Case No: 2006 0703 A3
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION, COMMERCIAL COURT
Hon Mr Justice Tomlinson
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD JUSTICE BUXTON
LORD JUSTICE LONGMORE
and
LORD JUSTICE CARNWATH
Between :
TAVOULAREAS | Respondent |
- and - | |
TSAVLIRIS & ors | Appellants |
(Transcript of the Handed Down Judgment of
WordWave International Ltd
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
PETER IRVIN Esq (instructed by Constant and Constant) for the Appellants
DAVID GOLDSTONE Esq QC (instructed by Howe and Keates) for the Respondent
Judgment
Lord Justice Longmore :
The question which arises in this appeal is whether a Greek judgment, published on 22nd October 2004 in favour of the appellants, should be recognised by the English courts. Tomlinson J has held [2006] EWHC 414 (Comm) that it should not be so recognised, but granted permission to appeal to this court.
The tangled history of the events leading up to this appeal is set out with admirable clarity and succinctness in the first 34 paragraphs of the judgment. For the purposes of determining the issues raised in this appeal it can (with considerable oversimplification) be summarised as follows:-
(1) the claimant in 2001 Folio 1255, Mr Peter Tavoulareas, asserts (and the defendants Messrs George and Andrew Tsavliris deny) that he advanced money to them in relation to salvage services rendered to the ATLAS PRIDE;
(2) these English proceedings were served in December 2001;
(3) a number of Tsavliris interests began Greek proceedings against Mr Tavoulareas for a declaration that they were not so liable. Those proceedings came to the notice of Mr Tavoulareas on 31st December 2001 in the course of interlocutory skirmishing in the English proceedings but were not formally served on him;
(4) on 17th January 2003 Tomlinson J stayed the English proceedings holding that the Greek court was the court first seised (the Greek proceedings having been served on the Public Prosecutor before the English proceedings were served on Messrs Tsavliris);
(5) on 5th February 2004 the Court of Appeal reversed this decision of Tomlinson J, holding that the English courts were first seised since Messrs Tsavliris had been served before the Greek proceedings came to the notice of Mr Tavoulareas (and because Mr Tavoulareas had not, in any event, been served with the Greek proceedings);
(6) in the course of September and October 2004 the Greek court (without being informed by either party of the decisions of Tomlinson J or the Court of Appeal) proceeded to hear the Greek proceedings in the absence of Mr Tavoulareas and made a declaration that the Tsavliris interests were under no liability to Mr Tavoulareas;
(7) meanwhile on 16th August 2004 Mr Tavoulareas issued a second set of English proceedings (2004 Folio 675) against Alexander G Tsavliris and Sons Maritime Company claiming against that company a larger sum than that claimed in the earlier proceedings;
(8) the Tsavliris interests have now issued applications in both sets of proceedings for a declaration that the Greek judgment published on 22nd October 2004 be “recognised” pursuant to Article 33 of Council Regulation (EC) No 44/2001 on jurisdiction and recognition and enforcements of judgments in civil and commercial matters (“the Judgments Regulation”).
The reason why the judge held that the judgment should not be recognised was that the judgment had been given in default of appearance and that the defendant in the Greek proceedings (Mr Tavoulareas) had not been served with the document initiating the proceedings. The Tsavliris interests challenge both these propositions and it is now necessary to set out the relevant parts of Article 34 of the Judgments Regulation. They provide:-
“A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;
2. where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so . . . .”
Submissions
Mr Peter Irvin for the Tsavliris interests relied on the fact that the Judgments Regulation and its predecessors (the Brussels and later Conventions on Jurisdiction and the Enforcement of Judgments in civil and commercial Matters) were intended to promote the free movement of judgments in the European Community. He further relied on the “Proposal for a Council Regulation” which preceded the Judgments Regulation. The Official Journal of the Community published the proposal on 28th December 1999 and said of the draft article which became Article 34:-
“This Article determines the sole grounds on which a court seised of an appeal may refuse or revoke a declaration of enforceability. These grounds have been reframed in a restrictive manner to improve the free movement of judgments.”
Mr Irvin then proceeded to argue that phrases such as “default of appearance” and “service with the document which instituted proceedings or with an equivalent document” should be given a meaning which “leans heavily in favour of recognition of judgments”. In general terms there is, no doubt, much to be said for Mr Irvin’s submission but the fact remains that both “appearance” and “service” are legal concepts which must be given a legal meaning of some kind otherwise the parties will only get palm-tree justice.
Both “appearance” and “service” are in issue; since “service” chronologically must precede “appearance”, I shall consider “service” first.
