Introduction
There is before the court an application under R.S.C., Ord. 12, r. 8 to set
aside service of proceedings made in Belgium on the second and third
defendants (the A. companies). The A. companies are Belgian companies
domiciled in Belgium. Under the provisions of the Brussels Convention
(which the parties agree is the applicable Convention), they should
ordinarily be sued in Belgium. They were served with the proceedings
on the grounds that this court had jurisdiction under article 6 of the
Convention. This provides: "A person domiciled in a contracting state
may also be sued: (1) where he is one of a number of defendants, in the
courts of a place were any one of them is domiciled..." The A. companies
were joined to these proceedings in 1997, although the proceedings had
originally been begun in 1993 against the first defendant (Mr. S.). It is
the contention of the A. companies that in 1993 Mr. S. was not domiciled
in England and therefore they can not be joined to the proceedings by
virtue of article 6(1), though by the time they were joined in 1997, Mr. S.
was domiciled in England. Before considering the short issues as to where
Mr. S. was domiciled in 1993 and the scope of article 6(1) (if he was not
then domiciled in England in 1993), it is necessary to describe briefly the
nature of the plaintiffs' claim and how the claim came originally to be
made against Mr. S. and subsequently against the A. companies.
The plaintiffs' claim
The plaintiffs are associated companies beneficially owned by Mr. Bruce
R.. Mr. S. was employed from 1988 by the second and then the third
plaintiff first as chartering manager and then head of operations of their
oil trading division. He worked and lived in Geneva. In September 1993,
the plaintiffs claimed that they discovered that Mr. S. was defrauding
them. The first plaintiffs are large charterers; customarily charterparties
provide that owners will pay address commission to charterers. Often this
is netted against the freight or hire payable by charterers, but in the way
in which the plaintiffs conducted their operation, the address commission
was not netted against the freight payable, but paid by the owners of the
vessels to the chartering brokers who had negotiated the charterparty.
The brokers were then instructed to pay the amounts in cash to the order
of Mr. R.. It is the plaintiffs' contention that Mr. S. diverted this cash into
his own account.
The plaintiffs said that they discovered this fraud on 3 September 1993.
Very shortly thereafter, the defendant made a visit for a few days to
England and, on 7 September 1993, he was arrested by the City of
London police. A condition of his bail granted by the City of London
magistrates required him to remain in the United Kingdom. He remained
subject to this condition until the criminal proceedings were discontinued
against him in 1995.
On 24 September 1993, the plaintiffs commenced these proceedings by
the issue of a writ against Mr. S. as the sole defendant. On the writ the
plaintiffs gave as his address his home in Switzerland. At the same time,
a worldwide Mareva injunction was granted against him. Proceedings
were also begun against him in Switzerland, but those proceedings were
limited to obtaining documentation from his home. The allegations set
out in points of claim endorsed on the writ related solely to the address
commissions.
Shortly thereafter, the plaintiffs claimed that they discovered another
fraud involving Mr. S.. The plaintiffs used to appoint the A. companies as
agents on calls of vessels to Antwerp. The agents agreed to pay rebates
known as "port agent rebates" which were paid to a Jersey company
called I. M. S. Ltd. It was the plaintiffs' case that these were payments to
Mr. S.. They said they received at the time, from inquiries they made, a
firm denial that those at the A. companies had any knowledge of Mr. S.'s
involvement and the A. companies assumed that the payment to I. M. S.
Ltd. was payment to the plaintiff group.
In those circumstances, the writ and points of claim endorsed on the writ
were amended in November 1993 to include a claim only against Mr. S.
in respect of the port agent rebates. Thereafter, the plaintiffs commenced
proceedings in Jersey to obtain the documents of I. M. S. Ltd. These
proceedings were somewhat protracted; when the documents of that
company were obtained in early 1997, the plaintiffs claimed that they
showed that not only was Mr. S. receiving moneys from I. M. S. Ltd.
derived from the port agent rebates, but that substantial sums were also
being paid to the employees of the A. companies. The application to join
the A. companies to the 1993 proceedings
On 17 June 1997 the plaintiffs issued a summons to join the A. companies
as the second and third defendants to the proceedings begun in
September 1993. They sent a copy of the summons together with the
draft re-amended writ and points of claim to the A. companies.
