OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 24 November 2005 1( )

Case C-3/05

Gaetano Verdoliva

v

J.M. Van der Hoeven BV and Others

(Reference for a preliminary ruling from the Corte d’Appello di Cagliari (Italy))

(Brussels Convention – Article 36 – Meaning of service – Defective service of the enforcement order – Equivalence of notice and service – Curing of service defects in the event of notice of the enforcement order)

I – Introduction

1. In the present case the Corte d’Appello di Cagliari requests the Court to interpret Article 36 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (hereinafter ‘the Convention’). ( ) In particular the question has arisen whether, in cases of failure of service or defective service, notice of the enforcement order none the less causes time to run for the purposes of the time-limit referred to in Article 36 of the Convention.

II – Legislative background

A – The Brussels Convention

2. Article 26 of the Convention provides that a judgment given in a Contracting State is to be recognised in the other Contracting States without any special procedure being required.

3. Articles 27 and 28 of the Convention list exhaustively the reasons for denying recognition. Under Article 27(2) of the Convention a judgment is not to be recognised inter alia

‘where it 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.’

4. Pursuant to Article 31 of the Convention, a judgment given in a Contracting State and enforceable in that State is to be enforced in another Contracting State when, on the application of any interested party, it has been declared enforceable there. Under Article 34 of the Convention, the court applied to is to give its decision without the party against whom enforcement is sought being entitled at that stage of the proceedings to make any submissions on the application.

5. Article 35 of the Convention requires the appropriate officer of the court to bring the decision given on the application to the notice of the applicant without delay in accordance with the procedure laid down by the law of the State in which enforcement is sought. Pursuant to Article 40 of the Convention, the applicant may appeal against the refusal of his application.

6. Article 36 of the Convention lays down the following rules on appeals by parties against whom enforcement is sought:

‘If enforcement is authorised, the party against whom enforcement is sought may appeal against the decision within one month of service thereof.

If that party is domiciled in a Contracting State other than that in which the decision authorising enforcement was given, the time for appealing shall be two months and shall run from the date of service, either on him in person or at his residence. No extension of time may be granted on account of distance.’

7. Pursuant to Article 37 of the Convention, appeals in Italy must be lodged with the ‘corte d’appello’. Article 39 of the Convention states that, during the time specified for an appeal pursuant to Article 36 and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures taken against the property of the party against whom enforcement is sought.

B – National legislation

8. Article 143 of the Codice di Procedura Civile (hereinafter ‘CPC’) provides that, if a person’s place of residence is unknown, the bailiff is to effect service by lodging a copy of the document in the town hall of the last place of residence and attaching another copy to the notice board of the bailiff’s office.

9. According to statements by the referring court, in its case-law the Corte Suprema di Cassazione has held that the lodging of the document in the town hall and the posting of the document on the notice board are essential procedural requirements: if they have not been performed, there is a failure of service. ( ) Moreover, again according to the case-law of the Corte Suprema di Cassazione, service pursuant to Article 143 CPC ‘must be treated as invalid where the bailiff does not provide any information in his report as to the searches and enquiries carried out in order to identify the addressee’s residence.’ ( )

10. The provisions on orders compelling payment pursuant to Articles 633 to 659 CPC contain, in Article 650 CPC, a rule governing appeals that are out of time. ( ) Article 650 CPC states:

‘The defendant may also appeal against the order even after the expiry of the period set by the order provided that he proves that he had no notice of the order owing to defective service, fortuitous circumstances or force majeure.

…

An appeal ceases to be admissible 10 days from the date of the first notice of enforcement.’

III – Facts of the case and questions referred

11. By judgment by default of 14 September 1993 the Arrondissementsrechtbank Den Haag (Netherlands) ordered Gaetano Verdoliva, domiciled in Italy, to pay NLG 365 000 to J.M. Van der Hoeven B.V. (hereinafter ‘Van der Hoeven’), established in the Netherlands, for the supply and construction of greenhouses.

12. On 24 May 1994 the Corte d’Appello di Cagliari made an order authorising enforcement of that judgment in the Italian Republic, as well as protective attachment of Mr Verdoliva’s assets in the sum of ITL 220 million.

13. An initial attempt to serve that order at Mr Verdoliva’s residence in Capoterra was unsuccessful because, ‘whilst still registered at this address, [he] had in fact moved elsewhere more than a year ago’ (taken from the statement of failed service of 14 July 1994).

