Canada Trust Company v. Stolzenberg and Gamba [2000] UKHL 51

House of Lords
Between
Canada Trust CompanyAppellantStolzenberg and GambaRespondent
Before
Lord SteynLord HoffmannLord Cooke of ThorndonLord Hope of CraigheadLord Hobhouse of WoodboroughDate 12 October 2000
[1]The Issue The main issue in this appeal can be shortly stated. Article 2 of the Brussels and Lugano Conventions requires that, subject to exceptions, a person domiciled in a Contracting State should be sued in the courts of that State. Article 6.1 is one such exception. It provides that a person domiciled in a Contracting State may also, when he is one of a number of defendants, be sued in the courts for the place where any one of them is domiciled. At what stage in English civil procedure is a person "sued" for the purposes of Articles 2 and 6? Is it the time when the proceedings are started by the issue of a claim form by the court? (C.P.R. 7.2.(1)). Or is it the time when the claim form is served on the defendant? At which stage does the defendant (or one of them) have to be domiciled in England?[2]The facts The plaintiffs are the trustees of Canadian pension funds. They claim to have been induced by a fraudulent conspiracy to invest £120m. in companies called the Castor group, which collapsed in 1992. Mr Stolzenberg, the President and Chief Executive of the Castor Group, is said to have been the chief conspirator. He lived in a house in Belgravia and was domiciled in England. Three other individuals were alleged to have conspired with him. They lived in Canada and Switzerland. The plaintiffs decided to commence proceedings in England, suing Mr Stolzenberg under Article 2 and the other defendants domiciled in Convention countries ("the Convention defendants") under Article 6.1. They also wished to join 33 corporate entities which were alleged to have received some of the money or to have been otherwise involved in the fraud. Most of them were incorporated in various tax havens. None was domiciled in England. The plaintiffs proceeded slowly and carefully. The case was complicated. The statement of claim as eventually served, with its schedules and appendices, ran to over 300 pages. On 15 May 1996, before the issue of proceedings, they applied ex parte and in camera to Rimer J. for Mareva injunctions and associated interlocutory relief against various proposed defendants. Rimer J. heard submissions for five days and on 4 June 1996 he made the orders upon an undertaking by the plaintiffs to issue a writ. The writ was issued on 1 August 1996. But neither the writ nor the secretly obtained interlocutory orders were served until March of the following year. Ordinarily a writ has to be served within four months of issue: see R.S.C., Ord. 6, r. 8(1)( c ), now C.P.R. 7.5(2). But the court gave the plaintiffs leave to defer service because they wanted to co-ordinate the service of interlocutory relief in other jurisdictions in which some of the defendants were present. In some cases, such as Switzerland, it was necessary to institute criminal proceedings. This took time. Meanwhile Mr Stolzenberg got wind of the proceedings. He was the subject of a B.B.C. investigative programme in February 1996. He sold his house in August 1996 and moved to another house nearby. 11 March 1997 was the day for service. But Mr Stolzenberg could not be found. On the following day he caught the Eurostar to Germany. He abandoned his English domicile. Rattee J. made an order for substituted service. On 13 June 1997 he made an order that Mr Stolzenberg had been duly served. But by that time he was no longer domiciled in England.[3]The proceedings The defendants other than Mr Stolzenberg were served on 11 March 1997. The Convention defendants were served without leave under R.S.C., Ord. 11, r. 1(2). The defendants domiciled in states which were not parties to either of the Conventions ("the non-Convention defendants") were served by leave granted under Ord. 11(1)( c ) on the ground that they were necessary and proper parties to a claim brought against other persons duly served within or out of the jurisdiction. This appeal arises out of an application under R.S.C., Ord. 12, r. 8 by two Convention defendants domiciled in Switzerland and four non-Convention defendants to set aside service of the writ on the ground that the English court had no jurisdiction over them. The main ground was that for the purposes of Articles 2 and 6, Mr Stolzenberg was not "sued" until the proceedings were served upon him. As he was not then domiciled in England, the court had no jurisdiction. It followed that there was no English defendant for the purpose of founding jurisdiction against the other Convention defendants under Article 6.1 And as they had not been "duly served", leave should not have been given to serve the non-Convention defendants under R.S.C., Ord. 11(1)( c ). Rattee J. held that a defendant was sued in England for the purposes of the Conventions when the writ was issued. His decision was affirmed by a majority of the Court of Appeal (Nourse and Waller L.JJ., Pill L.J. dissenting). The defendants appeal to your Lordships House.