That summons was heard on 17 July 1997 before Clarke J. The A.
companies did not attend. Clarke J. was told that the jurisdiction over
the A. companies was derived from article 6(1) as Mr. S. was by this time
domiciled in England. Clarke J. made an order joining the A. companies as
second and third defendants, permitting the re-amendment but giving the
A. companies liberty to discharge the order. The writ was then reissued
under the provisions of Order 20 on 5 August 1997 with the A. companies
joined as second and third defendants. The re-amended writ was then
served on the A. companies in Belgium. On 23 September 1997, they
applied to set aside the writ and service of the writ upon them.
When the matter came on for hearing, the plaintiffs relied not only
on their original contention that joinder was permissible as Mr. S. was
domiciled in England at the date of joinder in 1997, but also on the basis
that at the time the original proceedings were issued in 1993, Mr. S. was
domiciled in England. If Mr. S. was domiciled in England at the time the
proceedings were originally issued in 1993, then it was accepted by the A.
companies that it was permissible to join them as additional defendants.
It is therefore convenient first to consider whether Mr. S. was domiciled in
England in September 1993. Mr. S.'s domicile on 24 September 1993
For the purposes of the Convention, section 41(3) of the Civil Jurisdiction
and Judgments Act 1982 provides that an individual is domiciled in the
United Kingdom if "a) he is resident in [the United Kingdom]; and (b)
the nature and circumstances of his residence indicate that he has a
substantial connection with [the United Kingdom]." Section 41(6) provides
that if a person has been resident for the last three months or more in the
United Kingdom, then the condition in paragraph (b) is to be presumed to
be satisfied unless the contrary is proved.
The question of Mr. S.'s domicile is a question of fact. I was referred to
the decision of the House of Lords in Reg. v. Barnet London Borough
Council, Ex parte Nilish Shah [1983] 2 A.C. 309, where the meaning
of "ordinarily resident" was considered; the House of Lords held that
the words must be given their natural and ordinary meaning as words
in common usage in the English language. Lord Scarman referred to
the relevance of the mind of the person. He concluded that voluntary
presence is an important factor, but was is not
conclusive, at p. 344:
"The residence must be voluntarily adopted. Enforced presence by reason
of kidnapping or imprisonment, or a Robinson Crusoe existence on a
desert island with no opportunity of escape, may be so overwhelming a
factor as to negative the will to be where one is."
In determining this question of fact, the Court of Appeal held in Canada
Trust Co. v. Stolzenberg (No. 2) [1998] 1 W.L.R. 547 a plaintiff must show
a good arguable case that a defendant is domiciled in the jurisdiction.
The evidence as to Mr. S.'s circumstances on 24 September 1993 can be
summarised as follows. He had English nationality. He was born in Leigh-
on-Sea in 1952. He owned a house in Surrey, but it was not his home. He
had bank accounts in Kingston and London. He had moved to Switzerland
in 1985 and married a Swiss national; in September 1993 he was living
and working in Switzerland and he had his home there. It is accepted that
on 3 September 1993 he was not domiciled in England for the purposes
of the Convention; he was domiciled in Switzerland. He came to England
for a very brief visit (intended to be about four days) shortly after 3
September 1993; he was prevented from returning to Switzerland by
the conditions of his bail following his arrest. His employment in Geneva
was terminated summarily on 13 September 1993. He had not gone to
Switzerland to work for the plaintiffs as he had been living there prior to
his employment with the plaintiffs. Thus the summary determination of
his employment did not mean he no longer had a reason to reside there.
The criminal proceedings against him were discontinued in 1995 and he
decided to remain in England.
The plaintiffs accepted that a visit of the few days in September
1993 which was all Mr. S. intended when he came to England in early
September did not amount to residence, but claimed that the position
changed once he was granted bail on condition that he remained in
England. By the time proceedings were issued on 24 September 1993,
they contended that he was living in England and likely to remain there
for an indefinite time until the criminal proceedings were resolved; he was
therefore domiciled in England for the purposes of the Convention, or at
least there was a good arguable case to that effect.