14. According to the statement of service of 27 July 1994, service of the order was therefore carried out pursuant to Article 143 of the Italian Code of Civil Procedure. As evidenced by that statement of service, ‘since the recipient could not be found at the address given, from which he has moved, a copy of the enforcement order was lodged at the town hall and another copy posted on the notice board of this Office within the meaning of Article 143 of the Code of Civil Procedure.’

15. Since Mr Verdoliva did not appeal within 30 days of the service of that order, Van der Hoeven proceeded to enforce the judgment against Mr Verdoliva by intervening in enforcement proceedings already pending against him.

16. On 4 December 1996 Mr Verdoliva appealed to the Tribunale Civile di Cagliari objecting to the enforcement of the Dutch judgment on the grounds that, in the absence of an order by an Italian court authorising enforcement, the latter was unlawful since it contravened the Brussels Convention. In addition, the Dutch judgment by default could not be recognised because it contravened Article 27(2) of the Convention. In the subsequent course of the proceedings he then complained that the enforcement order issued by the Corte d’Appello di Cagliari had not been served on him, since, contrary to the statement of service, the document had not been lodged at the Capoterra town hall. As the document had not been served, the period laid down in Article 36 of the Convention had not begun to run.

17. By its judgment of 7 June 2002 the Tribunale Civile di Cagliari dismissed the appeal against enforcement of the judgment and the complaint that the statement of service had been falsified. It held that the period for lodging such opposition had expired, since the 30-day period for bringing an appeal had – as in the case of orders compelling payment pursuant to Article 650 CPC – begun not later than the date of the first enforcement order. The appeal had clearly not been brought within that period.

18. Mr Verdoliva appealed to the referring court against that judgment, adding to his pleas the argument that, before proceeding to the public display of the order pursuant to Article 143 CPC, the bailiff had failed in his official duty to determine whether Mr Verdoliva was indeed untraceable.

19. In its request for a preliminary ruling the Corte d’Appello states that the enforcement order does not constitute a document authorising enforcement until the 30-day period has expired. The necessary enforcement document did not therefore exist in the present case if the enforcement order had not been validly served and the period had not begun to run.

20. The Corte d’Appello also points out that the parties agreed that, at least during the proceedings at first instance, the appellant had been aware of the order authorising enforcement, which he had himself produced in the proceedings on 29 June 1998. He had not since appealed against that order.

21. Against this background the Corte d’Appello refers the following questions to the Court for the interpretation of Article 36 of the Convention:

‘1. Does the Brussels Convention provide an independent definition of notice of procedural documents or is that term left to be defined by national rules?

2. Can it be inferred from the rules of the Brussels Convention, and in particular from Article 36 thereof, that service of the enforcement order referred to in Article 36 of the Convention may be effected in a manner deemed equivalent to service?

3. Does notice of the enforcement order in cases of failure of, or defective, service, none the less cause time to run for the purposes of the time-limit referred to in that article? If not, is the Brussels Convention to be interpreted as limiting the ways in which notice of the enforcement order will be deemed to have been acquired?’

IV – Arguments of the parties

22. Mr Verdoliva, the Italian Government and the Commission submitted their observations in the case .

23. Mr Verdoliva takes the view that notice does not replace the service for which Article 36 of the Convention provides. The rights of the defence are guaranteed only if the party against whom enforcement is sought is able to acquire notice of the order through its being lawfully served on him. Mere presumption of notice is not sufficient. In the absence of effective service of the order authorising enforcement of the foreign document, the order must be regarded as legally non-existent, with the result that there is no document authorising enforcement. ( )

24. The Italian Government begins by pointing out that the term ‘service’ in Article 36 of the Convention must be understood in a strictly ‘technical-procedural’, that is to say, formal, sense, this being deduced inter alia from the fact that Article 36 of the Italian language version of the Convention provides only for the possibility of ‘notificazione’, while other provisions of the Convention also permit mere ‘comunicazione’. As the Convention itself does not contain a definition of formal service, it can depend only on the procedural law of the State in which enforcement is sought. This is also true of the definition of notice.

25. On the referring court’s second and third questions the Italian Government maintains that the Convention does not permit any alternatives to formal service. As the Convention referred to national law for the definition of formal service, it is for the national courts to decide whether, under the relevant national procedural law, simple, actual notice of the enforcement order is legally equivalent to formal service. When reaching that decision, the national courts take account of the basic requirement of safeguarding the rights of the defence.

