Laserpoint Ltd v The Prime Minister of Malta & Ors

The appellant submits that Article 34 (1):

The appellant relies specifically on the right to a fair trial in Article 6 of the ECHR. In Maronier v Larmer [2003] QB 620 the Court of Appeal recognised the paramount importance of one aspect of the right to a fair trial, namely, that the trial process must ensure that the defendant has a fair chance to defend himself. The court must hear both parties: see [27]. The court observed that, in an exceptional case, where the procedure of the court first seised had resulted in a defendant being prevented from putting his case to the court, Article 27(1) of the Brussels Convention can justify refusal to enforce the resultant judgment on grounds of public policy: [30].

Here, the appellant submits, the proceedings were in abeyance and were not reactivated until 2007. The matter then proceeded to a trial involving MFPS. There is no suggestion that the appellant was notified at that stage.

In the Maronier case Lord Phillips giving the judgment of the court said at [36]:

“We find it surprising that, having regard to the fact that Mr Larmer was unaware that the action had been reactivated, the three month limit for appealing renders the judgment ‘unassailable’ without the court apparently having any discretion to reopen the matter.”

Accordingly, on the facts before the court it was driven to the conclusion that Mr Larmer was denied a fair trial in Rotterdam because he was unaware that the proceedings had been reactivated until even the time for an appeal had passed.

Similarly in Joint Stock Company “Aeroflot-Russian Airlines” v Berezovsky & Anr [2014] EWCA Civ 20 the court referred to the strong presumption of compliance which originates in Maronier (supra). The court continued:

“57.

In my judgment, when the court says that there is a presumption of compliance, it is not using the word ‘presumption’ in its usual sense. Courts must for reasons of practicality proceed on the basis that until the contrary is shown they can assume that procedural steps were done properly. Likewise, courts attach no significance to procedural irregularities that have no material effect. In my judgment, they are entitled to do the same in relation to violations of article 6. Such a presumption is not inconsistent with the rule of law.

58.

So, when a court is asked to enforce a foreign judgment, it need not actively inquire whether the foreign court was entitled to make the order it made. It is entitled to assume that the court acted in a proper way unless the contrary is proved. It should not simply judge the foreign court's procedure by reference to its own. It should require a clear breach of the finality principle to be shown. In practice it will probably be easier to review compliance with that principle by Convention states than by non-Convention states.

59.

In my judgment, the question whether the court should apply a strong presumption of compliance with article 6 for Convention states should be read in the light of this explanation.”

The appellant submits that it is common ground that, as a matter of Maltese law, any appeal against a judgment had to be brought within 20 days. That was the advice received from Maltese lawyers acting for both the appellant and the respondents. Further, under Maltese law there is no requirement for the judgment to be served on a party or for notice of the judgment to be given. As a result, a party may not know of a judgment until after the 20 day time limit had expired. Maltese law does not provide for any possibility of extending the time for the appeal. The court has no discretion in relation to such time period even if the party does not know of the judgment. The case of Carmel Bugeja DISc Combined Industries Limited of 29 July 2015 was a decision of the Maltese Court of Appeal which refused to accept an appeal filed 21 days after the date of judgment. Any appeals presented once the 20 day time limit is over were held to be null and void ab initio.

Here, the plaintiff was on notice that the appellant did not know of the proceedings and, certainly, was unaware of their reactivation because by 2007 there was no curator acting on their behalf.

The appellant, therefore, submits that this is not a normal case. It is more extraordinary than the factual position in Maronier. The delay of 26 years is in itself a breach of Article 6 ECHR. The appellant has had no opportunity to defend itself and there is no evidence that it knew about the case until after the judgment. Although a curator was appointed he was not in touch with the appellant. There is no record of any contact made by him with the appellant unlike the position in the MFPS case. The appellant is entitled to rely on a breach of Article 6 for the purposes of Article 34.

The case of Price & Lowe v The United Kingdom [2003] All ER (D) 486 was a case where the writ was issued on 12 February 1986 with the trial eventually taking place in January 1995. Judgment was given three months later in favour of the defendant. That was appealed and the appeal dismissed by the Court of Appeal in 1997. The applicants were refused permission to appeal to the House of Lords. They complained to the European Court of Human Rights that the proceedings which lasted 12 years, 1 month and 18 days were not dealt with within a reasonable time as required under Article 6. The court held that once the matter had been set down for trial it proceeded within a reasonable time. The proceedings were not dealt with within a reasonable time required by Article 6 in relation to the period preceding the trial of the action.

In the case of Davies v The United Kingdom [2002] Case C-42007/98 the European Court of Human Rights held that the reasonableness of the length of proceedings was to be assessed in the light of the circumstances of the case, having regard, in particular, to its complexity and the conduct of the parties to the dispute and of the relevant authorities. In that case proceedings had commenced in July 1992. There had been an appeal to the High Court which had been dismissed in 1995 and to the Court of Appeal where the appeal was dismissed in 1996. Ultimately the proceedings were discontinued in January 1998. The applicant applied to the ECHR contending that the length of the proceedings constituted a violation of his right to a fair trial under Article 6(1). The court found, in the circumstances, that proceedings against the applicant had not been pursued with the diligence required by Article 6(1) and there had accordingly been a violation of that provision.

Article 34 mandates the court to refuse recognition if there is a breach of public policy. A breach of Article 34(1) is thus made out.

The respondents submit that if the appellant wanted to pursue Article 6 proceedings or an appeal in Malta then the respondents would be agreeable to staying the instant proceedings pending the outcome of those in Malta. Failing that, the appellant is prohibited from relying upon Article 6 in the enforcement procedure.

