National Justice Compania Naviera SA v Prudential Assurance Company Ltd ('The Ikarian Reefer' (No 2))
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER,LORD JUSTICE TUCKEY,LORD JUSTICE SIMON BROWN |
| Judgment Date | 12 October 1999 |
| Judgment citation (vLex) | [1999] EWCA Civ J1012-6 |
| Docket Number | Case No: QBCMI 1999/0924/3; QBCMI 1999/0893/3 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 October 1999 |
[1999] EWCA Civ J1012-6
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
MR JUSTICE RIX
IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 51 OF THE SUPREME COURT ACT 1981 FOR AN ORDER THAT MR CONSTANTINE EMANUEL COMNINOS PERSONALLY PAY THE UNRECOVERED COSTS OF THESE PROCEEDINGS
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Simon Brown
Lord Justice Waller
and
Lord Justice Tuckey
Case No: QBCMI 1999/0924/3; QBCMI 1999/0893/3
198. Folio No 2296
On Appeal From:
(The "Ikarian Reefer" (No 2))
A Latin Esq QC, Miss L Wallows (instructed by Messrs Waterson Hicks, London, EC3M 8AJ for the Appellant)
R Hildyard Esq QC, Miss A Markham (instructed by Messrs Ince & Co, London, EC3R 5EN for the Respondent)
Tuesday 12 October 1999
Introduction
This appeal relates to a jurisdictional challenge raised by Mr Constantine Comninos to an application by Prudential Assurance Company Limited (Prudential) to make him liable, pursuant to section 51 of the Supreme Court Act 1981, for the balance of the unpaid costs of an action in which Prudential obtained judgment and an order for costs against the plaintiffs.
The action was concerned with the claim by the plaintiffs, a Panamanian company, as owners of the M.V. Ikarian Reefer, to recover from her hull and machinery underwriters, represented for these purposes by Prudential, the lead underwriter. The claim was made on the basis that the Ikarian Reefer was a constructive total loss following grounding and a fire in April 1985. Prudential defended the claim on the ground that the vessel had been deliberately cast away by her owners. At the trial, Cresswell J gave judgment in favour of the owners [1993] 2 Lloyd's Rep. 68. In December 1994, following a hearing lasting 30 days in the Court of Appeal, Prudential's appeal was allowed. The Court of Appeal held that the vessel had been deliberately run aground and then deliberately set on fire on the authority of her owners, the plaintiffs: [1995] 1 Lloyd's Rep 455. Prudential were awarded their costs both on appeal and in the court below. The total costs for which Prudential has obtained certification amount to £2,771,072.81 to which a sum in excess of £1m in interest needs to be added. Prudential has recovered £1,175,000 of those costs by reason of awards of security for costs made prior to trial. Prudential claims a balance including interest in the sum of £2,680,215.87.
On 15 December 1998 Prudential issued a summons in this action seeking an order pursuant to section 51 of the Supreme Court Act (the Act) that Mr Comninos be liable personally to pay its costs. There is no issue that section 51 does permit such an order to be made against a non-party, see Aiden Shipping Co. Ltd. v Interbulk Ltd. (The Vimeira) [1986] A.C. 965.
Section 51(1) provides:—
"Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in the civil division of the Court of Appeal, the High Court and any county court shall be in the discretion of the court."
Section 51(3) provides:—
"The court shall have full power to determine by whom and to what extent the costs are to be paid."
The grounds on which the order is sought against Mr Comninos are set out in the seventh affidavit of Mr Jeremy Farr, a partner in Messrs Ince & Co, Prudential's solicitors, sworn on 14 December 1998. They are summarised by Rix J as follows:—
"The owners were a typical one ship company whose only asset, the Ikarian Reefer, has been scuttled. The principals behind the owners were two brothers, Mr Constantine ("Costas") Comninos, against whom the summons has been issued, and his brother, Anthony. At the time the vessel was scuttled, they were both directors of the owning company, and Costas held 80% of its shares and Anthony held the other 20%. Subsequently, in November 1986 Anthony transferred his shares to Costas, who became the sole shareholder, and in June 1987 Anthony formally resigned as a director. In an affidavit in these proceedings dated 13 May 1992, by which time the bank to which the vessel had been mortgaged had been paid out, Costas referred to himself as having "effectively the entire beneficial interest in the Ikarian Reefer and in the proceeds of this insurance." Prudential draws the inference from these and other indications that Costas Comninos was involved in the direction of the action and that it was he who instituted, controlled and financed the litigation."
Prudential's summons of 15 December 1998 was served on Mr Comninos in Greece. No leave was obtained from the English court for that service. The only evidence before Rix J, so far as Greek law was concerned, indicated that that service was good service according to Greek law. On 12 January 1999 copies of the summons and of Mr Farr's affidavit were served on Messrs Clifford Chance, the plaintiff's solicitors, who acknowledged that service on 13 January 1999.
Mr Comninos wished to challenge the jurisdiction of the English court. Agreement was given by Ince & Co, for Prudential, that such challenge would not itself be taken as a submission to the jurisdiction. It was in those circumstances that the matter came before Rix J on 12 July 1999. At the hearing on 12 July 1999 Mr Hildyard QC on behalf of Prudential, without notice to Mr Comninos, sought permission to add Mr Comninos as a party to the proceedings (for the purpose of costs only) and in that connection for permission to dispense with further service of the amended summons and with service of any amended writ.
Rix J dismissed Mr Comninos' application challenging the court's jurisdiction. He held that leave should have been obtained for the service of the summons on Mr Comninos in Greece. He however held that that leave could be given retrospectively, and gave such leave, and in the result Mr Comninos' challenge failed.