The evidence before me is that at the time that the proceedings
commenced, Mr. S. intended to remain living in Switzerland; he was
prevented from doing so by the conditions of his bail. He lived with his
sister in Cheshire for a while before moving to rented accommodation in
London to study. There is also evidence before me from a Swiss lawyer
that under Swiss law he would have been regarded as domiciled in
Switzerland on 24 September 1993.
In my view, the evidence before me shows that had it not been for the
condition imposed as a term of his bail that he remain in the United
Kingdom, he would have returned to Switzerland after a few days. The
only reason he stayed in England, on the evidence before me, was the
condition of his bail. Given the very short period of time between his
arrest and the imposition of that condition and the commencement of
these proceedings, I do not think that there is a good arguable case
that he was domiciled by 24 September 1993 in the United Kingdom
for the purpose of the Convention; the circumstances in which he came
and his enforced presence did not indicate a substantial connection with
England, even if by 24 September he could be said to be resident. Plainly
his stay in England was involuntary, but that is only one factor which,
together with the other evidence before me, I have taken into account in
concluding that the plaintiffs have not made out a good arguable case.
The scope of article 6(1)
It follows from this conclusion that I consider that these proceedings
can only be maintained against the A. companies on the basis that the
relevant time for determining the place where any one of the defendants
is domiciled is not the time at which the action is originally brought, but at
the time that the suit is brought against the other defendants.
Although this point has not as far as the researches of counsel have
shown been the subject of any previous decision, there are two decisions
that provide guidance. First, it is clear from the decision of the European
Court of Justice in Kalfelis v. Bankhaus Schroder, Munchmeyer, Hengst and
Co. (Case 189/87 [1988] E.C.R. 5565, 5585, para. 19 that:
"the 'special jurisdiction' enumerated in articles 5and 6 of the Convention
constitute derogations from the principle that jurisdiction is vested in the
courts of the state where the defendant is domiciled and as such must be
interpreted restrictively."
Secondly, it was determined by the Court of Appeal in Canada Trust Co.
v. Stolzenberg (No. 2) [1998] 1 W.L.R. 547 in relation to article 6(1)
that the relevant time for determining domicile was at the time the writ
was issued and not when it was served. In that case the writ had named
all the defendants when issued and the question before the court was
whether the time for determining the domicile of the person whose
domicile determined the jurisdiction was either the time the writ was
issued or the time that the writ was served on that person. The issue
before me in this application is different because the relevant distinction
is not between issue and service, but between original issue when one
person was the defendant, and reissue or re-service when it is sought
to join other defendants. In summarising the conclusion reached in the
Stolzenberg, case Waller L.J. said, at p. 568:
"The correct date for determining whether or not a defendant is domiciled
in England for the purpose of determining whether the court has
jurisdiction under article 6 is the date of the issue of the proceedings
against the defendant domiciled in England."
It was argued by the A. companies that this summary of the decision
showed that the determination of the issue in this case had been
determined by the Court of Appeal in the Stolzenberg case. I do not
agree, though the reasoning of the court in that decision points, in my
view, very clearly to the resolution of the issue in this case.
Although no express guidance on this issue is given in the reports of M.
Jenard (O.J. 1979 C. 59, p. 1) or Professor Schlosser (O.J. 1979 C. 59,
p. 71), it is made clear in M. Jenard's report, at p. 27, that the purpose
of this provision was to prevent multiplicity of proceedings resulting in
irreconcilable judgments:
"Jurisdiction derived from domicile of one of the defendants was adopted
by the committee because it makes it possible to obviate the handing
down in the contracting states of judgments which are irreconcilable with
one another."
This principle was affirmed by the European Court of Justice in the
Kalfelis case [1988] E.C.R. 5565. M. Jenard's report refers to the
provisions in the law of other jurisdictions within the regime covered by
the Brussels Convention adopting in their internal law the principle of
allowing the court of one defendant's domicile to have jurisdiction over
other defendants. In Kaye, Civil Jurisdiction and Enforcement of Foreign
Judgments (1987) a short observation is made, at pp. 269-270:
"Accordingly, if a court possesses jurisdiction on the ground, say, of
the situation of the defendant's domicile in the contracting state of the
forum at the date of the institution of proceedings, its jurisdiction should
remain unaffected by a subsequent change of domicile by the defendant
in the course of proceedings, under the said principle of perpetuatio fori
[Fortdauer der internationalen Zustandigkeit]. The alternative would lead
to uncertainty and abuse."
