[1] On 1 February 1991 judgment was given against the pursuer in an
action brought by him against F. Bank Limited, the former name of F.
Limited, the defenders. This action was in the United States District Court
for the District of Delaware. The pursuer sought to establish that there
had been a conspiracy between the defenders and certain businessmen
in order to deprive the pursuer of the office of president of a company
known as D.R.X. Inc. On 23 March 1992 the pursuer's appeal was refused
by the United States Court of Appeals for the Third Circuit. Costs were
awarded against the pursuer in both courts. The pursuer then petitioned
the Supreme Court of the United States for a Writ of Certiorari to the said
Court of Appeals, to review the latter's judgment on the appeal, and made
application for a re-hearing. The petition was dismissed on 5 October
1992. Thereafter the pursuer took proceedings to have the judgment
against him set aside on the ground that it had been obtained by fraud.
This was based on the claim that an executive director and an in-house
counsel of the defenders (Messrs Adamson and Hall) had committed
perjury at the trial. The Court in Delaware determined that the evidence
in support of this claim was not sufficient as a matter of law to establish
fraud. As a result the pursuer's challenge was dismissed on 30 December
1994. This decision was affirmed on 24 October 1995 by the Court of
Appeals for the Third Circuit. On 18 March 1996 the pursuer's petition to
the United States Supreme Court for a Writ of Certiorari to the Court of
Appeals to review the latter's judgment was dismissed.
[2] In 1993 the defenders sued the pursuer in the District Court City
and County of Denver, State of Colorado for sums totalling just under
11 million Canadian dollars. The pursuer relied on the same allegations
as in the Delaware action. The Court in Denver decided that since the
same issue had been litigated and decided in Delaware, the pursuer was
estopped from pleading that defence. Judgment against the pursuer was
pronounced on 11 July 1996.
[3] In February 1994 the pursuer and another raised an action in the High
Court in England seeking inter alia damages for breach of contract and/
or misuse of confidential information and/or negligence. On 24 December
1994 on the motion of the defenders, the pursuer's statement of claim
was struck out on the basis of issue estoppel, in respect that at its heart
lay the same assertions of fact as had been the subject of determination
in the action in Delaware. Appeals to a judge of the Queen's Bench
Division and to the Court of Appeal (Civil Division) were refused. Costs
were awarded against the pursuer. Leave to appeal to the House of Lords
was refused.
[4] In this action, in which the conclusions and pleadings have been
amended from time to time, the pursuer now seeks, in terms of the first
and second conclusions, declarators that the costs orders pronounced
against him in Delaware and the judgment against him in Colorado
respectively are "not enforceable by the defenders in Scotland, the
said orders having been obtained through fraud on the Court". He also
seeks, in terms of the third and fourth conclusions, interdict against the
defenders from "taking any steps in Scotland and elsewhere to enforce
the" Colorado judgment and the costs orders pronounced in Delaware
respectively.
[5] The matter came before me on procedure roll by virtue of an
interlocutor pronounced by the Lord Ordinary on 18 April 2002 by which
inter alia the case was appointed to the procedure roll "of new". In light
of certain arguments advanced before me, in particular, but not only,
in relation to what could now competently or properly be debated, it is
necessary to refer to certain aspects of the history of the action thus far.
[6] In the first place, when the action was raised the pursuer did not seek
a declarator or an interdict in relation to the Delaware cost orders. This, it
seems, was because the pursuer was already defending an action brought
against him in the Court of Session by the defenders for decree conform
in respect of those orders. This action was defended on the basis that
the orders in question had been obtained by fraud. In that action in due
course a proof before answer was allowed by agreement. On 29 May 1998
the present defenders abandoned that action. Since that abandonment
was under statute it did not prevent the defenders from re-raising similar
proceedings, and by amendment to the present proceedings the pursuer
then sought to include conclusions for declarator and interdict in relation
to the Delaware cost orders. In the present action, in this connection, he
avers inter alia
"In an affidavit sworn on 19 June 1998, however, a solicitor acting for
the defenders explained that the defenders retained the right to 're-
raise' the claim should the need arise. In the whole circumstances
hereinbefore condescended on the pursuer is reasonably apprehensive
that the defenders will seek to enforce the said orders of the Delaware
and Colorado Courts in Scotland by an action of decree conform".
