Report for the Hearing in Case C-280/90
I — Facts and procedure before the national court
1. It appears from the order for reference that on 5 April 1989 Mrs Hacker, who is domiciled in the Federal Republic of Germany, concluded in that country a contract described as a tenancy agreement with Euro-Relais GmbH, a travel organizer which advertises by way of brochures and whose head office is also in the Federal Republic of Germany.
2. Under the contract Euro-Relais undertook, in return for payment of DM 1520, to provide for the use of Mrs Hacker and six other persons accompanying her, for the period from 29 July to 12 August 1989, a holiday home which was not owned by the company situated in Ameland, Netherlands. Euro-Relais was not acting as a mere intermediary, because it undertook to make the holiday home available for Mrs Hacker's use as its own obligation. For an additional payment of DM 35 Euro-Relais also undertook to arrange the booking of the ferry crossing to Ameland for Mrs Hacker; the cost of the crossing itself was to be paid separately by Mrs Hacker to the shipping company.
3. Mrs Hacker considered that the holiday home provided by Euro-Relais did not correspond to what had been agreed and brought proceedings against Euro-Relais before a German court. She claims that the size of the holiday home, which the catalogue described as 100 square metres in area, proved to be at most 55 square metres, which was too small for four adults and three children, obliging them to rent an additional room from 31 July to 8 August 1989 for DM 288. Since that solution proved unsatisfactory, however, on 8 August 1989 Mrs Hacker decided to cut short her holiday and return home with her husband and child.
4. Mrs Hacker claims on her own behalf and on behalf of her husband, who has assigned his rights to her, payment of a sum itemized as follows:
5. The Landgericht Köln, which heard the case on appeal, considered that the case turned on the question whether or not the claims put forward fell within the scope of Article 16(1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to that convention and to the Protocol on its interpretation by the Court of Justice (amended text published in Official Journal 1978 L 304, p. 77, hereinafter referred to as the Convention. It therefore stayed the proceedings and referred the following questions to the Court of Justice:
6. In the grounds of the order for reference the Landgericht expresses doubt as to whether a contract of the type in question falls within the scope of Article 16(1) of the Convention. It compares the present case with the case which gave rise to the judgment of th'e Court of 15 January 1985 in Case 241/83 Rosier v Rottwinkel [1985] ECR 99, and points out that in this case a contract was concluded between a travel organizer and a customer for the use and occupation of a holiday home which was not the property of the travel organizer, whereas in Rosier there was a contract for the letting of a holiday home which was the property of the person letting it.
7. The Landgericht considers that the characterization of the contract under German law cannot determine whether there is a tenancy agreement within the meaning of Article 16(1) of the Convention, since in order to ensure uniform and consistent application of the Convention in all the contracting States the legal terms contained therein must be defined autonomously in the framework of the Convention itself. The Landgericht takes the view, moreover, that a contract of the type in question falls within a separate category of cases which can be clearly defined and does not give rise to the risk of uncertainty regarding jurisdiction. According to the Landgericht, that type of contract does not fall within the ambit of Article 16(1) of the Convention. Such an approach would mean that contracts of the type in question would not be characterized as tenancies within the meaning of Article 16(1); the considerations referred to in the Rosier judgment concerning the proximity of the evidence and the close link to the law of immovable property and mandatory provisions protecting the rights of tenants would normally not apply.
8. Should the Court answer Question 1 in the affirmative, the Landgericht, referring to the distinction made in the Rosier judgment between claims directly related and claims only indirectly related to the use of the property let, considers that such a distinction lacks clarity and may have undesirable effects from the point of view of procedural efficiency, resulting in more expense for the parties because it can lead to a division of jurisdiction. Such a division is, moreover, likely to result in conflicting decisions and in both courts declining jurisdiction. In view of those difficulties the Landgericht is inclined to the view that all claims based on a tenancy agreement fall within the scope of Article 16(1) of the Convention and therefore asks the Court to reconsider the distinction referred to above.
9. However, should the Court stand by that fundamental distinction, the Landgericht considers that the claims for a reduction in the rent and for damages for having had to rent an additional room are to be regarded as directly related to the use of the rented property; they would thus fall within the ambit of Article 16(1). The Landgericht has doubts whether the same is true with regard to the claim for reimbursement of the actual additional rental costs incurred, which, although certainly connected with a shortcoming in the rented property, were also the result of a situation related indirectly to the rented property, namely the price paid for other accommodation, or with regard to the claim for compensation for a wasted holiday. According to the Landgericht, if that distinction is to be made, the basis of all the claims is a shortcoming in the rented property and consequently they are all related directly to the rented property.
