Deutsche Bank AG v (1) Sebastian Holdings Inc. (2) Mr Alexander Vik (Defendant for costs purposes only/Respondent)
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare,Teare J. |
| Judgment Date | 13 March 2017 |
| Neutral Citation | [2017] EWHC 459 (Comm) |
| Date | 13 March 2017 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2009-000709 |
[2017] EWHC 459 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: CL-2009-000709
Sonia Tolaney QC, James MacDonaldandAndrew Lodder (instructed by Freshfields Bruckhaus Deringer LLP) for the Claimant/Applicant
Duncan Matthews QC, Charlotte TanandAlistair Wooder (instructed by Brecher LLP) for the Defendant for costs purposes only/Respondent
Hearing date: 3 March 2017
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is the second judgment which I have had to give in this matter which concerns questions of procedure and service in the context of an application for a committal order. My first judgment was given on 16 December 2016; see [2016] EWHC 3222 (Comm). The background is apparent from that judgment. I need not repeat it. I held that Deutsche Bank ("DB") was entitled to proceed by way of CPR Part 81 when seeking a committal order against Mr. Vik; see paragraphs 3–10. I further held that DB's application for permission to serve Mr. Vik out of the jurisdiction must be dismissed because there was no applicable jurisdictional gateway; see paragraphs 15–21.
However, it had always been DB's position that permission to serve an application for committal out of the jurisdiction was not in fact required. This judgment concerns that issue and an application for alternative service.
Is permission to serve out required?
Miss Tolaney QC submitted that for three reasons permission to serve out was not required. First, it was said that the application to commit for contempt was an ordinary incident of the Part 71 order which had been validly made. Second, it was said that Mr. Vik had submitted to the jurisdiction. Third, it was said that permission was not required because of the effect of Article 24(5) of the Recast Brussels Regulation.
An ordinary incident?
Miss Tolaney submitted that where the court already has substantive jurisdiction over a person to make an order, permission to serve out of the jurisdiction an application for committal alleging breach of that order is not required; the court has jurisdiction to make orders which are the ordinary incidents of that substantive jurisdiction, including in particular orders for costs and committal. In the present case it was submitted that the court has substantive jurisdiction over Mr. Vik because he was personally served within the jurisdiction with an order made pursuant to CPR Part 71, namely, an order dated 20 July 2015 requiring him to provide documents in SHI's control relating to SHI's means of paying the judgment debt and to attend court to be cross-examined about SHI's means. I shall refer to that order as the "Part 71 order". Although Mr. Vik provided some documents and attended for cross-examination DB contends that Mr. Vik failed to provide many documents and lied under oath. It is said that DB's application to commit Mr. Vik for contempt is an ordinary incident of litigation and in particular of the Part 71 order and so, although Mr. Vik is presently out of the jurisdiction, the application to commit him may be served on him out of the jurisdiction. Miss Tolaney relies upon a decision of mine, Marketmaker Technology Limited v CMC Group plc [2008] EWHC 1556 (QB).
Mr. Matthews QC, on behalf of Mr. Vik, submits that DB's argument as advanced by Miss Tolaney is mistaken. He says that the existence of jurisdiction in respect of the Part 71 order cannot found jurisdiction in respect of a new claim against a foreign defendant (and for which permission to serve out could not be obtained). Mr. Matthews relies upon Dar Al Arkan Real Estate Development Co v Refai [2015] 1 WLR 135 to support his submission that contempt applications are "new" proceedings. He submits that Miss Tolaney's reliance on Marketmaker is misplaced because it concerned a committal claim against a claimant who had invoked the court's jurisdiction by bringing a substantive claim here; see Glencore v Exter [2002] EWCA Civ 528. Marketmaker was a simple and orthodox application of the principle identified in Glencore that a claimant who commences a claim submits to the jurisdiction without reservation and so is subject to all new claims which might be brought against him by the defendant.
As a matter of principle where jurisdiction in respect of a claim or an order is established over a person the jurisdiction which is established must include, in my judgment, jurisdiction in respect of matters which are incidental to that claim or order. I did not understand that principle to be denied by Mr. Matthews because he accepted that where jurisdiction over a person is established in respect of a claim the court has jurisdiction to make an order for costs against that person in respect of that claim. An order for costs is incidental to the claim in respect of which the court has jurisdiction over the defendant. The question in the present case is whether an order for committal is incidental to the Part 71 order.
