Judgments - Canada Trust Company (Acting In Its Capacity As Trustee of The Chrysler Canada Limited's Benefit Plan, The Chrysler Canada Limited Master Trust Fund, The Chrysler Canada Limited Non-Canadian Master Trust Fund and The Holme Foundry Division Master Trust Fund) and Others v. Stolzenberg and Gambazzi and Others

(back to preceding text)

    Miss Gloster said that all these reasons except perhaps the fourth were equally applicable to the question of whether the defendant had been sued. Mr Carr Q.C. answered by challenging each of the reasons in turn. The court's "involvement" was not much greater as a result of service than it had been before. The process server was not even a "relatively junior administrative officer". He was usually the postman. After service and until 14 days after service of a defence the plaintiff could discontinue without leave: see R.S.C., Ord. 21, r. 2(1) and C.P.R. Rule 38.2. The claim may still be in terms of the utmost generality when it is served. The defendant is no longer obliged even to enter an appearance after service. While it is true that interlocutory relief may be granted before issue of a writ, it is always upon an undertaking to issue one: see the observations of Nourse L.J. in P.S. Refson & Co. Ltd. v. Saggers [1984] 1 W.L.R. 1025, 1028. As for the question of whether the defendant is subject to the jurisdiction of the court, it depends what you mean by jurisdiction. English law regards anyone within the country on the date of issue of the writ as within its jurisdiction in the sense that he may be served with process and, if he goes abroad, an order for substituted service can be made. On the other hand, if he was already abroad on the date when the writ was issued, he can be served out of the jurirsdiction only under R.S.C., Ord. 11: see Wilding v. Bean [1891] 1 Q.B. 100 and Laurie v. Carroll (1958) 98 C.L.R. 310.

    I do not think it is necessary for me to say more than that some of these reasons appear to me with respect to be better than others. Their weight should not be considered in the abstract but in the context of whether the time of issue or time of service is best characterised as the moment at which an English court takes jurisdiction over a defendant for the purposes of Articles 2 and 6.

    8. The defendant's domicile rule

     Miss Gloster laid some stress upon the fact that the basic principle of the Conventions is contained in Article 2, which requires the defendant to be sued in the court of his domicile. The European Court has said several times that the rule is for the protection of defendants and that exceptions should be strictly construed. Miss Gloster submitted that if your Lordships held that the requirement of domicile was to be applied at the date of the issue of proceedings, that would be somehow whittling away at the domicile rule. I do not understand how this can be so. To choose any date as the moment at which the defendant must be domiciled within the jurisdiction means that he does not have to be domiciled there on any other date. But that is an application of the domicile rule, not a denial of it.

    9. Principle and pragmatism

     My Lords, let us first consider whether it would be contrary to principle to hold that in English domestic law a defendant was sued at the time when the writ was issued. Such a contention seems to me quite impossible. C.P.R. Rule 7.2.(1) says that "proceedings are started when the court issues a claim form at the request of the plaintiff." If the proceedings have been started, then surely the defendant has been sued. Under the old Rules of the Supreme Court, it was a general principle that proceedings were started when the writ was issued. Of course there were exceptions, such as the Admiralty practice deriving from civil law (see The Helenslea (1881) 7 P.D. 57, as explained in Arab Monetary Fund v. Hashim (No. 4) [1992] 1 W.L.R. 1176 and also In re Foseco International Ltd.'s Patent [1976] 2 F.S.R. 244, in which a statutory context displaced the general principle. And Dresser U.K. Ltd. v. Falcongate Freight Management Ltd. [1992] Q.B. 502 is a striking example of such a case. But the Civil Procedure Rules appear to assume that the issue of the claim form will be the moment by reference to which the existence of the court's jurisdiction over the defendant will be decided. Paragraph 3.5 of the Practice Direction which supplements CPR Part 7 says that when a claim form to be served out of the jurisdiction is one which the court has power to deal with under the Civil Jurisdiction and Judgments Act 1982 (i.e., under the Conventions) the claim form "should be endorsed with a statement that the court has power under that Act to deal with the claim." (My emphasis). A similar requirement existed under R.S.C., Ord. 6, r. 7(1)(b). And it is in accordance with this principle that the question of whether the court has power to order substituted service upon a defendant who has left the jurisdiction depends upon whether he was here when the writ was issued.

