B e f o r e :
LORD JUSTICE ROBERT WALKER
LORD JUSTICE RIX
and
LORD JUSTICE DYSON
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TSN KUNSTSTOFFRECYCLING GmbH
| Claimant/
Respondent
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| | and -
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| | Harry Maria JURGENS
| Defendant/
Appellant
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(Transcript of the Handed Down Judgment of
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Michael Davey (instructed by Messrs Pritchard Englefield) for the Claimant/Respondent
Adrian Jack (instructed by Messrs Bates Wells & Braithwaite) for the Defendant/Appellant
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HTML VERSION OF JUDGMENT
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Lord Justice Rix :
- On 9 February 1999 Mr Jurgens, the appellant in this court, was served at his home in England with proceedings issued in the regional court of Neubrandenburg (Zivilkammer des Landgerichts) in Germany by TSN Kunststoffrecycling GmbH, here the respondent (“TSN”). Mr Jurgens failed to enter an appearance within the two weeks allowed for doing so, and as a result judgment in default of appearance for DM 520,000 plus interest was issued by the regional court on 16 March 1999, just short of five weeks after service.
- In the present proceedings in England TSN seeks registration of that default judgment pursuant to Title III of the Brussels Convention (the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as given the force of law by the Civil Jurisdiction and Judgments Act 1982).
- The issue in the present appeal is whether, for the purposes of article 27(2) of the Convention, Mr Jurgens was served “in sufficient time to enable him to arrange for his defence”. That issue in turn depends on whether the relevant period of time is the two weeks allowed to enter an appearance or the five weeks between service and the issue of the default judgment. If it is the former period, then the parties are in dispute as to whether that time was sufficient for the purposes of the Convention. If, however, the five week period is the relevant one, then Mr Jurgens accepts that he had sufficient time and that the German judgment is entitled to registration and enforcement in England.
- The issue identified above has emerged from the registration proceedings in England not without difficulty. Since TSN has disputed Mr Jurgens’ entitlement to argue this issue in this court, I will have to set out the background to this appeal in greater detail than would otherwise be necessary.
The Convention
- It is not in dispute that the Convention is designed to facilitate the recognition and enforcement of judgments issued in one contracting state throughout all other contracting states. The scheme of the Convention is characterised by simplicity and speed. That scheme and the purposes of the Convention are empowered by the common agreement found in the Convention as to the establishment of jurisdiction. Since there is consensus as to jurisdiction, the opportunities for challenge granted at the stage of recognition and enforcement are correspondingly limited.
- Articles 26 and 31 provide the basic rules, which are that a judgment shall be recognised without any special procedure being required, and that a judgment enforceable in one contracting state shall be enforced on application in another contracting state when it has been declared enforceable there, or, in the case of the United Kingdom, when it has been registered for enforcement in the relevant part of the United Kingdom, eg in England and Wales. Articles 32/35 lay down the procedure for the application for enforcement. In England and Wales it is to be made to the High Court (and under RSC 71, rule 27 to a master). Article 34 provides:
“The court applied to shall give its decision without delay; the party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.
The application may be refused only for one of the reasons specified in Articles 27 and 28.
Under no circumstances may the foreign judgment be reviewed as to its substance.”
- Articles 36/41 are concerned with rights of appeal from what is in effect an ex parte procedure at first instance. If enforcement is authorised, the respondent has one month in which to lodge an appeal. In England that would be to a High Court judge. If the application to enforce is upheld on appeal, article 37(2) allows a further appeal, in these terms:
“The judgment given on the appeal may be contested only…
- in the United Kingdom by a single further appeal on a point of law.”
- The question has been raised whether article 37(2) gives a right of appeal, free of the limitations of CPR Part 52 and, in the case of second appeals, of section 55(1) of the Access to Justice Act 1999 and CPR rule 52.13. It has also been submitted that the article 37(2) appeal is not a true second appeal, since the original hearing before the master is not inter partes. As will appear below, it has not proved necessary to determine such questions.
- As stated in article 34, the only exceptions to the applicant’s right to enforcement of a Convention judgment are those contained in articles 27 and 28. For present purposes the only relevant exception is that set out in article 27(2) as follows –
“(2) Where [the judgment] was given in default of appearance, if the defendant was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable him to arrange for his defence.”