[4]The Conventions The Brussels and Lugano Conventions are for present purposes in identical language. The Brussels Contracting States are members of the European Union and questions on the interpretation of the Convention may be referred to the European Court of Justice. The Lugano Convention includes non-members and the European Court has no jurisdiction over it. Nevertheless, as the two Conventions were intended to establish a single system for the allocation of jurisdiction among Contracting States and the mutual recognition of their judgments,. decisions of the European Court on the Brussels Convention are obviously of great authority for the interpretation of the parallel provisions of the Lugano Convention. As the two Convention defendants in this case are domiciled in Switzerland, the Lugano Convention is the one engaged.[5]Autonomous and national concepts The jurisprudence of the European Court distinguishes between those concepts in the Brussels Convention which have an autonomous or independent meaning, irrespective of their content in the law of any particular national system, and those which require the national court to give content to the Convention concept in accordance with its domestic law. So, for example, the expression "consumer" in Articles 13 and 14 has been given an autonomous meaning: see Benincasa v. Dentalkit Srl (Case C-269/95) [1998] All ER (EC) 135 . On the other hand, in Tessili v. Dunlop [1976] ECR 1473 the Court decided that "place of performance" of a contract in Article 5.1 should be determined according to whatever the national court's conflict rules regarded as the proper law of the contract. The Conventions contain numerous references to the commencement of proceedings. Thus Articles 2, 3, 5, 6, 8, 9 and 20 speak of a person being "sued", articles 6.2 and 20 of proceedings being "instituted", Articles 10, 11, 14, 21 and 22 of proceedings being "brought" and Articles 21, 22 and 23 of courts becoming "seised" of actions. In Zelger v. Salinitri (Case 129/83) [1984] ECR 2397 the Court of Justice had to decide whether the concept of a court being "first seised" for the purposes of Article 21, which, as Advocate General Mancini said (at p. 2413), "presupposes a definition of the moment at which proceedings are initiated", should receive an autonomous or a national meaning. The court decided, at p. 2408, para.15, that it referred to the moment when the proceedings had been "definitively brought" but that the content to be given to that concept - whether it happened when proceedings were lodged with or issued by the court or upon notification to the defendant - was a matter for national law:
"Since the object of the Convention is not to unify those formalities, which are closely linked to the organization of judicial procedure in the various States, the question as to the moment at which the conditions for definitive seisin for the purposes of Article 21 are met must be appraised and resolved, in the case of each court, according to the rules of its own national law."
In Dresser U.K. Ltd v. Falcongate Freight Management Ltd [1992] Q.B. 502 the Court of Appeal applied these instructions and characterised the time of service of proceedings as the moment when the English court was "definitively seised" for the purposes of Article 21.[6]Zelger v. Salinitri The appellants submit that if service is the moment when proceedings are initiated for the purposes of Article 21, it should also be the moment when the defendant is "sued" for the purposes of Articles 2 and 6. If the court is seised when the proceedings are definitively brought, why should it have jurisdiction when they have been less than definitively brought? For this purpose it is necessary to examine the reasoning in Zelger v. Salinitri [1984] ECR 2397 . The plaintiff's argument turned upon a play on words in the German language. He had sued the Italian defendant in Munich on the ground that it was the place of performance of the contract upon which he was suing. When this appeared likely to be in issue, he sued him in Italy as well. The German proceedings had been lodged with the court before those in Italy but were served later. The Munich court declined jurisdiction on the ground that the Italian court was first seised when its proceedings were served. The Munich Court of Appeal referred the question of whether this was a correct interpretation of Article 21 to the European Court. German procedural law has three technical expressions which can be translated into English as pending. When the claim form ( Klageschrift ) is lodged with the court, the proceedings become anhängig . This has certain legal consequences: for example, the limitation period stops running. When the claim form has been served, the proceedings have been erhoben , literally, raised (there is a parallel with Scottish terminology). This has other procedural consequences. Germany also has a domestic lis pendens rule, by which a defendant can object to the jurisdiction on the ground that proceedings between the same parties raising the same issue are pending in another court. Proceedings pending in this sense are said to be rechtshängig and German proceedings become rechtshängig when they have been erhoben and not when they are merely anhängig . The plaintiff's argument in Zelger v. Salinitri therefore started with the initial handicap that the Munich proceedings would not have been regarded as rechtshängig in German domestic law at the time when the Italian proceedings were served. Nevertheless, he argued that the terms of Article 21 showed that for Convention purposes a court should be treated as seised when the claim form was lodged. This turned upon the German language version of Article 21:
"Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."
