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OUTER HOUSE, COURT OF
SESSION
[2009] CSOH 19
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P1774/09
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OPINION
OF LORD BRAILSFORD
in
the Petition of
BADEN-WURTTEMBERGISCHE
BANK, AG
For
An
order under Section 4 of the Civil Jurisdiction and Judgments Act 1982 for
registration of an authentic instrument dated 26 August 1997
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Weir; McClure
Naismith
Defenders: Munro; Brodies
12th February 2009
[1] Baden-Wurttembergische Bank AG
(hereinafter referred to as "the Bank") presented a petition to the Court on
9 August 2005 seeking an order under section 4 of the Civil
Jurisdiction and Judgments Act 1982 for registration of an authentic
instrument, being a land charge, granted in their favour by David Ferrier
(hereinafter referred to as "Mr Ferrier") on 26 August 1997. Lord Malcolm granted the order sought in
the petition on 19 August 2008. On 1 October 2008 a motion was enrolled on behalf of Mr Ferrier under Rule of
Court 62.34 and Article 37 of the convention in schedule 1 to the
said act of 1982 appealing against the order for registration of the
authentic instrument.
[2] The relevant statutory background to the
present motion is, as already noted, schedule 1, article 50 of the
act of 1982. That provision provides
that
"a document which has been formally drawn up or registered as an
authentic instrument and is enforceable in one Contracting State shall, in
another Contracting State, be declared enforceable there, on application made
in accordance with the procedures provided for in article 31 et seq.
The application may be refused only if enforcement of the instrument is
contrary to public policy in the State addressed".
The authentic
instrument in the present petition was, as aforesaid, a land charge registered
and enforceable in Germany. The application for
registration has been made to the Scots Courts.
[3] For Mr Ferrier, Counsel invoked the
public policy exception in the above quoted statutory provision and submitted
that the prayer of the petition for registration should be refused. She accepted under reference to Hoffmann v Krieg [1988] ECR 645 that the public policy exception could
only apply in exceptional circumstances.
She further submitted that the circumstances of the present case were
exceptional in that there had been inordinate, unexplained and inexcusable
delay on the Banks part in making the application to the Scots Court. Having regard to this delay it was submitted
that to grant the order sought by the Bank would involve a violation of the
appellant's rights under article 6 of the European Convention on Human
Rights. It followed that this Court
would be in breach of it's duty in terms of section 6 of the Human Rights
Act 1998 to act in a manner compatible with the convention rights if
registration of the authentic instrument were to be permitted.
[4] The context in which the argument that
there was unreasonable delay was advanced was the chronology behind these
matters. The authentic instrument which
the Bank seek to register for enforcement in Scotland
is a land charge in the amount of DM198,000 secured over heritable property in Germany. In addition the charge creates a personal
liability upon Mr Ferrier for the payment of a sum of money equal to the
land charge amounts. The charge was
dated 26 August 1997. I was informed that the charge
secured borrowings of Mr Ferrier from the Bank which funds were used to
purchase the property in question. I was
informed that the amount outstanding in relation to that debt as at 12 November 2008 was 94,545.11 inclusive of costs, fees and interest. I interject to state that there was on the
documentation presented to me some slight dispute in relation to that sum. I raised this at the outset of the motion
with Counsel and was informed that that matter was capable of resolution
without intervention by the Court.
[5] I was further informed that Mr Ferrier is a dentist
originally from the United
Kingdom. He resided and worked in Germany
between 1994 and December 1999. It
was during that period that the land charge was effected. In December 1999, Mr Ferrier left Germany
and returned to live in the UK
in Scotland. It was represented by Counsel
for Mr Ferrier, and not disputed by Counsel for the Bank, that
Mr Ferrier did not conceal his removal from Germany
and his residence in Scotland. He left business interests in Germany
and he engaged a German agent to deal with the winding up of his affairs in
that country. There was produced a
letter (6/13 of process, translation 6/14 of process), dated 16 February 2001 from that agent to the Bank indicating the agents intention to resign
from that post. The significance of that
letter was that it disclosed the address in Scotland
where Mr Ferrier resided. I was
informed that Mr Ferrier had stayed continuously at the address stated in
that letter from the time of his return to Scotland
until the present. It was therefore
clear that from at latest the date of the letter in 2001 the Bank were aware of
Mr Ferrier's whereabouts. It
followed that from at latest that date there was no impediment to them seeking
to take any proceedings they required to effect their land charge against
Mr Ferrier in Scotland. Notwithstanding that knowledge,
when the Bank chose to seek to enforce the land charge, they did so by taking
proceedings in England. On 10 March 2003 the Bank obtained an order registering the authentic instrument for
enforcement from the Boston District Registry of the Queen's Bench Division of
the High Court of Justice of England
and Wales. Mr Ferrier was named as
respondent in that order and he was designed as having an address in Aylesbury,
Buckinghamshire. The address given was
in fact the home of his brother. That
brother is a chartered accountant. He
had assisted Mr Ferrier in the winding up of his business affairs in Germany
and on one occasion, by a letter dated 30 July 2001, had written on his brother's behalf to the Bank. Beyond that one occasion Mr Ferrier's
brother that had no connection or dealings with the Bank. Mr Ferrier had no knowledge of why the
Bank chose to utilise his brother's address in the English proceedings. The first knowledge Mr Ferrier had of
the English proceedings was when in December 2003 he was served with an
order regarding costs in those proceedings.