The respondents refer to ‘Dicey, Morris & Collins The Conflict of Laws’ paragraph 14-225, where it says:

“The first ground is that recognition of the foreign judgment would be manifestly contrary to public policy in the State where its recognition or enforcement is sought. The public policy exception is to operate only in exceptional circumstances, a fact which is reinforced by the incorporation of the word ‘manifestly’ into Art.34(1)… Before it may find recognition contrary to public policy, the court addressed must conclude that recognition would conflict, to an unacceptable degree, with the legal order in the State of recognition because it would infringe a fundamental principle, or would involve a manifest breach of a rule of law which is regarded as fundamental within that legal order.”

The judgment does not come close to fulfilling exceptional circumstances as the appellant was served as a matter of English law. Had this been a purely English proceeding the respondents would have been entitled under English law to enter judgment in default against the appellant. The fact that the Maltese court appoints a curator and required the respondents to prove their case demonstrates that the Maltese procedure in fact protected the appellant to a greater degree than the procedure in English law. Had this been purely a matter of English law, whilst the appellant could have attempted to set aside a judgment in default against it under the CPR, it would have to establish good reasons why the claim had not come to its attention. The appellant has failed to do that. The claim was clearly served at the company’s registered office, as was the notice of the first hearing. If the appellant failed to put into place proper procedures to ensure that the post was forwarded from the Hatton Garden address to the Cambridge address that is its own fault. It is not a good reason to set aside a judgment made against it.

In any event the appellant does have an avenue of challenge in Malta – namely a claim under Article 6 of the ECHR. It is notable that this is one of the grounds upon which it seeks, in England, to have the recognition order set aside and yet it did not avail itself of this procedure which is available to it in Malta. The appellant should not be entitled to use the public policy argument under the Judgments Regulation as a method to usurp the jurisdiction of the Maltese court to determine for itself whether the procedure adopted accorded with the appellant’s Convention rights. Moreover, the inherent jurisdiction of the English court to try a matter in the absence of a defendant who has failed to acknowledge service has long been recognised.

Accordingly, it cannot be said that the procedure adopted in Malta is manifestly contrary to public policy of England and Wales. For the same reason it cannot be said to be contrary to Article 6 of the ECHR. However, and in any event, the proper procedure for the appellant to adopt if it wishes to make a challenge under the Convention is to make such a challenge in Malta which it has elected not to do. Failure to take the opportunity of doing so precludes the appellant from making the same argument in enforcement proceedings.

Article 34(1) concerns whether enforcement would be a breach of public policy in England. The question here is not whether Article 6 has been breached, but, whether it is against public policy to enforce the judgment. Mr Holmes had become aware of the judgment in 2013 when he heard from Mr Malocca and in 2014 when he received a copy of it. He could, and should, have sought Maltese legal advice as to how the judgment was to be challenged. Instead, he waited for enforcement proceedings and has made the argument here and, in addition, refused the invitation to make such an application in Malta.

The only time when one sees a court engaged in Article 6 rights is where all avenues of challenge in a foreign state have been used.

A challenge in Malta is not as a result of forum shopping but as a matter of comity given that the fire was in Malta and the damage was in Malta that is where one would expect proceedings to be heard.

If the court is not satisfied on that, and if the appellant is right that it is for the court to consider Article 6 and whether there has been a breach then there are two heads of consideration: first, service; and second delay.

There has been proper formal service under Maltese law and English law. The three employees had lawyers and filed a defence, presumably paid for by the appellant. They had pursued an application to strike out which was heard whilst the employees were in Malta. It would be extraordinary if the employees had not informed the appellant of the claim. There is no reasonable reason why the appellant was not aware of formal service now considering all the other matters but in particular that of the employees.

Delay is a factual exercise only. If it is to be decided then the proceedings were complex, expert evidence was involved from engineers, laser technologists, architects and valuers. There has been a great lack of cooperation from the defendants as a whole.

John Light, in his witness statement of 24 May 2016, says that he was the Company Secretary of Tozer, Kemsley & Milbourn (Holdings) PLC (TKM) in 1987. TMK was the parent company of Daihatsu (UK) Limited which was the UK distributer of Daihatsu motorcars. Various Daihatsu staff went to Malta to make the preparation for the new vehicle to be launched in 1987. The most senior of those was Mr Ray Cave. He is surprised by the assertion on the part of Mr Holmes that he was unaware that Laserpoint were made a party to the proceedings until some time in 2013. He sets out that Simmons & Simmons were the solicitors acting for his firm at the time. Their advice was that it was important for Daihatsu to take no step in the proceedings. He recalls an envelope being delivered to Daihatsu in the spring of 1987 which had come from the Maltese High Commission. He arranged for that to be forwarded to Simmons & Simmons unopened. He recalls being informed by them that Daihatsu was a defendant and that, accordingly, the approach of taking no step in the proceedings would need to be strictly followed. His recollection is that that approach was one which had been discussed between Simmons & Simmons and the other potential UK defendants including Laserpoint. That discussion might have taken place with Laserpoint’s solicitors or its insurers. His understanding was that if the tactic was to prevail it was important for all the UK defendants in the Malta proceedings to adopt it not just Daihatsu. He did not discuss the proceedings or legal tactics with anyone from Laserpoint. But he would have explained the approach to Mr Cave who was at the time still in Malta. Mr Cave was in regular contact with the Laserpoint employees and they would have discussed what their employers were doing on their behalf.

Until 2004 Malta was not a member of the EU and the Brussels Convention was not in force.