In the German version, "proceedings...are brought" was rendered as " Klagen [werden] anhängig gemacht". This is a perfectly ordinary German expression for bringing proceedings, without necessarily any technical connotation about the stage they have reached. But the plaintiff argued that the use of the term anhängig meant that, contrary to German domestic law, a court in a Convention country was seised when the proceedings were issued. He contrasted the German version of Article 22, which rendered "actions are brought" as " Klagen werden erhoben " and said this showed that the draftsman was using different words to refer to different concepts of initiating proceedings. The Court, as I have said, rejected the argument that the Convention was intending to adopt a single autonomous concept of the initiation of proceedings, let alone one which was intelligible only to a person having a detailed acquaintance with the technical terms of German civil procedure. The plaintiff was therefore referred to the concept of initiation in German domestic law. But which concept of initiation? German law, as we have seen, has at least two: the stage at which proceedings are anhängig and the stage at which they are erhoben. Advocate General Mancini said that one had to choose the one which applied in the appropriate context. In other words, what step should be characterised as being the initiation of proceedings for the purposes of Article 21? In the ordinary way, it would be that step which the domestic law regarded as initiating proceedings for the purposes of its own lis pendens rule. In German law, this pointed to the moment when the proceedings were erhoben. But, looking outside the original six Contracting States and in particular at England and the Irish Republic, the Advocate General did not consider that a Contracting State should have complete freedom of choice in applying its domestic rules to Article 21. He proposed two limitations: first, that the rule had to be fixed and ascertainable, not discretionary as under the common law forum non conveniens doctrine. Secondly, it should not be a rule which "limited the rights of the defence": p. 2415. He considered that for two reasons the defence would be so limited if one chose a time before service of proceedings. The first was that the defendant might be unaware that he could raise a plea of lis pendens elsewhere. The second was that a defendant might start proceedings elsewhere without realising that they were already barred by a lis pendens in, say, England. The Court of Justice, as it seems to me, accepted the Advocate General's general approach. But it said at p. 2408, para. 14 of the judgment:
"It may properly be inferred from Article 21, read as a whole, that a court's obligation to decline jurisdiction in favour of another court only comes into existence if it is established that proceedings have been definitively brought before a court in another State involving the same cause of action and between the same parties. Beyond that, Article 21 gives no indication of the nature of the procedural formalities which must be taken into account for the purposes of considering whether or not to recognise the existence of such an effect. In particular, it gives no indication as to the answer to the question whether a lis pendens comes into being upon the receipt by a court of an application or upon service or notification of that application on or to the party concerned."
This seems to me a rejection of the Advocate General's proposal to restrict domestic choice to a time after service of the documents. In so doing, the court may have been conscious of the fact that in some jurisdictions, "service" did not necessarily mean personal service. It could be simply the delivery of the document for service to an official of the court. So a rule which required service in this sense would not necessarily eliminate the defence handicaps mentioned by the Advocate General. On the other hand, the Court did in my opinion accept the Advocate General's opinion that proceedings are initiated and the court is seised for the purposes of Article 21 only when it would be so seised for the purposes of its own domestic lis pendens rule. On this point, however, the language used by the Court requires some explanation. As we have seen, it said in paragraph 14 that Article 21 applies only when proceedings have been "definitively brought" and it answered the question in paragraph 16 by saying:
"the court 'first seised' is the one before which the requirements for proceedings to become definitively pending are first fulfilled, such requirements to be determined in accordance with the national law of each of the courts concerned."
In England, the word "definitively" in those two paragraphs of the judgment has proved puzzling. In Dresser U.K. Ltd. v. Falcongate Freight Management Ltd. [1992] Q.B. 502, 519, Bingham L.J. said that the European Court did not use this adverb "by way of mere rhetoric". He thought it was used to express approval of the Advocate General's view that a court in a Contracting State can in no circumstances be seised of proceedings for the purposes of Article 21 unless they have been served. I would respectfully disagree. Paragraph 14 of the judgment is in my opinion a clear rejection of any such rule. But that leaves the question of what "definitively" was intended to mean. "Definitively", like "really" and "actually" (compare Charter Reinsurance Co. Ltd. v. Fagan [1997] AC 313 , 391-392) is what J.L. Austin called a "trouser-word". In Sense and Sensibilia (1962) at p. 70, he said:
"Next, 'real' is what we may call a trouser-word . It is usually thought, and I daresay usually rightly thought, that what one might call the affirmative use of a term is basic - that, to understand ' x ', we need to know what it is to be x, or to be an x , and that knowing this apprises us of what it is not to be x, not to be an x . But with 'real'...it is the negative use which wears the trousers. That is, a definite sense attaches to the assertion that something is real, a real such-and-such, only in the light of a specific way in which it might be, or might have been, not real. 'A real duck' differs from the simple 'a duck' only in that it is used to exclude various ways of not being a real duck - but a dummy, a toy, a picture, a decoy, &c.; and moreover I don't know just how to take the assertion that it is a real duck unless I know just what, on that particular occasion, the speaker has it in mind to exclude."
