Vitkovice Horni A Hutni Tezirstvo v Korner
| Jurisdiction | UK Non-devolved |
| Judge | Lord Simonds,Lord Oaksey,Lord Radcliffe,Lord Tucker |
| Judgment Date | 20 June 1951 |
| Judgment citation (vLex) | [1951] UKHL J0620-3 |
| Date | 20 June 1951 |
| Court | House of Lords |
[1951] UKHL J0620-3
Lord Simonds
Lord Normand
Lord Oaksey
Lord Radcliffe
Lord Tucker
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Vitkovice Horni A Hutni Tezirstvo against Korner, that the Committee had heard Counsel, as well on Wednesday the 4th, as on Thursday the 5th, Monday the 9th and Tuesday the 10th, days of April last, upon the Petition and Appeal of Vitkovice Horni A Hutni Tezirstvo, Witkowitzer Bergbau Und Eisenhutten Gewerkschaft (a company incorporated according to the laws of Czechoslovakia), whose registered office is situate at Moravska Ostrava, in the Republic of Czechoslovakia, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal of the 13th of February 1950, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Emil Korner, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled. That the said Order of His Majesty's Court of Appeal, of the 13th day of February 1950, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
In my opinion this Appeal should be dismissed. For that reason I intend to confine my remarks within the narrowest limits, for I do not wish in any way to prejudice any issue which may come before the Court for determination.
It is not easy to state with precision the question now before the House. It will emerge when I have briefly stated the relevant facts. On the 15th May, 1946, the Respondent, Emil Korner, formerly a Czechoslovakian, but since 1947 a naturalised British subject, applied ex parte at Chambers in the King's Bench Division of the High Court of Justice for leave to issue a writ against the Appellants, a Czechoslovakian company, claiming certain sums which he alleged to be due to him under two agreements described in these proceedings as the pension agreement and the service agreement, and for leave to serve notice of this writ on the Appellants out of the jurisdiction. The application, which was founded on that part of rule 1 of Order XI of the Rules of the Supreme Court which provides that such service may be allowed by the Court where the action is brought against a defendant not domiciled or ordinarily resident in Scotland or Ireland, in respect of a breach committed within the jurisdiction of a contract wherever made, was duly granted by Master Moseley. The Appellants entered a conditional appearance to the writ and on the 15th January, 1947, applied in Chambers that the Order of Master Moseley and the Writ of Summons issued pursuant thereto and all subsequent proceedings should be set aside. The grounds of this application were (1) that there was no jurisdiction to make the order or to try the action ; (2) that if there was jurisdiction the discretion of the Court should not be exercised in favour of the Respondent; and (3) that the forum conveniens was in the Republic of Czechoslovakia. Upon this application a number of affidavits were filed, a considerable delay occurred and it was not until the 22nd November, 1948, that Master Grundy made an order setting aside the Order of Master Moseley and the Writ of Summons in the action and the notice thereof ordered to be served out of the jurisdiction and the service thereof and all subsequent proceedings. From this order the Respondent appealed to Mr. Justice Slade who on the 28th July, 1949, dismissed the Appeal but gave the Respondent leave to appeal to the Court of Appeal. He appealed accordingly and on the 13th February, 1950, that Court (Bucknill and Singleton L.J.J., Denning L.J. dissentiente) allowed his Appeal and restored the Order of Master Moseley with a qualification to which I shall refer later. From that Order the present Appellants have by leave appealed to this House. The grounds of their Appeal remain those that I have already stated as founding the application to Master Grundy with the formidable addition that they now further contend that the Court of Appeal ought not to have interfered with the exercise by the learned Judge of a discretion vested in him by the Rules of the Supreme Court. To this the Respondent replies that the learned Judge did not purport to exercise his discretion in the matter at all, but, adopting (as the Respondent contends) a wrong construction of the relevant Rules, held that he had no jurisdiction to make the order, and adds that the Court of Appeal did exercise its discretion on right principles and therefore that its order should not be disturbed.
My Lords, to me it appears that the crux of the matter lies in the question whether the learned Judge did exercise his discretion, and did so on right principles, and having studied his careful judgment with the greatest attention I have come to the conclusion that he did not. As I have said, the Respondent relied on the allegation that there had been a breach or breaches within the jurisdiction of two agreements. It was common ground between the parties that the agreements were made in Czechoslovakia and that the law of that country was "the law of the contract" and that the Appellants were there resident. The jurisdiction of the Court therefore only arose if the action was brought in respect of a breach of the agreements committed within the jurisdiction and, even if the jurisdiction was established, it was a discretionary jurisdiction which must be exercised with caution and with a bias against invading the sovereignty of a foreign state. These matters were well appreciated by the learned Judge but, as I think, it was in his construction or application of Rule 4 of Order XI that he fell into error. That Rule, which applies equally to an application under any of the heads of Rule 1, provides that "every application for leave to serve such writ or notice on a defendant out of the jurisdiction shall be supported by affidavit or other evidence, stating that in the belief of the deponent the plaintiff has a good cause of action … and the grounds upon which the application is made ; and no such leave shall be granted unless it shall be made sufficiently to appear to the Court or Judge that the case is a proper one for service out of the jurisdiction under this order."
The earned Judge concludes his judgment with these words:
"For the reasons I have given, I hold that the Court has no jurisdiction in the circumstances of this case, because I am not satisfied that there has been any breach of either of these contracts within the jurisdiction, and for the further reasons that I have given in the case of the service agreement. I base my judgment solely upon that, and I decide nothing at all, because it is unnecessary to decide it, upon the question of what discretion I would have exercised had it become necessary to consider which was the forum conveniens."
I do not think that the learned Judge can have meant that it is only on the question of forum conveniens that it is the duty of the Court to exercise a discretion, but, however that may be, it is I think clear that the Judge holding that he had no jurisdiction did not purport in any way to exercise his discretion.
Why then did the learned Judge hold that the Court had no jurisdiction to grant leave? It was, he says, because he was not satisfied that there was a breach within the jurisdiction. This is the meaning which, following certain observations of Goddard, L.C.J, in Malik v. Narodni Banka [1946] 2 A.E.R. 663, he places on the words of Rule 4 "made sufficiently to appear to the Court or Judge that the case is a proper one for service out of the jurisdiction under this order". But, my Lords, whether the issue is as to the making of a contract within the jurisdiction (Rule 1 ( e) (i)) or the making of it by an agent trading or residing within the jurisdiction on behalf of a principal trading or residing out of the jurisdiction (Rule 1 ( e) (ii)) or as to the law which by its terms or by implication governs it (Rule 1 ( e) (iii)) or as to the place where the alleged breach has been committed, the obligation of the Plaintiff is not to "satisfy" the Court that he is right but to make it sufficiently appear that the case is a proper one for service out of the jurisdiction under the order. As Lord Davey said in Badische Anilin und Soda Fabriks Chemische Fabrik 90 L.T. 733 "This" (i.e. Rule 4) "does not of course mean that a mere statement by any deponent who is put forward to make the affidavit that he believes that there is a good cause of action is sufficient. On the other hand the Court is not on application for leave to serve out of the jurisdiction … called upon to try the action or express a premature opinion on its merits". Yet, as I read the judgment of the learned Judge (and here, too, I think, he founds on the observations of Lord Goddard in Malik's case) he adopted a standard of proof in regard to the place of breach which in effect amounted to a trial of the action or a premature expression of opinion on its merits. For example one reason, but not the only reason, why the Respondent alleged that there was a breach within the jurisdiction was...
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