Iain Shovlin v Paul Careless
| Jurisdiction | England & Wales |
| Judge | Clare Ambrose |
| Judgment Date | 16 February 2024 |
| Neutral Citation | [2024] EWHC 324 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QB-2021-003847 |
[2024] EWHC 324 (KB)
Clare Ambrose
(Sitting as a Deputy Judge of the High Court)
Case No: QB-2021-003847
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Sebastian Kokelaar and Mark Baldock (instructed by Richard Slade & Co Ltd) for the Claimant
Saul Lemer (instructed by DAC Beachcroft LLP) for the Defendants
Hearing dates: 26, 29 & 30 January 2024
Approved Judgment
This judgment was handed down remotely on 16 February 2024 at 10.30 by circulation to the parties or their representatives by email and released to the National Archives.
A Introduction
This is the trial of a claim to enforce a judgment made in the Superior Court of the State of California (“the Californian Court”) and recorded in an order granting default judgment dated 9 June 2021 (“the Judgment”). The Judgment contained an order that the Second to Fifth Defendants 1 (“the Defendants”) pay the Claimant the sum of US$10,066,353. The Claimant now seeks an order in this court that the Defendants pay that sum plus interest and costs.
The Claimant is UK citizen but has lived in the USA for many years and was made a director of the Third Defendant in around 2008. The Third to Fifth Defendants are English companies within the Money Expert group which is a price comparison website business. The late Mr Nigel Warr was the chief executive and a significant shareholder of the Third Defendant. The First Defendant was a business partner of the Third Defendant but the claim against him was struck out. There is an underlying dispute arising from events that mainly took place in 2008.
However, the dispute before me is as to whether the Californian Court is a court of competent jurisdiction because the Defendants voluntarily submitted to that court's jurisdiction. The Claimant's case is that both as a matter of Californian and English law the Defendants voluntarily submitted by appearing (through their attorney) at a hearing on 9 February 2019 (“the Prove Up Hearing”) and arguing that his claim against them should be dismissed for want of prosecution.
B The English law background
The claim is an action on the Judgment brought at common law, and is not made under any treaty or statute providing for enforcement. It was common ground that the Judgment met the common law requirements of being a) for a definite sum of money and b) final and conclusive. The issue in dispute was as to whether the Claimant met the further requirement that the Californian Court had jurisdiction over the defendant as determined by the English conflict of law rules of international jurisdiction ( Dicey, Morris & Collins on the Conflict of Laws, 16 th Edition, Rules 46–47).
The Claimant alleged that the Californian Court had jurisdiction on grounds of the Defendants' voluntary submission, and his case depended on whether there was a submission by way of voluntary appearance. Consent or unequivocal waiver will be
the underlying rationale for submission on this ground. This is explained by Philips J in Golden Endurance Shipping SA v RMA Watanya SA, The Golden Endurance [2016] EWHC 2110 (Comm) [41], adopting the explanation from Briggs, Civil Jurisdiction and Judgments, para 7.52 of the 6 th Edition:“ as a matter of theory, a party who voluntarily appears or participates in proceedings is considered by the common law to have accepted an offer from the opposing party who commenced the proceedings to accept the jurisdiction and be bound by its judgment. The touchstone of submission on this basis is therefore consent, although the question of whether consent has been given is to be judged objectively.”
The important aspects of the English law on voluntary submission were not controversial:
a) The onus lies on the claimant seeking to enforce the judgment of a foreign court at common law to prove the competence of such court ( Adams v Cape Industries PLC [1990] 1 Ch 433, 550).
b) Both sides referred to Lord Collins' explanation of the applicable test in Rubin v Eurofinance SA [2013] 1 AC 236.
“ 159 The general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the English court must have taken some step which is only necessary or only useful if an objection to jurisdiction has been actually waived, or if the objection has never been entertained at all: Williams & Glyn's Bank plc v Astro Dinamico Cia Naviera SA [1984] 1 WLR 438, 444 (HL) approving Rein v Stein (1892) 66 LT 469, 471 (Cave J).”