Service
The judgment in question is not to be recognised
“if the defendant was not served with the document which instituted proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence.”
Mr Irvin first pointed to the changes in the wording compared with the wording of Article 27(2) of earlier conventions (the equivalent to Article 34(2)). Article 27(2) had the word “duly” before the word “served” and did not have the words “and in such a way as”. He then emphasised the expressed need for the defendant to have the relevant document in time for him to prepare his defence and in a form to which he could satisfactorily respond. He concluded by submitting that, so long as the defendant was notified of the proceedings in a time and in a way that enabled him to defend if he wanted to do so, the defendant could not claim that he had not been formally served. In support of this conclusion he cited Hendrickman v Magenta Druck [1996] ECR1-4943 in which the Dutch Hoge Raad asked 3 questions of the European Court including
“(3) Must Article 27(2) of the Brussels Convention be interpreted as meaning that the provision is also applicable in a case in which, although the defendant was not declared to be in default of appearance, the document instituting the proceedings or an equivalent document was not duly served on, or notified to, him in sufficient time and the defendant was not validly represented in the proceedings.”
The Court answered that question in the affirmative because the persons purporting to represent the defendant in the court in which judgment was given had not in fact had authority to represent him. No question arose about service or notification of the proceedings and it was not necessary for the Court to determine the meaning of “service” in the Brussels Convention. The words “or notified to” were in the question but I cannot regard either the reasoning or the answer of the Court, contained in paragraphs 13, 14 and 21 of the judgment, as constituting a decision that mere notification of the proceedings to the defendant would be enough.
In this context it is important to note that Section 9 of the Judgments Regulation, which is headed “Lis pendens – related actions”, contains the familiar Articles 27 and 28 giving primacy to the court first seised. Article 30 then provides:-
“For the purpose of this Section, a court shall be deemed to be seised:
1 at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or
2. if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court.”
It is also important to note that only 7 months before the adoption of the Judgments Regulation, the Council of the European Union adopted Council Regulation No 1348/2000 on Service in the Member States of judicial and extra-judicial documents in civil and commercial matters (“the Service Regulation”). The concept of “service” in Article 30 of the Judgments Regulation must be consonant with the concept of “service” in the Service Regulation and the word “service” in Article 34(2) of the Judgments Regulation must likewise have the same meaning as in Article 30 and the Service Regulation. Otherwise there would be a serious mismatch between the respective provisions for seisure and judgment recognition. Given the primacy of the court first seised, it is, par excellence, the judgment of that court to which recognition must be extended.
The only remaining question, therefore, is whether the Greek proceedings were “served” on Mr Tavoulareas. For this purpose Mr Irvin relies on the fact that they were exhibited to a witness statement served in the English proceedings in support of the Tsavliris brothers’ jurisdictional objection to the continuance of the proceedings in England. This witness statement and its exhibits were received by Mr Tavoulareas on 31st December 2001 but there has never been any service of the Greek proceedings in accordance with the Service Regulation as pointed out by Mance LJ when this case was last before the Court of Appeal, see [2004] 1 Lloyds Rep 445, 458, [2004] EWCA Civ 48 at para. 38. That was not conclusive of seisure for the Court of Appeal on that occasion since the provisions of the Judgments Regulation were not then applicable to the question of which court was the court first seised. But it is, in my judgment, conclusive on the question whether service was effected pursuant to the Service Regulation. Nor does Mr Irvin suggest that there was service in accordance with either English law or Greek law so far as those laws might be thought to be relevant.
My conclusion that notification is insufficient is not affected by the absence of the word “duly” from Article 34(2). If service of the document initiating the proceedings has occurred but is defective in some way eg because some part of the document is missing or untranslated, that consideration might well be relevant. But it cannot be relevant when proceedings have never been served at all. The discussion of the matter in Dicey & Morris, Conflict of Laws 14th edition (2006) para. 14-214 certainly proceeds on the assumption that there has at least been purported service; see also Briggs and Rees, Civil Jurisdiction and Judgments, 4th ed page 509. It follows that I agree with the decision of Tomlinson J on this point.
Default of appearance
Mr Irvin accepted (Skeleton Argument para. 23) that in both a literal and a colloquial sense, the judgment of the Greek court was a judgment “in default of appearance” but submitted that, in the context of Article 34(2) as a whole, default of appearance was only a bar to recognition if a defendant “was not given the opportunity to defend himself at the hearing by being notified of the proceedings”. I have already held that the requirement of service cannot be met by notification; for much the same reasons, I cannot believe that notification is relevant to the concept of “default of appearance”. The provisions of the Judgments Regulation are technical provisions but need to be construed sensibly in order to promote free movement of judgments. It cannot be right to input extraneous concepts into the meaning of the technical phrases which are used in the Regulation. This must all the more be the case if such concepts are themselves inherently uncertain and likely to lead to further argument.