- It is interesting to observe that the same test of “sufficient time to enable him to arrange for his defence” is also contained in the jurisdictional safeguards of article 20, which similarly apply where a defendant does not enter an appearance, thus –
“Where a defendant domiciled in one Contracting State is sued in a court of another Contracting State and does not enter an appearance, the court shall declare of its own motion that it has no jurisdiction unless its jurisdiction is derived from the provisions of the Convention.
The court shall stay the proceedings so long as it is not shown that the defendant has been able to receive the document instituting the proceedings or an equivalent document in sufficient time for him to arrange for his defence, or that all necessary steps have been taken to this end.
The provisions of the foregoing paragraph shall be replaced by those of Article 15 of the Hague Convention of 15th November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial matters, if the document instituting the proceedings or notice thereof had to be transmitted abroad in accordance with that Convention.”
The background facts
- The background facts can be speedily stated. Mr Jurgens is a Dutch national, now resident in England near Sudbury in Suffolk. At some point he was a director of an East German company, Aquarius GmbH, which did business with TSN. In its statement of claim (or “Klage”) in Germany TSN claims against Mr Jurgens in fraud, on the basis of his responsibility for falsely certifying that work supposedly done by Aquarius for TSN and paid for by TSN had been carried out, when it had not.
- TSN’s proceedings were issued in Germany on 20 October 1998. On 23 October 1998 the matter came before the regional court, whose presiding judge was required to determine the period available to Mr Jurgens from service to enter his notice of appearance. Where a defendant is resident in Germany, this period is fixed at two weeks and cannot be extended; but where, as in this case, the defendant was resident abroad, the presiding judge had to determine the period for appearing, and he fixed a period of two weeks.
- It is common ground that prior to 1 January 2000 any party to proceedings before a regional court had to be represented by a Rechtsanwalt admitted to that particular regional court. However, all that was required by way of a notice of appearance from such a duly admitted Rechtsanwalt was a letter stating that the defendant appeared and intended to contest the proceedings: a single sentence to that effect would suffice, and no special formality was necessary.
- Service of the German proceedings was effected under the Hague Convention through the English Supreme Court as the designated central authority. A certificate of service for the purposes of the Convention was produced bearing the Supreme Court’s stamp dated 9 February 1999. The certificate records that service was effected by posting a sealed envelope through the letter-box of Mr Jurgens’ home in Sudbury.
- Before Jack J in the court below Mr Jurgens denied that he had been duly served on 9 February 1999 in this way. As Jack J said:
“It is Mr Jurgens’ case that he was abroad at that time, returning from the United States on 15 February 1999. He states that he never saw the envelope. He suggests that either his wife or his 15 month son may have destroyed it. He also appears to suggest that it may have been delivered to the house next door. If that had happened, presumably his neighbours would have delivered it to him. He appears to have made no enquiries.”
- At any rate Jack J considered with the assistance of decisions of the European Court of Justice whether Mr Jurgens could successfully contest the due service of the Klage. He concluded that he could not, and there is no appeal from that decision. Jack J reasoned as follows:
“If service is effected at an address such as the defendant’s business address, or at his home, where in the ordinary course it should come to his attention, then, provided that the time between the date of service and the entry of the default judgment should have been sufficient for him to arrange for his defence, it will normally be immaterial that such service did not bring the proceedings to his attention. In contrast, if service is effected at an address that may not, or is unlikely to, bring the proceedings to the defendant’s attention, then this is a factor which the court may take account of and which may lead it to conclude that the defendant had not had due time…
“I have found here that service was duly effected at the defendant’s home. There is no explanation as to why it did not bring the proceedings to his attention. In my view there are no exceptional circumstances here of the kind referred to by the European Court in Klomps, which would justify me in concluding that by reason of them the period between service and the default judgment was inadequate.”
- The judge therefore ruled that service had been duly effected; that there were no exceptional circumstances for the purposes of the further test of sufficient time to arrange his defence; and, implicitly, that that further test was to be made by reference to the period between service and default judgment, the five week period, rather than the two week period allowed for entering notice of appearance.