The ‘do nothing’ approach appeared to correspond with Mr Holmes’ email of 28 February 2014 to his broker where, having set out reasons to doubt that the equipment in use would have caused the fire, he said:

“As I say, these are all reasons for doubt rather than irrefutable proof that the lasers had not caused the fire, but none of this seems to have figured in the recent court cases in Malta as no attempt was made to include any former Laserpoint personnel in those cases. These issues did not feature at the time of the incident mainly because of the plight of the hostages that the Maltese Government had taken to try to extract insurance money to repair their conference centre. A great deal of pressure was put on Laserpoint by the relatives of the 3 staff members held on the island and the company was not in a position to influence the insurer’s attitude. Huge costs were incurred by Laserpoint that were not recoverable. These costs included subsistence of the 3 staff on the island for many months and the damage done to the company’s reputation by the allegation that we had caused the fire. I mention this solely because, once the insurance company took over the situation, I/Laserpoint had no power to influence what happened, and were left paying the uninsured costs whilst the insurers denied that we were responsible. The impasse that this created was only broken when the elections (the ones mentioned above) took place and a new pro Europe government came to power and within a few days the 3 staff were released.”

Mr Light’s evidence is not contradicted in that adduced by the appellant.

It would seem that the approach of all defendants not to engage in the proceedings had effect on the progress of the case. In 1987 Laserpoint was engaged because its employees were in Malta and gave evidence to the magisterial inquiry. The large period when the proceedings were in limbo was one in which the defendants did not engage. The reasonableness of the length of the proceedings has to be seen in the context of the conduct on the part of the defendants. Article 6 is not to be used as a mechanism to vindicate an approach contrary to fair justice. The situation is very different from the cases cited by the appellant. This is purely a monetary claim. The appellant has had the advantage of €3 million for some 27 years. It has suffered no prejudice. The same can be said in relation to the insurers. It is not a case where Article 6 should be used to prevent enforcement of a judgment.

The case on Article 34(1) fails because the defects complained of could have been cured but the appellant elected not to do so. That means that there is no breach of policy from the English perspective. As a monetary claim there can be no breach of Article 6.

The wording in Article 34(1) is mandatory:

“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;”

By “manifestly contrary to public policy” the words used mean, in my judgment, a judgment that is plainly or obviously contrary to public policy.

To make good its case the appellant relies on a right to a fair trial under Article 6 ECHR which was recognised in the case of Krombach (supra) as a right which included the right to be defended. In the case of Maronier that right was breached when a defendant was unaware that a trial had been reactivated some 12 years after it had been stayed.

The respondents do not contend that the right to a fair trial is inapplicable. Rather, they submit that it is applicable but, whether there has been a breach or not, is for the determination of the Maltese courts.

As was said in Maronier at [24] one of the fundamental objectives of the Brussels Convention is “to facilitate, to the greatest extent possible, the free movement of judgments by providing a simple and rapid enforcement procedure.” It was said that the objective would be frustrated if courts of an enforcing state could be required to carry out a detailed review of whether the procedures followed in the judgment state had resulted in a judgment which complied with Article 6. There was a strong presumption that procedures in other signatories to the Human Rights Convention were compliant with Article 6. However, that was not an irrebuttable presumption. The trial process had to ensure that the defendant had a fair chance to defend himself. The court must hear from both parties.

After the fire on 25 March 1987 the appellant was clearly aware that:

On 13 April 1987 proceedings were started with the issue of a writ in Malta. The following day the Maltese court appointed curators to act on behalf of the appellant. The writ was then duly served on the curators on 24 April and on the employees on 30 April. Service on a curator is valid service under Maltese law. A writ was then sent by registered post on 5 May 1987 to the appellant at its then registered address with Companies House. A certificate of service is in the court papers. That would be deemed to be good service in English law. By that time the appellant had notified, on 24 April 1987, Companies House of a change in the company’s address but Companies House had not altered the register which was not altered until 18 May 1987. Whatever arrangements were or were not in place by the appellant on 5 May 1987 for forwarding correspondence, service of the writ was duly effected in accordance with English law by service on the then registered address of the company. Mr Holmes says that he was unaware of the writ and there is no reason to doubt that. Indeed, given his prompt referral of other matters to his insurers that would seem to corroborate what he says. However, that does not affect the fact that the writ would be deemed to be validly served.

Further, by the end of April the appellant’s insurers, Royal Insurance, had instructed their own solicitors, Herbert Smith. They were aware of the allegation of extensive damage caused by a fire resulting from the operation of laser equipment. Mr Bakes, instructed on behalf of Royal Insurance, travelled to Malta at the end of April 1987 to obtain accounts from the employees who were detained there. As he says, in his witness statement, he anticipated a claim would be made against the appellant. Several years later, as no claim was made, he closed his file which has subsequently been destroyed.

It is clear, therefore, that, by the end of April 1987, the appellant and their insurers were expecting a claim to be made against them.

The legal system in Malta with its provision of curators for those who are not legally represented clearly provides a sufficient safeguard for the recipient of legal suits, at least initially. However, to be able to discharge that duty effectively, the curator needs to be in receipt of instructions from his/her client. The advice of the Maltese lawyers in the instant case is that it would be good practice on the part of the curators to make contact and to record the steps that they have taken. For whatever reason, that does not appear to have been the practice followed by the curators representing the appellant in this case at any stage. Absent any evidence that there was contact between the curator and the appellant that means that the curators would have been acting, when they did, without instructions and without authorisation from their client. It is difficult to see how that could amount to competent and authorised representation: see Hendrikman (supra).

Although a claim was made by a third party for damage to equipment arising out of the fire which was dealt with by the appellant’s insurers and concluded in around 1994 no other steps appear to have been taken by the appellant in connection with the fire.

