Foote Cone & Belding Reklam Hizmetleri & Others v Theron & Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE PATTEN |
| Judgment Date | 27 April 2006 |
| Neutral Citation | [2006] EWHC 1585 (Ch) |
| Court | Chancery Division |
| Date | 27 April 2006 |
| Docket Number | 1HC52106 |
[2006] EWHC 1585 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand London WC2A 2LL
Mr Justice Patten
1HC52106
MR JULIAN WILSON appeared on behalf of the CLAIMANTS
THE FIRST DEFENDANT appeared IN PERSON
I have during the course of today to deal with a number of applications but I propose now to give my reasons for refusing the first defendant's application that I should stay these proceedings in favour of an alternative forum comprising the courts of Turkey in Istanbul.
The applications made by Mr Theron are in response to an action commenced by four companies, including a Turkish company which is the first named claimant, alleging various breaches of duty by him and also the misapplication of company monies. It is not necessary for the purposes of this ruling to go into the detail of those claims because freezing order relief was granted initially by Mr Justice Hart on 20 January of this year and it is accepted by Mr Theron that the freezing order should continue until trial.
It is, however, necessary to mention that the claim does have two aspects, namely, the original breaches of duty and also the subsequent transfer of funds, coupled with a number of allegations of misrepresentation, and that will be relevant to the issue of forum non conveniens which arises as part of the defendant's application.
The freezing order relief was granted principally in relation to a property in Kingston in Surrey, which on the evidence is the permanent home of Mr Theron's wife but is registered in his name. Mrs Theron has already applied to discharge the freezing order so far as it affects that property, but it has been agreed between her and the claimants that that issue requires to be tried, ie the issue of her alleged beneficial ownership, and I am simply invited today to give directions for a case management conference which will eventually lead to the trial of that issue.
The substantive matter which I have to deal with and to which this ruling relates is an application that was issued by Mr Theron's solicitors (who are no longer on the record) for a declaration that the court has no jurisdiction, or alternatively should not exercise its jurisdiction, over Mr and Mrs Theron in these proceedings and also for a declaration that there has been no effective service of the proceedings on the first defendant. That application was issued at a time, I believe, when the proceedings and the orders made by Hart J had been served by leaving them at the Kingston property with a view to service being effected pursuant to CPR rule 6.56, that is to say, on the basis that the Kingston property was Mr Theron's usual place of residence.
However, since then, on 8 February, he has been personally served with the proceedings at the Kingston property. There is no dispute about this and on that basis the court clearly has jurisdiction as of right over him by virtue of the personal service on him within the jurisdiction. The only issue, therefore, is whether I should stay the action and the current proceedings in favour of an alternative forum and Mr Theron has reformulated his application so that it is in effect an application for a stay on forum non conveniens grounds, the alternative forum being, as I have indicated, the courts of Turkey.
The possibility of a stay in favour of an alternative jurisdiction only arises if the defendant is able to demonstrate that he is not domiciled in England. Under article 2 of Council Regulation number 44 of 2001 the English court is given exclusive jurisdiction over any person domiciled within the United Kingdom. Article 2.1 provides that:
"Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State."
Subarticle 2 goes on to say that:
"Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State."
If article 2 applies and it is established on the requisite threshold test that Mr Theron is domiciled in England, then it is simply not open to me, regardless of the merits of such an application, to consider staying the proceedings in favour of Turkey. The position, however, is different if the defendant is not domiciled in this country because in those circumstances article 4 applies. That provides that:
"If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each member state shall, subject to articles 22 and 23, be determined by the law of that Member State."
In other words, the provisions of the Council Regulations do not apply and the ordinary provisions of national law govern the question of jurisdiction.
There is an argument which Mr Wilson, on behalf of the claimants, has drawn my attention to, to the effect that even when article 4 applies it may not be open to this court to refuse jurisdiction and to stay the proceedings in favour of another country. That remains undecided as a matter of authority, but it would only be necessary for me to determine that issue were I to come to the conclusion, firstly, that Mr Theron is not domiciled or at least was not domiciled at the date of the issue of proceedings in England and, secondly, that, assuming in his favour I did have power to stay proceedings in favour of litigation in Turkey, there was the material before me on which I could and should properly exercise that discretion in his favour. The claimant's position is that neither of those conditions is satisfied in this case. I propose, therefore, to turn to those two issues before considering whether or not what might be an interesting point of law does in fact arise on this application.
Domicile for purposes of article 2 is to be determined according to English law. That is made clear by article 59 of the Regulation which provides in terms that:
"In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law."
The internal law for these purposes is contained...
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