26. The Commission understands the first question referred as meaning that the referring court wishes to ascertain whether ‘service’ in Article 36 of the Convention presupposes that the party against whom enforcement is sought has effective notice of the enforcement order. It admits that the Convention does not harmonise the national systems of service. The aim of Articles 20, 27 and 36 of the Convention was, however, to ensure comprehensive protection of the rights of the defence at all stages of the proceedings in both the State in which the judgment is given and the State in which enforcement is sought. ( ) National provisions on service should also take this into account.

27. The Commission proposes that the answer to the first question referred should be that service within the meaning of the Convention does not, as a general rule, require that the recipient has personal and effective notice, provided that the latter may rely at a later date on defective notice of the legal document served, despite the expiry of the period for an appeal set in motion by the service, and may defend himself against that document.

28. In the Commission’s view, the wording of the second and third questions referred is ambiguous. On the one hand, they could be seeking to establish whether enforcement can take place without service of the enforcement order, it being sufficient for the party against whom enforcement is sought to have notice of that order as a result of the measures of enforcement. This would constitute a clear infringement of the rights of the defence, and the answer would be negative.

29. On the other hand, the answers to the questions might be affirmative if it was a matter of determining whether such notice was capable of causing an additional period to begin to run in that event; this could be considered if the party against whom enforcement is sought had been unable to comply with the one-month time-limit laid down in Article 36 because of irregularities of service or because the document concerned was not served on him personally.

30. The Commission contends that it is for the Member States to choose how they transpose the rule on time-limits contained in Article 36 at national level in a way that protects the rights of the defence. ( ) In any case, the Commission continues, the service requirement must not be circumvented, nor must the period laid down in Article 36 be shortened.

V – Legal analysis

31. With its first question the referring court seeks to establish whether the Convention provides a definition of notice. However, the Convention, and in particular Article 36 thereof, the interpretation of which forms the subject-matter of the current proceedings, makes no mention of notice. Article 36 is concerned only with service.

32. Against the background of the dispute in the main action and in view of the wording of Article 36, the first question must be taken to mean that what is to be clarified is whether, under the Convention, the term ‘service’ is to be defined autonomously, and whether, in accordance with that definition, notice is to be deemed equivalent to service, with the result that the period for bringing appeals pursuant to the first paragraph of Article 36 of the Convention begins to run when notice is received.

33. In the Commission’s view, on the other hand, the Court is being asked to adopt a position the fundamental question of whether the term ‘service’ in Article 36 of the Convention generally presupposes that the party against whom enforcement is sought has had effective notice of the enforcement order.

34. Given the facts in the main action, however, that question is hypothetical. The referring court thus submits the question with the possibility in mind that the enforcement order was not validly served on Mr Verdoliva. The referring court is not therefore intent on determining whether notice of that order must be added as a further requirement for proper service, but solely whether notice of the enforcement order may in certain circumstances replace its service.

35. Understood in that way, the first question largely overlaps the second and third. It therefore seems appropriate to consider the three questions together.

36. To summarise, the referring court accordingly seeks to establish whether the first paragraph of Article 36 of the Convention must be taken to mean that, if there is defective service of the enforcement order, the fact that the party against whom enforcement is sought has had notice of the order is sufficient to cause the period for bringing an appeal to begin to run.

37. Before answering that question, I have some comments to make on the significance of appeals pursuant to the first paragraph of Article 36 of the Convention for the protection of the rights of the party against whom enforcement is sought.

A – The significance of appeals pursuant to Article 36 of the Convention

38. In the Carron case the Court held that ‘in Articles 31 to 49 the Convention establishes an enforcement procedure common to all Member States. At the initial ex parte stage, that procedure enables the applicant seeking enforcement of a judgment in another Member State to obtain satisfaction swiftly. At the second stage, involving proceedings inter partes, it guarantees the rights of the party against whom enforcement is sought by setting up an appeal procedure.’ ( )

39. The procedure for authorising enforcement forms part of an overall system established by the Convention which seeks to strike a balance between the free movement of judgments in civil and commercial cases ( ) and the protection of the rights of the defence. ( ) The rights of defence of the party against whom enforcement is sought are protected by the general principle of Community law recognised by the Court that everyone is entitled to fair legal process. ( ) This principle is guided by Article 6 of the ECHR ( ) and is reflected in Article 47 of the Charter of Fundamental Rights of the European Union. ( )