By 1994 the legal proceedings were not progressing. The troubled process of the litigation is set out in the factual background section above. It is important to note that delay was not attributable exclusively to the defendants to the litigation but at least equally attributable to the plaintiffs.

Some three years later, on 11 November 1997, the appellant company was struck off the register of companies and dissolved.

On 18 January 2001 Mr Victor Grech, curator for the appellant, informed the court to that effect by a note which was placed on the court file. The court took no action. On 3 November 2003 Mr Grech filed an application in the proceedings and requested that the court give directions for him to be removed from the case. Again, the court took no action. On 9 July 2004 the case was called on and deferred yet again. That is the last occasion when the curator acting for the appellant was noted to be in attendance.

The case then seems to have meandered along until the end of 2007 when the application to defer judgment to allow participation in the proceedings by MFPS was made. The position would clearly change so far as the defendants were concerned with the accession of Malta to the EU in 2004. There is no evidence that the appellant company or its curator were notified of the proceedings in the case from the end of 2003 to 2007.

During the period of reactivation from 2007 to 2013 equally there is no evidence of any communication by any party or the court with either the curator for the appellant or by making contact with any of the former directors of the appellant or through the former employees of the appellant.

It is clear from the judgment that expert evidence was given that:

“The 18 watt laser used was far more powerful than that regularly used in places of entertainment and that there was nothing else that could have caused the fire except for the laser; there was no electrical power nearby which could have caused a short circuit. The fire started high up and there was no equipment in place, like ladders, for somebody to start the fire. The location was far from the stage catwalk and therefore the fire could not have started manually. When one considers where the fire started I could not see anything else which could have been the source of the fire apart from the laser.”

The evidence introduced by MFPS was initially in writing in affidavit form but subsequently the subject of cross-examination. The judgment refers to the appellant as “today liquidated and represented in the proceedings by deputy curators”. The basis for the second part of that statement is entirely unclear. Mr Grech was dead. There was no evidence before the court of anyone else acting or continuing to act in his stead – indeed he had asked the court on two previous occasions, namely 12 years and 10 years previously, for directions that he be removed given the liquidated state of the company and the court had not responded.

I do find it inconceivable that the appellant did not know of the writ given that it was personally served on its three employees on 30 April 1987. The appellant’s position is very different from that of Mr Bakes who, after his visit to Malta in the spring of 1987, had no further links with the case until the third party claim in the early 1990s and then closed his file. The three employees left Malta in June 1987 but there is no evidence that they did not remain employed by the appellant upon their return. Given the concerns expressed by Mr Holmes to get them released from detention and returned to the UK it is almost incredible to suppose that there was no debrief upon their return.

However, that was the position in the summer of 1987 and circumstances change. Because of the extraordinary length of time that the proceedings took to come to a conclusion and the combination of other factors, namely:

It is of note that after cross-examination had taken place of the individual witnesses for MFPS Andrew Creighton asked for leave to put in closing submissions. He was, by then, a former employee of the appellant but he had been individually named on the writ. Notification must have been given to him of the resuscitated litigation. That does not provide evidence that notification was similarly given to the appellant whether through its former directors or curators.

Absent evidence on that I conclude that this is an exceptional case where there has been a breach of Article 34(1) as a fair trial has not taken place so far as the appellant was concerned. They were entitled not only to that but that it occurred within a reasonable time. Whilst the case was complex and needed expert evidence it was not so complex as to warrant the time that it took, namely, 26 years.

The respondents have contended that the defendants have failed to cooperate with the proceedings. That is true in relation to MFPS where there is evidence that they knew of the proceedings and ignored them. The witness statement of Mr Light makes clear that they were advised initially to do nothing.

From 2007 MFPS appear to have become aware that judgment was about to be entered, and because of the changed position, as I have set out, reactivated the litigation. During that second period the appellant’s rights were not acknowledged let alone protected.

The respondents contend that if there is an issue on Article 6 then the appellant should not be entitled to use the public policy argument under the Judgments Regulation as a method to usurp the jurisdiction of the Maltese court to determine for itself whether the procedure adopted accorded with the appellant’s Convention rights.

There are three reasons, in my judgment, why that submission does not find favour. First, the wording of the Article 34 itself. A manifest breach of public policy has to be established. If that is done through an analysis of the Article 6 rights by the enforcing court that is consistent with the objective of speedy enforcement which the article embodies. To insist that the matter be litigated in the Maltese courts would add to the delay which has already occurred in this case which would be thoroughly undesirable.

Second, an analysis of Article 6 within the enforcement procedures within the English courts is consistent with the decision of Maronier. This is another exceptional case.

Third, for the national court to embark upon the exercise of whether there is a breach of Article 6 is not a question of usurping the function of the Maltese court. Whether there has been a breach of Article 6 is within the scope of national permitted policy and, therefore, relevant to public policy in the enforcing country. As set out, the trial did not progress within a reasonable time and failed to engage with the appellant, in particular in the period from 2007 onwards.

For those reasons I reject the submission by the respondents that there has to have been a complete exhaustion of remedies available in the originating court before the enforcing court can step in.

Accordingly, I find that there has been a breach of Article 34(1) as the recognition sought is based upon a judicial process which was unfair and which was manifestly contrary to public policy.

I deal with this for the sake of completeness.

The appellant invites the court to refuse recognition on the basis of Article 34(2).