- The regional court had issued its default judgment against Mr Jurgens on 16 March 1999. TSN had requested in its Klage that default judgment should be entered in default of timeous entry of Mr Jurgens’ notice of appearance. In such a case, upon expiry of the time limit, the regional court’s administration places the file before the court, whereupon judgment may be entered. However, if a notice of appearance is entered late, but at any time before default judgment signed by the judges has reached the court office in order for it to be issued, the court is not permitted then to issue the default judgment (para 331 of the Zivilprozeßordnung or ZPO).
- On the same day that the regional court had entered its default judgment against Mr Jurgens it wrote to him to inform him of the judgment. Its letter arrived a few days later, for on 22 March 1999 Mr Jurgens wrote to the court stating that until receipt of the court’s letter he had known nothing of the proceedings. He asked for an extension of time in which to appeal. The default judgment itself was formally served on Mr Jurgens on 29 April 1999.
- It appears that Mr Jurgens then had a fortnight in which to apply as of right to set aside the default judgment, but he did not do so. However, on 26 May 1999 the regional court treated Mr Jurgens’ letter of 22 March as such an application, but dismissed it as inadmissable because it had not been filed and signed by a duly admitted Rechtsanwalt.
- It was not until 8 December 2000, over 18 months later, that Mr Jurgens filed, through a duly admitted Rechtsanwalt, an appeal against the decision of 26 May 1999 in order to set aside the default judgment and request reinstatement of the proceedings. The Oberlandsgericht (the higher regional court) dismissed this appeal in its judgment of 17 January 2001. Mr Jurgens pursued a further appeal to the Federal Supreme Court, but failed there as well.
The judgment below
- A number of points were pursued by Mr Jurgens before Jack J, but none of them has survived to this appeal. There is no sign from the judge’s judgment, or from the skeleton arguments below, that the point which has been argued on this appeal, namely that the relevant period for testing whether Mr Jurgens had sufficient time to arrange for his defence was the two week period allowed by the regional court for entering an appearance and not the period of five weeks pending issue of the default judgment, was even argued before Jack J. (Neither counsel in this court appeared before Jack J.) On the contrary, it appears to have been assumed that the five week period pending the issue of the default judgment was the relevant period. This is reflected in the passage from Jack J’s judgment which I have cited above.
- It follows that there can be no assistance to this court on this appeal to be derived from the reasoning in the judgment below.
- It also follows that the reasoning of Jack J on the factual aspect of the test of sufficient time is no longer relevant in this court. Jack J had to ask himself whether five weeks was a sufficient time in circumstances, exceptional or not, where Mr Jurgens’ case had been that he had been absent in America from the date of service on 9 February to 15 February 1998 and thereafter had never seen the sealed envelope which had been served through his letter-box. Clearly, if he had been able to prove that he had never received the documents, which he could not, that may have been a different situation. In the circumstances, his absence from home during the limited period up to 15 February would have been of no consequence in terms of the five week period up to 16 March. One question which has arisen on this appeal is whether it can still legitimately be brought into play if the relevant period is only two weeks.
- The fact that the critical issue on this appeal was never argued below has given support to TSN’s submission that that issue is not properly before this court. The real basis for that submission, however, requires me to turn now to the circumstances in which Buxton LJ granted Mr Jurgens permission to appeal on his renewed oral application for such permission.
The grant of permission to appeal
- In his appellant’s notice the essential ground of appeal raised by Mr Jurgens was that the two week period allowed him to enter his notice of appearance was insufficient time for him to arrange for his defence within the meaning of article 27(2) (ground 4), especially in the light of his absence from home until 15 February 1999 (ground 5). The point was also made that the judge ought to have held that there were exceptional circumstances within the meaning of the ECJ jurisprudence (ground 7). There was also an application to admit new evidence, namely the witness statement of a German law expert, Mr Jens Michael Priess, a Rechtsanwalt, made on 16 March 2001.
- Buxton LJ focused on the principal point concerning the two week period allowed to Mr Jurgens from service of the proceedings and whether that was a sufficient period for him to arrange his defence. He appreciated, correctly, that “this issue was not raised before the judge”. He appears, nevertheless, to have been under the misapprehension that the alternative period of five weeks was a period commencing with the service of the default judgment, rather than the period between service of the Klage and the making of the default judgment. He therefore identified as a possible error on the part of the judge, but in my view mistakenly, that the judge had viewed the default judgment rather than the Klage as the “document which instituted the proceedings” whose service had, for the purposes of article 27(2), to allow sufficient time to enable a defendant to arrange for his defence. Despite that misapprehension, Buxton LJ was, in my judgment, clear that the issue for which he gave permission to appeal included that identified in Mr Jurgens’ grounds of appeal. Thus he said –
“I therefore give leave limited to that issue, that is to say whether the judge correctly determined what was for present purposes the document instituting the proceedings; and secondly, what follows from that as to his conclusion that there had been sufficient time for Mr Jurgens to arrange his defence.”
