Dmitry Lazarichev & Ors v Tsimafei Lyndou [2024] EWHC 8 (Ch)

“The court was not required to find that the claimant resided in any specific non-Convention State in order for the rule to be engaged; it sufficed that he had failed to establish residence in a Convention State.”

“When interpreting a statute, the court’s function is to determine the meaning of the words used in the statute. The fact that context and mischief are factors which must be taken into account does not mean that, when performing its interpretive role, the court can take a free-wheeling view of the intention of Parliament looking at all admissible material, and treating the wording of the statute as merely one item. Context and mischief do not represent a licence to judges to ignore the plain meaning of the words that Parliament has used. As Lord Reid said in Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, 613, ‘We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used.’”

“56. On the basis of the authorities cited to me, my conclusion is that the following principles apply: (1) In deciding whether the word ‘lawfully’ should be implied in the reference to resident in CPR r. 25.13(2)(a), I am engaged in a process of statutory construction: see Mark v Mark, at [30]. (2) Resident is an ordinary English word, and should be given its ordinary meaning. The dictionary meaning of the word means ‘to dwell permanently or for a considerable time, to have one’s settled or usual abode, to live in or at a particular place’, as pointed out by Lewison J in HMRC v Grace [2008] EWHC 2708 (Ch), at [3]. (3) Residence in a place connotes some degree of permanence, some degree of continuity or some expectation of continuity: HMRC v Grace, ibid. (4) The question as to where a particular respondent resides on an application for security for costs is a factual one. However, that does not mean that questions of lawfulness are wholly irrelevant. If there was clear evidence that a respondent was at immediate risk of deportation, that could very well lead to the conclusion that the respondent was not, in fact, resident in a particular jurisdiction: see the comments of Baroness Hale in Mark v Mark, at [36], giving the example of a person who was ‘on the run’ after a deportation order or removal directions. Compare Lord Hope’s conclusion in Mark v Mark, at [13], that ‘… illegality is relevant to the question whether the person intended to reside in a country with the intention of remaining there indefinitely, but not to the question whether the person is present here.’ (5) Counsel for the Defendants emphasised the carve-out or caveat suggested by Baroness Hale, to the effect that other statutory provisions ‘in particular those conferring entitlement to some benefit from the state’ would make it proper to imply a requirement that residence be lawful. However, it is difficult to see how that applies in the context of an application for security for costs. There is no question of Mr Lyndou claiming benefits from the United Kingdom in the usual sense of that term. The suggestion that, by claiming residence in Poland, Mr Lyndou was in some way claiming a ‘benefit’ in the sense that he would not be ordered to provide security for costs is, in my view, forced and artificial. (6) On an application for security for costs, the court should be cautious about entering into questions of the lawfulness of a person’s residence in another country. It will be a rare case where the evidence is sufficiently clear to reach a conclusion with any confidence. Immigration law is notoriously complex. I note that Moore-Bick J in Aoun v Bahri declined to reach a decision where what was involved was whether Mr Aoun was lawfully resident in the UK, indicating that this was a matter best left to the Home Office. How much more caution is justified where what is in issue is a question of the lawfulness of a person’s residence in a foreign state. (7) The other matter to which one ought to be alive is what Baroness Hale termed ‘the shifting nature of immigration status’: Mark v Mark, at [48]. The example given was that of an asylum seeker, who may commit a criminal offence in entering this country illegally, but who upon making his claim to the authorities, may be granted temporary admission. Again, I appreciate that the remarks were made in the context of considering UK immigration and asylum law, but the position is even more difficult when what the court is being asked to consider involve questions of foreign immigration law. (8) If submissions about the lawfulness of a person’s residence in a foreign state became routine on applications for security for costs, then that would inevitably require expert evidence, and possibly cross-examination of the parties’ respective experts. Applications for security for costs are interim applications, which ought to be decided in a proportionate way and without the need to examine complex factual or legal questions.”

