Four Seasons Holdings Incorporated v Brownlie

Permission to serve proceedings outside the jurisdiction requires a plausible evidential basis for an applicable gateway. Where disputed facts can be assessed reliably, the court must take a view on the available material. If interlocutory limitations prevent a reliable assessment, a plausible but contested basis is sufficient.

Permission cannot stand where reliable evidence shows that the named foreign defendant was neither the contracting party nor legally responsible for the alleged tortfeasor.

The court’s majority considered, strictly obiter, that “damage” under the tort gateway bears its ordinary meaning and may include significant secondary harm sustained in England. It is not confined to the damage completing the cause of action.

Lady Brownlie booked a chauffeur-driven excursion while staying at a hotel in Cairo. The vehicle crashed in Egypt, killing her husband and his daughter and seriously injuring Lady Brownlie and two children. She brought contractual and tortious claims, including claims under the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976, against Four Seasons Holdings Incorporated, a Canadian holding company.

Master Yoxall permitted service outside the jurisdiction. Master Cook set that permission aside, but Tugendhat J restored it. The Court of Appeal, in [2015] EWCA Civ 665, upheld jurisdiction in contract while holding that the personal-injury claims did not pass through the tort gateway.

The principal questions were whether the claimant had a good arguable case that Holdings was the correct defendant, whether the claims had a reasonable prospect of success, and, if necessary, whether indirect consequences experienced in England amounted to “damage” sustained within the jurisdiction.

1. Disposition. The Supreme Court unanimously allowed Holdings’ appeal. The evidence established that Holdings was a non-trading holding company. It neither owned nor operated the Cairo hotel and was not responsible for the driver. The court therefore lacked jurisdiction to try any pleaded claim against it. Lady Brownlie’s cross-appeal on the tort gateway required no order, and consequential matters were remitted to the High Court.

2. Evidential standard. Lord Sumption, with Lord Hughes agreeing, explained that a claimant invoking a jurisdictional gateway must establish a “good arguable case”. Lady Hale and Lord Wilson expressly agreed. The claimant must provide a plausible evidential basis. If the court can decide a factual dispute reliably on the interlocutory material, it must do so. If the material does not permit a reliable assessment, a plausible but contested basis will suffice. The word “much” in the formulation that one party must have a “much better argument” introduced an unwarranted degree of conviction.

3. Application to Holdings. The additional evidence gave a reliable account of the corporate arrangements. An Egyptian subsidiary operated the hotel for its independent Egyptian owner. Other subsidiaries provided central services and licensed trade marks. There was no realistic prospect of proving either a contract with Holdings or its vicarious liability. The particular gateways and the general reasonable-prospect requirement therefore failed.

4. Foreign-law tort and statutory dependency claim. Lord Sumption considered, and Lady Hale and Lord Wilson agreed, that the Fatal Accidents Act 1976 forms part of the proper law of the tort and does not apply where the tort is governed by foreign law: Cox v Ergo Versicherung AG [2014] AC 1379. The pleaded statutory dependency and bereavement claim, governed by Egyptian law, had no prospect of success. This conclusion was unnecessary once Holdings was shown to be the wrong defendant.

5. Tort gateway—majority obiter view. Lady Hale, Lord Wilson and Lord Clarke considered that “damage” in paragraph 3.1(9)(a) of Practice Direction 6B bears its ordinary and natural meaning. It can include significant physical, financial or social detriment sustained in England after injury abroad. The omission of the definite article supported that construction. European rules allocating jurisdiction between member states did not control the differently worded domestic gateway. The discretion to determine the proper forum provided an important safeguard against tenuously connected claims.

6. Competing obiter view. Lord Sumption, with Lord Hughes agreeing, would have confined “damage” in a personal-injury claim to the direct injury to the legally protected interest. Later expenditure, financial loss, pain and other consequences would measure or flow from that damage without relocating it. On that approach, jurisdictional gateways identify the maximum legal reach of the English courts, while forum conveniens can restrict but cannot enlarge that reach.

7. Contract formation. The place of formation of the alleged contract did not arise. The court nevertheless confirmed that the rule in Entores Ltd v Miles Far East Corpn [1955] 2 QB 327 remained applicable to instantaneous communications. Any reconsideration by the Rules Committee could concern the contractual gateway, not the substantive rule of contract formation.

1. United Kingdom Supreme Court: In Four Seasons Holdings Incorporated v Brownlie [2017] UKSC 80, unanimously allowed Holdings’ appeal, declared that the court had no jurisdiction over the pleaded claims against Holdings, made no order on Lady Brownlie’s cross-appeal, and remitted consequential matters to the High Court.
2. Court of Appeal: In [2015] EWCA Civ 665, endorsed the restoration of permission against Holdings on the contractual case but held that the personal-injury claims did not fall within the tort gateway.
3. High Court: Tugendhat J allowed Lady Brownlie’s appeal from Master Cook and restored the order permitting service outside the jurisdiction.
4. Masters: Master Yoxall initially granted permission for service outside the jurisdiction. Master Cook subsequently set that permission aside.