The objective of this article of the Convention is accordingly clear;
however, that objective on its own cannot provide a solution for the issue
in this case. Anomalies could arise whichever view was taken. In this
case, for example, if the relevant time is the time at which the writ was
issued originally, there may be multiplicity of proceedings if the plaintiffs
are obliged to commence their proceedings against the A. companies
in Belgium. However, on other facts, if a defendant moved from the
jurisdiction where the claim had been brought originally on the basis
of his domicile, and it was sought subsequently to add parties to that
action, then although the action would continue in the place where the
person had been domiciled at the date of the issue of the writ, the further
defendants could not be added to those proceedings if the determinative
time was the date of the issue of proceedings for joinder.
On the facts of this particular case, the A. companies rightly point out that
if the proceedings had been brought in Switzerland in 1993 (which was
at that stage a party to the Lugano Convention (O.J. 1988 L. 319, p. 9)
and on the unchallenged evidence of Swiss law was the place of Mr. S.'s
domicile at that time), then,if the relevant time was the time at which the
proceedings were originally issued, there would not have been multiplicity
of proceedings as a consequence of the defendant moving his domicile.
In my view, however, the considerations set out in the judgment of the
Courtof Appeal in Canada Trust Co. v. Stolzenberg (No. 2) [1998] 1
W.L.R. 547 point clearly to the relevant time being the time at which the
proceedingswere issued. Waller L.J. said, at p. 564:
"It furthermore seems to me that, since the issue of proceedings is a step
that the plaintiff is bound to take and incur cost in taking, it is important
that a plaintiff can identify easily the court before which he can bring his
action before he launches it. Support for this being the plaintiff's right is
provided by a passage in the judgment of the European Court in Mulox
IBC Ltd. v. Geels (Case C-125/92) [1993] E.C.R. I-4075, 4102-4103,
paras. 10-11, where it is said: 'It is settled case law that, as far as
possible, the Court of Justice will interpret the terms of the Convention
autonomously so as to ensure that it is fully effective having regard to
the objectives of article 220 of the E.E.C Treaty, for the implementation
of which it was adopted. That autonomous interpretation alone is capable
of ensuring uniform application of the Convention, the objectives of which
include unification of the rules on jurisdiction of the contracting states, so
as to avoid as far as possible the multiplication of the bases of jurisdiction
in relation to one and the same legal relationship and 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.' (My emphasis.) Waller L.J. also
said, at p. 566:
"The relevant date must be the same for article 6 as for article 2. A
plaintiff faced with wishing to sue defendants in proceedings connected in
the sense required for article 6 purposes has to take the same decisions
as a plaintiff seeking to sue one defendant in the courts of his domicile
under article 2. What in fact article 6 allows him to do is to comply
with article 2 so far as one or more defendants are concerned, and join
others who are domiciled in other contracting states. It is article 6 that
provides the power to issue the process in the court of the domicile of
one defendant, and that court then allows service on the defendants so
joined. It must once again be as at the date when the writ is issued that
the relevant domicile must be tested for all the reasons already given in
relation to article 2."
In my view, the solution to the question before me is one based on
domicile at the time of the original issue of the writ; it is the one that
coincides with the rule established in Canada Trust Co. v. Stolzenberg (No.
2) and with the purposes of the Convention. It settles the jurisdictional
question at the date of the original proceedings and fixes them in that
court from that time onwards. It enables a plaintiff to identify the court
before which he wishes to bring the action and a defendant reasonably to
foresee the court before which he may be sued.
The plaintiffs say that this result cannot be achieved on the language of
the Convention. As the Court of Appeal pointed out in the Stolzenberg
case, the process is one of construction although the court must not be
confined slavishly to the language. The plaintiffs argue that article 2 and
article 6 both use the present tense. They therefore say that as a matter
of language, the relevant time must be at the time at which it is proposed
to sue the additional defendant because at that time he "is" one of a
number of defendants in the courts at the place where any one of them
is" domiciled.