- The first part of that permission was, on the understanding that both parties and this court now have of the matter, unnecessary: but the second part directly raised the issue whether Mr Jurgens had had sufficient time to arrange for his defence. Whether, for the purpose of that issue the time was two weeks or five was not perhaps explicitly identified: nevertheless, that question necessarily became critical to the appeal. And whether it was two weeks or five, was it enough?
- I therefore reject the submission of Mr Michael Davey on behalf of TSN that there is no permission to appeal in respect of the principal issue which Mr Jurgens wishes to argue in this court, namely the submission that the relevant period whose sufficiency has to be assessed for the purposes of article 27(2) is one of two weeks rather than, as assumed before the judge below, one of five.
- However, as for ground 7 of Mr Jurgens’ appellant’s notice, that relating to the presence of exceptional circumstances, Buxton LJ refused permission to appeal.
- As for Mr Jurgens’ application to adduce fresh evidence Buxton LJ said as follows:
“As I have explained to Mr Jack, that is not an application that is within my power to grant, given that it requires adversary argument. Mr Jack, has, however, permission, if so advised, to renew such an application to the full court. He may or may not find that that is a matter, in view of the nature of the evidence, that can be resolved by agreement before the hearing, and certainly efforts must be made to do that, so that the time of the court can be saved” (my emphasis).
- Nevertheless Buxton LJ had already commented that it seemed to him that the point on which he had given permission to appeal –
“will require some reasonably sophisticated analysis of the German process to put in context the issue arising under Article 27(2).”
That was on 11 May 2001. Pursuant to Buxton LJ’s order made that day, Mr Jurgens amended his grounds of appeal and accompanying skeleton argument. A new ground 5A stated that Jack J had erred in treating the five week period from service to judgment by default as the relevant period. That correctly exposed the question inevitably covered by Buxton LJ’s permission to appeal: as Buxton LJ had said, such amended documents should set out “the point now in issue and the implications of it”. Ground 7 dealing with exceptional circumstances was now deleted. The new skeleton argument dated 30 May 2001 correctly stated that permission to appeal was granted on “the single issue as to whether the two week period given by the German Court for Mr Jurgens to enter an appearance was sufficient time to enable him to arrange for his defence”.
- On 5 July 2001 Buxton LJ made further directions in the appeal. He ordered the parties to –
“make active and immediate efforts to agree any points as to German law and practice that are in issue…”
That the parties have done. Thus they have drawn up a “Joint Statement of German Law” which identifies those parts of Mr Priess’ witness statement on which there is common ground. Nevertheless, as it remains formally open to it to do, TSN still objects to the admission of any further evidence, including the joint statement, from Mr Jurgens, and submits that if such evidence is admitted, then there is still further evidence of German law that it would wish to introduce.
- I am now in a position to address directly the essential issue which arises on this appeal.
The relevant period: two weeks or five?
- On behalf of Mr Jurgens, Mr Adrian Jack submitted that, however easy and efficient the Convention’s scheme for the free transfer of judgments between contracting states was intended to be, article 27(2) reflected a concern to protect defendants which was paramount. That concern would be undermined if the relevant period extended up to the date of the default judgment itself. A defendant ought to be in a position to know upon service of proceedings how long he had to arrange his defence, and to be able to take advice from his lawyers accordingly. If the time allowed him was insufficient, then he was entitled to know there and then that he could afford to ignore the proceedings. If, however, the relevant period depended on the time taken to issue a default judgment, then a defendant would be in a position of uncertainty.
