Inter-Tel Inc v Ocis Plc & Anor

On 7^th October I heard and dismissed the defendant’s application made by notice dated 24^th August 2004. These are the reasons, which I then said I would give later for that decision. The application was for an order that the proceedings be stayed pursuant to CPR 11(1)(b) which provides that a court may decide not to exercise the jurisdiction that it has to try the action. The grounds relied on is what is commonly called forum non conveniens. I also heard and disposed of other applications made by the Claimant by Application notice dated 21^st September 2004. There was an application that a Mr Mihaylo be added as a party pursuant to CPR 19.4(2)(b) and that he be deemed a representative party for other persons with the same interest in the claim against the defendants pursuant to CPR 19.6(1)(b). That application was not opposed by the Defendants and I made that order. I also ordered that an amended Particulars of Claim be deemed to have been served on that date. Finally I disposed of an application for an injunction, which had originally been made by Notice issued on 12^th August 2004. On 22^nd September 2004, McCombe J. had made an order upon the Claimant’s application dated 12^th August as follows:

I continued that order until a return date which both counsel proposed should be as soon as possible after 7^th December 2004.

The claimant is an Arizona corporation, which carries on business, by itself and through subsidiaries, in the field of telecommunications. One subsidiary is known as Integrated, which is also an Arizona corporation. The first defendant is a telecommunications company, registered in the United Kingdom. The second defendant is the chairman and chief executive and controlling shareholder of the first defendant. There is no dispute that this court has jurisdiction under the Civil Jurisdiction and Judgments Order 2001 SI/2001/3929.

There is a history of dispute between these parties, which until now has been conducted in the United States. By a complaint dated 22^nd July 2002, the first defendant brought proceedings for alleged breach of contract against Integrated in the U.S. District Court for the District of Arizona ("the U.S. Court"), claiming damages of not less than $US159, 500,000. Integrated filed a counterclaim. In the Particulars of Claim it is alleged that from about April 2002 the second defendant began to make telephone calls to Mr Mihaylo, now the second claimant in this action, the chairman of the first claimant, in relation to the proceedings in the United States and to business dealings between the claimant, its subsidiaries and the first defendant. It is alleged that hundreds of such calls were made including at least 24 on a single day.

On 11^th October 2002 the U.S. Court granted an injunction which the claimants say was by consent in the following terms:

committing any acts of harassment, as defined in ARES Para 12-1809(R), upon Stephen G. Mihalo and/or any officer or employee of defendant;

communicating with or contacting (in writing, orally or otherwise), Stephen Mihalo and/or any officer or employee of the defendant unless through plaintiff’s legal counsel;

committing any acts of harassment, as defined in ARS para 12 – 1809(R), upon the family of Stephen G. Mihalo and/or the family of any officer or employee of the defendant;

coming within one hundred and fifty feet of the known residence and known places of business or employment of Stephen G. Mihalo and/or any known residence or known place of business or employment of any officers or employee of the defendant; and

knowingly, coming within one hundred and fifty feet of Stephen Mihaylo and/or any officer or employee of the defendant when in the same location at the same time, absent consent, and unless in connection with court authorised proceedings in connection with the above-incaptioned litigation".

The Particulars of Claim goes on to allege that on 15^th October 2002, no more than four days later, Integrated filed its first motion for contempt of court against the defendants alleging breaches of the injunction and that there followed a number of other proceedings relating to those and subsequent alleged breaches of that injunction of 11^th October. It is alleged that by an order dated 28^th May 2003, the U.S. Court ordered that Integrated’s third motion for contempt be granted and that the defendants pay a fine of US$500,000 to the U.S. Court suspended pending any further violation of the 11^th October Injunction together with other financial orders. It is pleaded that the U.S. Court commented in its order that "Mr Murphy has demonstrated utter contempt for the authority of this court and its orders. OCIS and Mr Murphy have remained undeterred by the sanctions previously imposed by this court". The Particulars of Claim sets out details of the alleged breaches of the 11^th October Injunction and the proceedings arising out of that over some seven pages of the pleadings. These end with an order said to have been made on 18^th February 2004 in which the U.S. Court granted Integrated’s fifth, sixth and seventh motions for contempt of court, ordered the first defendant to pay the (previously suspended) fine or U.S. $US500,000 to the court by reason of the violations of the Injunction Order and ordered the first defendant to pay further fines and finally dismissed the first defendant’s claim with costs. A copy of that order is exhibited to the Particulars of Claim. It is then pleaded that by a Notice of Appeal dated and filed on 16^th March 2004, the first defendant appealed to the Court of Appeals for the ninth circuit against the U.S. courts order dated 18^th February 2004. It is said that since the dismissal of the first defendant’s claim by the U.S. Court the first and second defendants have continued to make insulting and threatening telephone calls and to send e-mail messages of the same kind and that these communications have formed the subject of Integrated`s eighth and ninth motions for contempt filed on 4^th March and 19^th April 2004 respectively. However, by orders dated 20^th September and 29^th April 2004, the U.S. court denied Integrated’s eighth and ninth motions by reason that it was divested of jurisdiction upon the filing of the first defendant’s notice of appeal. Accordingly, it is pleaded that the facts upon which the claimant’s now rely in making the current claim, that is to say events occurring after the 18^th February 2004, are not the subject of proceedings in the United States or any other jurisdiction.