II — Procedure before the Court
10. The order referring questions to the Court was lodged at the Court Registry on 14 September 1990.
11. Pursuant to Article 1 of the Protocol on the interpretation by the Court of Justice of the Convention, in conjunction with Article 20 of the Protocol on the Statute of the Court of Justice of : the European Communities, written observations were submitted by Euro-Relais, represented by Messrs Kühn and Jäger, Rechtsanwälte, Cologne, by the United Kingdom, represented by H. A. Kaya, of the Treasury Solicitor's Department, acting as Agent, and by the Commission of the European Communities, represented by Henri Etienne and Pieter van Nuffel, members of its Legal Department, acting as Agents, assisted by Wolf-Dietrich Krause-Ablass, Rechtsanwalt, Düsseldorf.
12. Upon hearing the Report of the Judge-Rapporteur and the views. of the Advocate-General, the Court decided to open the oral procedure without any preparatory inquiry.
III — Written observations submitted to the Court
The first question
13. On the basis of the Court's judgment in Rosier v Rottwinkel, cited above, Euro-Relais considers that the contract falls under Article 16(1) of the Convention and in consequence the courts of the place where the rented property is situated have exclusive jurisdiction.
14. The United Kingdom, on the other hand, takes the view that the case does not fall within the ambit of Article 16(1) of the Convention.
15. Citing the Jeņard Report on the Convention (Official Journal 1979 C 59, p. 34), it submits that in order to determine whether a case falls within Article 16(1) of the Convention it is necessary to determine whether a matter referred to in Article 16(1) is the principal subject-matter of the proceedings of which the court is to be seised. That, in the submission of the United Kingdom, is the correct test, and accords with the statement of the Court of Justice in its judgment in Case 73/77, Sanders v Van der Putte [1977] ECR 2383, to the effect that the provisions of Article 16 must not be given a wider interpretation than is required by their objective.
16. In the United Kingdom's view that criterion, based on a strict interpretation of the provision, was not taken into account in the Rosier judgment, according to which Article 16 (1) applies to all tenancies of immovable property irrespective of their special characteristics. The United Kingdom argues that not every case which has some connection with the letting of immovable property should automatically be governed by Article 16(1).
17. The Commission also considers that a contract of the type in question should not be regarded as a tenancy agreement within the meaning of Article 16(1) of the Convention. As a preliminary point the Commission, taking the same view as the Landgericht, also emphasizes that the concept of a letting must be regarded as an independent concept in the light of the objectives and system of the Convention. Referring to the Jenard Report to show the rationale of the exclusive jurisdiction provided for in Article 16(1), the Commission asks whether a contract of the type at issue in this case corresponds to the objective pursued by that provision.
18. According to the Commission, Article 16(1), in its original version, refers to tenancies of immovable property without specifying whether such tenancies cover only lettings by the owner or also lettings by a third party (a non-owner). The Commission points out that the 1989 Convention on the Accession of the Kingdom of Spain and Portugal of 1989 (Official Journal 1989 L 285), added to Article 16(1) the following provision:
19. The Commission also points out that the Lugano Convention of 16 September 1988 (Official Journal 1988 L 319) reproduces those provisions and adds other conditions. Emphasizing, first, that in its judgment in Rosier v Rottwinkel the Court interpreted Article 16(1) broadly, so as to cover all lettings of immovable property and, secondly, that the new provision added by the Accession Convention and set out above has not yet entered into force, the Commission observes that according to the Report of Mr Almeida Cruz, Mr Desantes Real and Mr Jenard on the Accession Convention of 1989 (Official Journal 1990 C 189, p. 35) the Contracting States' conception of the objective pursued by Article 16(1) does not require that provision to apply to the short-term letting of a holiday home. However, according to the Commission, that factor is immaterial as regards the reply to the question referred to the Court by the Landgericht, which concerns the short-term letting of a holiday home not by its owner but by a travel organizer which did not own it.
20. Pointing out that the new special rule for short-term tenancies added by the Accession Convention of 1989 cited above is applicable only if the landlord and tenant are natural persons and domiciled in the same Contracting State, the Commission argues that the fact that the letting of property by a third party who is not the owner is not expressly mentioned by the Convention leads to one of the following conclusions: (a) that the derogation provided for in respect of short-term tenancies does not apply if a third party lets the property; or (b) that it is the domicile of the owner of the property let and not that of the person letting the property that should be taken into account for the application of that derogation; or, lastly, (c) that the Contracting States tacitly considered that Article 16(1) applied solely to lettings by an owner. The Commission believes that this last interpretation should be adopted in the case of short-term lettings, especially the letting of holiday homes. In its opinion there is no good reason for not applying the derogation introduced by the Accession Convention of 1989 for short-term tenancies to the case of a letting by a third party. It also considers it inexpedient to refuse to apply the derogation if the tenant and the person letting the property are domiciled in the same Contracting State, when the owner, who is domiciled in another Member State, plays no part in the transaction.
