The post below was written by Adrian Briggs QC, who is Professor of Private International Law Emeritus at the University of Oxford. It is the second contribution to the EAPIL online symposium, announced by an earlier post, regarding the ruling of the Court of Justice in the case of Hrvatske Šume. The previous post of Peter Mankowski can be found here.
The arrival of the decision in C-242/20 Hrvatske Šume in December 2021 was as predictable as it was depressing. So was the omicron variant of covid-19: early December 2021 will not go down as the high point of anyone’s year. Those who have already contributed to this commentary have highlighted the technical shortcomings in the apology for a judgment, and there is no need to repeat their criticisms which are, in my view and in any rational world, unanswerable. Their careful work allows others to paint a more impressionistic picture.
The claimant in the case sustained damage: any consequence arising out of … unjust enrichment, as this is explained in the Rome II Regulation. The reason why the claim was not within Article 7(2) of the Brussels I Regulation will therefore have been that there was no harmful event when the defendant refused to repay a sum which it had no legal basis to retain. Although English is only one of twenty-odd languages, each of which is equally authentic, in what sense is that refusal, assuming it is unjustified in law, not a harmful event ? Consider the child who, sent on a shopping errand, refuses to hand over to her mother the change from the original £10 which the shopkeeper had given her. This refusal is, it seems, not to be understood as a harmful event. That will come as news to many. If while out walking I find a wallet which someone has evidently dropped, and decide to pick it up and keep it, does the claim later brought against me by the owner fall within Article 7(2) ? One would think so; and it makes no difference whether the claim is for the leather folder or the banknotes which it contains. Or take the case in which I attempt to make an electronic transfer of funds to my favourite nephew’s bank account but which, as a result of my incompetent typing, I manage to transfer to a complete stranger (it happens; don’t ask). When I discover my mistake, and the bank, in the modern way of banks, refuses point blank to do anything to help, I am left to sue the intransigent recipient for repayment. Does the claim fall within Article 7(2) ? The answer should be yes, and the proposition that the refusal to repay that which one should not have received and certainly should never have kept is not a harmful event rejected as the nonsense which it certainly is.
In what sense is the refusal to pay over not a harmful event ? The only illumination has to come from bare and conclusory paragraph 55 of the judgment, which says that ‘a claim for restitution based on unjust enrichment is based on an obligation which does not originate in a harmful event. That obligation arises irrespective of the defendant’s conduct, with the result that there is no causal link that can be established between the damage and any unlawful act or omission committed by the defendant’. The proposition that there is no causal link between the damage (which seems to be admitted) and anything the defendant did or didn’t do is apparent only to those who value belief above observation. The damage of which the claimant now complains would not have occurred if the defendant had behaved otherwise: how is that relationship not a causal one ? The Court may say that it depends on the meaning of ‘causal’, which it may do. That, however, is not elaborated by the judgment. So we must try to do it ourselves.
One possible explanation might be that the recipient does me no harm; that I harmed myself and everything which follows is an immaterial consequence of that self-harm. If that is so, it would reflect developments within the judicial exegesis of ‘damage occurring’ as this relates to Article 7(2). Maybe so, but it makes cases of transfer or property as a result of fraud or misrepresentation hard to deal with. If it is suggested that the delayed-refusal to deliver or redeliver is not a harmful event, what of the case in which the person to whom I have lent my bicycle (gratuitously, not for reward) refuses to return it to me ? He did no wrong when I handed it over and he borrowed it, but it would make one rub one’s eyes in disbelief if it were said that his refusal to return it on my demand hand it over was not a wrongful act because I had self-harmed by voluntarily parting with it in the first place.
And so one could continue unto length of days. Not everyone will see the lines as needing to be drawn in the same place as I would locate them, which is, no doubt, exactly as it should be. One should instead ask why the Court has decided to turn its back on Kalfelis and thirty-odd years of general (granted, not universal) assumption that ‘all actions which seek to establish the liability’ of a defendant does not mean what it said, in favour of some abstract and doctrinaire distinction-drawing, which serves no useful purpose at all. It will now require a judge at first instance, perhaps in the remoter regions of the Union where theories of unjust enrichment and waiver of tort are not part of daily discourse, to figure out whether a non-contractual obligation giving rise to a pleaded claim is – as a matter of general European law, rather than within his or her own legal system, as paragraph 40 makes perfectly clear – based on a harmful event. What on earth was the sense of that ?