40. Within the framework of the procedure for authorising enforcement, the defendant’s right to a hearing is protected in particular by Article 27(2) and Article 36 of the Convention. Pursuant to Article 27(2), recognition and enforcement of a judgment are denied in order to protect the defendant’s rights if, exceptionally, the guarantees provided by the legislation of the State in which judgment was given and by the Convention have been insufficient to ensure that the defendant was able to defend himself before the court of that State. ( ) Article 36, on the other hand, gives the defendant the opportunity to have the enforcement order examined by bringing an appeal in inter partes proceedings.

41. Article 36 is particularly important for the protection of the rights of the defence at the recognition and enforcement stage since it acts as the counterbalance, needed to ensure a hearing, to the one-sided summary enforcement proceedings, during which the defendant does not, pursuant to Article 34 of the Convention, have an opportunity of making any submissions.

42. Only if he appeals pursuant to Article 36 does the defendant have an opportunity of arguing against recognition and enforcement of the judgment. Article 36 thus represents the procedural complement to the substantive reasons for denying recognition listed in Articles 27 and 28 of the Convention.

43. Although those reasons must also be examined by the court with jurisdiction in the State in which enforcement is sought, of its own motion, before the enforcement order is issued, ( ) the Convention does not impose an obligation to determine of its own motion the facts relevant to the decision, and a thorough discussion of the requirements for recognition therefore takes place only during the inter partes proceedings to which an appeal pursuant to Article 36 gives rise. ( )

44. Regulation No 44/2001, ( ) which does not apply to the current proceedings, now prohibits even review of the grounds for denying recognition before the enforcement order is issued, and it is therefore only the party against whom enforcement is sought who can cite those grounds when appealing against the enforcement order. ( )

45. Of particular importance is the right to a hearing at the enforcement stage, granted to the defendant by Article 36 of the Convention with respect to Article 27(2) thereof. Thus, where that ground applies, the defendant has for the first time the opportunity of defending himself. The protection afforded by Article 27(2) would be valueless without the opportunity to submit a defence provided by Article 36, so it would be possible in certain cases to enforce a judgment given in proceedings in which the defendant had had no opportunity to participate.

46. Inter partes proceedings pursuant to Article 36 represent not only the first but also the last, or only, opportunity for the party against whom enforcement is sought to rely on the grounds for refusal of recognition laid down in Articles 27 and 28 of the Convention. In order that the period prescribed in Article 36 for appeals remains effective, valid grounds which could have been advanced by the party against whom enforcement is sought during that appeal may not be advanced by him during a later appeal against the specific measure of enforcement. ( )

47. In the overall system established by the Convention, the time-limit defined in Article 36 thus plays a decisive role in determining the opportunities which the defendant has of defending himself. This must be taken into account in the interpretation and application of that provision.

B – The questions referred

48. Pursuant to the first paragraph of Article 36 of the Convention, the party against whom enforcement is sought may appeal against the decision authorising enforcement ‘within one month of service thereof.’

49. Although the Convention thus refers to ‘service’, it does not contain – leaving aside the special case referred to in the second paragraph of Article 36, which is not relevant in this context – any rules on the details of the service procedure and does not, in this respect, seek to harmonise national legislation. ( ) The requirements for the effective service of the enforcement order are therefore determined, in principle, by the legislation of the State in which enforcement is sought on internal service, provided that the party against whom enforcement is sought is domiciled there.

50. None the less, certain standards for service can be deduced from Article 36.

– Notice no substitute for service

51. According to the unambiguous wording of Article 36, the period within which an appeal may be lodged begins to run with the service of the enforcement order. When the context, spirit, purpose and wording of this provision are taken into account, the service requirement laid down in the first paragraph of Article 36 cannot be understood other than in the technical sense, that is to say, as formal service.

52. The first paragraph of Article 36 thus precludes national legislation which allows the service requirement to be disregarded where the party against whom enforcement is sought has notice of the enforcement order.

