Jurisdictional Challenge Test Considered

A recent decision of the High Court has considered the proper test to apply when the jurisdiction of the Irish courts to hear a case is challenged. Our Commercial Disputes team examines the decision.

The case involved an Irish domiciled plaintiff. She brought proceedings against a Spanish insurance company and Polish property owner following an accident in Spain. The issue was whether those proceedings could be pursued in Ireland.[1] Two motions were brought by the defendants, essentially seeking to set aside service of the proceedings. The court therefore had to determine the correct test governing the Irish court’s power to hear the matter. The court accepted, without dispute, that jurisdiction will be confirmed where the plaintiff has a claim reasonably capable of proof. The court proceeded to deal with the application on that basis. However, it was recognised that the higher threshold of “balance of probabilities” could also be relevant in appropriate cases.

Background

The decision arose from challenges brought by two defendants to proceedings against them being pursued in Ireland. The proceedings stemmed from an accident at a Spanish property while the Irish domiciled plaintiff was on holiday there. The plaintiff had also brought an application to have another insurer substituted in the proceedings. She had suffered injuries allegedly caused by water on the floor of the apartment due to a defective air conditioning unit. She also complained that the owner had failed to keep the property in a safe condition. Instead of suing in Spain, the plaintiff issued personal injury proceedings in Ireland, which is what the defendants challenged.

The defendants were a Spanish insurer, alleged to have provided cover for the apartment, and the apartment’s Polish owner. The plaintiff had relied on the jurisdictional grounds set out in the Brussels Recast Regulation. The general principle in Article 4 of that Regulation is that a defendant should be sued in their Member State of domicile. However, the Regulation provides for a number of exceptions. These include rules designed to protect weaker parties by allowing them to bring proceedings in a jurisdiction favourable to them. Here, the plaintiff relied on the following as the bases for bringing the claim in Ireland:

• Article 13 which addressed liability insurance, and
• Article 18 which deals with consumer contracts

It should be remembered that where a claim is brought under the Regulation, the plaintiff does not need to apply for leave to issue and serve proceedings before starting the case. That said, the relevant summons must include an indorsement. That indorsement needs to set out the basis on which the jurisdiction of the Court where the proceedings are commenced is claimed. It is then up to the defendant(s) to determine if they wish to challenge that asserted jurisdiction, which was done in this case.

Decision

Mr Justice Simons noted that the Rules of the Superior Courts contained a procedure allowing the Irish courts to decide, before a full trial, whether they can deal with the proceedings. The foreign defendant who wishes to contest jurisdiction may apply, under Order 12, Rule 26, for an order to set aside service. Through these applications, the court can decide, as a preliminary issue, whether it has the power to hear the case.

Mr Justice Simons noted that there is extensive case law on the ‘legal threshold’ which governs set aside applications. A plaintiff must meet this threshold in order to show that the courts where the proceedings were commenced have jurisdiction. He referred to Kolassa v Barclays Bank[2] where the European Court of Justice was asked to give a preliminary ruling on the ‘verification obligations’ that national courts must follow when they are determining their international jurisdiction. Although the extent of the verification obligations is determined by national procedural law, the application of national laws should not impair the effectiveness of the Regulation. Legal certainty requires that a national court should be able to decide readily whether it has jurisdiction, without having to consider the substance of the case. Instead, a national court has some discretion in how far it examines disputed facts when deciding whether it has international jurisdiction.

Turning then to the domestic case law, Mr Justice Simons referred to IBRC v Quinn.[3] In that case, the Supreme Court rejected the proposition that, in deciding international jurisdiction, the court should limit itself to a review of the statement of claim and assume the pleaded case is capable of proof. However, in Ryanair v Unister GmbH,[4] the Supreme Court stated on a non-binding obiter basis that a jurisdiction determination under the Regulation may require the court to decide on questions of fact. Those questions may also go to the substance of the dispute. This rationale was cited approvingly in Ryanair v Billfleuege.de.[5] In that case, the Supreme Court appeared to suggest that, if questions of fact are to be determined, the operative standard of proof is ‘the balance of probabilities’.

From these cases, Mr Justice Simons observed that there appeared to be two approaches:

• A limited assessment to see if the plaintiff’s claim is reasonably capable of being proven, or
• The determination of jurisdictional facts on the balance of probabilities.

In this case, the parties had agreed that the lower threshold of ‘reasonably capable of proof’ from IBRC v Quinn applied. They cited Mr Justice Barniville in Trafalgar Developments v Mazepin[6] as an example of that threshold being applied to a claim brought under the Regulation. Accordingly, Mr Justice Simons accepted that the plaintiff had to show a claim under the relevant gateway which was ‘reasonably capable of proof’.[7]

He then considered each jurisdictional gateway the plaintiff relied on, using that test. He was not satisfied that there was any evidence which showed the defendant insurer actually insured the apartment. The plaintiff’s application to join an alternative insurer indicated that this was the position. Accordingly, even the lower standard of ‘reasonably capable of proof’ had not been met, much less the other higher standard. Therefore, the insurance company's motion succeded. As to the consumer contract ground, the owner argued that the contract the plaintiff had was with a lease management company, not him. However, the documentary evidence in fact suggested that it had acted as the owner’s agent when entering into the contract with the plaintiff. Therefore, Mr Justice Simons was satisfied that defendant’s set aside application would not have succeeded under either standard.

Conclusion

The decision is a useful reminder of the law on the threshold to be met when the court is faced with determining its international jurisdiction. There are potentially two tests, but in this case both the parties and the court preferred the lower one, albeit the outcome would not have differed even if the stricter test had applied.

The stricter ‘balance of probabilities’ test is still potentially applicable, especially where the Regulation involves an express jurisdictional choice. But in this case, the court decided the issue on the basis that the plaintiff only had to show a claim that was ‘reasonably capable of proof’. Even if that is the test applied, parties involved in these applications, or thinking about making one, would be wise to check their position against the higher test. Doing so gives them more certainty about their chances of succeeding.

For more information and expert advice on commercial disputes, contact a member of our Commercial Disputes team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Farley v Mapfre Asistencia & Kulka [2025] IEHC 304

[2] Case C-375/13, EU:C:2015:37

[3] [2016] IESC 50 – albeit, that decision related to a case where leave to serve outside the jurisdiction was granted under Order 11, RSC.

[4] [2013] IESC 14

[5] [2015] IESC 11

[6] [2022] IEHC 167

[7] However, he did caution that a different threshold may apply in cases where jurisdiction is asserted by reference to an express contractual jurisdictional choice (eg Ryanair Ltd v Billigfleuege.de Gmbh [ 2015] IESC 11).