- On behalf of TSN, on the other hand, Mr Michael Davey submitted that the purposes of the Convention were best promoted if the derogation from recognition allowed by article 27(2) was not construed in such a way as to interfere unduly with the policy of rapid and easy enforcement of judgments. The question should therefore be: did Mr Jurgens as a matter of fact have sufficient time to arrange for his defence? If he did, there would be no justification in refusing to recognise or enforce a default judgment against him or any other defendant in a similar position. It would be bizarre to think of a defendant seeking advice from his lawyers as to whether he could safely allow a default judgment to be given against him on the basis that the time allowed for a notice of appearance was too short.
- Both counsel sought to derive support for their respective positions from a limited number of cases in the European Court of Justice.
- In Klomps v. Michel [1981] ECR 1593 Mr Michel applied in Germany for a summary order for payment of a debt against Mr Klomps. Service was effected by a special procedure in Germany. Under the then current legislation in Germany, Mr Klomps was allowed a period of not less than three days in order to submit an objection to the order for payment, but that period was extended until such time as the German court issued an order for its enforcement, and in the event that period was six days from service. After service of the enforcement order Mr Klomps had a further period of one week to lodge an objection to that order. Mr Klomps did nothing for four months. He then claimed to reside in Holland and invoked the protection of article 27(2). Two of the issues before the European Court of Justice are relevant for present purposes. The first (the “second question” before the Court) was whether, on the assumption that the payment order rather than the enforcement order was the “document which instituted the proceedings”, account should nevertheless be taken of the further period of one week allowed for objecting to the enforcement order for the purposes of deciding whether Mr Klomps had had sufficient time to arrange for his defence. On that question the Court ruled (in para 9 of its judgment) as follows:
“…the court in which enforcement is sought must take account only of the time, such as that allowed under German law for submitting an objection to the order for payment, available to the defendant for the purposes of preventing the issue of a judgment in default which is enforceable under the Convention.”
In other words, the payment order was there the equivalent of the Klage in the present case, the enforcement order was there the equivalent of the default judgment in the present case, and the only relevant period was the period available for the purposes of preventing the issue of such a default judgment.
- The second issue relevant for present purposes (the “fourth question” before the Court) was in two parts. The first was whether the finding by a court in the country in which the judgment was given, that service had been duly effected, rendered it unnecessary for the court in the country in which enforcement is sought to consider whether service had been effected in sufficient time for the defendant to arrange for his defence. On that part of the second question the Court held that that enquiry was still necessary. The second part of the fourth question was whether that enquiry was limited to the finding that the document reached the habitual residence of the defendant in sufficient time or whether it was also necessary that such service should provide a sufficient guarantee that the document would reach the defendant personally in good time (see para 17). On that issue the Court reasoned as follows (at paras 19/20):
“19. In this connection it must be stated first of all that Article 27, point 2, does not require proof that the document which instituted the proceedings was actually brought to the knowledge of the defendant. Having regard to the exceptional nature of the grounds for refusing enforcement and to the fact that the laws of the Contracting states on the service of court documents, like the international conventions on this subject, have as their objective the safeguarding of the interests of defendants, the court in which enforcement is sought is ordinarily justified in considering that, following due service, the defendant is able to take steps to defend his interests as soon as the document has been served on him at his habitual residence or elsewhere. As a general rule the court in which enforcement is sought may accordingly confine its examination to ascertaining whether the period reckoned from the date on which service was duly effected allowed the defendant sufficient time to arrange for his defence. Nevertheless the court must consider whether, in a particular case, there are exceptional circumstances which warrant the conclusion that, although service was duly effected, it was, however, inadequate for the purposes of enabling the defendant to take steps to arrange for his defence, and accordingly, could not cause the time stipulated by Article 27, point 2, to begin to run.
“20. In considering whether it is confronted with such a case the court in which enforcement is sought may take account of all the circumstances of the case in point, including the means employed for effecting service, the relations between the plaintiff and the defendant or the nature of the steps which had to be taken in order to prevent judgment being given in default. If, for example, the dispute concerns business relations and if the document which instituted the proceedings was served at an address at which the defendant carries on his business activities the mere fact that the defendant was absent at the time of service should not normally prevent him from arranging his defence, above all if the action necessary to avoid a judgment in default may be taken informally and even by a representative.”