“The question of a person’s residence for the purposes of CPR 25.13(2)(a) is one of fact and degree. A person is resident in a place for these purposes if they habitually and normally reside lawfully in that place from choice, and for a settled purpose, apart from temporary or occasional absences, even if their permanent residence or ‘real home’ is elsewhere: see note 25.13.2 in the White Book citing inter alia R v Barnet LBC, ex parte Shah (Nilish) [1983] 2 AC 309, 343G, 349. The Court of Appeal applied the dicta in Shah to a security application under the previous rules of court (RSC Order 23 rule 1) in Parkinson v Myer Wolff & Manley (23 April 1985, unreported, CA).”

“(i) The word ‘reside’ is a familiar English word which means ‘to dwell permanently or for a considerable time, to have one’s settled or usual abode, to live in or at a particular place’: Levene v Commissioners of Inland Revenue (1928) 13 TC 486, 505. This is the definition taken from the Oxford English Dictionary in 1928, and is still the definition in the current on-line edition; (ii) Physical presence in a particular place does not necessarily amount to residence in that place where, for example, a person’s physical presence there is no more than a stop gap measure: Goodwin v Curtis (1998) 70 TC 478, 510; (iii) In considering whether a person’s presence in a particular place amounts to residence there, one must consider the amount of time that he spends in that place, the nature of his presence there and his connection with that place: Commissioners of Inland Revenue v Zorab (1926) 11 TC 289, 291; (iv) Residence in a place connotes some degree of permanence, some degree of continuity or some expectation of continuity: Fox v Stirk [1970] 2 QB 463, 477; Goodwin v Curtis (1998) 70 TC 478, 510; (v) However, short but regular periods of physical presence may amount to residence, especially if they stem from performance of a continuous obligation (such as business obligations) and the sequence of visits excludes the elements of chance and of occasion: Lysaght v Commissioners of Inland Revenue (1928) 13 TC 511, 529; (vi) Although a person can have only one domicile at a time, he may simultaneously reside in more than one place, or in more than one country: Levene v Commissioners of Inland Revenue (1928) 13 TC 486, 505; (vii) ‘Ordinarily resident’ refers to a person’s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life, whether of short or long duration: R v Barnet LBC ex p Shah [1983] 2 AC 309, 343; (viii) Just as a person may be resident in two countries at the same time, he may be ordinarily resident in two countries at the same time: Re Norris (1888) 4 TLR 452; R v Barnet LBC ex p Shah [1983] 2 AC 309, 342; (ix) It is wrong to conduct a search for the place where a person has his permanent base or centre adopted for general purposes; or, in other words to look for his ‘real home’: R v Barnet LBC ex p Shah [1983] 2 AC 309, 345 and 348; (x) There are only two respects in which a person’s state of mind is relevant in determining ordinary residence. First, the residence must be voluntarily adopted; and second, there must be a degree of settled purpose: R v Barnet LBC ex p Shah [1983] 2 AC 309, 344; (xi) Although residence must be voluntarily adopted, a residence dictated by the exigencies of business will count as voluntary residence: Lysaght v Commissioners of Inland Revenue (1928) 13 TC 511, 535; (xii) The purpose, while settled, may be for a limited period; and the relevant purposes may include education, business or profession as well as a love of a place: R v Barnet LBC ex p Shah [1983] 2 AC 309, 344; (xiii) Where a person has had his sole residence in the United Kingdom he is unlikely to be held to have ceased to reside in the United Kingdom (or to have ‘left’ the United Kingdom) unless there has been a definite break in his pattern of life: Re Combe (1932) 17 TC 405, 411.”

“I agree with Lord Denning M.R. [in the Court of Appeal in Shah] that in their natural and ordinary meaning the words mean ‘that the person must be habitually and normally resident here, apart from temporary or occasional absences of long or short duration.’ The significance of the adverb ‘habitually’ is that it recalls two necessary features mentioned by Viscount Sumner in Lysaght’s case, namely residence adopted voluntarily and for settled purposes.”

“Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that ‘ordinarily resident’ refers to a man’s abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration. There is, of course, one important exception. If a man’s presence in a particular place or country is unlawful, e.g. in breach of the immigration laws, he cannot rely on his unlawful residence as constituting ordinary residence … There is, indeed, express provision to this effect in the Act of 1971, section 33(2) Section 33(2) of the Immigration Act 1971 provides: “It is hereby declared that, except as otherwise provided in this Act, a person is not to be treated for the purposes of any provision of this Act as ordinarily resident in the United Kingdom or in any of the Islands at a time when he is there in breach of the immigration laws.”

“I would add one further comment. By giving the words their natural and ordinary meaning one helps to prevent the growth and multiplication of refined and subtle distinctions in the law’s use of common English words. Nothing is more confusing and more likely to bring the statute law into disrepute than a proliferation by judicial interpretation of special meanings, when Parliament has not expressly enacted any.”

“The way in which they [the Divisional Court and the Court of Appeal] used policy was, in my judgment, an impermissible approach to the interpretation of statutory language. Judges may not interpret statutes in the light of their own views as to policy. They may, of course, adopt a purposive interpretation if they can find in the statute read as a whole or in material to which they are permitted by law to refer as aids to interpretation an expression of Parliament’s purpose or policy. But that is not this case.”

“33. It is common ground that habitual residence and ordinary residence are interchangeable concepts: see Ikimi v Ikimi [2002] Fam 72. The question is whether the word ‘lawfully’ should be implied into section 5(2) of the 1973 Act. I see no reason to do so. The purpose of the 1973 Act was to provide an answer to the question ‘when is the connection with this country of the parties and their marriage sufficiently close to make it desirable that our courts should have jurisdiction to dissolve the marriage?’ …”

“It is possible that the legality of a person’s residence here might be relevant to the factual question of whether that residence is ‘habitual’. A person who was on the run after a deportation order or removal directions might find it hard to establish a habitual residence here. But such cases will be rare, compared with the large numbers of people who have remained here leading perfectly ordinary lives here for long periods, despite having no permission to do so. … There will, however, be other statutory provisions, in particular those conferring entitlement to some benefit from the state, where it would be proper to imply a requirement that the residence be lawful.”

“64. Taken as a whole, therefore, I find that the evidence shows that Mr Lyndou is not living in Belarus, but that he is habitually and normally residing in Poland. There is no evidence at the moment that Mr Lyndou is residing in Belarus.”

“66. The starting point for my analysis is that Mr Lyndou has been granted a Polish temporary residence permit. On that basis, Mr Lyndou is in fact lawfully resident in Poland. What the Defendants invite me to do is to look behind this and conclude that there is clear evidence of unlawful conduct, and that the court should infer that the temporary residence permit was both obtained unlawfully and is now liable to be set aside.”

“23. Where a claimant is unlawfully resident in a particular State, it is inherently likely that it would be more difficult or expensive to enforce any award of costs against them: their unlawful residence makes it inherently unlikely that they would (or would continue to) hold assets lawfully in the jurisdiction against which enforcement might be effected; on the contrary, it would suggest that they would be very much more likely to be deported or otherwise leave the State in question (which intentionally or not would increase the prospect of evading enforcement); and, further, it might afford them the ability to contest jurisdiction in the event of any enforcement proceedings. 24. In those circumstances, and for the reasons set out further below, it is submitted that ‘residence’ in the Rule must connote ‘lawful residence’ if it is to serve the policy and purpose of that provision.”

“29. There is no reason why a different approach [viz. from that in the passage in Shah] should be adopted in the context of Security for Costs: as a matter of principle, per Lord Scarman’s analysis, it would be wrong in principle for a claimant to be able to rely on his own unlawful act to secure an ‘advantage’, namely the ability to evade an order obliging them to provide Security for Costs. … 37. … [T]he Judge ought to have concluded that the Rule did in fact confer a benefit, or something equivalent to it: if a claimant is found to be resident in a Hague Convention State within the meaning of the Rule, they are put in a more advantageous position than a claimant who is found not so to reside. The latter claimant, as the ‘price’ of litigating13, must pay into Court substantial sums of money, failing which their claim will be stayed. It is an advantage, or benefit, for a party not to be required to make such a payment or face the choice between payment and a stay of their claim. As Green J has put it, in Ras Al Khaimah Investment Authority v Farhad Azima [2022] EWHC 1295 (Ch), at ¶34: ‘In my view there is a substantial qualitative difference between being ordered to pay a sum of money or costs as the price of continuing with the litigation and being willing to pay an adverse costs order at the end of the proceedings, having lost.’” ‘In my view there is a substantial qualitative difference between being ordered to pay a sum of money or costs as the price of continuing with the litigation and being willing to pay an adverse costs order at the end of the proceedings, having lost.’”

