Robert A Clarke V. Fennoscandia Ltd And Others
| Jurisdiction | Scotland |
| Judge | Lord Johnston |
| Date | 10 March 2000 |
| Court | Court of Session |
| Published date | 10 March 2000 |
| OUTER HOUSE, COURT OF SESSION | |
|
| OPINION OF LORD JOHNSTON in the cause ROBERT A CLARKE Pursuer; against FENNOSCANDIA LTD AND OTHERS Defenders: ________________ |
Pursuer: Jones Q.C. , Summers; Drummond Miller, W.S.
Defenders: Lord McKay of Drumadoon, McCormick; Brodies, W.S.
10 March 2000
[1]This matter has a long and complicated history with a complicated background.
[2]In the late 1980s the pursuer was the director of an American company, DRX. The defenders were a merchant bank. A civil action was raised by the pursuer against a number of defendants which included the present defenders in the United States District Court in the district of Delaware ("Delaware No. 1") seeking a number of orders relating to and surrounding what was effectively a board room argument between directors of DRX which, according to the pursuer, was designed to unseat him. In that action the pursuer also asserted that the defenders had been approached by representatives of a major share holder in the relevant company DRX in relation to the directors dispute. The matters material to the present action surrounded whether or not a loan which was due by a mining company in which the pursuer had an interest to the defenders had been verbally renewed as the pursuer avers and asserts. The loan was supported by a pledge of DRX shares and a guarantee by the pursuer. It was asserted that the mining company would default and thus the pursuer would be exposed in respect of his DRX shares. A further issue, according to the pursuer, related to the disclosure by two officials of the bank defenders, Mr Adamson and in-house counsel, Mr Hall of an non-renewal letter which information the pursuer asserts was passed to a Mr Webster who had been a former associate of the pursuer.
[3]By a judgment dated 1 February 1991, Judge Farnon, of the Delaware Court, (No. 1) on these specific matters, did not accept as credible the pursuer's assertion that he had been told the loan would be renewed and accepted the evidence of Hall and Adamson against that of Webster that they had not disclosed the contents of the non-renewal letter.
[4]Having failed in that action, the pursuer raised a further action against the present defenders and Messrs Hall and Adamson as defendants, initially in New York State but the case was transferred back to Delaware (Delaware No. 2). In that action the pursuer alleged what amounted to a fraud on a court in Delaware No. 1 by Messrs Adamson and Hall, as part of the conspiracy to unseat him, to give perjured evidence all in turn part of the conspiracy to undermine the pursuer's position and remove him from the Board of DRX. In its judgment on 30 December 1994, the Delaware Court ruled that this was an attempt to retry the previous issue which had been determined as a matter of credibility and effectively estopped the pursuer from proceeding with the action, which therefore also failed. Thereafter the defenders pursued the mining company for the loan and certain other costs in the State of Colorado where there was jurisdiction and in due course that State Court pronounced orders in favour of the present defenders by a judgment dated 31 October 1995 and by a further judgment dated 11 July 1996.
[5]In the meantime the pursuer brought the matter to London, issuing a writ in 1994 against inter alia the defenders seeking declarations of the non-liability of the present pursuer and the mining company under a guarantee given by the pursuer and a facility given by the defendants in relation to the loan to the company. That case was finally disposed of by the Court of Appeal by a judgment dated 17 May 1996 which effectually rejected the pursuer's claims as being an abuse of process. In the meantime, the defenders had raised an action in the Court of Session which I shall describe as the "decree conform action" to recover the cost orders they had obtained in Delaware. That action was abandoned on 29 May 1998, but both parties accept that it was abandoned under the statute and it is therefore still open to the defenders to pursue the pursuer for the monetary orders standing against him in relation to both principal sum under the guarantee and costs. This gives rise to the present action now raised by the pursuer seeking the declarators set out in the conclusions as now amended. In that latter respect the pursuer's senior counsel obtained leave to amend the conclusions in terms of a minute of amendment yet to be tendered which would have the effect of restricting the orders as regards enforceability to the single means of an action of decree conform.
[6]The case called before me on procedure roll at the instance of the defenders who were seeking dismissal. I heard a debate over four days involving four speeches which ranged over a number of issues.
[7]Before turning to them specifically, both parties drew certain conclusions or inferences from the background I have narrated.
[8]The defenders submitted essentially in this context that the matter had gone on long enough and this was yet a further attempt to re-open the issues which had been settled in the American Courts. The Court of Appeal in England had proceeded on the basis of an abuse of process and that was equally applicable to the present action upon the basis that a failed litigant should not be permitted to continue to raise the same issue before this court.
[9]For the pursuer, however, it was submitted, particularly by senior counsel that the issue which the pursuer was were now trying to raise in this action and had raised by way of defence in the decree conform action was essentially an allegation of a fraud on the Delaware Court in as much that the conclusions reached by that Court as to the credibility, respectively, of Hall and Adamson, and the unreliability of Webster and the pursuer were based on a conspiracy to give perjured evidence. That issue, said Mr Jones, had never been litigated since in the initial case the issue was only assertions of fact and thereafter in the subsequent litigations the decisions had been based on either estoppe or an abuse of process and not on the substance of the allegation now being made.
[10]In opening, junior counsel for the defenders, whose submissions were adopted by his senior argued firstly, that there was no legal wrong capable of being interdicted where all that was being threatened was the legal right to enforce a foreign decree by an action of decree conform and if there was no legal wrong there was no jurisdiction in the Scottish Courts since such could only be obtained by means of a relevant and competent claim for interdict asserting such a wrong. He referred to Burn Murdoch at page 187 and 194 and to Young v Barclay 8D. 774 as an example of where an interdict might be permitted if there was a risk of double jeopardy in relation to court proceedings, but here there was no exception to the general rule which allowed to freedom of access to the courts to any person, only if a legitimate right was being asserted. The Civil Jurisdiction and Judgment Act 1982 could not be used since none of the itemised matters in the relevant schedule were covered by the declarators, if interdict did not give jurisdiction.
[11]He went on to submit that the declarators were incompetent since they sought to challenge the validity of foreign decrees. What was being sought was an attempt to give validity to what was really a defence to an action of decree conform which was required to await such an action being represented.
[12]He submitted, albeit fairly faint-heartedly an argument that all parties had not been called to this action, particularly Messrs Adamson and Hall who had an interest in the matter.
[13]He then turned to deal with the question of relevancy of the averments of fraud which strike at the heart of the case in Condescendence 7. He said if the court had any jurisdiction to entertain as a matter of competency and relevancy an attack on a foreign decree by reason of fraud, that fraud had to be extrinsic to the substance of the case and not intrinsic (MacIntosh's Trustees v Stewart's Trustee 1906 8 F. 467 and in particular at 473-474. The averments at best instructed only a case of intrinsic fraud within the confines of the action and that excluded the only means whereby a foreign decree could be attacked. On that basis, therefore, even if competent the action was irrelevant and fell to be dismissed.
[14]Mr Summers for the pursuer opened on the question of jurisdiction. He pointed to the terms of article 18 of the Third Schedule of the 1982 Act and submitted that the plea to jurisdiction which was only added in 1999, the action having been raised in October 1997, had not been timeously taken While there was room for the view that it was competent under the Convention to plead both jurisdiction and the defence to the merits of the case at the same time, it was not competent to plead a defence and then subsequently take up issue on the question of jurisdiction. Having lodged the defence not taking the plea, the opportunity to take it was lost. He referred to Elefanten Schuh Gmbh v Pierre Jacqmian (Case 150/80 in the European Court) the judgment being dated 24 June 1991. He further pointed to...
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