Ioanna Christofi v National Bank of Greece (Cyprus) Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Andrews DBE,Mrs Justice Andrews |
| Judgment Date | 14 April 2015 |
| Neutral Citation | [2015] EWHC 986 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Appeal Ref: QB 2014-0511 and QB 2014-0586 |
| Date | 14 April 2015 |
[2015] EWHC 986 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM DEPUTY MASTER EYRE
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Andrews DBE
Appeal Ref: QB 2014-0511 and QB 2014-0586
Daniel Warents (instructed by Fletcher Day) for the Appellant
Camilla Lamont (instructed by Charles Russell Speechlys LLP) for the Respondent
Hearing date: 26 March 2015
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.
On 21 July 2006 the Respondent Bank ("the Bank") issued proceedings in the District Court of Nicosia, Cyprus, against the Appellant ("Mrs Christofi") and her husband, Lambros Christofi, under action number 4900/2006. The proceedings related to sums alleged to be due under a loan agreement dated 4 September 2002 made between the Bank and Mr Christofi, and a personal guarantee and mortgage over certain property in Cyprus given by Mrs Christofi as security for that loan.
The proceedings were served personally on Mr Christofi on 31 July 2006. It is the Bank's case that this was valid service on both Mr and Mrs Christofi under the law of Cyprus. A firm of advocates in Cyprus, Kallis & Kallis, entered an appearance ostensibly on behalf of both Mr and Mrs Christofi, and defended the proceedings for around 4 1/2 years, filing a defence and counterclaim. Eventually the proceedings were compromised in terms of a consent order made by the Cypriot Court ("the Settlement Order") under which it was ordered that Mrs Christofi, jointly and severally with her husband, pay:
a) The sum of €2,221,181.90 plus interest to the date of settlement and
b) The sum of €12,443 for costs, plus interest to the date of settlement, a fee of €102 for the settlement order and €1783.56 VAT.
The Settlement Order provided for a suspension of execution until 30 April 2011, on the basis that if Mr and Mrs Christofi paid the sum of €3,519,770.96 plus costs by that date the judgment would be deemed paid in full. However, no payment was made by the deadline. The Bank therefore started to take action to enforce the terms of the Settlement Order, first in Cyprus, and then in the UK. By the time that the Bank sought registration of the Settlement Order in the UK, the total amount due under it was calculated at €7,368,044.88. Credit was given for some relatively small amounts recovered in Cyprus.
On 14 May 2014, following a "without notice" application made by the Bank pursuant to CPR 74.3, Deputy Master Eyre registered the Settlement Order for enforcement pursuant to Council Regulation EC 44/2001 ("the Judgments Regulation"). He made two Registration Orders, it appears in order to cater for the alternative possibilities that Mrs Christofi was domiciled in England or in Cyprus, but nothing turns on this.
Article 34(2) of the Judgments Regulation sets out the limited grounds on which a judgment of another EU Member State shall be refused recognition. One of these is:
" 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 purpose of Article 34(2) of the Judgments Regulation (and of its predecessor, Article 27(2) of the Brussels Convention 1968) is to ensure that a judgment is not recognized or enforced if the defendant has had no opportunity of defending himself before the court first seised (see e.g. Case 166/80 Klomps v Michel [1981] ECR 1593, at [9] and Case C-172/91 Sonntag v Waidmann [1993] ECR 1–1963, at [38]). The issue of whether a judgment or order is given " in default of appearance" is not determined by the rules of procedure of the Contracting State in which the judgment or order is obtained, or by the law in the Contracting State where it is sought to be enforced. It is treated as an issue of fact. Thus the fact that service was properly effected under the law of the court of origin, as the Bank contends it was, does not preclude re-examination of whether it was effected in sufficient time to enable the defendant to arrange a defence.