“The submission was and is that, as in the case of estoppel, the common law [wrongdoing principle] operates as an evidential bar. Thus the claimant could not and cannot be heard to rely upon the existence of his residence permit, since to do so would offend against that principle.”

“But this, with respect, is not construction; ‘cannot be heard to say’ is the language of estoppel; what the learned Lord Justice is really saying is that there is some rule of law that prevents A.P.E.X. from relying on rule 14 as against Cheall.”

“In the course of the speeches, which are not entirely consistent with one another, reference was made by all their Lordships to the well known rule of construction that, except in the unlikely case that the contract contains clear express provisions to the contrary, it is to be presumed that it was not the intention of the parties that either party should be entitled to rely upon his own breaches of his primary obligations as bringing the contract to an end, i.e. as terminating any further primary obligations on his part then remaining unperformed. This rule of construction, which is paralleled by the rule of law that a contracting party cannot rely upon an event brought about by his own breach of contract as having terminated a contract by frustration, is often expressed in broad language as: ‘A man cannot be permitted to take advantage of his own wrong.’ But this may be misleading if it is adopted without defining the breach of duty to which the pejorative word ‘wrong’ is intended to refer and the person to whom the duty is owed. … To attract the principle, whether it be one of construction or one of law, that a party to a contract is not permitted to take advantage of his own breach of duty, the duty must be one that is owed to the other party under that contract; breach of a duty whether contractual or non-contractual owed to a stranger to the contract does not suffice. I have no hesitation in rejecting the argument based upon the supposed rule of law.”

“54. Whether conduct will on public policy grounds disentitle a person from relying upon an apparently unqualified statutory provision must be considered in context and with regard to any nexus existing between the conduct and the statutory provision. Here, the four-year statutory periods must have been conceived as periods during which a planning authority would normally be expected to discover an unlawful building operation or use and after which the general interest in proper planning control should yield and the status quo prevail. Positive and deliberately misleading false statements by an owner successfully preventing discovery take the case outside that rationale. … … 56. Here, Mr Beesley’s conduct, although not identifiably criminal, consisted of positive deception in matters integral to the planning process (applying for and obtaining planning permission) and was directly intended to and did undermine the regular operation of that process. Mr Beesley would be profiting directly from this deception if the passing of the normal four-year period for enforcement which he brought about by the deception were to entitle him to resist enforcement. The apparently unqualified statutory language cannot in my opinion contemplate or extend to such a case.”

“50. Whilst I accept that Mark v Mark was concerned with the court’s jurisdiction, I am not persuaded that the approach of the House of Lords to that question does not point the way in this case. The question here is whether during the two years immediately preceding his death the deceased and the claimant lived as husband and wife in the same household. That is a pure question of fact. It is not dependent on whether the claimant is an illegal overstayer. The purpose of the jurisdiction is to recognise the financial claims against a deceased’s estate of persons closely related to or financially dependant upon the deceased. In the case of claims by a spouse or former spouse of the deceased, there is a close affinity with the jurisdiction exercised by the court on the break-up of a marriage. See, for example, section 3(2) of the Act. It would be extraordinary if an overseas national who had lived for, say 30 years, in this country as the wife of a man resident and domiciled in this country and who, to the man’s knowledge, had originally entered this country illegally and had never regularised her presence here were disabled from advancing any claim out of his estate under the Act by virtue of her unlawful status here but could have made a claim against him if, before his death, she had successfully petitioned for divorce and made a claim for ancillary relief. 51. In my judgment, just as the wife’s unlawful presence in this country was no bar to her ability in Mark v Mark to establish habitual residence and domicile in this country so as to ground jurisdiction in the court under section 5(2) of the Domicile and Matrimonial Proceedings Act 1973, so also was the claimant’s unlawful presence in this country no bar to her ability to invoke the court’s jurisdiction under the Act to make reasonable financial provision for her out of the deceased’s estate.”