[7] In the second place, early on in the present proceedings the pursuer
concluded for interdict against the defenders "from taking any steps to
enforce against the pursuer by way of bankruptcy or other proceedings
against him in Scotland certain taxed costs allowed against him by the
taxing master arising out of the English proceedings". An initial attempt to
obtain interim interdict in terms inter alia of this conclusion was refused
by the Lord Ordinary on 22 December 1997. The pursuer's reclaiming
motion against refusal of interim interdict in respect of the English costs
order was refused in the Inner House by interlocutor dated 20 February
1998. The basis of the Court's decision (reported at 1998 SLT 1014) was
that the Scottish Court could not interdict the defenders from taking
steps which Parliament had provided would competently be open to them
under the Civil Jurisdiction and Judgements Act 1982 and the Bankruptcy
(Scotland) Act 1985, the English orders themselves not being reviewable
in Scotland.
[8] Turning to more general matters of history, after sundry procedure,
including amendment to include conclusions in relation to the Delaware
orders and excluding the conclusion in relation the English costs order,
the action came before the Lord Ordinary on procedure roll on 23 and 24
February 2000. At that stage the declarators which the pursuer sought
were in similar terms to those he now seeks, but the interdicts were
restricted to interdicts against enforcement of the relevant court orders
in Scotland. Further, as recorded by the Lord Ordinary in his judgment,
the pursuer's senior counsel obtained leave to amend the conclusions
in terms of a Minute of Amendment to be tendered which would have
the effect of restricting the orders as regards enforceability to the single
means of an action of decree conform. Notwithstanding this, I was
informed that no such Minute of Amendment was ever tendered. At
procedure roll arguments were advanced on behalf of the defenders in
support of pleas that the action should be dismissed on the basis that
the Court had no jurisdiction to entertain, or competence to pronounce,
the conclusions sought. The principal submission advanced was that the
apprehended action of decree conform could not be said to amount to
a legal wrong which could be interdicted, and that it was not competent
for the Court to pronounce bare declarators before any further action of
decree conform was raised. The Lord Ordinary, having considered these
submissions, decided that the pursuer was entitled to seek to prevent an
apprehended legal wrong in Scotland, namely the defenders seeking to
enforce decrees ex hypothesi obtained by fraud (and thus that the court
had jurisdiction) and, on the understanding which the Lord Ordinary had
that the pursuer would not seek to use the declarators elsewhere, that
he was entitled to the declarators sought as effectively stating a defence
to such actions of decree conform as might be brought. He held in any
event that it was too late for the defenders to challenge jurisdiction,
having initially apparently succumbed to it. He also repelled a plea to
the effect that all parties were not called in respect of the Delaware
orders. At the same procedure roll the defenders also sought to advance
certain arguments in support of their general plea to the relevance and
specification of the pursuer's averments in relation to the claimed fraud.
On this aspect the Lord Ordinary allowed a proof before answer. Against
the interlocutor pronounced on 10 March 2000 by the Lord Ordinary the
pursuer reclaimed. On 14 April 2000 the cause was appointed to the
Summar Roll with grounds of appeal to be lodged within 28 days. The
defenders duly lodged grounds of appeal which sought, on the face of
it, to challenge the Lord Ordinary's decisions against them in respect of
jurisdiction, competence and all parties not called and also in respect of
the decision to allow a proof before answer in respect of the pursuer's
averments of fraud.
[9] In February 2001 the joint liquidators of the defenders lodged in
process a Minute (No 35 of process) in which they gave
"on their own behalf and on behalf of the company the following
irrevocable undertaking to the pursuer and to the court ... that the
company and the joint liquidators thereof will not at any time seek to
enforce, or take steps which would entitle others to seek to enforce, by
action of decree conform in Scotland the orders and judgments referred to
in Conclusions 1, 2, 3 and 4 of the present action."
Without making any attempt to amend, the defenders then by motion
sought dismissal of the action having regard to the undertaking which
had been lodged. On 28 February 2001 this motion was refused.
