted.

4. The tenancies were not, however, the object of the proceedings. Article 16(1) extends only as far as its purpose requires. A claim must be based upon the right in rem or tenancy, rather than merely connected with it. These claims were founded upon debtor-creditor-supplier agreements and the personal statutory rights attached to those agreements by sections 56 and 75 of the Consumer Credit Act 1974.

5. The “like claim” conferred by section 75(1) meant a like cause of action. It did not reproduce every remedy or import the jurisdictional restrictions governing proceedings against the supplier. Parliament had not imposed such a restriction upon the separate statutory claim against the creditor.

6. No reference to the European Court of Justice was necessary. The relevant interpretative principles were clearly established, and the remaining questions concerned their application by the domestic court.

1. Court of Appeal: In [1996] EWCA Civ 847, the consumers’ appeals in Jarrett and Jones were allowed and the bank’s appeal in Peacock was dismissed. All three actions were directed to proceed to trial in the County Court.

2. Ipswich County Court: His Honour Judge Brandt struck out the Jarrett action for want of jurisdiction, holding that the timeshare agreement was a tenancy and that articles 16(1) and 19 required the claim to be brought in Portugal.

3. Liverpool County Court: His Honour Judge Hamilton allowed the bank’s appeal from District Judge Wolfson and struck out the Jones action, holding that the tenancy was the principal matter with which the proceedings were concerned.

4. Bristol County Court: His Honour Judge Jack dismissed the bank’s appeal from District Judge Daniel in Peacock, holding that article 16(1) did not apply because the agreement was not a tenancy.