21. Those observations lead the Commission to the conclusion that for the Contracting States Article 16(1) in both its new and old versions surely does not apply if a third party, a travel organizer for example, lets for a short period a property which it does not own.
22. In addition the Commission considers that contracts between travel organizers and their customers, even if they include arrangements for the letting of a holiday home or other arrangements, should not be treated as tenancies within the meaning of Article 16(1) of the Convention, because such contracts have legal aspects which do not appear in simple rental contracts but fall within the ambit of consumer protection. Thus a travel organizer advertises and negotiates with customers in a place other than that where the holiday takes place and the substantive law applicable is not that of the holiday resort but of the place where the contract is concluded. Furthermore, that type of contract gives rise to legal questions concerning the liability of the travel organizer in respect of the information given in the brochures, any clauses limiting liability, the customer's rights, and so on. In those cases, says the Commission, it is the courts of the seat or domicile of the contracting parties which have the best knowledge of the legal provisions applicable. The importance of the special provisions required in that area has, moreover, been demonstrated by the adoption of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (Official Journal 1990 L 158, p. 59).
The second question
23. Euro-Relais refers to the distinction made by the Court between disputes which are directly related and those which are only indirectly related to the use of the rented property and considers that the court seised does not have jurisdiction with regard to paragraphs 1 and 2 of the document instituting Mrs Hacker's action.
24. On the distinction between claims which are directly related to the use of the rented property and those which are only indirectly so related, the United Kingdom expresses the same preoccupations as the Landgericht (see supra, paragraph 8) and emphasizes the uncertainty and inconvenience of such a distinction.
25. The United Kingdom suggests that the distinction between claims which are directly related to the use of the property and those which are only indirectly so related should be seen as part of the question referred to earlier, namely what is the principal subject-matter of the proceedings. If the case is principally concerned with the law of landlord and tenant, the courts for the place where the property is situated should have exclusive jurisdiction under Article 16(1) and, in order to avoid a division of jurisdiction, should also hear any ancillary claims. On the other hand, if the case is principally concerned with the law of obligations and there is only an incidental connection with a tenancy, no part of the case should fall to be governed by Article 16(1). It is in the interests of the parties and of the good administration of justice that the subject-matter of a claim should not be divided and that where there is a single cause of action the case should be heard as a single case.
26. Stating first that it is replying to the second question only in the alternative, the Commission also underlines the distinction between obligations arising from a tenancy and disputes which are only indirectly related to the use of the rented property. It also refers to the criticism voiced of that distinction and considers that as far as possible a division of jurisdiction should be avoided, in view of the extra costs for the parties and the risk of both courts declining jurisdiction. The Commission gives a broad construction to the criterion of the relationship between the rented property and the claims in the case. Thus the three claims listed in the order for reference have, it says, a sufficient connection with the contract in question: the claim for a reduction in the price on the ground of the alleged shortcoming in the holiday home relates directly, according to the Commission, to the obligations of the person letting the property and results from the state of the rented property; the claim for damages for expenditure incurred is also based on the shortcoming in the rented property; finally, the claim for damages for a wasted holiday might give rise to difficulties since it could be regarded as analogous to the questions concerning loss of holiday enjoyment and travel expenses on which the Court ruled in the Rosier case.
27. However, the latter can be distinguished from the present case in the Commission's view. In Rosier it was not the tenant who brought an action because of the defective state of the rented property but rather the landlord, because of the way the rented property had been used in breach of the contract, which had disturbed the holiday that he was spending at the property in question at the same time as the tenant. According to the Commission the claim by the landlord did not represent a typical case as regards lettings of property. In this connection it draws attention in particular to the fact that the claim did not relate to the state of the rented property. The Commission takes the view that the situation is different in the present case inasmuch as the tenant is here claiming damages for lost holiday enjoyment which was directly related to the alleged failure of the rented property to conform to the conditions of the contract. According to the Commission there is therefore a sufficient link between that claim and the tenancy agreement to justify application of the head of jurisdiction provided for in Article 16(1) of the Convention.
28. The United Kingdom also distinguishes between the present case and Rosier v Rottwinkel on its facts and draws attention to the following differences:
1 Language of the case: German.