The Canada Trust Company (Plaintiffs) and Others v Wolfgang Otto Stolzenberg and Others (Defendants
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PILL,LORD JUSTICE NOURSE,LORD JUSTICE WALLER |
| Judgment Date | 06 May 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0506-5 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | FC3 98/5767 FC3 97/6542— FC3 98/5686 CMS3 CHANI 97/0811 CMS3 CHANI 97/1010 CMS3,CHANI 97/0811/B |
| Date | 06 May 1998 |
[1997] EWCA Civ J1029-8
Lord Justice Nourse
Lord Justice Pill
and
Lord Justice Waller
CHANI 97/0811/B
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Rattee)
Royal Courts of Justice
Strand, London WC2
MR A HOCHHAUSER QC, MR M GRIFFITHS and MR V FLYNN (instructed by Messrs Richards Butler, London EC3) and on 29.10.97 MR C SALTER (instructed by Messrs Colman Coyle, London N1) appeared on behalf of the Appellant Second, Fifth, Seventh, Tenth, Fifteenth and Sixteenth Defendants (RB Defendants).
MR T IVORY (instructed by Messrs Rakisons, London WC2) appeared on behalf of the Appellant Fourth Defendant.
MR C CARR QC, MR P MARSHALL and MR A LENON (instructed by Messrs Denton Hall, London WC2) appeared on behalf of the Respondent Plaintiffs.
Wednesday, 29th October 1997
This is an appeal by the Second, Fifth, Seventh, Tenth, Fifteenth and Sixteenth defendants, on behalf of whom Mr Hochhauser Q.C. presented the appeal, and of the Fourth defendant, for whom Mr Ivory presented separate but supporting arguments. The appeals are from the judgment of Mr Justice Rattee delivered on 27 May 1997. That judgment was concerned with the question of the jurisdiction of the English court over the defendants. The Plaintiffs assert that the First defendant ("Mr Stolzenberg") has at all material times been domiciled in England, and it is on that basis that they assert that the English court has jurisdiction over him, and indeed it is on that basis alone (as will appear) that they assert that the English court has jurisdiction over the other defendants. It is the plaintiffs' case that Mr Stolzenberg is the principal defendant, and responsible with other defendants for inducing them by fraud to make investments in a Group of Companies called the Castor Group. The plaintiffs have accordingly commenced these proceedings against Mr Stolzenberg in England, and have sought to join as parties those whom they assert partook in the fraud together with certain entities or persons whom they assert hold assets into which the plaintiffs claim to trace their investment.
The plaintiffs assert that the English court has jurisdiction over the Second, Sixteenth and Fourth defendants on the basis that they were domiciled in Switzerland, a contracting state under the Lugano convention, relying on Article 6.1 of that convention which provides as follows:
"A person domiciled in a Contracting State may also be sued- 1. Where he is one of a number of defendants, in the courts for the place where anyone of them is domiciled."
The Lugano convention was incorporated into English law by Section 3A of the Civil Jurisdiction and Judgments Act 1982 inserted by the Civil Jurisdiction and Judgments Act 1991. The plaintiffs desired to serve the above defendants in Switzerland, and, by Ord.11 r.1(2) were entitled so to do without leave of the court provided that prior to issue of the same they could in compliance with Ord.6 r.7 indorse thewrit with a statement that the court had power under the Civil Jurisdiction and Judgments Act 1982 (the 1982 Act) to hear and determine the claim, and that no other proceedings involving the same cause of action were pending in another contracting state or in another part of the United Kingdom. Prior to issuing the writ the plaintiffs so indorsed the same in relation to the above defendants. These defendants were served with the proceedings, but applied under Ord.12 r.8 for declarations that the English court had no jurisdiction over them on the ground that the English court did not have jurisdiction to hear and determine the claim because Mr Stolzenberg was not domiciled within the United Kingdom at the material time. It is that declaration which the Judge refused to grant from which refusal these defendants ("the Convention Defendants") appeal.