“Appearance” may have two separate meanings. Usually, once court proceedings have begun, a defendant will have to decide whether to ignore the proceedings or defend them or challenge the jurisdiction of the court. If he decides to defend he will at some stage have to lodge with the court a formal document of some kind; so will he if he challenges the jurisdiction of the court. Once that formal document has been lodged, he would in most legal systems, be said to have “appeared”. If, however, he decides to ignore the proceedings he will not lodge any formal document with the court; in that sense he will not have “appeared” but, if he has been served with the proceedings, he will be at risk of having an enforceable judgment being entered against him.
Once proceedings come before a court for a hearing a defendant will again have to choose whether to be present in court or not. If he does choose to be present he will, on any view, have “appeared”; if he chooses not to be present he will not, in one sense, have “appeared”. But if he has already chosen to take part in the proceedings by defending them or even by challenging the jurisdiction, he may (in some legal systems) be said to have already “appeared” and thus not be in default of appearance.
Mr Tavoulareas did not “appear” in either of the meanings of the word; he neither lodged any formal document with the court in Greece nor was he present when the proceedings came to trial. On any view, therefore, the judgment against him was given in default of appearance. In the Hendrickman case it was said that “appearance” should be given an autonomous meaning rather than the meaning given by any individual legal system. Since Mr Tavoulareas did not “appear” on any possible meaning of the word, this is not an appropriate case to decide what that autonomous meaning should be.
As recorded in paragraphs 23 and 25 of the judgment below, the Greek court stated that Mr Tavoulareas had not appeared “during the calling forth of the case in its order from the cause list” and recorded that the judgment was given in the absence of the defendants. This is probably to be understood to mean that there was no appearance at the hearing. It might well be the case that the words “In default of appearance” would not be apposite if the defendant had lodged a formal document with the court indicating that jurisdiction was not objected to at some earlier stage but since Mr Tavoulareas did not do that, it is unnecessary to decide that point.
I therefore agree with the judge when he said
“on the assumption that the proceedings were not served on the Defendant, then pursuant to any acceptable or autonomous definition of “given in default of appearance” this judgment was, as the court rendering it expressly said, given in default of appearance by the Defendants” (para. 43).
There being no service or appearance, therefore, the judgment is not a judgment which the English court is bound to recognise.
Third requirement
The judge held that there was a third requirement before Article 34(2) could apply viz that the defendant must not have failed to commence proceedings to challenge the judgment when it was possible for him to do so. The judge further held that Mr Tavoulareas had not so failed because he had begun proceedings to challenge the judgment on 16th February 2006. In the court below Mr Irvin argued that it was not sufficient to begin such proceedings after application had been made for recognition of the judgment on 28th November 2005. The judge rejected that argument and there is no appeal from that part of the judgment. In those circumstances it is unnecessary for this court to decide whether there is, indeed, this third requirement which must be met in all cases where recognition of a judgment is sought under the Judgments Regulation (the contrary argument would be that it only needs to be met if service is effected); nor is it necessary to decide whether, if there is such a requirement, it can be complied with after the application for recognition is made. I prefer to leave those questions to a case where they arise for direct decision.
Cross-appeal
In the light of my conclusion I do not need to express any view on the question, raised by Mr Tavoulareas in his respondent’s notice whether the judgment of the Greek court should not be recognised on the ground of public policy under Article 34(1).
Costs
Mr Irvin developed a short argument about the costs order of the judge. He complained that, having won on two of the points taken below and having only lost on the third point because (after the application for recognition was brought) Mr Tavoulareas had at last got round to challenging the decision of the Greek court, it was wrong for the judge to have ordered the appellants to pay all the costs of their application.
The judge was asked for permission to appeal his costs order but he refused permission, although granting permission on the substance of the case. Application for permission to this court was only made at the hearing. For my part, I would not give permission to appeal on this point.
The fact that we did hear argument does, however, enable me to say that, had I been minded to give permission, I would not have disturbed the judge’s order which was well within his discretion. Not every application has to be split into issues for the purpose of awarding costs; the application may have had a number of points but the judge was entitled to look at the overall picture viz that the Tsavliris interests had lodged an application which failed.
Lord Justice Carnwath:
I agree.
Lord Justice Buxton:
I also agree and have nothing to add.