Clarke v Fennoscandia Ltd [Outer House]
| Jurisdiction | Scotland |
| Judgment Date | 23 July 2003 |
| Docket Number | No 11 |
| Date | 23 July 2003 |
| Court | Court of Session (Outer House) |
OUTER HOUSE
Lord Kingarth
Procedure - Declarator and interdict - Competency - Pleadings - Relevancy - Declarators sought that foreign court orders not enforceable in Scotland having been obtained by 'fraud on the court' - Interdicts sought against enforcement of foreign court orders in Scotland and 'elsewhere' - Competency of orders sought in light of irrecoverable undertaking by defenders to the pursuer and to the court that they would not at any time seek to enforce, or take steps entitling others to enforce, foreign orders and judgments by action of decree conform in Scotland - Foreign Judgments (Reciprocal Enforcement) Act 1933 (cap 13), sec 1(2A)(c) - Civil Jurisdiction and Judgments Act 1982 (cap 27), sched 1, art 25
By sec 1(2A)(c) of the Foreign Judgments (Reciprocal Enforcement) Act 1933, it is provided that the act's provisions enabling reciprocal enforcement of judgments between participating countries do not apply to a judgment given in proceedings founded on a judgment of a court in another country and having as their object the enforcement of that judgment.
In terms of art 25 of sched 1 to the Civil Jurisdiction and Judgments Act 1982, the Brussels and Lugano Conventions apply in the United Kingdom to any judgment given by a court or tribunal of a contracting state.
Judgment against the pursuer was given in an action at his instance in the US District Court for the District of Delaware. Attempts by the pursuer to have the judgment against him set aside by appeal courts in the US on grounds of conspiracy and fraud failed. In a separate action raised by the defenders judgment was obtained against the pursuer in the District Court City and County of Denver, Colorado. The latter court held that the pursuer was estopped from relying on the allegations made, as they had been determined in the previous action. An action raised by the pursuer in the High Court in England was struck out on the basis of issue estoppel, in respect that at its heart lay the same assertions of fact as had been subject to determination in the Delaware action. Attempted appeal in this action was likewise unsuccessful.
The pursuer raised an action in the Court of Session in which, after amendment, he sought declarators that the costs orders pronounced against him in the Delaware action and the Colorado judgment were unenforceable in Scotland, 'the said orders having been obtained through fraud on the court' and interdicts against the defenders from taking any steps to enforce the same in Scotland. An action previously raised by the defenders in the Court of Session seeking decree conform was abandoned by them, and, following debate on the procedure roll in the instant action, on 23 and 24 February 2000, a proof before answer was allowed. Thereafter, the defenders lodged in process an irrevocable undertaking to the pursuer and to the court that they would not seek to enforce or take steps entitling others to seek to enforce the Delaware and Colorado orders by action of decree conform in Scotland. An initial motion for dismissal of the action on the basis of the undertaking was refused and the defenders thereafter amended to aver that the undertaking given rendered the action unnecessary. Dismissal on this basis was sought in terms of a new eleventh plea-in-law. A further twelfth plea-in-law to the competency of the declarators sought was added by adjustment. In his answers the pursuer's averments of fraud were left substantially unaltered but it was made clear that the declarators sought were to be founded upon elsewhere than Scotland. The interdict conclusions were amended so that the pursuer now sought to interdict the defendes 'from taking any steps in Scotland and elsewhere to enforce "the decree" in Scotland and elsewhere'. Amendment was allowed on 18 April 2002 and the cause reappointed to the procedure roll.
At debate, the defenders sought to advance argument in relation to the pleadings as a whole, including the new averments. Counsel for the pursuer submitted that debate should be restricted to the addition of the words 'and elsewhere' in the two interdict conclusions. The arguments in respect of the irrevocable undertaking should not be heard, and were in any event misconceived. The irrevocable undertaking came too late in the day, and the foreign orders could be enforced in Scotland in ways other than by decree conform and in relation to which the question of fraud would be relevant. Specifically, the pursuer being resident in France, the equivalent of a decree conform could be obtained in that country and then registered against him in Scotland under either the Foreign Judgments (Reciprocal Enforcement) Act 1933 or the Civil Jurisdiction and Judgments Act 1982.