As regards the Fifth, Seventh, Tenth and Fifteenth defendants (entities domiciled in Panama, Liechtenstein and Netherlands Antilles i.e. non-contracting states) the plaintiffs needed leave under Ord.6 r.7(1) to issue the writ or a concurrent writ for service out of the jurisdiction. The grounds on which they sought leave were that those defendants were necessary and proper parties within Ord.11 r.1(1)(c) i.e. necessary or proper parties to a claim brought against a person duly served (whether within or out of England). The plaintiffs sought that leave prior to having served any defendants, and these defendants accordingly applied to set aside leave. It was accepted before the judge that before leave to serve out of the jurisdiction could be granted in reliance on Ord.11 r.1(1)(c), at least one other defendant should have been served, and that thus prima facie leave had been wrongly granted. However, the judge having ruled that Mr Stolzenberg was domiciled in the United Kingdom at the material time, and that the Convention Defendants had been duly served, was prepared to validate service retrospectively on these "non-Convention Defendants" following the guidance given in Kuwait Oil Tanker Co. S v. Al Bade [1997] 2 All ER 855.The non-Convention Defendants challenge the judge's decision to validate, but they do so simply by reference to the point which arises in relation to the Convention Defendants. Their submission is that the judge was wrong to conclude that Mr Stolzenberg was domiciled in England at any material time, and was wrong thus to conclude that theEnglish court could ever have any jurisdiction over any defendant. Thus, it is submitted, since such service as has taken place must be set aside there could never be a basis for leave under Ord.11 r.1(1)(c), and obviously thus no foundation for any validation.
Various matters were raised before the judge and have been raised on the appeal which may need further consideration; for example the judge, when the matter was before him, was asked to consider whether Mr Stolzenberg had been served within the United Kingdom, and there is a respondents' notice on that aspect of the case. There are further applications to adduce fresh evidence from both sides, the application from the defendants seeking to put in further evidence to challenge whether Mr Stolzenberg was ever domiciled within the United Kingdom at any material time, but we have been asked to deal at this stage with certain points of principle decided by the judge against the appellants in the hope that that will dispose of the appeal or at least curtail the same.
Those points of principle are as follows.
(1) What is the correct standard of proof to apply to the question whether a defendant is domiciled in England on an application under Ord.12 r.8 involving issues arising under Article 6?
(2) What is the correct date for determining whether or not a defendant is domiciled in England for the purpose of determining whether the court has jurisdiction under Article 6?
(3) Should Article 6 on its true construction require the defendant domiciled within England to have been served prior to issue or service of the proceedings against defendants in other contracting states?
The relevant Standard of Proof
The judge held that the Convention Defendants' applications to set aside service would fail if the plaintiffs had shown a good arguable case that the requirements of Article 6.1 had been satisfied. Herefused to accept the submission made on behalf of those defendants that the standard of proof required was what he described as "the ordinary civil standard of proof, that is to say, on the balance of probabilities."
We have had a full and helpful citation of authority. What can be gleaned from those authorities can in some instances be summarised, but also calls for some comment.
(1) There is no doubt that where the English court is considering whether any of the sub-paragraphs under Ord.11 r.1(1) apply in relation to leave to serve out of the jurisdiction, the relevant question is whether the plaintiff has established a good arguable case: see Seaconsar Ltd. V Bank Markazi [1994] 1 AC 438.
(2) There are however points in and arising from the speech of Lord Goff of Chievely in Seaconsar which establishes the above proposition and in his analysis of Vitkovice Horni a Hutni Tezirsto v Korner [1951] A.C. 869, on which I should expand a little:
a. first, he makes clear that under Ord.11 r.4(2) the words "No such leave shall be granted unless it shall be made sufficiently to appear …" are directed to whether the plaintiff has established that the case falls within one of the heads of jurisdiction specified in r.1. In this he is following Lord Davey in Chemische Fabriik vormals Sandos v Badische Anilin und Soda Fabriks (1904) 90 L.T. 733 at 735 where he said in relation to similar words under the former rule "The words at the end of the order do not, I think, mean more than that the court is to be satisfied that the case comes within the class of cases in which service abroad may be made under the first rule of the order."
b. second, he demonstrates through his analysis of Korner that the House of Lords in that case rejected the civil standard of proof in relation to establishing that a case fell within one of the relevant sub-paragraphs. In Korner the question that arose was whether a breach of contract had occurred within the jurisdiction. Slade J, purporting to follow Lord Goddard in Malik v NarogniBanka [1946] 2 All E.R. 663, had distinguished between the questions (1) whether there was a contract; (2) whether there had been a breach of contract; and (3) whether such breach had been committed within...
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