Submissions
Mr Layton QC, for Mr Comninos, submitted before Rix J and again before us that there is simply no basis on which the English court has jurisdiction or can assume jurisdiction over Mr Comninos. His main argument was that the summons under section 51 seeking an order for costs against Mr Comninos must be considered distinct and separate from the main action and that the Brussels Convention applies to that claim. He submitted that section 51 proceedings against a non-party are a "civil or commercial matter" to which Article 1 of Title I applies. He submitted accordingly that the English court is not entitled to take jurisdiction because (a) by Article 2 a person such as Mr Comninos domiciled in a Contracting State (Greece) is entitled to be sued only in Greece, unless other provisions of the Convention allow otherwise, and because (b) the only provisions that could apply "otherwise" are (as Article 3 provides) set out in sections 2–6 of Title II and none apply. He submitted that Article 6(2) (Third-Party proceedings) would effectively be the only candidate, and that provision, he submitted, does not apply. In the alternative, he submitted that if the section 51 process is not to be considered separately from the main action for jurisdiction purposes, then section 3 of Title II of the Convention applies on the basis that the action is a matter relating to insurance. He submitted thus on that basis that by Article 11 Prudential could bring proceedings only in Greece. In the further alternative he submitted that if the Brussels Convention did not apply, then the court had no inherent jurisdiction over someone not physically within the United Kingdom. He submitted that (in the absence of a submission to the jurisdiction) the English court could only have jurisdiction over someone outside the territorial jurisdiction of the English court where statute had provided that jurisdiction. He submitted that the only relevant statutory jurisdiction available to the English court in these circumstances was that provided by the rules of court made with statutory authority. Those rules are set out under Order 11 rule 1 and he submitted that Order 11 rule 1 simply did not cover a section 51 application against a non-party. He submitted this was so whether one was considering the position under the rules applicable at the time of the issue of the section 51 summons or whether one was considering the position under the new Civil Procedure Rules. Under the new C.P.R. it is specifically provided in relation to costs orders in favour of or against non-parties as follows:—
"48.2(1) Where the court is considering whether to exercise its power under section 51 of the Supreme Court Act 1981 (costs are in the discretion of the court) to make a costs order in favour of or against a person who is not a party to proceedings—(a) that person must be added as a party to the proceedings for the purposes of costs only; and (b) he must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further."
There is however nothing in the C.P.R. which expressly deals with the situation where the non-party is domiciled outside the jurisdiction. Accordingly, even now, the court (submitted Mr Layton) is driven back to Order 11 rule 1 if there is to be power to exercise jurisdiction over a non-party out of the jurisdiction and Order 11 rule 1 simply does not provide a basis for jurisdiction.
Mr Hildyard's submissions in broad terms were as follows:—
(1) The...
To continue reading
Request your trial
-
Masri v Consolidated Contractors International Company SAL and Others (No.4)
...presence of assets here). Most recently, following the expression by the Court of Appeal in National Justice Compania Naviera SA v Prudential Assurance Co. Ltd. (The Ikarian Reefer)(No 2) [2000] 1 WLR 603, 615D-F of anxiety about the existence of a possible lacuna in the rules, the rule-ma......
-
Masri v Consolidated Contractors International Company SAL and Others (No.4)
...upon the decision of this court in National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer (No 2)) [2000] 1 WLR 603 as authority for the proposition that a claim need only be brought within one of the heads of jurisdiction under Brussels I if that claim asser......
-
Aspen Underwriting Ltd and Others v Kairos Shipping Ltd and Others
...... Before: . Mr. Justice Teare . Case No: CL-2016-000749 ..., demonstration, guarantee or assurance of real and actual consensus or consent in fact ... meaning and will not be dependent upon national laws I consider it helpful to look at those ... 63 The second English case is The Ikarian Reefer (No.2) [2000] 1 Lloyd's Reports 129 . ......
-
Martin S. Kenney Cc International Ltd Appellants v Ace Ltd Respondent to Appeal
...Court of Appeal (on appeal from Mr Justice Rix) in Comninos v Prudential Assurance Ltd (The Ikarian Reefer (No. 2) [1999] EWCA Civ 3019; [2000] 1WLR 603 was given by Lord Justice Waller; as Justice Sir Peter Cresswell may be taken to have been well aware. The judge added: ‘The requirement ......
-
Hong Kong court confirmed examination orders can be served on officers of corporate judgment debtors out of jurisdiction
...connection test along the lines of the dicta in National Justice Cia Naviera SA v Prudential Assurance Co Ltd, The Ikarian Reefer (No 2) [2000] 1 WLR 603. A close connection is created if the officer’s conduct is such as to make it unjust not to lift the corporate veil of the judgment debto......
-
Hong Kong Courts Made Landmark Decision On Principals Applicable To Service Out Of Examination Orders
...debtor to withhold information about its finance so as to frustrate the execution of the judgment debt (The Ikarian Reefer (No.2) [2000] 1 WLR 603 was preferably Prima facie, a close connection was created by the conduct of the sole or substantial shareholder; the sole director or officer w......
-
Hong Kong Courts Made Landmark Decision On Principles Applicable To Service Out Of Examination Orders
...debtor to withhold information about its finance so as to frustrate the execution of the judgment debt (The Ikarian Reefer (No.2) [2000] 1 WLR 603 was preferably Prima facie, a close connection was created by the conduct of the sole or substantial shareholder; the sole director or officer w......