- It will be observed that neither of these questions is directly concerned with the issue before us. The European Court of Justice was not asked to decide, as would have been directly analogous to the present appeal, whether it was the three day period following service or the six day period ending in the enforcement order that was the relevant period for the assessment of the “sufficient time”. Nevertheless, counsel have drawn our attention to the reasoning of the Court because each of them submits that it at least indirectly or implicitly supports their respective positions. Thus Mr Davey emphasises the statement by the Court of the facts of that case (in para 3) where the period of six days is mentioned as well as the period of three days; and the language of the Court to the effect that consideration is to be given as to what needs to be done in time to prevent judgment being given in default (see eg para 10). Whereas Mr Jack relies on the reference, also in para 10, to account being taken only of that period of time “allowed under German law for submitting an objection”, which he submits must be the three day rather than the six day period.
- In this connection our attention was also directed to the Opinion of Mr Advocate General Reischl. He preferred the view (see at 1618/9) that the relevant period extended until the time for objecting to the enforcement order had expired, a view ultimately not adopted by the Court. Nevertheless, in the course of conceding the cogency of the opposing view that the time for objecting to the enforcement order was irrelevant, he appears to have proceeded on the basis that in that case (ultimately the judgment of the Court) it was necessary to take account of the fact that Mr Klomps had not only three days, but six for arranging his defence. Thus he said (at 1618):
“In that connection it is of course necessary to take into account a number of factors in ascertaining whether this period is reasonable. What is concerned is not a strict exclusionary time-limit. On the contrary, it was possible for an objection to the order for payment to be made until the enforcement order was issued, which, owing to the volume of work, was often not done until some considerable time had elapsed, in this case six days after the issue of the order for payment. It is also important that during that time the debtor is simply required to make it known that he does not admit the claim. That may be done without giving reasons and without observing any requirements as to form…”
- I will defer comment on Mr Davey’s and Mr Jack’s respective submissions until I have completed the citation of authority.
- In Debaecker v. Plouvier [1985] ECR 1779 the question before the European Court of Justice was more fact specific and concerned what a court in the country of enforcement could take into account for the purposes of assessing the question of sufficient time. Nevertheless, Mr Jack relied on the following statement of principle (at para 10 of the Court’s judgment):
“Although the Convention is, as is clear from the preamble, intended to ‘secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals’, that aim cannot, according to a series of decisions of the Court, be attained by undermining in any way the right to a fair hearing.”
- Mr Jack also relied on Isabelle Lancray SA v. Peters und Sickert KG [1990] ECR I-2725, where French proceedings were served on the defendant in Germany. There was no dispute there that service had been effected in sufficient time for the defendant to arrange for its defence: but it was said that service had not been effected in due form because the document instituting the proceedings had not been translated into German. The Court pointed out (in para 18) that –
“the requirements of due service and service in sufficient time constitute two separate and concurrent safeguards for a defendant who fails to appear. The absence of one of those safeguards is therefore a sufficient ground for refusal to recognize a foreign judgment.”
- It was nevertheless submitted that service in due form did not matter since the defendant in any event had had sufficient time to respond. The Court disagreed. It said (at paras 20/21):
“20. That reasoning cannot be accepted…it would render completely inoperative the requirement of due service. If the sole issue were whether the document came to the defendant’s attention in sufficient time, plaintiffs would be tempted to ignore the prescribed forms for due service, the requirements of which have in any event been considerably relaxed by international agreements. That would create considerable uncertainty as to whether documents had actually been served, thus thwarting the uniform application of the provisions of the Convention. Finally, a defendant could not know with certainty whether proceedings which might lead to a finding against him had been properly instituted and whether it was therefore necessary to arrange for a defence, a situation which would also be inconsistent with the aims of the Convention.
“21. It must be added that, as the Court held in its judgment in Case 49/84 Debaecker v Bouwman [1985] ECR 1779, although the Convention is, as is clear from its preamble, intended to secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals, that aim cannot be attained by undermining in any way the right to a fair hearing.”
- Mr Jack therefore submitted first, that the preservation of the right to a fair hearing for the defendant was paramount, and secondly that matters had to be judged as of the moment of service: the defendant was entitled there and then to know whether the proceedings against him had been served in such a way as to have met the twin requirements of due form and of sufficient time.
