Phillips v Symes; Nussberger v Phillips
| Jurisdiction | UK Non-devolved |
| Judge | LORD BINGHAM OF CORNHILL,LORD RODGER OF EARLSFERRY,BARONESS HALE OF RICHMOND,LORD BROWN OF EATON-UNDER-HEYWOOD,LORD MANCE |
| Judgment Date | 23 January 2008 |
| Neutral Citation | [2008] UKHL 1 |
| Date | 23 January 2008 |
| Court | House of Lords |
and another
(suing as administrators of the estate of Christo Michailidis)
and others
and others
[2008] UKHL 1
Appellate Committee
Lord Bingham of Cornhill
Lord Rodger of Earlsferry
Baroness Hale of Richmond
Lord Brown of Eaton-under-Heywood
Lord Mance
HOUSE OF LORDS
Appellants:
Alan Steinfeld QC
Richard Millett QC
John Stephens
Jessica Hughes
(Instructed by Lane & Partners LLP)
Respondents:
John Martin QC
Thomas Lowe
(Instructed by Withers LLP)
My Lords,
I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Brown of Eaton-under-Heywood. I am in full agreement with it and would, for the reasons which he gives, allow the appeal and make the order which he proposes.
My Lords,
I have the advantage of considering the speech of my noble and learned friend, Lord Brown of Eaton-under-Heywood, in draft. I agree with it and, for the reasons he gives, I too would allow the appeal and make the order which he proposes.
My Lords,
I agree that this appeal should be allowed, for the reasons given by my noble and learned friend, Lord Brown of Eaton-under-Heywood. It is not strictly necessary, therefore, to express a view on the issues discussed by my noble and learned friend, Lord Mance, in paragraphs 42 to 53 of his opinion. But they were fully canvassed in argument before us. I feel it only fair, therefore, to confess that I share Lord Mance's views upon those issues. In my view the English court is seised of proceedings for the purpose of the Lugano Convention when the claim form is issued or when the court first makes an order against the defendant in connection with them, whichever is the earlier.
The particular facts of this case happen to provide a good illustration of the artificiality of a different solution. These proceedings were a by-product of the estate's proceedings against Mr Symes, in which Mrs Nussberger had already been involved as a witness. They were effectively begun by a worldwide freezing order against her of which she rapidly became aware. In the county courts, the general rule has always been that the court itself effects service of the claim form, a rule which now applies throughout the civil justice system. In this particular case, the court itself accepted the documents for service outside the jurisdiction in accordance with the Hague Convention. It is unsatisfactory if a claimant who has in fact begun his proceedings first in a court of competent jurisdiction can be excluded from that jurisdiction as a result of the vagaries of a service procedure over which he has no control. There is no compelling reason for English law to adopt a service rule, given the lack of a concept of lis pendens. All of this adds up to a powerful case for holding that the English court was seised of these proceedings long before 19 January 2005. But, for the reasons Lord Brown has explained, it was certainly seised of them no later than that.
My Lords,
The appellants are the administrators of the estate of Christo Michailidis who before his death was in partnership with Robin James Symes (now bankrupt) dealing in antiquities. Following Mr Michailidis' death the appellants took proceedings against Mr Symes and various court orders were made. On 14 February 2003, in breach of those orders, Mr Symes sold a rare statue (an inlaid alabaster statue of the Egyptian Pharaoh, Akhenaten) to the second respondent for US$3m, no part of which has been paid. The second respondent is a Swiss company, Galerie Nefer AG ("Nefer") whose sole proprietor and sole officer is the first respondent, Frieda Nussberger ("Mrs Nussberger"), herself of Swiss nationality. Nefer seeks to justify the non-payment of the statue's purchase price by reference to various claims exceeding US$3m which Mrs Nussberger asserts against the appellants and seeks to set off.
By the present proceedings, begun by claim form issued out of the High Court on 16 December 2004 (the English proceedings), the appellants claim US$3m against the respondents and in the alternative certain lesser sums or damages against four further defendants, including Mr Symes and his joint trustees in bankruptcy, whom I shall call simply "the English defendants."