     Next, are there any practical considerations which would make a choice of the date of issue of proceedings unsuitable to achieve the objects of the Conventions? In Mulox IBC Ltd. v. Geels (Case C-125/92) [1993] ECR I-4075, 4103, at paragraph 11, the European Court formulated a rationale for the uniform jurisdiction rules of the Conventions:

    "to reinforce the legal protection available to persons established in the Community by, at the same time, allowing the plaintiff easily to identify the court before which he may bring an action and the defendant reasonably to foresee the court before which he may be sued."

    The majority in the Court of Appeal said that these objectives would be best achieved by choosing the date when the claim form was issued. If a defendant was domiciled in England on that date, the plaintiff would know that he could commence proceedings without the risk that they might be set aside because the domiciled defendant chose to remove himself before he could be served. Such an event would be outside the plaintiff's control. Miss Gloster said that this was all very well for plaintiffs, but took no account of the needs of defendants. They also needed to know that if they abandoned a domicile, they would not have to return to defend proceedings of which they were unaware at the time when they left.

    Neither choice can be wholly satisfactory for both parties and your Lordships must consider where the balance of advantage and disadvantage lies. Who should take the risk of the defendant changing his domicile between the issue and service of the writ? Is it the plaintiff, who may have sought legal advice and incurred expense in launching proceedings in what was then the defendant's domicile? Or is it the defendant, who may find himself having to defend himself in a jurisdiction which he has already left? It is the plaintiff who will rely upon the defendant's apparent domicile in deciding whether to sue. He may, in so doing, incur very considerable expense, especially if there are, as in this case, heavy interlouctory proceedings before or together with the commencement of the action. It seems to me no answer to say that provisional measures ordered in England will continue to be effective even if the merits have to be tried elsewhere. The plaintiff will have made England the centre of gravity of his action. The English lawyers will be in general charge of the proceedings and the documents will be in English. It will be a considerable expense to have the whole action moved elsewhere.

    The defendant, on the other hand, will not ordinarily have relied upon not being sued in England. Or if he has, it will be because he has deliberately left the jurisdiction to avoid being sued here. This is hardly deserving of sympathy. If he has left for a better reason and finds himself having to defend proceedings which were issued before he left, that may admittedly be a misfortune. But he will have incurred no wasted expense in another jurisdiction and England will be a country in which he was recently domiciled and with which he may be assumed to be familiar.

    In my view the balance of advantage is in favour of adhering to the traditional English rule. On this point I agree with the majority in the Court of Appeal. On the remaining questions which were raised by the appeal, I agree with my noble and learned friend Lord Steyn and have nothing to add. I would therefore dismiss the appeal.

LORD COOKE OF THORNDON

My Lords,

    I have had the advantage of reading in draft the speeches of my noble and learned friends Lord Steyn and Lord Hoffmann. Some additional reasons for arriving at the same conclusion are very persuasively presented by Lord Hoffmann; but as not all these were the subject of full argument in your Lordships' House, I am content to say that I would dismiss this appeal for the reasons given by Lord Steyn.

LORD HOPE OF CRAIGHEAD

My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend Lord Steyn. I agree with it, and for the reasons which he has given I too would dismiss the appeal.

    It was recognised by the European Court of Justice in Zelger v. Salinitri (Case 129/83) [1984] E.C.R. 2397, 2408 and in the more recent case of Shearson Lehman Hutton Inc. v. TVB Truehandgesellschaft für Vermögensverwaltung und Beteiligungen mbH (Case C-89/91) [1993] E.C.R. 1-139, 186, para. 13 that the concepts used in the Convention may have a different content according to the national law of the courts in each contracting state. The court declined in Zelger's case to impose on the contracting states a uniform procedural rule which was not laid down in the Convention itself in order to identify the date at which the court of each state was "first seised" for the purposes of resolving contests of jurisdiction under articles 21 to 23. The rules of procedure of the contracting states are not identical. As Bingham L.J. said in Dresser U.K. Ltd. v. Falcongate Freight Management Ltd. [1992] Q.B. 502, 515, it is left to the national courts to apply the concepts defined in the Convention to their own procedure. It is plain that the same approach must be taken to the words "be sued" in articles 2 and 6 as regards the time for testing whether the court has jurisdiction on the ground that it is the court for the place where the person is domiciled.