- Finally, Mr Jack relied on Minalmet GmbH v Brandeis Ltd [1992] ECR I-5661. There the facts involved a combination of the issues raised in both Klomps v. Michel and Lancray: service had not been effected in due form but the defendant had subsequently received notice of the default judgment and had failed to take advantage of the legal remedies available to him to set that judgment aside. The European Court of Justice ruled that the judgment could not be enforced, since the defendant had never been duly served. It referred to Klomps v. Michel where the Court had said (at para 9) that article 27(2)
“is intended to uphold the rights of the defence and ensure that a judgment is not recognized or enforced under the Convention if the defendant had not an opportunity of defending himself before the Court first seised.”
It went on (at para 19):
“…the proper time for the defendant to have an opportunity to defend himself is the time at which proceedings are commenced. The possibility of having recourse, at a later stage, to a legal remedy against a judgment given in default of appearance, which has already become enforceable, cannot constitute an equally effective alternative to defending the proceedings before judgment is delivered.”
- This court was also referred to passages in the Jenard Report. These in my judgment take matters no further, for their observations are reflected in the judgments of the European Court of Justice. It is interesting to note, however, that Mr Jenard states, under article 30, that –
“That court has in practice only two points to examine: public policy and whether the defendant has had the opportunity of defending himself.”
That language of “opportunity of defending himself” is reflected in the language of para 9 of the judgment in Klomps cited above.
- The conclusions at which I arrive on this jurisprudence and the competing submissions before this court are as follows. (1) The point at issue in this case is not covered precisely by any authority brought to our attention. (2) Nevertheless, the language in which the European Court of Justice repeatedly glosses the critical words of article 27(2) (“in sufficient time to enable him to arrange for his defence”) suggests that the relevant period of time which has to be examined is the period right up to the issue of the default judgment. Thus the Court uses language such as “an opportunity of defending himself” and “the time available to the defendant for the purposes of preventing the issue of a judgment in default” and “time to prepare his defence or to take the steps necessary to prevent judgment’s being given in default” and “the nature of the steps which had to be taken in order to prevent judgment being given in default” (Klomps); or “an equally effective alternative to defending the proceedings before judgment is delivered” (Minalmet). (3) Whereas the requirement of due form for the purposes of service is strictly enforced (Lancray and Minalmet), that is only to be expected where due form is the subject of examination. On the other hand the requirement of sufficient time is not a question of form but of fact to be decided on all the circumstances of the case (Klomps). Moreover, form can necessarily only be judged at the point of service, whereas that is not true of the question of sufficient time. Prima facie that is an empirical matter to be assessed over the whole period starting with service and ending with the default judgment. It follows that the strict approach of the Court to the first requirement of due form does not necessarily throw light on the approach to be taken to the second requirement of sufficient time. (4) Although the cases stress the importance of the protection to the defendant provided by article 27(2) and thus the need to protect the defendant’s right to a fair hearing, that is by way of exception to the Convention’s underlying purpose to ensure the free movement of judgments between the contracting states. To do justice to both purposes requires that the exception not be expanded further than is reasonably necessary to achieve the required protection of the defendant’s right to a fair hearing, that is to say of his opportunity to defend himself and to prevent a judgment being given against him by default. That can be achieved if the relevant period to be examined for its sufficiency is the period during which a notice of appearance will in fact prevent the issue of a judgment by default. (5) If, therefore, German procedural law were to the effect that once the period allowed for a notice of appearance had expired it would thereafter be too late to enter an appearance, however long judgment by default might be delayed, then it would follow that the relevant period would expire with the time allowed for that appearance, such as the two weeks set by the presiding judge of the regional court. For in that case, there would be nothing that a defendant could do to prevent a judgment by default issuing. (6) In the present case, however, it is common ground that a valid notice of appearance entered at any time prior to the issue of a default judgment would have prevented its issue. Mr Priess’ evidence is that that is so as a matter of “practice”. TSN’s submission is that that was so as a matter of the provisions of the ZPO itself (para 331). This court was not shown the provisions of the ZPO, but as stated above it was agreed, by reference to para 11 of the parties’ joint statement of German law, that if a notice of appearance is entered late but at any time before default judgment signed by judges has reached the court office in order for it to be issued, “the court is not permitted then to issue a default judgment (paragraph 331 of ZPO)”. (7) The conclusions set out above are consistent with the presence of the same test of sufficient time being included in article 20 of the Convention as a requirement for the establishment of jurisdiction. Article 20 states that the court seised of the claim should stay the proceedings unless satisfied that the defendant has had sufficient time. Ex hypothesi no judgment has yet been entered but, as contemplated by the first paragraph of article 20, the defendant “does not enter an appearance”. The inference is that the court should test the question of sufficient time by reference to the full facts and not merely because there has been a default of appearance.