In the Particulars of Claim, it is then said that the campaign of harassment originally directed against Mr Mihaylo alone, has subsequently been extended to six other named individuals being men and women with various positions with the claimant company, whose names are identified. Particulars of these incidents cover some nine pages of the pleading in paragraphs numbered from (a) to (ee).

It is then pleaded that the claimants rely on English law, namely the Protection from Harassment Act 1997, sections 1 and 3. These provide as follows:

A person must not pursue a course of conduct

which amounts to harassment of another, and

which he knows or ought to know amounts to harassment of the other.

For the purposes of this section, the person whose course of conduct is in question ought to know that it amounts to harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to harassment of the other.

Sub-section (1) does not apply to a course of conduct if the person who pursued it shows

that it was pursued for the purpose of preventing or detecting crime,

that it was pursued under any enactment or rule of law or to comply with any condition or requirement imposed by any person under any enactment, or

that in the particular circumstances the pursuit of the course of conduct was reasonable…

an actual or apprehended breach of section 1 may be the subject of a claim in civil proceedings by the person who is or may be the victim of the course of conduct in question.

on such a claim, damages may be awarded for (among other things) any anxiety caused by the harassment and any financial loss resulting from the harassment.

It is alleged that the style and nature of the second defendant’s calls have ranged widely and I quote:

some have made threats ranging from total defeat in litigation to physical violence in the event of a face-to-face meeting;

many have contained personal insults relating to the competence, intelligence, integrity and even sexual conduct of the recipient;

certain calls have involved shouting and/or swearing;

others again have consisted in barely coherent ramblings which appear at times to verge upon instability."

There then follows an alternative claim under Arizona law. It is pleaded that the Arizona Revised Statutes, Chapter 12-1809(R) provides as follows:

There is a plea as to the joint liability of the defendants and the Particulars of Claim claim relief by way of an injunction pursuant to the English 1997 Act or the Arizona statute in terms granted on an interim basis by McCombe J and now myself.

For the purposes of the proceedings before me, and for no other purpose, the claimant’s concede that this court does have jurisdiction to stay proceedings. Counsel makes that concession pending a decision to be given by the European Court of Justice in the cases of Owusu v Jackson[2002] EWCA Civ 877 and another action subject to reference to that court.

Counsel for the defendant in his skeleton argument has helpfully summarised the principles on which a stay may be granted on the grounds of forum non-conveniens. For the purposes of this judgment, I am content to adopt his summary which reads as follows:

the court must be satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action;

initially, the burden rests upon the defendant to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum;

in considering this question, the court considers whether there are ‘connecting factors’ which indicate that some other forum is prima facie more appropriate or is that with which the action has the most real and substantial connection. Such ‘connecting factors’ include those affecting convenience and expense, the law affecting the relevant transaction, the place where the parties respectively reside or carry on business.

if some other available forum is prima facie clearly more appropriate for the trial of the action, the court will ordinarily grant a stay unless the claimant can discharge the burden of showing that there are nonetheless circumstances by reason of which justice requires that a stay should not be granted; including circumstances which go beyond those taken into account when considering connecting factors with other jurisdictions.

the court should be cautious regarding the prominence given to a legitimate personal or juridical advantage of the claimant; such an advantage is not decisive and is just one factor to be considered in assessing ‘the interests of all parties in the ends of justice".

The defendant submit that the claimant could bring proceedings for the relief in the ninth circuit in the United States and that as a matter of U.S. law that would be the proper forum for the subject matter of this claim. They rely on the advice of a Mr Lang. Evidence from the claimant’s side from a Miss Kennedy disputes that qualification of Mr Lang. I am not concerned with that dispute. I refused, the defendant’s application for an adjournment based on the need to adduce further evidence in relation to it. I shall assume, in favour of the defendants, that there is an available forum in Arizona whether or not it happens to be that particular court subject to the matters which I shall address below. Indeed the claimants do not dispute that these proceedings could be brought in a court in Arizona.