That reads:

“A judgment shall not be recognised:

…

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…”

The overall question, again, is whether the procedure of the Maltese court was sufficient to protect the rights of Laserpoint. The appellant submits that the conditions for the application of the article are satisfied in that:

The appellant relies on the case of Debaecker v Bouwman Case C-49/84 on the interpretation of the Article 27(2) of the Brussels Regulation, the predecessor to Article 34. In that case the plaintiff’s lawyer had made no attempt to inform the defendant at his new address that he had been summonsed to appear before the court so that on that date the defendant was ordered by judgment in default of appearance to pay Mr and Mrs Debaecker damages. The court held that to ascertain whether the requirements of service and sufficient time were justified – that required being laid down precisely in order to ensure the defendant’s rights are effectively protected – regard must be had to facts which, although occurring after service was effective, may nonetheless have had the effect that service did not enable the defendant to arrange for his defence. Accordingly, a court in which enforcement was sought may, in examining whether service was effective in sufficient time, take account of exceptional circumstances which arose after service was duly effected. Whether service was effected in sufficient time was a question of fact and, therefore, cannot be determined on the basis of the domestic law of the adjudicating court or on the basis of the domestic law of the court in which enforcement was sought. The judgment continued at [32]:

“Thus the defendant’s behaviour cannot automatically rule out the possibility of taking into account exceptional circumstances which warrant the conclusion that service was not effected in sufficient time. Instead, such behaviour may be assessed by the court in which enforcement is sought as one of the matters in the light of which it determines whether service was effected in sufficient time. It will therefore be for that court to assess, in a case such as the present, to what extent the defendant’s behaviour is capable of outweighing the fact that the plaintiff was apprised after service of the defendant’s new address.”

As to default of appearance a party can “appear” either by filing a document or by being present in court at a hearing: see Tavoulareas v Tsavliris & Others [2006] EWCA Civ 1772. In that case the claimant served proceedings on the defendants some of whom began proceedings in a Greek court for declaration they were not liable to the claimant. The Greek proceedings came to the notice of the claimant but they were not formally served upon him. A judge stayed the English proceedings on the ground that the Greek court was the court first seised but the Court of Appeal reversed that decision, holding that the English court was first seised because the defendants had been served before the Greek proceedings came to the claimant’s notice and because the claimant had not in any event been served with the Greek proceedings. Longmore LJ held at [11F]:

“11.

…The provisions of the Judgments Regulation are technical provisions but need to be construed sensibly in order to promote free movement of judgments…

12.

‘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.

13.

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.

14.

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 Hendrikman 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.”

The case of Hendrikman v Magenta Druck Case C-78/95, where proceedings leading to a German judgment and order had been instituted by Magenta in Germany without the knowledge of Mr and Mrs Hendrikman, the proceedings concerned an unpaid invoice for stationery which had been ordered on behalf of Mr and Mrs Hendrikman by two people who had no authority to do so. The same two people instructed lawyers in the name of Mr and Mrs Hendrikman but, again, without their authority to represent the couple in the proceedings. The question asked was whether Article 27(2) of the Brussels Convention was to be interpreted as meaning that the provision is 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 said:

“13 By this question, the national court is essentially asking whether Article 27(2) of the Convention applies to judgments delivered against a defendant who was not duly served with, or notified of, the document instituting proceedings in sufficient time and who was not validly represented during those proceedings, albeit the judgments given were not given in default of appearance, because someone purporting to represent the defendant appeared before the court first seised.

…

18 Where proceedings are initiated against a person without his knowledge and a lawyer appears before the court first seised on his behalf but without his authority, such a person is quite powerless to defend himself. That person must therefore be regarded as a defendant in default of appearance, within the meaning of Article 27(2), even if the proceedings before the court first seised became, in point of form, proceedings inter partes. It is for the court from whom recognition is sought to ascertain whether those exceptional circumstances exist.”

The appellant submits that the proceedings in the Maltese court were treated as inter partes proceedings because the curator was there representing the appellant but in fact the curator was acting without authority so that the appellant should be regarded as being in default of appearance.

In the case of A v B & Others Case C-112/13 a similar issue arose, albeit for Article 24. The court said:

“51.

Furthermore, the provisions of EU law, such as those of Regulation No 44/2001, must be interpreted in the light of fundamental rights which, according to settled case-law, form an integral part of the general principles of law whose observance the Court ensures and which are now set out in the Charter (see, to that effect, Google Spain and Google, C-131/12, EU:C:2014:317, paragraph 68 and the case-law cited). In that respect, it must be borne in mind that all the provisions of Regulation No 44/2001 express the intention to ensure that, within the scope of the objectives of that regulation, proceedings leading to the delivery of judicial decisions take place in such a way that the rights of the defence enshrined in Article 47 of the Charter are observed (see Hypotecní banka, C-327/10, EU:C:2011:745, paragraphs 48 and 49, and G, C-292/10, EU:C:2012:142, paragraphs 47 and 48 and the case-law cited).

52.

It is in the light of those considerations that it is appropriate to examine the question whether an appearance entered by a court-appointed representative amounts to an appearance entered by the absent defendant, for the purposes of Article 24 of Regulation No 44/2001.

…

55.

Furthermore, an absent defendant who is unaware of the action brought against him or of the appointment of a representative to act on his behalf cannot provide that representative with all the information necessary, for the purposes of determining whether the court seised has international jurisdiction, which would enable him effectively to contest that jurisdiction or to accept it in full knowledge of the facts. Nor, accordingly, may an appearance entered by a court-appointed representative be regarded as tacit acceptance, by the defendant, of the jurisdiction of that court.

56.