What, therefore, did the Court have it mind to exclude when they said that the proceedings must be not merely pending but "definitively pending"? Here it helps to look at the language of the case, which was German. In paragraph 14, "definitively pending" is " endgültig erhoben ". And the language in the answer to the question in paragraph 16 is even clearer, where "the requirements for proceedings to become definitively pending" is rendered " die Voraussetzungen für die Annahme einer endgültigen Rechtshängigkeit ", that is to say, the proceedings must be rechtshängig, pending for the purposes of the domestic lis pendens rule. By combining endgültig or "definitively" with the technical term of German law which refers to proceedings being pending for the specific purposes of the lis pendens rule, the Court was simply intending to exclude any concept of proceedings being pending which did not satisfy this rule. In a different context, the word "definitively" or " endgültig" might have been used to convey an altogether different idea. Thus, in the context of limitation of action, an English lawyer might say that time did not stop running merely because the plaintiff had sent a letter of demand. He must actually (note the word) have commenced proceedings. A German lawyer might say that the proceedings must be endgültig anhängig , or definitively pending in the sense of the claim form having been lodged. It is the excluded concept - in this case, mere preparatory steps - which wears the trousers.[7]Contextuality My Lords, the purpose of subjecting the House to this elaborate analysis of Zelger v. Salinitri is to demonstrate that it provides no support for Miss Gloster's submission that a court cannot have jurisdiction for the purposes of Articles 2 and 6 unless it is seised for the purposes of Article 21. On the contrary, it is authority for two propositions. First, that the concept of initiating proceedings must be characterised according to national law and secondly that it may be characterised differently for different purposes. Miss Gloster's alternative submission was that even if there was no logical equivalence between the commencement of proceedings for the purposes of the different articles, many of the reasons given by the Court of Appeal in Dresser U.K. Ltd. v. Falcongate Freight Management Ltd [1992] Q.B. 502 for choosing the time of service for the purpose of Article 21 could equally be applied to Articles 2 and 6. The problem which faced the Court of Appeal in Dresser was that the common law has no lis pendens rule. Instead, it has a discretionary doctrine of forum non conveniens in which the existence of a lis pendens is merely one factor to be taken into account. In Contracting States which had a lis pendens rule, Zelger v. Salinitri was no doubt easy enough to apply. German courts had no difficulty in knowing when proceedings were endgültig rechtshängig. The Civil Procedure Code told them that it was when the proceedings were erhoben . But the Court of Appeal in Dresser had to invent a domestic rule solely for the purpose of allowing Article 21 to refer to it. They started with a blank sheet of paper and were in my opinion free to devise whatever rule appeared most suitable. The question was one for pragmatic rather than dogmatic choice. The pragmatic nature of the decision was emphasised by Advocate General Mancini in the reasons he gave in Zelger for wanting to rule out any time before service of the proceedings as within the legitimate choice of domestic law. The Court was, as I have said, not willing to go so far. But the reasons given by the Advocate General are weighty and even without the authority of the Court, they deserved the attention which Bingham L.J. gave them in Dresser. On the other hand, Grupo Torras S.A. v. Sheik Fahad Mohammed Al-Sabah [1996] 1 Lloyd's Rep 7 shows that there are problems about applying a date of service rule to cases involving multiple defendants which the Court of Appeal may not have foreseen. It is not my purpose to comment on whether the Court of Appeal made the right choice in Dresser . The question is not before the House and may in any case be overtaken by a proposed revision of the Conventions. The reasons of the Advocate General are of course specific to the lis pendens situation. But other reasons given by the Court of Appeal in Dresser are expressed in more general terms. Thus Bingham L.J. said (at p. 523) that it was - "artificial, far-fetched and wrong to hold that the English court is seised of proceedings, or that proceedings are decisively, conclusively, finally or definitively pending before it, upon mere issue of proceedings, when at that stage(1) the court's involvement has been confined to a ministerial act by a relatively junior administrative officer;(2) the plaintiff has an unfettered choice whether to pursue the action and serve the proceedings or not, being in breach of no rule or obligation if he chooses to let the writ expire unserved;(3) the plaintiff's claim may be framed in terms of the utmost generality;(4) the defendant is usually unaware of the issue of proceedings and, if unaware, is unable to call on the plaintiff to serve the writ or discontinue the action and unable to rely on the commencement of the action as a lis alibi pendens if proceedings are begun elsewhere;(5) the defendant is not obliged to respond to the plaintiff's claim in any way, and not entitled to do so save by calling on the plaintiff to serve or discontinue;(6) the court cannot exercise any powers which, on appropriate facts, it could not have exercised before issue;(7) the defendant has not become subject to the jurisdiction of the court." 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 QB 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] ECR 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] ECR 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. © 2000 Crown Copyright

Cited in 8 later judgments