Next the defendants say that a forum in Arizona is clearly and distinctly more appropriate than one in England. They say that a claim the Protection from Harassment Act 1997 is not available to a corporate claimant (citing Daiichi U.K. Ltd. v Stop Huntingdon Animal Cruelty[2003] 1 WLR 1503, a judgment of Owen J. The defendants submit that the position is the same in Arizona and note that the injunction of the District Court of Arizona mentioned above, did not restrain harassment of the corporate claimant but only of its officers and employees.

This submission has been somewhat overtaken by the application to join the personal second claimant, which proceeded, as I have noted, without opposition.

In any event, the defendants submit, Arizona law is the applicable law pursuant to the Private International Law (Miscellaneous Provisions) Act 1995 section 11. The defendants submit, that it is clearly preferable that Arizona law should be applied by an Arizona court rather than an English court. This issue is one which would require some consideration to resolve. However, I do not need to resolve it. Counsel for the claimant recognises that the editors of Dicey & Morris ‘The Conflict of Laws’ at para 35-086 support the submission of the defendants in suggesting that the applicable law in the case of torts arising out of communications is generally the law of the place in which the communication is received. While he wishes to argue the contrary for reasons which I shall give, I find that I can reach a decision on this application which would not be affected whichever submission as to the applicable law is correct.

Finally, counsel for the defendants submit that all other connecting factors point towards Arizona. The damage and distress pleaded in the particulars of Claim is all alleged to have been suffered in Arizona, and the witnesses to it would come from Arizona. The history of the matter is litigation of some complexity which has been conducted in Arizona and which would be better understood by a court in Arizona.

Counsel for the claimants wishes to reserve the right to argue in a higher court that the decision of Owen J. in Daiichi is correct, and submits that a corporate claimant can claim under Arizona law as well as under English Law. It is not suggested that this is a point which I could resolve myself at this hearing.

The essential submission of counsel for the claimant is that England and Wales is the only jurisdiction where by reason of the defendants` presence, a practically enforceable order can be obtained. As a matter of English private international law, absent treaty or convention, the only foreign judgments enforceable at common law in England and Wales are money judgments. Any fine imposed by an American court could not be enforced here and there is no means by which a court in Arizona could commit the defendants` for contempt of court, sequestrate the corporate defendants assets or provide any other effective enforcement of any injunction that might be granted. This is accepted by counsel for the defendant.

Counsel for the defendant however, submits that such matters as enforceability are what Lord Goff was referring to when he spoke of ‘juridical advantages’ which cannot be taken into consideration.

To counter this submission, counsel for the claimant referred to International Credit & Investment Company (Overseas) Ltd., v. Sheikh Kamal Ad ham [1999] I.L.Pr.302. In that case Morritt L.J. (as he then was) gave a judgment with which the other members of the court agreed. It included, at paragraphs 24 and 25 the following and I quote:-

It is submitted that the question of enforcement is an immeasurably powerful factor in a case where no effective enforcement is available in the forum which is otherwise said to be more appropriate. However it is also submitted that the defendants have produced no evidence that any court in the United States could or would in fact assume jurisdiction over a foreign domiciled defendant in proceedings for relief against harassment. The fact that the Arizona court has been able to make the orders cited above is due to the fact that those orders were made in proceedings in which the present defendants were plaintiffs, and so no jurisdictional difficulty arose as to the making of the orders. It is also noted that the defendants have not offered to undertake to submit to the jurisdiction of any court in the United States and that it would make no difference if they did, absent any means of enforcing any judgment by way of injunction.

It is submitted that English courts would have little difficulty in adjudicating upon a tort under the Arizona statute, if that is the applicable law, because as is apparent, the law of Arizona is not dissimilar from the English 1997 statute. It is accepted that the witnesses are abroad.

I conclude that the International Credit case establishes that enforceability of a judgment is an advantage, which a claimant is entitled to rely on in the way that the claimant seeks to rely upon it in these proceedings. In this case it is in my judgment of overwhelming importance compared to any other factor in the case. I accept that on balance all other factors point towards Arizona as the appropriate forum. But for reasons of enforceability, it is clearly not appropriate. Nor do I accept that it is available to the claimants in any meaningful sense of that word. The most they could expect to obtain there is an empty judgment. Accordingly, I have no hesitation in concluding that the defendants have failed to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum and I unhesitatingly exercise my discretion to decline the relief sought.