#5017 - Gruber - Conflict of Laws BCL

Gruber (2005)

Facts

Proceedings between Mr Gruber, domiciled in Austria, and Bay Wa AG ('Bay Wa'), a company incorporated under German law, established in Germany, on account of the alleged defective performance of a contract that Mr Gruber had concluded with Bay Wa.

Mr Gruber, a farmer, owns a farm building constructed around a square ('Vierkanthof'), situated in Upper Austria, close to the German border. He uses about a dozen rooms as a dwelling for himself and his family…. The area of the farm building used for residential purposes is slightly more than 60% of the total floor area of the building.

Bay Wa operates a number of separately managed businesses in Germany. In Pocking (Germany), not far from the Austrian border, it has a building materials business and a DIY and garden centre. The latter published brochures which were also distributed in Austria.

Mr Gruber considered that the tiles delivered by Bay Wa to tile the roof of his farm building showed significant variations in colour despite the warranty that the colour would be uniform. As a result the roof would have to be re-tiled. He therefore decided to bring proceedings on the basis of the warranty together with a claim for damages.

For that purpose, Mr Gruber commenced proceedings on 26 May 1999 before the Landesgericht Steyr (Austria), designated as the competent court in Austria.

Questions

1. Where the purposes of a contract are partly private, does the status of consumer for the purposes of Article 13 of the Convention depend on which of the private and the trade or professional purposes is predominant, and what criteria are to be applied in determining which of the private and the trade or professional purposes predominates?

2. Does the determination of the purpose depend on the circumstances which could be objectively ascertained by the other party to the contract with the consumer?

Holding

Court relied on the following General Principles:

1. Principle of autonomous interpretation

2. Provisions relating to consumer contracts constitute an exception to the general rule under Art. 2 – they must therefore be narrowly interpreted.

3. Provisions relating to consumer contract provide for jurisdiction to courts of the claimant’s domicile, they must therefore be restrictively construed.

4. As held in Shearson Lehmann Hutton, consumer contract provisions are intended for the personal protection of the consumer himself and they are inapplicable to other persons who may sue on behalf of the consumer (same in VFK)

5. As held in Benincasa, Consumer contract provisions apply only when the goods were obtained for the claimant’s personal use alone and not for his business or trade purposes. The nature of the contract is relevant in determing this.

Application to Facts

In that regard, it is already clearly apparent from the purpose of Articles 13 to 15 of the Brussels Convention, namely to properly protect the person who is presumed to be in a weaker position than the other party to the contract, that the benefit of those provisions cannot, as a matter of principle, be relied on by a person who concludes a contract for a purpose which is partly concerned with his trade or profession and is therefore only partly outside it. It would be otherwise only if the link between the contract and the trade or profession of the person concerned was so slight as to be marginal and, therefore, had only a negligible role in the context of the supply in respect of which the contract was concluded, considered in its entirety.

As the Advocate General stated in paragraphs 40 and 41 of his Opinion, inasmuch as a contract is entered into for the person's trade or professional purposes, he must be deemed to be on an equal footing with the other party to the contract, so that the special protection reserved by the Brussels Convention for consumers is not justified in such a case.

That is in no way altered by the fact that the contract at issue also has a private purpose, and it remains relevant whatever the relationship between the private and professional use of the goods or service concerned, and even though the private use is predominant, as long as the proportion of the professional usage is not negligible.

Accordingly, where a contract has a dual purpose, it is not necessary that the purpose of the goods or services for professional purposes be predominant for Articles 13 to 15 of the Convention not to be applicable.

The exclusion for trade or business purpose is worded in negative terms: That interpretation is supported by the fact that the definition of the notion of consumer in the first paragraph of Article 13 of the Brussels Convention is worded in clearly restrictive terms, using a negative turn of phrase ('contract concluded... for a purpose...outside [the] trade or profession'). Moreover, the definition of a contract concluded by a consumer must be strictly interpreted as it constitutes a derogation from the basic rule of jurisdiction laid down in the first paragraph of Article 2, and confers exceptional jurisdiction on the courts of the claimant's domicile (see paragraphs 32 and 33 of the present judgment).

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