Secondly, it should be observed that, within the scheme of Regulation No 44/2001, the international jurisdiction of the court seised is not subject to judicial scrutiny by the court of its own motion or on the application of the defendant, as is clear from Article 26 and point (2) of Article 34 of that regulation, unless the defendant can be regarded as not having entered an appearance. Accordingly, respect for the rights of the defence requires that the legal representative should be unable validly to enter an appearance on behalf of the defendant, for the purposes of Regulation No 44/2001, unless that measure does in fact ensure that an absent defendant's rights of defence are respected. However, as is made clear by the case-law of the Court relating to Article 27(2) of the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (OJ 1972 L 299, p. 32), as amended by the later conventions relating to the adherence of new Member States to the Brussels Convention, and by the case-law on point (2) of Article 34 of Regulation No 44/2001, where proceedings are initiated against a person without his knowledge and a lawyer or ‘representative’ appears on his behalf but without his authority, such a person is quite powerless to defend himself and must therefore be regarded as a defendant in default of appearance, for the purposes of point (2) of Article 34 of Regulation No 44/2001, even if the proceedings have become inter partes (see, to that effect, as regards the interpretation of the Convention of 27 September 1968, as amended, Hendrikman and Feyen, C-78/95, EU:C:1996:380, paragraph 18, and the judgment in Hypotecní banka, EU:C:2011:745, paragraphs 53 and 54).”

The requirements are that a writ has to be properly served and done in sufficient time to allow the defendant to arrange his defence. The absence of one of those safeguards is sufficient for the court in which enforcement is sought to refuse to recognise a foreign judgment.

The fact that, as a matter of Maltese law, service on a curator who is acting without knowledge or authorisation of a defendant may be good service does not impact on the English court’s assessment of whether, as a matter of fact, service was effected in sufficient time and in such a way so as to enable the appellant to arrange its defence. In making that assessment it is highly relevant for the court to consider the means employed by the respondents for effecting service and the knowledge of the respondents: see Debaecker (supra).

The evidence before the court demonstrates that the proceedings did not come to the attention of Mr Holmes until long after judgment had been given. Service of the proceedings was thus not effected in sufficient time and in such a way as to enable the appellant to arrange its defence.

The requirement that a defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so was to avoid a challenge on the basis of a purely technical breach. The appellant relies upon ‘Dicey, Morris & Collins on the Conflict of Laws’ at paragraph 14-231 which reads:

“…The opportunity to apply for a legal remedy after the making of the order may not be equivalent, but may instead be inferior, to having the right to be heard before the order is made. If, however, the defendant has had and has exercised the opportunity to challenge the judgment, was under no handicap in doing so, and was entitled as part of that challenge to argue that he had not been served in time to make his defence, Art.34(2) will no longer be available, and the question whether the judgment is still to be regarded as one given in default of appearance is without substance. The overriding question is whether the procedure of the foreign court was sufficient to protect the rights of the defendant to defend. …”

The most recent advice from Dr Ghio of Fenech & Fenech Advocates who was instructed by the appellant was to the effect that he agreed with Professor Refalo (lawyer advising the respondents) that the 20 day time limit to appeal may not be extended. The advice continued “We note that in the same section of his opinion, Prof Refalo opines that the 20 day time limit cannot be extended save perhaps any remedy which a court of constitutional jurisdiction may warrant.” Reference is made to a case in the name Amabile Zammit v L-Onorevole Prim Ministru (Constitutional Court 7 March 2014) in which the court, while refusing to extend the time limit to appeal on the basis of the appellant’s illness, was not hypothetically adverse to a possible situation where the rigid time limits to file an appeal could be relaxed.

The opinion continued:

“While we do not dispute the interpretation of this case we note that we are currently not aware of any court decision ever being given by the Maltese courts which actually applied this principle in practice. We therefore believe that the chances of Laserpoint ever making this argument and obtaining a successful outcome on these grounds are slim at best, and would require Laserpoint to bring forward evidence and proof which would strongly justify the taking of such extraordinary measures allowing Laserpoint to appeal a judgment after three years, rather than 20 days.”

The appellant rejects the suggestion by the respondents that it can make an application to the Maltese court that the proceedings in respect of which judgment was issued are in breach of Article 6 of the ECHR. Whilst the appellant accepts that is a theoretical possibility it is not what Article 34 is aimed at. The court can take a view as to whether the proceedings complied with Article 6 as part of giving an independent second review under Article 34. A reference to the Maltese court is, therefore, not an option.

The construction of Article 34(2) is important. Provided there is any possible route of challenge to the judgment in Malta that precludes reliance on Article 34(2). That includes a “theoretical” challenge because of the wording of the Article.

In fact, there are two possible avenues of challenge:

If a party is able to argue Article 6 in the context of enforcement when some remedy is available in the original jurisdiction there would be a breach of ECHR because a remedy would be available at the national stage which should be resorted to first.

Professor Refalo, in his report of 26 May 2016 said:

“The 20 day period for an appeal serves as a cut-off point in the interest of ensuring the certainty of the judgment; once the judgment delivered as first instance is read out in open court even the curator is deemed to be aware of it and he can appeal within the 20 days just like any other party. This 20 day time limit cannot be extended saving perhaps any remedy which a court of constitutional jurisdiction may grant.”

That is footnoted by a reference to the Amabile Zammit case decided in March 2014 although the court refused to extend time on the basis of the applicant’s illness but in its reasoning was not adverse to the fact that there could be other cases where restitutio in integrum would be called for in order to sanction a late appeal. On appeal the Constitutional Court confirmed the judgment but added that there might be circumstances where it was exceptional, and independent of the will of the party where it could be in the interests of justice to grant restitutio in integrum so that the normally rigid approach to the time limit for lodging an appeal could be relaxed. The rights existed although they had yet to be allowed in any case.