I do not think that this literalist interpretation governs. In the ordinary
case either the defendants are all parties to the writ at the same time
or, the defendant whose domicile is chosen, will not change his domicile;
the very short text of the Convention is plainly directed at that. The facts
of this case have produced an unusual situation, and one which is not
contemplated in the text of the Convention. The fact that the present
tense is used is therefore not of great significance, and cannot override
the considerations to which I have referred.
Reliance was also placed by the plaintiffs on the procedure under English
law by which additional defendants are joined. In Ketteman v. Hansel
Properties Ltd. [1987] A.C. 189, the House of Lords decided that at
common law there was no relation back when an additional defendant was
joined. The principle was
expressed by Lord Keith of Kinkel, at p. 200:
"A cause of action is necessarily a cause of action against a particular
defendant, and the bringing of the action which is referred to must be the
bringing of the action against that defendant in respect of that cause of
action. The causes of action here against Mid-Sussex and the architects
were separate and distinct from the cause of action against Hansel. In
my opinion there are no good grounds in principle or in reason for the
view that an action is brought against an additional defendant at any
earlier time than the date upon which that defendant is joined as a party
in accordance with the rules of court."
The plaintiffs argued that to the extent local law was relevant to the
determination as to when a defendant was to be regarded as joined to the
proceedings, the decision made clear that at English common law it was
the time of joinder that mattered. They contended that the relation back
for the purposes of limitation should not be imported into the Convention.
I agree.
However, it is also clear from that decision that the defendants who are
added do not become parties when the order is made or when the writ is
reissued but only on service on them. The House of Lords overruled the
decision in Seabridge v. H. Cox & Sons (Plant Hire) Ltd. [1968] 2 Q.B.
46 and held that the additional defendant does not become party until
the writ has been served upon him. Lord Keith said in the Ketteman case
[1987] A.C. 189, 198:
"The natural meaning of R.S.C., Ord. 15, r.8(4)(a), according to the
ordinary use of language, would appear to be that a person added as
a defendant does not become party until not only has the writ been
amended but also the amended writ has been served upon him"
He then considered the decision of the Court of Appeal in the Seabridge
case, which decided that the amended writ took effect as against the
added defendant on reissue, and held, at p. 199: "In my opinion the
plain language of the rule must prevail, and the Seabridge case should
be overruled as wrongly decided." Thus under the rules of court, the
A. companies would not have become parties to the action until they
were actually served; it might follow, therefore, that the time at which
the defendant would have to be domiciled, on the plaintiffs' case, is not
the time when the writ is reissued, but on service. This is a technical
consideration and is not in my view determinative in any way; a decision
on the meaning of article 6(1) must have regard to the international
purpose which the Convention was designed to achieve and is not
determined by the perspective of such a technical domestic rule: see the
Stolzenberg case [1998] 1 W.L.R. 547. The issue under article 6(1) raised
in this case is an issue of general applicability in all Convention countries
and should not turn on detailed points of local procedure which may well
differ from state to state, but on the broader considerations to which I
have referred.
Conclusion
In my view, therefore, the relevant time under article 6(1) is the time at
which the proceedings were originally issued and not the time at which
it is sought to join the additional defendants or the time at which they
are actually joined, whether by reissue of the writ or by service of that
amended writ on them. It follows therefore that, as the plaintiffs do
not have a good arguable case that Mr. S. was domiciled in England in
September 1993, the service of the writ on these defendants must be set
aside.
I should add that if new proceedings could be brought against Mr. S. in
this jurisdiction in respect of the port agent's commission, then it would
be possible to serve those proceedings upon the defendants in Belgium.
There could be no objection to that course, provided that proceedings
could properly be brought against Mr. S.. It would then, of course, be
open to the plaintiffs to apply to consolidate those proceedings with
the existing action. I have not taken this factor into account for two
reasons. First, there are difficulties in the way of the plaintiffs adopting
that procedure because, as I have said, they have already brought the
claim in respect of the port agent's commission against Mr. S.. Secondly,
proceeding in that way may deprive them of the benefit of being able to
avoid the limitation defence that might be open to A., although on the
facts of this case limitation may not be a very material issue. However,
considerations particular to a given case are, as the Court of Appeal
observed, not determinative of what is in the end a short point on the
interpretation of the Convention.