Posts Tagged characterisation

McDonald v Broadspectrum. When does a claim by an employee against her employer ‘relate to’ the contract of employment?

[2019] QSC 313 McDonald v Broadspectrum can go straight into the comparative binder – thank you Angus Macinnis for signalling it. A teacher employed by Broadspectrum on Nauru, sues it for personal injury. Amongst other things, Ms McDonald alleges Broadspectrum failed to provide a safe place or system of work, to warn her about the mould contamination, to provide protective clothing or respirators, to prevent exposure, and to provide adequate ventilation, in each instance in Nauru.

Broadspectrum applied for a declaration at the Supreme Court of Queensland that the substantive law applicable to her claims is the law of New South Wales and for an order setting aside or staying and transferring her claims to the Supreme Court of that State.

The relevant compensation schemes, in Queensland and New South Wales, each exclude from their scheme an employer’s liability arising under the law of another country. Bradley J however held that lex loci delicti is Nauru law,  which therefore is lex causae. The argument that the employment contract contained implied term to the contrary was rejected.

As I discussed with Angus, I was confused by the court’s qualification of the facts as ‘tort’ (particularly as it also refers to claimant’s argument re forum contractus being Nauru); is this not a contractual claim rather than one in tort? (and one relating to the employment contract, for that matter). Angus however pointed out that in Australia workplace injury claims are usually brought as tortious breach of care claims rather than breach of a contractual obligation to provide a safe system of work. Comparatively speaking, the EU approach would probably be different. For a comparative (consumer contracts, health and safety) angle see e.g. [2018] EWCA Civ 1889 Committeri v Club Med.

On the issue of concurrent liabilities and  EU PIL see recently also Bosworth.

Geert.

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Secure Capital v Credit Suisse: Downstream holders of securities and third party redress.

As I seem to be in a mopping-up mode this morning, I might as well sneak in late review of Secure Capital SA v Credit Suisse AG, [2015] EWHC 388 (Comm) and at the Court of Appeal [2017] EWCA Civ 1486. Draft post of the latter has been in my ledger since 2017…

The cases essentially are concerned with characterisation; privity of contract, choice of law and dépeçage (bifurcation or severance).

My father-in-law OBE wonderfully sums up the world of international finance as fairy money. Harry (aka Tim Nice But Balding) & Paul express a similar feeling here. I can’t help but think of both when re-reading judgments in both cases.

Allen & Overy have most useful overview here, and RPC add useful analysis here. Claim related to eight longevity notes issued by Credit Suisse in 2008. The Notes were linked to life insurance policies, which meant that the prospect of the holder receiving payments for the Notes depended on mortality rates among a set of “reference lives”.  Secure Capital contended that Credit Suisse failed to disclose that the mortality tables used to generate the estimated life expectancies were shortly to be updated in a way that would significantly increase life expectancies, rendering the Notes effectively worthless. Secure Capital relied on a term in the issuance documentation that stated that Credit Suisse had taken all reasonable care to ensure that information provided in such documentation was accurate and that there were no material facts the omission of which would make any statements contained in those documents misleading.

The Notes were issued by Credit Suisse’s Nassau branch. Under the terms of the transaction documents, the Notes were deposited with the common depositary, Bank of New York Mellon, which held the securities on behalf of the clearing system, in this case Clearstream: which is Luxembourg-based.  The Notes were governed by English law and issued in bearer form.

Secure Capital essentially employ an attractive proposition in Luxembourg law reverse-engineering it either as the proper law of the contract in spite of prima facie clear choice of law, or alternatively as dépeçage: it argues that the provisions of a 2001 Luxembourg law on the Circulation of Securities, being the law that governed the operation of Clearstream through which the Notes were held, gave it an entitlement “to exercise the right of the bearer to bring an action for breach of a term of the…Notes“. In order to succeed, Secure Capital would have to circumvent the English law on privity of contract in respect of a transaction governed by English law.

Allen & Overy’s and RPC’s analysis is most useful for the unsuspected bystander like myself (thankfully I have a researcher, Kim Swerts, starting soon on a PhD in the area of conflict of laws and financial law).

In the High Court Hamblen J at 35 ff discusses the alternative arguments, wich would displace the suggestion that Secura Capital’s claim is a contractual claim. (Tort, as Betson LJ at the appeal stage notes at 24, was not advanced). This included a suggested property right (with discussion on the issue of the lex causae, whether e.g. this might be the lex situs), or, more forcefully, a right sui generis. None of these was upheld. Discussion on relevance of Rome I and /or the Rome Convention took place very succinctly at 53-54 – a touch too succinctly for Hamblen J’s swift reflection is that under both Rome and English conflicts rules, there was no suggestion of displacing the lex contractus. Depending on what counsel discussed, one would have expected some discussion of mandatory law perhaps, or indeed dépeçage – the latter was discussed summarily by Beatson LJ at the Court of Appeal under 54-55.

Geert.

(Handbook of) Private International Law, 2nd ed. 2016, Chapter 3.

 

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