It was agreed, therefore, between the two Maltese legal experts that there was the possibility of an appeal and a possibility of an Article 6 challenge in Malta. The clear intent of Article 34(2) was that those arguments should be run before the original court where the proceedings took place. The laws of Malta were sufficient to protect the defendant’s rights because, if there had been a breach of Article 6, proceedings could be brought in Malta.

Maronier was argued on the basis that the judgment was unassailable which is materially different to the situation here where there were routes of challenge under Article 6 and an appeal available. Article 34(2) is concerned with cases where the court of origin’s procedures have failed. The existence of a procedure to vindicate the appellant’s rights in Malta precludes reliance on their part on Article 34(1) or 34(2). The purpose of the Judgments Regulation is for a quick and effective recognition of the judgment.

The respondents have offered the opportunity to the appellant to issue in Malta. It is not appropriate to usurp the jurisdiction of the Maltese courts in circumstances where the appellant has not attempted to exercise its rights their. If the appellant could import the Article 6 argument into Article 34(1) in the same way as it can into Article 34(2) that would render it otiose. The claim should fail on that basis alone.

Alternatively, if that construction is not accepted the mere appointment of a curator in Malta does not necessarily mean that the appellant has appeared so that there is a default of appearance. But, unlike the position in Hendrikman, (supra) the appellant is not powerless to defend itself. The documents were served at the registered address. In that sense there is a merger between default of appearance and service.

The appellant must have known of the proceedings because:

Notice of the first hearing was served at the Hatton Gardens address within 14 days of the actual transfer but within a time period when service would remain good under English law.

The first hearing took place on 17 June 1987 when the employees were still in the country. That was to deal with the argument on the part of the employees that the writs against them were to be struck out for a procedural irregularity. That argument failed. By the end of June the employees had left Malta.

Mr Bakes had flown to Malta on 25/26 April 1987 to meet the employees in an attempt to secure their release. He was there to gather evidence in case a claim was made against the appellant. As the writ was served a matter of four days later it was highly likely that the claim would have been forwarded to Mr Bakes.

The email from Mr Holmes of 28 February 2014 indicates that he had knowledge of events prior to June 1987.

The entry in the insurer’s database of 25 March 1987 has the same reference number and indicates that the insurers knew. It says, “Fire in Maltese Conf Centre allegedly caused by insured laser equipment.”

After that the plaintiffs sent three telexes to the appellant requesting details of its insurers. No response was received to any. A telex was sent on 3 April 1987 before the application was made to change the registered office which means that it was sent on by the Maltese High Commission in accordance with the correct information at the time. Accordingly, proper service was effected under Maltese and English law and, even if that was not enough the plaintiffs went through a number of steps to engage with the appellant and its three employees who were detained. To say that the appellant was not on notice was fanciful. The plaintiffs should be able to rely upon the proper process of civil procedure.

On the respondents’ case service under Article 34(2) was effected and in a way which gave sufficient time for the appellant to mount a defence.

The same principles set out in the Tavoulareas case, namely, of the “concept of service” must be consonant with the word “service” in Article 34(2) of the Judgments Regulation and must likewise have the same meaning as in Article 30 of the Service Regulation. Otherwise there would be a serious mismatch between the respective provisions for seizing 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. Formal service should fulfil both limbs. Service on the curators alone where the court appointed them would not necessarily be so but where the service is at the registered office of the appellant company the court should be wary of supplanting a concept of service with notice.

Article 34(2) provides an alternative basis for the appellant to argue that the judgment should not be recognised. It requires three steps:

The respondents accept that appearance by a curator does not equate to an appearance. As I have set out I am satisfied that the writ was validly served upon the appellant. Further, the first hearing took place on 17 June 1987 when the three employees of the appellant were still detained in Malta. Through them, if nothing else, I am satisfied that around late spring/early summer of 1987 the appellant was aware that proceedings had commenced.

However, the problem is that there is no evidence that the curator sought to establish contact with the appellant company and obtain instructions. The evidence from both Maltese legal experts is that in accordance with the Code of Organisation and Civil Procedure Article 936 regulated the duties and obligations of the curators. Their current duties include contacting forthwith the person that they represent, informing the person whom they represent of any judicial act and of its contents, to obtain all the necessary information to defend the interests of that person and to continue looking after the interests of the person whom they represent although the period of appointment may have expired and to keep the court regularly informed of all actions taken in the execution of their duties. At the relevant time the duties were not set out so clearly and in such detail but it is clear that best practice would have included the steps set out now or similar.

What the curators in the instant case did, in their note of pleas, was to say that they were ignorant of the facts which led to the claim but that they reserved the right to file further pleas should they be in a better position to comment thereon at a later stage in the proceedings. That is consistent with there being no contact with their principal. There is simply no evidence before the court that the curators made contact with the appellant at any stage. Although they did file a note of pleas in answer to the claim that was on the basis that the claim against the appellant should be declared non-suited as the company had no juridical relationship with the plaintiff. The note did not condescend to any detail about the claim itself.

On the facts here it does appear that when the appellant appeared through the curators the curators were not acting with authority as there is no evidence of contact by the curators with the appellant at any stage and no knowledge on the part of the appellant of their existence. Further, in the second stage of the proceedings, by which I mean the reactivation from 2007 onwards, the appellant was unaware of the situation. I find, therefore, that judgment was entered in default of appearance.

The second requirement is that service took place and in sufficient time to enable the appellant to arrange its defence.

The fact that the writ was served in a way which was good service in Maltese law on the curators and in English law at the then registered office of the company is highly relevant but not absolutely determinative of this issue.