“The Judge in any event erred in failing to apply his own direction that lawfulness would be relevant where ‘there was clear evidence that a respondent was at immediate risk of deportation’ (¶56(4)). It was not open to a reasonable judge to conclude that there was no such ‘clear evidence’ in this case, in light of (a) the clear and uncontroverted evidence that the Claimant had obtained his permit by making false and/or misleading representations (J/¶67, 68, 69, 73 and 74) and (b) the wording of the Polish declaration form signed by the Claimant (J/¶67) which provided that a person’s permit ‘shall’ be refused or cancelled in the event of a false declaration.”

“35. These are serious allegations which depend in part on findings as to what took place when Mr Aoun presented himself at immigration control on last entering this country. They raise issues which in my view are not really suitable to be determined on an application for security for costs, and even though in this case Mr Aoun has given evidence and so has had an opportunity to respond to the points made against him, I do not think that there has been an opportunity to investigate the matter fully. It would be particularly unfortunate if I were to express any view about Mr Aoun’s immigration status on the basis of incomplete evidence that might have an effect, one way or the other, on his application for a residence permit. That is a matter best left to the Home Office to be determined on its merits in the ordinary way.”

“The hearing is over. The Defendants do not have permission to file further evidence. Further, the new material is described as being expert evidence, and no permission has been sought (let alone obtained) pursuant to CPR Part 35.4. A judgment will be produced in due course.”

“75. Moreover, I have no evidence as to what might be the attitude of the Polish immigration authorities in relation to the matters raised by the Defendants. Mr Lyndou has been advised by a Polish lawyer in the course of obtaining his temporary residency permit. The Defendants have not sought to obtain further evidence from their proposed expert, Ms Świtajska, as to the probable or likely course that the Polish immigration authorities may adopt. The Defendants complain that they could not have obtained a further report from Ms Świtajska earlier, given that Mr Lyndou has still failed to provide a copy of his contract of employment with Sfera Bit, as well as other material documents. However, while Mr Lyndou has not provided this contract, nor has he provided a complete copy of the original temporary residence permit application, with supporting documents, the Defendants have had the application for the temporary residence permit itself and the employer’s declaration (the truthfulness of which they now seek to challenge) since I believe September 2022.”

“97. A few days after the hearing had ended, the Defendants served what is described as a Supplemental Expert’s Report of Ms Świtajska. That report indicated that, assuming that Mr Lyndou had provided false information in his temporary residence permit application or the attachment to it, and this came to the attention of the Polish authorities, then they would be obliged to cancel the permit that Mr Lyndou holds. The report appeared designed to address certain questions which had been raised in the course of the submissions before me. 98. The Defendants had no permission to rely on this further evidence once the hearing was over. Further, the new evidence is in substance expert evidence, for which permission would need to be obtained. In the covering letter under which the evidence was served, the Defendants indicated that Mr Lyndou should have the opportunity to respond, if necessary by filing evidence from his Polish lawyer if there were any points where Mr Lyndou disagreed with Ms Świtajska. 99. I declined the invitation to hold a further hearing to consider the conclusions of the Supplemental Report. It is important that applications for security for costs should be made and opposed in a reasonable and proportionate manner. Moreover, I do not think it right for time to be taken up in a further, no doubt contested, hearing, which could only involve the Court trying to second-guess what the approach of the Polish authorities might be. It would be one thing, were the Polish immigration authorities to revoke Mr Lyndou’s temporary residence permit. That might well constitute a material change of circumstances, enabling the Defendants to re-apply to court. However, it is quite another matter for this Court to try and determine, on the basis of competing reports and submissions from the parties, the likelihood (or not) of that occurring.”

“I accept, without reservation, that this Court should not interfere with case management decisions made by a judge who has applied the correct principles, and who has taken into account the matters which should be taken into account and left out of account matters which are irrelevant, unless satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge.”