An order of a court must carry with it the means to enforce that order. If it did not there would be no utility in the order for it could be disobeyed without the threat of sanction. The means to enforce an order are therefore a necessary incident of the order. An order for committal is one of the means by which court orders are enforced. For that reason an order for committal is, in my judgment, a necessary incident of a court order. That is clearly demonstrated by the presence of a penal notice at the beginning of the Part 71 order. I therefore consider that in circumstances where the court has jurisdiction to make the Part 71 order against Mr. Vik the court also has jurisdiction to make a committal order against him. Permission to serve the application to commit Mr. Vik for contempt out of the jurisdiction is not required because he is already subject to the jurisdiction of this court in respect of the Part 71 order and all matters which are incidents of that order, one of which is an order for committal for contempt of the Part 71 order. Thus it was that in my earlier judgment I indicated that, had it been necessary to decide the issue, I would have accepted Miss Tolaney's submission that where a valid order has been made against a person pursuant to CPR 71.2 whilst he was within the jurisdiction an order for committal can be sought against him pursuant to CPR 71.8 notwithstanding that he has since left the jurisdiction; see paragraphs 11–14 of my earlier judgment. If that is so for the summary contempt procedure provided by CPR 71.8 it must also be for the longer procedure provided by CPR 81 (pursuant to which DB is now proceeding).
Mr. Matthews submitted that where jurisdiction is established over a person outside England and Wales the court's jurisdiction over that person is limited to the claim in respect of which jurisdiction is established. Jurisdiction in respect of a new claim cannot simply be added to the first claim. That is an uncontroversial submission. But Mr. Matthews submitted that for the purposes of that principle an order for committal is a new claim.
The foundation of Mr. Matthews' submission that an application to commit for contempt is a new claim is Dar Al Arkan Real Estate Development v Refai and others [2015] 1 WLR 135. In that case there was an application to commit for contempt the managing director of the claimant company. The question for the court was whether the court's powers under CPR 81 could be exercised against an officer of the claimant company who was outside the jurisdiction of the court and if so whether permission could be given for service out of the jurisdiction pursuant to PD 6B paragraph 3.1(3). It was held that the court's powers pursuant to Part 81 could be exercised against an officer who was outside the jurisdiction of the court. It was further held that permission could be given for service out of the jurisdiction. On the latter question the court had to consider whether an application for a committal order was a "proceeding" within CPR 6.2. It had been argued that "proceedings" were the substantive proceedings and not committal proceedings. Beatson LJ (with whom Richards and Briggs LJJ agreed) held that an application for committal is the commencement of proceedings. Beatson LJ rejected the argument that not all contempt applications involve separate proceedings. He held that an application pursuant to CPR 81 involved "new" proceedings.
A number of matters may be noted about this decision. First, the court was not considering a case, like the present case, where jurisdiction to make an order against the alleged contemnor had already been established. The court did not therefore consider whether the jurisdiction so established extended to and included orders which were incidental to the order in respect of which jurisdiction existed. Second, the court was considering the question whether an application to commit for contempt was an application to commence proceedings within CPR 6.2. Third, it was in that context that it was said that an application to commit for contempt involves "new" proceedings.
I accept that an application to commit for contempt is an application to commence "proceedings" for contempt and that such proceedings can fairly be described as "new". However, I am unable to accept that such an application cannot also be described as "incidental" to an order which has been validly made against a person whilst he was...
To continue reading
Request your trial
-
Ronald Dennis (Petitioner) v Tag Group Ltd and Others
...found that Choudhary need not be followed as a result of the implementation of the Recast Brussels Regulations, in Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2017] EWHC 459 found: "the amended wording of Article 24(5) together with the reasoning….of the Court of Appeal in Da......
-
Integral Petroleum S.A v Petrogat FZE
...as well as a decision on the determination of costs or expenses by an officer of the court”. [Emphasis added] 18 Gross LJ in Vik v Deutsche Bank AG [2018] EWCA Civ 2011 observed (albeit obiter) at [80]: “… given the width of the wording of Article 2(a), I would have struggled to see why th......
-
Mr Alexander Vik v Deutsche Bank AG
...The question of alternative service fell away. 9 Subsequently, in a second judgment dated 3 rd March, 2017 (“the second judgment”), [2017] EWHC 459 (Comm), Teare J held that permission to serve the committal application on Mr Vik was not required. This was so because the Court already had ......
-
Liao Chen Toh v Loyal International Enterprises Co Ltd And Others
...[2008] EWHC 1556 (QB), Deutsche Bank AG v Sebastian Holdings Inc [2017] 1 WLR 1842 and Deutsche Bank AG v Sebastian Holdings Inc (No 2) [2017] 1 WLR 3056 (upheld on appeal in Deutsche Bank AG v. Sebastian Holdings Inc (Nos 1 and 2) [2019] 1 WLR 1737), Anthony Chan J said : ‘ 16. In summary,......