This caused him, not surprisingly, to instruct solicitors and the
English proceedings were subsequently challenged and set aside on 6 February 2004. So far as Mr Ferrier was
concerned, he had no subsequent knowledge of these matters until the present
proceedings were served upon him in August 2008. Counsel for Mr Ferrier informed me that
she had been informed, by Counsel for the Bank, in the course of the few days
prior to the hearing that the Bank had sought to institute proceedings in Scotland
in 2005 but for reasons which had not been explained to her there had been
further delay until the present proceedings commenced.
[6] Counsel for Mr Ferrier characterised this chronology as
displaying unreasonable delay. She
pointed out that the Bank had no reason to be unaware of Mr Ferrier's
actual address. There was no impediment
or bar to the Bank raising proceedings against him at any time in the period
from the registration of the charge in 2001.
She submitted that this delay violated the "reasonable time" requirement
in article 6 of the European Convention of Human Rights. In that regard my attention was drawn to the
approach taken to the question of "reasonable time" in Marie Brizzard v William
Grant & Sons Limited (No 2), 2002 SLT 1365, Dyer v Watson, 2002 SC (PC) 89 and Tonner v Reiach & Hall 2008 SC 1. In particular reliance was placed on the
approach of Lord Bingham of Cornhill in Dyer (supra) at
para [52] of his speech. In that
passage Lord Bingham said:
"In any case
in which it is said that the reasonable time requirement...has been or will be violated,
the first step is to consider the period of time which has elapsed. Unless that
period is one which, on its face and without more, gives grounds for real
concern it is almost certainly unnecessary to go further, since the Convention
is directed not to departures from the ideal but to infringements of basic
human rights. The threshold of proving a breach of a reasonable time
requirement is a high one, not easily crossed.
But if the period which has elapsed is one which, on its face and
without more, gives ground to real concern, two consequences follow. First, it is necessary for the court to look
into the detailed facts and circumstances of the particular case. The Strasbourg case law shows
very clearly that the outcome is closely dependent on the facts of each case".
[7] The
second consequence identified by Lord Bingham as applicable in a case
where the delay was of real concern is of no application in the present
case. Lord Bingham then indicated
three areas calling for "particular inquiry" in a case where the delay did
cause "real concern". These areas were,
the complexity of the case, the conduct of the defendant and the manner in
which the case has been dealt with by the administrative and judicial
authorities (paras [53], [54] and [55]).
[8] In response to these submissions, Counsel for the bank did
not dispute counsel for the respondent's approach to the applicable law. It was accepted, primarily on the authority
of Dyer (supra) that this Court
required to have regard to all the facts and circumstances of the instant case
in determining whether or not the right to have proceedings brought against the
person within a reasonable time had been satisfied. Approached in this way, the argument for
Counsel for the Bank was that one had to have regard to the whole chronology as
set out by Counsel for the respondent against the background that this was a
case involving an obligation, voluntarily entered into, which, by its very
nature, had the potential to survive over an extended period of time. It was pointed out that under German law, the
law whereby the relevant obligation had been created, obligations of this sort
were subject to a 30 year prescriptive period. While Counsel for the Bank accepted that the
German prescriptive period applicable to the obligation had no direct relevance
in determination of the current petition, he submitted that it was a fact to be
assessed and placed in the balance when considering whether or not the prayer
of the petition should be granted. The
argument advanced was that whilst it was accepted that the Bank could have
acted to enforce the obligation more expeditiously, this was not a case where
there was, objectively judged, any prejudice to Mr Ferrier. As was apparent from the chronology set forth
by Counsel for Mr Ferrier, to which no material issue was taken, he had
been aware of the Bank's intention to enforce the charge and recover the monies
due to it throughout almost the entire time since he had left Germany. For the purposes of the present petition,
there was no dispute that a sum was due.
