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PI and Civil Litigation

Law - practice - procedure

08 NOV 2013

Stylianou v Toyoshima & Suncorp Metway Insurance Limited [2013] EWHC 2188 (QB)

Summary

This case is an early example of the way in which the Courts may grapple with some of the undecided issues arising out of EC Regulation 864/2007 ‘Rome II'.

In a claim pursued in England against a foreign domiciled tortfeasor and motor insurer, the High Court considered issues of service out and jurisdiction under CPR Part 6, displacement of the applicable law and the applicability of foreign law damages limits.

In April 2009, the Claimant was a front seat passenger of a motor car driven by Toyoshima in Western Australia when it was involved in a collision. The Claimant was rendered tetraplegia as a result. The Claimant is habitually resident in England and was on holiday in Australia at the time. Toyoshima was believed to be habitually resident in Japan. Suncorp, his motor insurer, was registered in Queensland, Australia.

The Claimant issued proceedings in Western Australia against Toyoshima and liability was admitted. Those proceedings were litigated for two-and-a-half years and were at an advanced stage. Three days before the expiry of the three-year limitation period in England, the Claimant also issued proceedings in England against Toyoshima and Suncorp. Permission was given to her ex parte to serve the proceedings out of the jurisdiction on Suncorp. Suncorp applied to set aside that order and to strike out the claim as an abuse of process.

Jurisdiction

Under CPR rr. 6.36 and 6.37, the Claimant had to establish that: (a) damage was sustained in the jurisdiction; (b) there was a serious issue to be tried; and (c) England was the proper place to bring the claim. There was no dispute that there was a serious issue to be tried.

Suncorp submitted that the "damage" was limited to direct damage, being that sustained in the place of the accident. This was rejected. Applying Booth v Phillips [2004] 1 WLR 3292 and S.A. Cooley v T.R. Ramsey [2008] EWHC 129, the court found that "damage" was wide enough to cover economic losses such as care costs or loss of earnings sustained within the jurisdiction. The court rejected Suncorp's argument that the word "damage" in the CPR must be given the same meaning as in article 4 of Rome II, given that Rome II does not concern jurisdiction.

Suncorp submitted that in any event, England was not the proper place for the claim because the accident happened in Western Australia; the law of Western Australia was the applicable law; proceedings in Western Australia were advanced and because it had already spent AUS$60,000 in costs in respect of those proceedings. However, the court concluded that England was the place which had the most real and substantial connection with the action. The Claimant's injuries made travel to Australia impossible; there were 12-plus expert witnesses, all from England; most medical records, social service records and other quantum documents were English documents; and because the Claimant "will continue to live and suffer the consequences of her grave injuries in England".

Applicable law

The parties were at odds as to the applicable law. In particular, a dispute arose as to whether the discount rate on future loss of 6% applicable in Western Australia would apply to the assessment of damages in the English proceedings. If it did, the damages available to the Claimant (the pleaded claim being in excess of £8.5 million) would be substantially lower.

The general rule in article 4(1) of Rome II provides that the applicable law "shall be the law of the country in which the damage occurs... irrespective of the country or countries in which the indirect consequence of that event occur". If the general rule applied, the law of Western Australia would be applicable. However, under article 4(3) of Rome II, where the tort is "manifestly more closely connected" with another country, the law of that other country applies.

The Claimant argued that England was manifestly more closely connected with the tort given that liability was admitted and proceedings concerned the cost and consequences in England of the catastrophic injury. The court found however that the Claimant's case did not fall within the exception. Considering all the circumstances, including the advanced Australian litigation, the court was not satisfied that that the tort was manifestly more connected with England.

Having found that Western Australian law was applicable, the question which arose was whether the discount rate was a matter of evidence or a matter of law. If a matter of evidence, the English procedural rules would apply in any event. The court concluded that the discount rate was mandated by Western Australian statute and therefore a matter of law. The Claimant's damages would accordingly be limited by it.

Summary

This case provides a useful insight into the approach and factors for consideration for service out of the jurisdiction under CPR Part 6. In cases where liability is not in dispute, the fact that a claimant's losses will principally be suffered in England may be a powerful reason to found the jurisdiction of the English court. Conversely, it may not be a sufficiently powerful reason to render England the place which is manifestly more closely connected with the tort for the purposes of determining the applicable law. The High Court's consideration as to whether damages limits in foreign jurisdictions were a matter of law or evidence also provides useful guidance on the factor's for the court's consideration. It is suggested that in each case it must be determined whether the limit is a rebuttable factual presumption or a mandatory legal requirement.

 

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