Notwithstanding this refusal, the Court subsequently, on 10 April 2001,
on the unopposed motion of the defenders, allowed their Minute of
Amendment No 36 of process to be received, and appointed the pursuer
to lodge answers thereto if so advised within fourteen days. In this
Minute of Amendment the defenders made averments in relation to the
undertaking which had been given, averred that the action was no longer
necessary and sought on that basis dismissal in terms of a new eleventh
plea-in-law. Answers were in due course lodged on behalf of the pursuer
and by interlocutor dated 2 May 2001, parties were allowed a certain time
to adjust the Minute of Amendment and Answers. Prior to the expiry of
the adjustment period, and before the date fixed for the hearing of the
reclaiming motion, the Court, on the unopposed motion of the defenders,
refused the motion of the defenders for review of the Lord Ordinary's
interlocutor dated 10 March 2000.
[10] Thereafter there was substantial adjustment by both parties to the
Minute of Amendment and Answers. In the course of this adjustment
period the defenders inter alia developed in the pleadings the argument
that the Court did not have the competence to pronounce declarators
which were (as now appeared) intended to be founded on elsewhere
than in Scotland and in ways unrelated to the obtaining of the interdicts
sought. These averments were supported by a new twelfth plea-in-law.
The pursuer for his part made it plain that he would seek to found on
the declarators elsewhere than in Scotland (and averred that the Lord
Ordinary had misunderstood the position in the course of the procedure
roll) and sought to include, in the interdict conclusions, interdicts against
enforcement of the relevant court orders not only in Scotland but also
"elsewhere" (although this was only allowed formally in the interlocutor
of 18 April 2002). Little or no material change was made to the pursuer's
averments in respect of fraud.
[11] When the defenders sought to amend in terms of the Minute of
Amendment and Answers as adjusted, this motion was opposed on behalf
of the pursuer. Amendment, however, was in due course allowed by the
Lord Ordinary on 18 April 2002 and on the same day the cause was re-
appointed to the procedure roll. As to what precisely took place before
the Lord Ordinary there was some disagreement before me, but parties
were agreed that (a) the Lord Ordinary indicated that he wished to hear
argument at the procedure roll relating to the effect of the undertaking
and in respect of the new pleas and (b) that although in the interlocutor
he pronounced the defenders were appointed to lodge a note of argument
within 28 days the defenders' note of argument was in fact already
drafted and was put before him. This note of argument formed the basis
at least of the defenders' submissions before me - to which submissions I
now turn.
[12] In the first place the defenders advanced arguments in support of
their new eleventh and twelfth pleas-in-law to which I have already made
reference.
[13] Having regard to the irrevocable undertaking which had been given,
there was, it was submitted, no live prospect of the relevant foreign
decrees being enforced in Scotland by action of decree conform. There
thus remained no legal basis for the conclusions for interdict insofar
as directed to any such action. Equally there was no continuing need
for the declarators insofar as thus directed. There was, further, no live
prospect of enforcement of the relevant decrees in Scotland by any other
means. The contention that the defenders might seek decree conform
or its equivalent in France against the pursuer (where it appeared he
was resident) and then seek to register it for enforcement in Scotland
either under the Foreign Judgments (Reciprocal Enforcement) Act 1933
or the Civil Jurisdiction and Judgments Act 1982 was misconceived.
As to the 1933 Act, it did not apply to judgments given by a Court "in
proceedings founded on a judgment of a court in another country and
having as their object the enforcement of that judgment" (section 1(2A)
(c) as substituted by the Civil Jurisdiction and Judgments Act 1982
Schedule 10, para 1). A similar result would be achieved under the Civil
Jurisdiction and Judgments Act 1982 which gave force to the Brussels
and Lugano Conventions. By virtue of Article 28 of those Conventions
a judgment would not be recognised in Scotland if it conflicted with the
provisions inter alia of section 5 of Title II. In Section 5 of Title II, Article
16(5) provides that in proceedings concerned with the enforcement of
judgments, the courts of the Contracting State in which the judgment
has been or is to be enforced "shall have exclusive jurisdiction....". As
a matter of construction this would cover any action of decree conform
or its equivalent (Jenard Report, page 694). In these circumstances a
Scots Court would not recognise any decree conform obtained in France.
Insofar as the pursuer suggested that the defenders might seek to obtain
a decree conform or its equivalent against him in England and seek to
register it under the 1982 Act, a similar result would obtain.