The respondents sent telexes to the Secretary to the Ministry of Foreign Affairs in Malta instructing him to telex the Maltese High Commission in London for onward transmission to the appellant. Those telexes were sent on 1 April 1987, 21 April 1987 and 2 June 1987. No response was received to any of them. The problem there is that, whilst I have no doubt that the instruction was given to the Ministry of Foreign Affairs on each occasion, the plaintiff was pursuing a mode of indirect contact. There is no evidence before the court that the instruction was completed. There is no evidence from the Ministry nor from the High Commission in London. What is known is that there was no response at any stage from the appellant. Given that the appellant had valid insurance cover and, as I have found, was unlikely to be taken aback by a claim, I am surprised that, if the appellant had received the telex, it did not reply. On the balance of probabilities therefore, I think it unlikely that the appellant did in fact receive them.

It is notable that there was no follow up on the part of the plaintiff after the instruction in relation to the three telexes, the last of which was in June 1987. One would have thought that, after a fire of the scale that had occurred, information as to the likely perpetrator’s insurers was critical and would be pursued actively until the details were received. There is no evidence that was the case. In my judgment, therefore, no reliance can be placed upon the telexes as a mode of additional notification.

Meetings did take place though with Masters & Co. Solicitors of Cambridge, then acting for the appellant. Minutes of the meeting show that there was discussion about the three detained employees but discussion was broader. On 9 April 1987 one entry reads: “sum claimed LM 2 million. If a lesser sum is later assessed the security will be reduced.” Immediately prior was an entry that three persons may leave Malta if a deposit of security is made.

In a meeting the following day with a London lawyer for Daihatsu the point was made that Mr Cave, their employee, was not able to leave on a personal undertaking to return unless a deposit or security was made for civil damages. The following entries then appear:

“3.

insurance does not go that high, but Laserpoint has their insurance.

If Laser produce guarantee their men may go as well as Cave.”

Those meetings merely underline that those acting for the appellant were not just acting on the release of the three employees but on claims likely to be made by the Maltese Government. The reference to insurance is also telling. I cannot believe that Masters & Co. would not report to the appellant after their meeting with Maltese Government Officials. I conclude that the appellant was well aware of the prospect of proceedings at the end of March/early April 1987. That is consistent also with the notification on the insurers’ file.

The writ was then validly served on the appellant at its then registered office and should have been sufficient to provide formal notice of the institution of proceedings. The timescales for service are set to allow appropriate time for a suitable defence to be served. The remaining issue on this aspect is whether the appellant had knowledge of the duly served document but knowledge is not a requirement of this part of Article 34(2). The issue is simply one as to service. I find, therefore, that service was duly effected in 1987. There was no additional notification, or such steps as were taken, at that time by the respondents were ineffectual for the reasons that I have set out. However, despite being validly served, exceptionally, the surrounding circumstances are such as to make it clear that the appellant was not able to prepare a valid defence in 1987.

Further, no steps were taken on the reactivation of the proceedings in 2007 to make contact or notify the appellant or its former directors at all.

It is common ground that the appellant did not challenge the judgment because it did not know about it until after the 20 day period for challenge had expired. The respondents contend that the word “possible” in the article means that the prospect of a challenge can be theoretical. The respondents rely on the evidence of Professor Refalo that the previous guillotine after 20 days in which to make a challenge has the potential to be lifted as a result of the case of Amabile Zammit decided on 7 March 2014. The full text of the relevant part of Professor’s Refalo’s advice reads:

“The 20 day period for an appeal serves as a cut-off point in the interest of ensuring the certainty of the judgment; once the judgment delivered as first instance is read out in open court even the curator is deemed to be aware of it and he can appeal within the 20 days just like any other party. This 20 day time limit cannot be extended, saving perhaps any remedy which a court of constitutional jurisdiction may grant.”

First, that advice is clear that the 20 day period for an appeal is a cut-off point which cannot be extended. The case footnoted was decided in March 2014 some 14 months after the decision in the instant case. The court rejected a claim based on an alleged breach of fair hearing because an appeal from a fiscal decision was rejected on the basis that it was filed out of time. The illness of the appellant did not impede him from filing an appeal within the timeframe established by law. In its reasoning the court was not adverse to the fact that there could be other cases where restitutio in integrum would be called for in order to sanction a late appeal if the circumstances warranted. That was upheld by the Constitutional Court.

Notwithstanding that, both Maltese lawyers agree that there has been no case where the time has been extended. There seems, therefore, to be a significant difference between a theoretical possibility and a realistic one in Malta. In my judgment that means that there is little realistic possibility of an extension of time being obtained by the appellant. I can see no point at all in the wording of the latter part of Article 34(2) if the prospect of proceedings to challenge a judgment is not realistically possible. If it was to include routes that were theoretically possible it deprives that part of the article of any real meaning. I reject the submission on the part of the respondents that the fact that something is theoretical means that it should be properly considered.

I conclude that Article 34(2) has not been fully complied with. Despite the valid service, the key issue is whether the Appellant received a document in such a way to enable him to arrange for his defence. On the facts of this particular case I am driven to find that the appellant did not. Again, on the facts, I find that the judgment was given in default of appearance because of the history of lack of contact between the curators and the appellant and complete absence of instructions from the appellant from 1987. Further, there was no involvement in proceedings from 2004 until 2013. As to failing to make an appropriate challenge within the requisite time it is clear that the Maltese legal structure is such that it does not permit of any realistic possibility of any extension of time within which to lodge an appeal.

Accordingly, if necessary to find, the appellant would have succeeded on Article 34(2) also.

In the premises this appeal is allowed.