53. That ‘service’ in Article 36 of the Convention is to be understood in the formal sense is proved by the fact that – as far as I can see – the various language versions use the appropriate technical term from procedural law. ( )

54. In contrast, Article 35 of the Convention merely requires that the decision given on the application be brought without delay ‘to the notice’ of the applicant seeking enforcement in accordance with the procedure laid down by the law of the State in which enforcement is sought. Similarly different requirements of the communication of that decision to the applicant and the party against whom enforcement is sought are laid down in the French, German, Italian, Dutch and Portuguese language versions. ( ) Regulation No 44/2001 also retains this distinction. ( )

55. The distinction between communication to applicants and communication to parties against whom enforcement is sought can be explained by the different consequences associated with that communication. While a binding period for bringing an appeal begins with the service of the enforcement order for the party against whom enforcement is sought, bringing the decision to the notice of the applicant has no such legal effect. Unlike Article 36 in the case of the party against whom enforcement is sought, Article 40 of the Convention does not, in the applicant’s case, specify a time-limit for appealing against the refusal of his application for enforcement. ( )

56. The Convention must therefore ensure only with respect to the party against whom enforcement is sought that communication of the enforcement order is effected by means of formal service. The service requirement performs a dual function in this context as regards causing the period for appealing to begin to run: on the one hand, it serves to protect the rights of the defence of the party against whom enforcement is sought, since formal service as a rule guarantees that he receives notice of the enforcement order and is able to appeal against it. On the other hand, service performs an evidentiary function and enables the period for bringing an appeal to be calculated accurately.

57. An interpretation which held notice to be equivalent to service would also be likely to undermine the service requirement completely, for if no more than notice was needed, the applicant would be tempted to ignore the prescribed forms for due service. ( ) As regards the criterion of due service in Article 27(2) of the Convention, the Court has stated as much, holding that ‘recognition of a foreign judgment should be refused if service has not been effected in due form, regardless of whether the defendant was actually aware of the document instituting the proceedings.’ ( )

– Consideration of notice for the curing of service defects under national law

58. Like the other provisions of the Convention, Article 36 does not contain any rules for curing service defects, but confines itself to requiring effective formal service of the enforcement order.

59. The legal consequences of the infringement of individual provisions concerning service and the conditions under which an infringement can be cured and effective service still achieved are thus determined by the relevant national legislation on the service of legal documents. ( ) For curing service defects, national legislation may refer to actual notice of the document to be served, an approach which the first paragraph of Article 36 of the Convention does not in principle preclude.

60. In qualification, however, it must be pointed out that the national law of the State in which enforcement is sought applies, although it must conform to the aims of the Convention. ( ) As the Court stated in Pendy Plastic, the Convention is designed to ensure that the defendant’s rights are effectively protected, without seeking to harmonise the different systems of service in the Member States. ( ) The application of the law of the State in which enforcement is sought must not therefore in any way prejudice the rights of the party against whom enforcement is sought, which the Convention is designed to safeguard. ( )

61. It is for the national court to decide whether, under domestic provisions on service, notice of the enforcement order results in an initially defective act of service having to be regarded as effective formal service, thus causing time to begin to run for the purposes of an appeal.

62. In applying its national legislation on the curing of defects, the national court must, however, bear in mind the protective function of the service requirement laid down in Article 36 of the Convention and the decisive effect of the time-limit for appeals, caused by service to begin to run, on the opportunities which the party against whom enforcement is sought has to defend himself within the overall system established by the Convention. The national court must ensure that the rights of the party against whom enforcement is sought are adequately protected in specific cases and that that party is actually put in a position of being able to appeal within the period prescribed, as provided for in Article 36.

VI – Conclusion

63. In view of the foregoing, I propose in summary that the Court should answer the questions referred by the Corte d’Appello as follows:

Article 36 of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, as amended by the Convention of 9 October 1978 on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, the Convention of 25 October 1982 on the accession of the Hellenic Republic and the Convention of 26 May 1989 on the accession of the Kingdom of Spain and the Portuguese Republic must be interpreted as meaning that the time-limit for lodging an appeal begins to run only with the formal service of the enforcement order in accordance with national law. In particular, service cannot be replaced by notice of the enforcement order on the part of the party against whom enforcement is sought. National law may, if necessary, have regard to whether the enforcement order has been brought to the notice of the party against whom enforcement is sought in order to cure service defects; in such cases, it must ensure that the rights of defence of the party against whom enforcement is sought are safeguarded and that he is actually put in a position of being able to appeal within the period prescribed, as provided for in Article 36.