Mrs Christofi claims that the first time she became aware of the existence of the proceedings in Cyprus was when she was served with notice of the orders made by Deputy Master Eyre. She alleges that her husband deliberately kept the proceedings from her, that Kallis & Kallis had no authority to represent her in the Cypriot proceedings, and that the signature on a letter of retainer purporting to be her signature is a forgery (though she has adduced no expert evidence in support of that assertion). Thus she contends this case is similar to Case C-78/95 Hendrickman v Magenta Drug &Verlag GmbH, (10 October 1996) in which the Court of Justice of the European Union (CJEU) held that an order obtained against a defendant in Germany with the purported consent of a lawyer in circumstances where the defendant had not instructed the lawyer was to be treated as given in default of appearance because " 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."
Mrs Christofi seeks to appeal the registration of the Settlement Order on those grounds, pursuant to CPR 74. Such an appeal does not require permission, but there are time limits for appealing. In this case, the time prescribed by Article 43(5) of the Judgments Regulation is two months from the date of service upon Mrs Christofi of the Registration Orders in person or at her residence, it being common ground that Mrs Christofi is domiciled in Cyprus. That time limit is reflected in CPR 74.8(4) which provides that:
" The appellant's notice must be served
a) where the appeal is against the granting of registration, within
i) one month; or
ii) Where service is to be effected on a party not domiciled within the jurisdiction, two months, of service of the registration order."
Although sub-paragraph (a) (ii) could be interpreted as referring to service of the appellant's notice on a respondent who is domiciled outside the jurisdiction, it is plainly intended to mean that where service of the registration order is to be effected on a party not domiciled within the jurisdiction, that person has two months from service on him in which to serve the appellant's notice on the opposing party. The upshot is that the non-UK domiciled appellant must both file the appellant's notice with the court and serve it on his opponent within two months of service on him of the registration order.
On 17 June 2014 the Bank obtained interim charging orders over Mrs Christofi's English properties. However, its solicitors, Charles Russell, were not notified of this by the court until after they sent a chasing letter on 7 July 2014. Further inquiries of the court office revealed that a hearing of the application to make the charging orders final was listed for 30 July 2014. Once Charles Russell were aware of the situation they acted with commendable speed. Mrs Christofi was served with copies of the Registration Orders and the interim charging orders on 11 July 2014, under cover of a letter from Charles Russell dated 8 July, which also enclosed a copy of the Settlement Order.
It is accepted by both parties that the time for filing and serving the appeal therefore expired on 11 September 2014. However, the appeal was neither filed nor served within that time limit. The appellants' notice was filed on 30 September 2014 and served on 3 October 2014, 22 days out of time. The evidence before me does not adequately explain why such a long delay occurred.
On 22 July 2014, Mrs Christofi's solicitors, Fletcher Day, wrote to Charles Russell to say that they had recently been instructed, and that their client had only received Charles Russell's letter of 8 July on 11 July. They said that the letter was the first their client knew of the Settlement Order, the Registration Orders or the interim charging orders, and complained that the Bank should not have taken steps to enforce the registered judgment until after the time limit for appealing the registration had expired (a complaint which Mr Warents, who represented Mrs Christofi on this appeal, sensibly did not pursue). They said that Mrs Christofi intended to commence proceedings in Cyprus to set aside the Settlement Order and had instructed Cypriot lawyers to do so; she would also be appealing against the Registration Orders "in due course".
Fletcher Day pointed out that the question whether the interim charging orders should be made final could not be resolved at a hearing on 30 July 2014 if Mrs Christofi was going to appeal against the Registration Orders. They proposed a consent order agreeing to the vacation of the hearing on 30 July, on the basis that their client should inform the Court if an appeal against the Registration Orders was filed, and if the Court were so informed then the Bank's application for final charging orders should abide the outcome of that appeal. In the event that Mrs Christofi did not file an appeal against the Registration Orders by 4pm on 11 September, the hearing of the Bank's application for final charging orders should be listed for the first available date thereafter.
It is clear from that proposal that Fletcher Day were well aware of the deadline for appealing. The reference to informing the Court if an...
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