Subsequently, on 3 February 2005, in circumstances which I must shortly recount in some detail, the respondents themselves issued proceedings against the appellants in Switzerland (the Swiss proceedings), claiming negative declaratory relief in respect of exactly the same facts as those the subject of the English proceedings.
The question for the House is whether, in the light of the Swiss proceedings, the English court must itself now decline jurisdiction over the English proceedings and impose a stay. This in turn depends upon which court was first seised of proceedings within the meaning of article 21 of the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988 ("the Lugano Convention") scheduled to the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act"). Article 21 provides:
"Where proceedings involving the same cause of action and between the same parties are brought in the courts of different contracting states, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."
It is common ground that the English proceedings (at any rate as between the appellants and the respondents) and the Swiss proceedings (at least in so far as they seek declarations relating to the Akhenaten statue and the sale and proceeds of sale thereof) involve "the same cause of action" and are "between the same parties."
The European Court of Justice held in Zelger v Salinitri [1984] ECR 2397 that a court's obligation under article 21 to decline jurisdiction in favour of another court only arises if it is established that the parallel proceedings have been "definitively brought before a court in another state" (para 14 of the Court's judgment) and that it is for each state to determine when this is:
"…the Court "first seised" is the one before which the requirements for proceedings to become definitively pending are first fulfilled, such requirements to be determined in accordance with the national law of each of the courts concerned." (para 16 of the Court's judgment)
English law has hitherto determined that proceedings become "definitively pending" only when they are served on the defendant'see particularly Dresser UK Ltd v Falcongate Freight Management Ltd [1992] QB 502 (the Court of Appeal decision which first so decided) and Neste Chemicals SA v DK Line SA (The Sargasso) [1994] 3 AER 180 (a subsequent Court of Appeal decision holding that there could be no exceptions to the rule). Under Swiss law, however, proceedings are held to be "definitively pending" as soon as they are issued.
In this case, therefore, the Swiss court became seised of the Swiss proceedings on 3 February 2005 when the respondents' claim was issued. Had there already by then been service of the English proceedings upon the respondents such as to make the High Court "the court first seised"? That logically is the first question for your Lordships' determination.
The detailed circumstances of the case as to service are as follows. On 15 December 2004, the day before the English claim form was issued, the appellants sought and obtained from Peter Smith J a worldwide freezing order against the respondents, restraining them from disposing of their assets up to a value of US$3m. The appellants undertook through counsel to issue a claim form and serve it on the respondents together with particulars of claim and various other documents underlying and including the order itself.
On 16 December 2004, as already stated, the Court issued the appellants' claim form against the respondents and the English defendants. In issuing the form, the staff at the Court Registry of the High Court erroneously stamped it "Not for service out of the jurisdiction". This was a plain mistake because the claim form had expressly been rendered eligible for service out of the jurisdiction by a statement upon it, verified as true, stating that the High Court had power under the 1982 Act to hear the claim and that no proceedings concerning it were pending in any other relevant country.
Mrs Nussberger resides in the canton of Aargau in Switzerland, Nefer's registered office being in Zurich. The proceedings, therefore, had to be served on them in accordance with the provisions of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1965) (Cmmd 3986) ("the Hague Convention"). Articles 2 and 3 of the Hague Convention require each contracting state to designate a "central authority" to effect service of such documents as are forwarded to it with a request in the appropriate form by the "authority or judicial officer competent under the law of the state in which the documents originate." The competent judicial officer for English proceedings is the senior master of the Queen's Bench Division, and the relevant Swiss central authority is, in Mrs Nussberger's case, the Obergericht of Aargau; in Nefer's case, the Obergericht of Zurich.
On 18 December the appellants filed requests for attachment (akin to freezing orders in England) with the Zurzach Court in Aargau and attachments were duly granted ex parte on 20...
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