Held that: (1) the arguments advanced by the defenders in respect of the relevancy and specification of the pursuer's averments anent fraud should not be heard in the exercise of discretion (para26); (2) but the issues arising from the lodging of the irrevocable undertaking fell to be considered (para 29); (3) the lodging of the irrevocable undertaking to the court, effectively barring any attempt to bring an action of decree conform, meant there could be no reasonable apprehension of that happening such as would entitle the pursuer to interdict against the possibility (para 30); (4) in light of the provisions of sec 1(2A) of the Foreign Judgments (Reciprocal Enforcement) Act 1933 and sched 1, art 25 of the Civil Jurisdiction and Judgments Act 1982 it would not be possible for the defenders to obtain a decree conform in France and register it in Scotland and it would in any event not be competent for the Scots court to recognise any such decree conform obtained in France or England under the 1982 Act on the basis that the original decree had been obtained by fraud, and the interdicts sought were thus incompetent (paras 31-34); (5) the declarator sought was a bare declarator with no legal consequences and therefore incompetent (para 35); (6) the interdicts sought against enforcement 'elsewhere' were incompetent and the court lacked jurisdiction to pronounce them in any event (para 37); and actiondismissed.
ROBERT A CLARKE brought an action against Fennoscandia Ltd (formerly Fenno- scandia Bank Ltd) seeking declarators that costs orders pronounced against him in an action at the defenders' instance in Delaware and a judgment against him in Colorado were unenforceable in Scotland and interdicts against the defenders from seeking to enforce the same in Scotland and elsewhere.
After sundry procedure, in accordance with an interlocutor pronounced on 18 April 2002 appointing the cause to the procedure roll 'of new', the cause came before the Lord Ordinary (Lord Kingarth).
Cases referred to:
Abouloff v Oppenheimer & Co (1882) 10 QB 295
Acutt v AcuttSC 1936 SC 386
Bain v ShandUNK (1833) 11 F 688
Bendex v James Donaldson & Sons LtdSC 1990 SC 259
Boe v AndersonUNK (1857) 20 D 11
Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671
Ellerman Lines v ReadELR [1928] 2 KB 144
Galbraith's Curator ad Litem v Stewart 1997 SLT 418
Gladstone & Co v Lindsay (1868) 6 SLR 71
Lockyer v FerrymanUNK (1876) 3 R 882; (1877) 4 R (HL) 32
McCarroll v McKinstery 1926 SC (HL) 1
McIntosh's Trs v Stewart's TrsUNKSC (1906) 8 F 467
Maltman v Tarmac Civil Engineering LtdSC 1967 SC 177
Miller v Mac Fisheries LtdENR 1922 SC 157
Owens Bank v BraccoELR [1992] 2 AC 443
Owens Bank Ltd v Bracco & Co [1994] QC 509
Owens Bank v Etoile CommercialeWLR [1995] 1 WLR 44
Phosphate Sewage Co v LawsonUNK (1878) 5 R 1125; (1879) 6 R (HL) 113
Shell (UK) Exploration & Production v Innes 1995 SLT 807
Smith & Wellstood v Carron Co (1896) 3 SLT 223
Societe D'Informatique Service Realisation Organisation (SISRIO) v Ampersand Software BVUNK [1994] ILPr 55
Westergaard v WestergaardENR 1914 SC 977
Textbooks referred to:
H Burn-Murdoch, Interdict in the Law of Scotland (1986, Caledonian, Edinburgh), p 103
L Collins, The Civil Jurisdiction and Judgments Act 1982 (1983, Butterworth, London), p 83
G C Cheshire and P North, Private International Law, 13th North and Fawcett ed, Butterworth, London, 1999), p 484
E B Crawford, International Private Law in Scotland (1998, W Green, Edinburgh), para 19.26, n 19
A V Dicey and J H C Morris, The Conflict of Laws (13th Collins et al ed, Sweet and Maxwell, London, 2001), paras 14.135, 14.186, 14.232; (2nd Supplement, 2002), para S14.188
Greens Encyclopaedia of the Laws of Scotland, Vol 8, para 924
J A Maclaren, Court of Session Practice (1916), p 647
Stair Memorial Encyclopaedia: The Laws of Scotland (Law Society of Scotland/Butterworth, Edinburgh, 1991), Vol 8, para 406
At advising on, 20 June 2003, the court sustained the defenders' pleas to the relevancy and competency anddismissed the action.
LORD KINGARTH -[1] On 1 February 1991 judgment was given against the pursuer in an action brought by him against Fennoscandia Bank Ltd, the former name of Fennoscandia Ltd, the defenders. This action was in the United States District Court for the District of Delaware. The pursuer sought to establish that there had been a conspiracy between the defenders and certain businessmen in order to deprive the pursuer of the office of president of a company known as DRX Inc. On 23 March 1992 the pursuer's appeal was refused by the United States Court of Appeals for the Third Circuit. Costs were awarded against the pursuer in both courts. The pursuer then petitioned the Supreme Court of the United States for a Writ of Certiorari to the said Court of Appeals, to review the latter's judgment on the appeal, and made application for a re-hearing. The petition was dismissed on 5 October 1992. Thereafter the pursuer took proceedings to have the judgment against him set aside on the ground that it had been obtained by fraud. This was based on the claim that an executive director and an in-house counsel of the defenders...
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