#5213 - Ennstone Building Products V. Stranger - Conflict of Laws BCL

Ennstone Building Products v. Stranger

Facts

The claimant was a supplier of stone for use in building work. The defendant provided testing and consultancy services. A problem had arisen in respect of stone supplied by the claimant for the Standard Life building in Edinburgh. The stone, which was sandstone quarried from Stainton Quarry in County Durham, was found to be becoming stained.

The parties contracted in May 1995 for the defendant to provide professional services, including investigation into the cause of the staining, testing of the stone and reporting on remedial action. The claimant subsequently alleged that the defendant was negligent and/or in breach of contract in the performance of its services. The defendant denied the allegations of negligence in respect of both the contractual and the tortious claims.

The defendant's registered office is at Wolverhampton. It is thus an English company. Its principal or main office was at Elstree, which was where its central administration was located. The contract of May 1995 came about after a visit to the defendant's Scottish office by a representative of the claimant, Mr Marshall, who raised the problem of the staining of the stone used on the Standard Life building. In response, Mr Revie sent a letter dated 27 April 1995, enclosing a proposed investigation programme and budget estimate. The letter was sent from the defendant's Scottish office and the programme covered investigation at the quarry in County Durham, a desk study of available information, and visits to sites including the Standard Life building itself and to another building in Scotland where similar stone had been used. The letter from Mr Revie was on notepaper bearing the defendant's Glasgow address and it confirmed that a file had been opened where all matters relating to this job would be held.

Holding

First, it is common ground that the characteristic performance of this contract was that of the defendant. Secondly, the contact was entered into in the course of the defendant's trade or profession. Thirdly, the principal place of business of the defendant is in England.

Contract requires performance through a particular place of business – Art. 19(2)

Given all these indicators, I conclude that the presumption under article 4(2) is indeed that, where the contract is entered into in the course of the relevant party's trade or profession, the country of that party's principal place of business is to be seen as the most closely connected country, unless the contract terms specify that performance is to be effected through some other place of business. Such an interpretation helps to achieve certainty as to the applicable law. I would accept that an implied term would suffice for this purpose, but unless a term of the contract would be broken by performance through a particular place of business, the last part of article 4(2) does not bite. In that case the principal place of business of the relevant party would determine the proper law.

One comes, therefore, to this contract, to see whether the terms of it required performance through the defendant's Scottish office. Its express terms, as contained in the three documents identified by the judge below, patently did not. Is such a term to be implied? Neither party has put before us any evidence as to how any system of law other than English law would seek to answer that question. The principles of English law on implied terms are well established. It is not contended in the present case that an implied term that performance should be via the defendant's Scottish office was necessary to give business efficacy to the contract.

Whether the...