160 The same general rule has been adopted to determine whether there has been a submission to the jurisdiction of a foreign court for the purposes of the rule that a foreign judgment will be enforced on the basis that the judgment debtor has submitted to the jurisdiction of the foreign court: Adams v Cape Industries plc [1990] Ch 433, 459 (Scott J) and Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, 96–97 (Thomas J); see also Desert Sun Loan Corpn v Hill [1996] 2 All ER 847, 856 (CA); Akande v Balfour Beatty Construction Ltd [1998] IL Pr 110; Starlight International Inc v Bruce [2002] IL Pr 617, para 14 (cases of foreign judgments) and Industrial Maritime Carriers (Bahamas) Inc v Sinoca International Inc (The Eastern Trader) [1996] 2 Lloyd's Rep 585, 601 (a case involving the question whether the party seeking an anti-suit injunction in support of an English arbitration clause had waived the agreement by submitting to the jurisdiction of the foreign court).
161 The characterisation of whether there has been a submission for the purposes of the enforcement of foreign judgments in England depends on English law. The court will not simply consider whether the steps taken abroad would have amounted to a submission in English proceedings. The international context requires a broader approach. Nor does it follow from the fact that the foreign court would have regarded steps taken in the foreign proceedings as a submission that the English court will so regard them. Conversely, it does not necessarily follow that because the foreign court would not regard the steps as a submission that they will not be so regarded by the English court as a submission for the purposes of the enforcement of a judgment of the foreign court. The question whether there has been a submission is to be inferred from all the facts.”
c) The same general rule applies whether the court is looking at the question of voluntary submission to an English court or a foreign court.
d) A modern and succinct way of stating the Rubin test is to ask whether there has been an unequivocal representation by word or conduct that objection is not taken to the relevant jurisdiction.
e) The Claimant acknowledged that the test set out in Rubin meant that relevant conduct must be unambiguous and unequivocal.
f) The court must look at all the circumstances and the totality of the conduct.
g) The assessment of the defendant's conduct must be undertaken objectively, sometimes said to be from the perspective of the disinterested bystander.
(On all these points see Rubin [159–161] PJSC Bank Finance and Credit v Zehvago [64, 66], SMAY Investments v Sachdev [2003] EWHC 474 (Ch) [41], AELF MSN 242 LLC v Surinaamse Luchtvaart Maatschappij NV [2021] EWHC 3482 (Comm) [66]).
h) Both parties also adopted the test of Goff LJ in The Messianiki Tolmi [1984] 1 Lloyd's Rep. 266, 270:
A party “ makes a voluntary submission to the jurisdiction if he takes a step which in all the circumstances amounts to a recognition of the court's jurisdiction in respect of the claim which is the subject matter of those proceedings.”
i) Both sides emphasised that the role of foreign law is important but not necessarily decisive.
Thomas J in Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, 97 suggested that a foreign court's conclusion that a person has not submitted to its jurisdiction may well be decisive, whereas the converse does not necessarily follow.
“ In The Atlantic Emperor (No. 2) regard was paid to the way the domestic law of the foreign court viewed the steps taken. In such cases the effect of the law of the foreign court may well be decisive; there would be some illogicality in an English court finding a person had submitted to the jurisdiction of the foreign court in circumstances in which that court would find he had not submitted. However the converse is not necessarily the case. Section 32(3) makes it clear that the English court is not bound by the decision of the foreign court that a person had submitted; it must follow that an English court is not bound by the characterisation of a step as a submission merely because the law of the foreign court would regard it as a submission.”
However, as stated above in Rubin [161], the English court will not necessarily follow the foreign court's conclusion that there is no submission.
j) Section 33 of the Civil Jurisdiction and Judgments Act 1982 provides a statutory rule that a person shall not be regarded as having submitted by reason only of appearing to contest the jurisdiction of the court.
C The underlying factual background
The claim before me depended on whether the Defendants had submitted to the jurisdiction of the Californian Court rather than the merits of the dispute that gave rise to the Judgment. It is common ground that the Judgment was obtained in Californian proceedings that were not defended on the merits, and there has never been a determination of the merits. I accept the Claimant's argument that I need not investigate the underlying merits. The mere fact that the Judgment was entered in default makes it no less enforceable than a...
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