FS Cairo (Nile Plaza) LLC v Brownlie

For the tort gateway governing service outside the jurisdiction, damage sustained in England and Wales means significant damage of any kind. It need not be the initial or direct damage. Any resulting breadth is controlled by the court’s separate discretion concerning the proper forum.

Where foreign law governs but its content is not proved, the court ordinarily applies English law as a default evidential rule. The rule remains available on a jurisdictional challenge unless its use is inappropriate or evidence establishes a material difference. A claimant may therefore establish a real prospect of success without initially proving every relevant aspect of foreign law.

Lady Brownlie sought damages under Egyptian law following a road accident during an excursion booked through a Cairo hotel. She was seriously injured, and her husband and his daughter were killed. She claimed personally, as executrix of her husband’s estate and as his dependant, alleging contractual liability and direct and vicarious liability in tort.

Nicol J, in [2019] EWHC 2533 (QB), substituted the Egyptian hotel operator as defendant and permitted service in Egypt. He held that the tort claims passed the damage gateway and that all the claims had a real prospect of success. The appeal concerned whether significant consequences suffered in England satisfied the tort gateway and whether gaps in the evidence of Egyptian law defeated the direct tort and contractual claims.

1. Appeal dismissed. By a majority, McCombe and Underhill LJJ held that the claims in tort fell within paragraph 3.1(9)(a) of Practice Direction 6B and that all the proposed claims had a real prospect of success. Arnold LJ dissented on both the tort gateway and the direct tort and contractual claims.

2. The phrase “damage was sustained within the jurisdiction” encompasses significant damage suffered in England and Wales even where the harmful act and initial injury occurred abroad. It does not require the court to distinguish between direct and indirect damage. The domestic service-out regime uses language and serves a purpose materially different from the Brussels jurisdictional regime. Its gateways are also supplemented by the court’s discretion to refuse jurisdiction where England is not the proper forum: per McCombe LJ at [23]–[56] and Underhill LJ at [158]–[160].

3. The fully considered but obiter majority view of the Supreme Court in the earlier stage of this litigation deserved substantial weight. The Court of Appeal should follow such a view unless satisfied that it was clearly wrong. The broader interpretation of the gateway was not shown to be clearly wrong: per Underhill LJ at [158]–[160].

4. Foreign law is a question of fact. Where it governs but satisfactory evidence of its content is absent, the court ordinarily applies English law as an evidential default. This does not displace the applicable foreign law. It assumes that the foreign law has substantially the same effect on the particular issue. The rule is flexible and may be excluded where its use would be inappropriate: per Underhill LJ at [169]–[188].

5. On an application for permission to serve outside the jurisdiction, the claimant may rely on that default rule to establish a real prospect of success unless and until the defendant produces evidence of a relevant difference in foreign law. Merely objecting to use of the rule does not displace it. Evidence about some self-contained issues of foreign law does not necessarily prevent reliance on the rule for other issues on which no evidence has been given: per Underhill LJ at [185]–[219].

6. The evidence established a real prospect of success for the vicarious-liability claim. The default rule also supported the direct tort and contractual claims. The respondent was nevertheless directed, as a matter of case management, to plead the Egyptian-law principles and sources supporting every claim before the action progressed: [223]–[224].

• Court of Appeal: In [2020] EWCA Civ 996, dismissed the Egyptian hotel operator’s appeal and upheld permission for service outside the jurisdiction, subject to a direction requiring the respondent to plead the relevant Egyptian law.
• High Court: Nicol J, in [2019] EWHC 2533 (QB), substituted the Egyptian hotel operator, held that the claims passed the applicable jurisdictional gateways and had a real prospect of success, and permitted service in Egypt.
• Supreme Court: In the earlier stage reported at [2017] UKSC 80 and [2018] 1 WLR 192, held that the original Canadian defendant was not a viable defendant and remitted ancillary matters to the High Court. Its majority also expressed an obiter view favouring the broader construction of the tort gateway.
• Earlier Court of Appeal: In [2015] EWCA Civ 665, had allowed the original defendant’s appeal in part, permitting service for some claims but refusing permission for other tort claims.