- I therefore conclude that the relevant period by which to test the sufficiency of the time available to Mr Jurgens in this case is the period of five weeks ending on 16 March 1999.
- I note that this conclusion is consistent with the view expressed in Civil Jurisdiction and Judgments, 2d ed, 1997, by Briggs & Rees, at para 2.199 where, in the course of a discussion about article 20 the following is found:
“If the plaintiff rushes to obtain a default judgment, he runs the risk that the court will refuse to enter it, or that a court called upon to recognise that judgment will decline to do so.”
Did Mr Jurgens have sufficient time to arrange for his defence?
- In the circumstances it is unnecessary to make any findings as to this question, for it is accepted by Mr Jack that if the relevant period is five weeks then Mr Jurgens did have sufficient time.
- If the relevant period for examination had been the two week period, this court would in principle have had the choice of either deciding it itself or of remitting it back to the High Court for its decision. Further costs and delay would have been avoided if the decision could have been made here, and that would have been the preferable choice. It is not clear however that this court would have had the facts needed for its decision. This is in essence because of the way in which the issue has developed, since the sufficiency of the two week period has never previously been examined, and also because TSN had taken its stand against Mr Jurgens’ right to conduct his appeal in this court.
- In that connection Mr Davey has submitted that, since article 37(2) only gives a further appeal “on a point of law”, it would not have been open for this court to examine the question of fact involved in the test of sufficient time. However, it seems to me that that submission is in error: it not infrequently occurs that, if the right legal test has not been adopted by a lower court, then a new question of fact needs to be resolved. It may be that in certain contexts, such as arbitration, a remission becomes unavoidable (unless the missing finding is implicit in the current award), since arbitrators are the sole finders of fact. That problem, however, does not arise in the present context, where the litigation as a whole has been conducted in the courts.
- Another question which would have arisen if the two week period had been the relevant one for examination is the extent to which it would have been open to this court, or to the High Court on any remission, to consider that question in the round. For instance, Buxton LJ refused permission to appeal on the ground of exceptional circumstances. In my view, if the two week period had had to have been examined, I would not for myself have placed any limitation on that enquiry from the point of view of Mr Jurgens’ allegation that he had been absent from home until 15 February 1999. Jack J never had to consider below the question of Mr Jurgens’ absence from his home in the context of a period of only two weeks. The European Court of Justice in Klomps emphasised that a court, in examining the question of sufficient time, is entitled to take account of “all the circumstances of the case in point”. It went on to point out that in a commercial matter where service is effected at the defendant’s business address, the defendant’s absence at the time of service should not “normally” prevent him from arranging his defence, particularly if the action necessary to avoid a judgment may be taken informally and by a representative. It may therefore be arguable, and it is unnecessary to form even a view on the point, that the significance of that example is that it is normally to be presumed that business activities are carried on in such a way that arrangements for taking limited legal steps (viz the mere filing of a notice of appearance) can be presumed to be in place despite the absence of a principal. Whether the same can be said where service of the proceedings is effected at a private home may be another question.
A reference to the European Court of Justice?
- Mr Jack also submitted on behalf of Mr Jurgens that the issue of the relevant period should be referred to the European Court of Justice, on the basis that it was a doubtful question of interpretation and not acte clair. I do not agree. In my judgment there is nothing in the wording of article 27(2) or in the jurisprudence of the European Court of Justice to lead me to think that this would be an appropriate case for reference.
Conclusion
- In conclusion, the relevant period for examination under article 27(2) is that beginning with due service and ending with the issue of the default judgment. In the circumstances it is accepted by Mr Jurgens that he had sufficient time to arrange for his defence. This appeal must therefore be dismissed.
Lord Justice Dyson:
- I agree.
Lord Justice Robert Walker:
- I also agree.
Order:
- Appeal dismissed with costs here and below.
- No order for costs on cross-appeal.
- Declaration that stay be lifted.
- Leave to appeal to the House of Lords refused.
(Order not part of approved judgment)