The delay in effecting these proceedings had not, on the information
presented to the Court, caused any particular prejudice to the respondent. If the Bank were unable to register this
obligation for enforcement in Scotland, the only outcome would be a windfall
benefit to the respondent. In short, the
Bank would be unable to recover sums of money legitimately due to it. In these circumstances, whilst Counsel
accepted that the delays outlined by the respondent could be considered, when
the matter was viewed in the balance, there were no exceptional circumstances
which would justify this Court's refusal to grant the prayer of the
petition. Equally, and of course
importantly, there would be no breach by this Court of its obligations under
the European Convention on Human Rights if the prayer of the petition were
granted.
[9] It is clear from the foregoing that, at the end of the day,
there was little dispute between counsel for the parties in relation to either
the facts underlying this petition or the applicable law. So far as the facts are concerned, it is, in
my view, plain that there has been delay.
In fairness, counsel for the Bank did not dispute this. The Bank were plainly aware that
Mr Ferrier had left Germany
and that he was residing in Scotland. Whilst, on the evidence of an affidavit sworn
by Dr Seibert, the German solicitor who acts for the Bank, the Bank appear
to have had some doubts in the period between about 2001 and 2003 whether
Mr Ferrier remained in Scotland, I can see no objective reason why they
harboured such doubts. My impression is
that for whatever reason the bank employees who were dealing with this matter
simply failed to apply rigorous attention to the issue. I also find it difficult to understand why
when the Bank did commence proceedings to register the authentic instrument,
they did so in England. I also find it difficult to
understand why the English solicitors instructed did not immediately recognise
the jurisdictional difficulties and advise their clients, the Bank,
accordingly. I cannot, and do not, make
any definitive judgement as to the cause of these errors. In the event I do not however consider them
of particular relevance. There is no
doubt that they occasioned delay. In my
view however, they are the results of lack of attention, or even possibly ineptitude,
but disclose no intention on the part of the Bank to give up the right to
obtain payment of sums due to it or, further, act in anything other than a
manner designed to enforce its rights.
Viewed the other way, that is from the perspective of Mr Ferrier,
it seems to me that it can be said that he was aware throughout the entire
period dating from his departure from Germany
until the service of the present proceedings upon him that the Bank wished to
enforce the obligation incumbent upon him.
He was aware in 2001, evidenced by the letter sent to the Bank on his
behalf by his brother, that the Bank were taking steps to enforce the
obligation. He became aware in 2003 of
their efforts to register the authentic instrument in England. In these circumstances, I do not consider
that it can be said that Mr Ferrier was given any reason to believe that
the obligation had in anyway been discharged, or, that the Bank had decided not
to seek to enforce the same. In all the
foregoing circumstances, it does appear to me to be fair to characterise the
benefit that Mr Ferrier would acquire if the authentic instrument could
not be enforced as no more than a windfall gain to him.
[10] So far as the law is concerned, I am bound by the dictum of
Lord Bingham, in the case of Dyer
(supra) which has already been quoted.
Applying the test set out there, I require firstly to consider the
period of time which has elapsed and determine whether on it's face that period
gives ground for real concern. If I am
satisfied that the period of delay does give rise to real concern then I am
required to have regard to the detailed facts and circumstances of the case,
having particular regard to the complexity of the case, the conduct of, in the
circumstances of this case, the Petitioners and the manner in which the case
has been dealt with by the relevant judicial and administrative
authorities. Approaching the matter in
this way and as I have already made clear there is no real doubt in my mind
that the period involved is lengthy.
However when I examine the matter critically, I find it more difficult
to be satisfied that this period of delay causes me "real concern" in the context
of an infringement of a basic human right.
I have to consider that the obligation represented by the authentic
instrument was voluntarily entered into.
Moreover the debtor, that is Mr Ferrier, must be deemed to have
been aware that it was an obligation which had the capacity to exist over an
extended period of time and that the creditor, that is the Bank, had never
acted in a way inconsistent with its right to enforce the obligation. Having regard to these factors, whilst I
readily acknowledge that the delay caused by the Bank may have occasioned
Mr Ferrier irritation, possibly inconvenience and even some degree of
prejudice, I find it far more difficult to satisfy myself that it can be said
to infringe a basic human right. It
follows that I am not satisfied that in this case the first hurdle set forth by
Lord Bingham in Dyer (supra) has
been overcome. That is sufficient to
determine the issue before me. For
completeness I should however indicate that as part of my consideration of the
case I have as a matter of fact had the benefit of a detailed consideration of
the facts and circumstances. Nothing in
that consideration causes me to doubt my view that the respondent has failed to
overcome the first hurdle identified by Lord Bingham.
[11] Having regard to all the foregoing, I am not persuaded that the
defence stated has been made out. I
would not consider that the public policy exception has been established. In the circumstances I will refuse the motion
made on behalf of Mr Ferrier.