    The present case has been brought in the English courts. So it is the English rules of procedure that must be applied in order to resolve the question whether the correct date for determining whether the court has jurisdiction under article 6 of the Convention is the date of issue of the proceedings against the defendant who is said to be domiciled in England. These procedural rules are not the same as those which apply in Scotland, and the Scottish rules are not relevant to the question that is before your Lordships. Nevertheless I think that it is appropriate to draw attention to the position in Scotland in order to remove any possible misunderstanding about the effect which your Lordships' decision may have in that jurisdiction. I have in mind the comment by the European Court in Mulox IBC Ltd. v. Geels (Case C-125/92) [1993] E.C.R. I-4075, 4103, para. 11 that one of the objectives of unifying the rules on jurisdiction of the contracting states was to avoid as far as possible the multiplication of the bases of jurisdiction in relation to one and the same legal relationship by allowing the plaintiff easily to identify the court before which he may bring an action. It ought not to be assumed without further inquiry that the date which your Lordships have held to be the correct date for determining whether the courts have jurisdiction under article 6 of the Convention under the English procedure is the correct date according to the procedural rules of all the jurisdictions of the United Kingdom.

    The equivalent step to that which occurs in England when the writ is issued is that which occurs in the Court of Session when the summons is signeted by a clerk of session under rule 13.5 of the Rules of the Court of Session 1994 and in the sheriff court when the warrant for citation is issued by the sheriff clerk under rule 5.1 of the Sheriff Court Ordinary Cause Rules 1993. In both courts this is an essential preliminary to the service of the summons or the initial writ on the defender, but in neither court is this in any sense a judicial act: Walls' Trustees v. Drynan (1888) 15 R. 359, 362 per Lord President Inglis. In that case the ground of jurisdiction was the arrestment of moveables - a ground of jurisdiction which was considered by Jenard, O.J.1979, C 59/19 and Schlosser, O.J. 1979, C 59/100-101 to be exorbitant and is not available under the Convention: Anton, Private International Law (2nd ed., 1990), p. 188. But when the summons was signeted the arrestment of the defender's moveable property had not yet been executed. It was held that it was not necessary for the court to have jurisdiction over the defender before the commencement of the action, which was when the summons was served. The court applied the rule that the date of the commencement of an action in Scotland is the date of the execution of service on the defender: Erskine, III.iv.3; Alston v. Macdougall (1887) 15 R. 78; see also Smith v. Duncan Stewart & Co. 1960 S.C. 329, 334 per Lord President Clyde.

    In the report by the Committee chaired by Lord Maxwell which was appointed to consider the practical aspects of the application of the Convention in Scotland, Report of the Scottish Committee on Jurisdiction and Enforcement, H.M.S.O., 1980, para. 5.226, it was recognised that the date when the court is seised of the case for the purposes of articles 21 to 23 is the date of service on the defender. The view was taken that this rule was so well established that it needed no statutory amplification. Accordingly the decision in Dresser U.K. Ltd. v. Falcongate Freight Management Ltd. [1992] Q.B. 502 that the English courts are first seised of the matter for the purposes of articles 21 to 23 when the writ is served is consistent with the position as the Maxwell Committee understood it to be in Scotland, although the two jurisdictions differ as to the date of commencement.

    The position in regard to the date for the determination of the defender's domicile for the purposes of articles 2 and 6 is less clear. In Greens Annotated Rules of the Court of Session, Parliament House Book, C 97, para. 13.2.8, it is stated that domicile for the purposes of the Civil Jurisdiction and Judgments Act 1982 is ascertained at the time when the cause is commenced, which is the time of citation. But the soundness of this proposition has yet to be tested judicially. It may need to be reconsidered in the light of your Lordships' decision that the words "be sued" in articles 2 and 6 should be interpreted as referring to the initiation of the proceedings.

