FS Cairo (Nile Plaza) LLC v Lady Brownlie

For the domestic tort gateway in paragraph 3.1(9)(a) of Civil Procedure Rules 1998 Practice Direction 6B, “damage” means actionable harm caused by the alleged wrong. It includes direct and indirect physical, financial and social harm. Significant damage may be sustained in more than one country.

The gateway does not itself confer jurisdiction. The claimant must also establish a serious issue to be tried and that England and Wales is the proper forum.

Where foreign law is pleaded as applicable, English law cannot apply by default. The court may nevertheless presume that foreign law is materially similar to English law where that is fair and reasonable. The presumption is evidential, fact-sensitive and more readily available at an interlocutory stage.

FS Cairo (Nile Plaza) LLC v Lady Brownlie arose from a road accident during a hotel excursion in Egypt. Lady Brownlie was seriously injured, her husband was killed, and other family members were killed or injured. She pursued contractual and tortious claims under Egyptian law against the Egyptian company operating the hotel.

After an earlier claim failed because the wrong Four Seasons company had been sued, Nicol J permitted substitution of the hotel operator and service in Egypt: [2019] EWHC 2533 (QB). The Court of Appeal affirmed that decision by a majority: [2020] EWCA Civ 996.

The Supreme Court had to decide whether the tort claims satisfied the gateway requiring damage to have been sustained within England and Wales, and whether the claims had a reasonable prospect of success despite gaps in the evidence and pleading of Egyptian law. A related question concerned the claimant’s obligation to plead the Egyptian rules and sources on which she intended to rely.

1. Disposition. The appeal was dismissed. By a majority of four to one, the court held that all three tort claims passed through the tort gateway. The court unanimously held that the contractual and tortious claims disclosed a serious issue to be tried. Permission to challenge the Court of Appeal’s pleading direction was refused.

2. The tort gateway. Lord Lloyd-Jones, with whom Lord Reed, Lord Briggs and Lord Burrows agreed, held that “damage” in paragraph 3.1(9)(a) of Civil Procedure Rules 1998 Practice Direction 6B means actionable harm caused by the alleged wrongful act. It is not confined to the damage completing a cause of action or to direct damage. The ordinary and purposive meaning includes bodily harm and consequential financial loss. Some significant damage within England and Wales is sufficient, and damage may be sustained in more than one country. The claimant’s continuing pain, loss of amenity, financial losses, injury to the estate, bereavement and loss of dependency were therefore damage sustained within the jurisdiction.

3. The domestic gateway was not assimilated to the narrower special jurisdiction under the Brussels regime. The domestic system retains a structured forum non conveniens inquiry. That inquiry requires the claimant to establish that England and Wales is the proper place for trial and prevents jurisdiction from resting on a merely casual or adventitious connection. The economic-loss authorities were distinguishable, although their assumption that the domestic gateway had to mirror the Brussels regime was disapproved.

4. Foreign law. Lord Leggatt, with whom all the other Justices agreed on this issue, distinguished two rules. If neither party pleads foreign law, English law may apply by default as a procedural consequence. Once foreign law is pleaded and shown to govern, the court must apply it. English law can then be relevant only through the evidential presumption that the foreign law is materially similar.

   The presumption applies only where similarity is a fair and reasonable factual inference. Relevant considerations include the relationship between the legal systems, whether the domestic rule is a general principle or a local regulatory rule, the likelihood that any difference would affect the outcome, the procedural stage, and the availability of better evidence. Existing but incomplete foreign-law evidence does not automatically exclude the presumption.

5. At this interlocutory stage, it was reasonable to presume that a hotel operator undertaking to provide a chauffeur-driven excursion would owe materially similar safety obligations under Egyptian law. The expert evidence also supported a reasonably arguable contractual claim and an accepted vicarious-liability claim. The possible effect of the Egyptian doctrine of non-cumul did not make the pleaded alternatives unarguable. The claimant was nevertheless required to amend her particulars to identify the Egyptian rules and sources on which she intended to rely.

   Lord Leggatt dissented on the tort gateway. He would have confined it to damage directly caused within the jurisdiction and treated the threshold connection and forum conveniens as distinct inquiries. The possible connected-claims gateway in paragraph 3.1(4A) was not decided because the claimant did not rely on it.

• United Kingdom Supreme Court: In FS Cairo (Nile Plaza) LLC v Lady Brownlie [2021] UKSC 45, dismissed the hotel operator’s appeal and refused permission to challenge the pleading direction.
• United Kingdom Supreme Court: In the earlier proceedings, Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, allowed the then defendant’s appeal because the wrong company had been sued, but permitted an application to correct or substitute the defendant.
• Court of Appeal: By a majority, affirmed Nicol J’s decision permitting service on the substituted defendant and held that the gateway and merits requirements were satisfied: [2020] EWCA Civ 996.
• High Court: Nicol J substituted FS Cairo, permitted amendments and service abroad, and declared that the court had jurisdiction: [2019] EWHC 2533 (QB).
• Court of Appeal: In the earlier proceedings against the original defendant, affirmed jurisdiction only in part: [2015] EWCA Civ 665.
• High Court: Tugendhat J restored permission to serve the original proceedings: [2014] EWHC 273 (QB).