    A feature of Scottish practice which may be relevant to this issue is the rule which requires a pursuer to include averments in the condescendence annexed to the summons or the initial writ stating the grounds on which the court has jurisdiction over the defender. Rule 13.2 (4) (a) of the Rules of the Court of Session states that, in an action to which the Civil Jurisdiction and Judgments Act 1982 applies, the pursuer must include averments stating the domicile of the defender (to be determined in accordance with the provisions of that Act) so far as known to the pursuer. Rule 7.2(2) of the Sheriff Court Ordinary Cause Rules states that the sheriff shall not grant decree without the attendance of the defender unless it appears ex facie of the initial writ that a ground of jurisdiction exists under the 1982 Act.

    The Maxwell Report, in its commentary on article 20, paras. 5.201 - 202 states:

    "5. 201 At present, in both the Court of Session and the Sheriff Court, there is an administrative check at the time of issuing the warrant to serve an initiating writ (which may be a summons, petition or initial writ) to ascertain whether it discloses adequate grounds of jurisdiction, and any defect will be drawn to the pursuer's attention. This practice can continue after the Convention comes into force. However, it must be understood that in view of Article 18 the clerk of court cannot refuse warrant to serve an initiating writ on grounds of lack of jurisdiction unless it is clear that another court has exclusive jurisdiction under article 19.

    5.202 We recommend that the following administrative practice be adopted to implement the first paragraph of article 20:-

(a)

    It should be presumed in practice, where the defender's address stated in the initiating writ is in Scotland, that the defender is domiciled here and that accordingly there is jurisdiciton."

    Accordingly a pursuer has not only to identify the Scottish court as the court before which he may bring his action before he presents his initiating writ to the clerk of session for signeting or to the sheriff clerk for the issuing of a warrant for citation. He has also, if he is relying on article 2 or 6 of the Convention, to include averments in his summons or initial writ as to the defender's domicile. And he has to satisfy the clerk of session or the sheriff clerk that his summons or writ discloses adequate grounds of jurisdiction under the Civil Jurisdiction and Judgments Act 1982. All these steps must be taken before the summons or initial writ is served on the defender.

    As the Scottish rule is that the commencement of the action dates from the date of service, and not as in England the date when the writ is issued, the normal practice is for the summons or initial writ to be served as soon as it has been signeted or the warrant for citation has been issued. If a pursuer in the Court of Session wishes to delay bringing his action into court, whether for negotiations or for any other reason, he may do so between service and lodging the summons for calling under rule 13.13 of the Rules of the Court of Session. This is because the period of notice does not expire until a year and a day after service. For these reasons the point which has arisen in this case is less likely to arise in practice in Scotland, as normally there will be no opportunity for the defender to change his domicile between the dates of the issuing of the warrant for citation and service. If the point should arise the practical considerations to which my noble and learned friends Lord Steyn and Lord Hoffmann have referred, which favour the date when the writ is issued as the appropriate date at which to determine the defendant's domicile according to the English rules of procedure, are likely to be relevant to the question whether the date at which the defender's domicile is to be ascertained for the purposes of articles 2 and 6 according to the Scottish procedure is the date when the summons is signeted or the warrant for citation is issued by the sheriff clerk - which would be consistent with the position in England as to the date of the initiation of the proceedings - and not the date of citation when, under Scots law, the cause is commenced.

LORD HOBHOUSE OF WOODBOROUGH

My Lords,

    I agree that the appeal should be dismissed for the reasons given by my noble and learned friend Lord Steyn.

    The point raised by the appeal, though important, was a relatively narrow one. It has not been necessary for your Lordships to resolve some of the difficulties, particularly for multi-party litigation, to which the present approach of English law gives rise. There is much of what my noble and learned friend Lord Hoffmann has said with which I would agree. But your Lordships do not on this appeal have to address the questions raised under Articles 21 to 23. Besides, if the Convention is to be revised it may well be that some of these provisions will be reconsidered.

 
previous

Lords Parliament Commons Search Contact Us Index

© Parliamentary copyright 2000
Prepared 10 October 2000