[14] The declarators on their own could not be said to have any legal
effect outside Scotland. Conclusions for declarator in the abstract with no
legal consequences were incompetent (McLaren, Court of Session Practice
at p. 647). Properly understood the declarators were confined as a matter
of language to the question of enforceability of the relevant decrees in
Scotland. It was difficult to see in these circumstances how any such
declarators could have any effect elsewhere. Article 28 would prevent
their recognition in, for example, France, if founded on in proceedings
concerned with the enforcement of the foreign decrees in that country.
Further, the declarators would not be recognised by virtue of Article 27(5),
insofar as they would be irreconcilable with earlier foreign judgments
"given in a non-contracting State involving the same cause of action and
between the same parties....". If the declarators were read more broadly
as general declarators that the foreign decrees had been obtained by
fraud (which they were not), the pursuer was in substance and effect
seeking to review the decisions of the Delaware and Colorado Courts.
This could not competently be done (or, perhaps, put another way, was
something which a Scottish Court had no jurisdiction to entertain).
Reference was made to Westergaard v Westergaard 1914 SC 977 and
Acutt v Acutt 1936 SC 386. Further if that was what the pursuer was
seeking it was arguable that the substantive law should be the law of the
foreign courts. In his pleadings the pursuer appeared to accept that he
could not meet the relevant legal test in the United States. In particular
he averred (at page 25A) "The threshold for fraud on the court in the
United States is higher than in Scotland, as it must involve an officer
of the Court". Although the pursuer averred that should he obtain the
declarators sought, his ability to raise finance for business ventures from
institutional sources and his ability to regain high level employment in
the public company sector would be materially improved, these supposed
collateral benefits could not help to answer the question of whether the
orders sought could competently be granted.
[15] Further, insofar as the interdicts sought included interdicts against
enforcement not only in Scotland but "elsewhere", such orders were
not competent. Any such interdicts, which would prevent the defenders
from enforcing the orders even in Delaware and Colorado, on the basis
of allegations of fraud already repelled in those jurisdictions, would
be wholly contrary to any notions of comity. Such interdicts would be
tantamount to orders reviewing the decisions of those courts. Further,
such orders would be unlawful in relation to the courts of contracting
state under the Brussels Convention - being orders in effect directing such
courts not to exercise the exclusive jurisdiction in relation to enforcement
which they have by virtue of Article 16(5). Nor would a Scots Court
make an order which it could not enforce. The defenders were not
personally present in Scotland, only being convened on the basis of an
apprehended wrong in Scotland of which there were now no prospects.
Although similarly wide interdicts were pronounced in England in Ellerman
Lines v Read 1928 2 KB 144, that case was readily distinguishable. The
defendants were personally subject to the jurisdiction of the court and
enforcement of the decree in question would ipso facto have been a
breach of a contract with which England had some substantial connection.
Further, even in England, such an interdict would probably now be
regarded as being in breach of Article 16(5) of the Brussels Convention.
Reference was made to Collins, The Civil Jurisdiction and Judgments Act
1982, at page 83 where it is said: "Article 16(5) may have the effect
of preventing an English Court from enjoining the enforcement of a
judgment in the courts of another contracting state"
[16] Secondly, the defenders advanced certain arguments challenging
the relevance and specification of the pursuer's averments in respect of
the alleged fraud. These arguments were advanced under and in terms
of plea-in-law 6, in respect of which the Lord Ordinary had previously
allowed a proof before answer. The essential basis of the pursuer's case
was that two of the defenders' witnesses, Messrs Adamson and Hall,
had perjured themselves in the court in Delaware in denying that a
non-renewal letter in respect of a loan had been exhibited at a meeting
on 28 April 1989 and further that Adamson had also perjured himself
in denying that he had met with the pursuer and agreed to renew the
loan until 31 December 1989. The critical averments of the pursuer
are that "The pursuer believes and avers that their perjured evidence
was a result of a collusive scheme agreed prior to the hearing of the
Delaware action in which officers of the defenders, namely Adamson and
Hall, conspired to give perjured evidence and to mislead the Delaware
Court." These averments are supported by claims that the evidence of
five witnesses had since come to the attention of the pursuer; witnesses
whose evidence would support the credibility of a witness - Mr W. - who
had given evidence contradictory of the defenders' witnesses Adamson
and Hall in respect of the exhibiting of the non-renewal letter. These
averments were insufficient. In Scotland a party seeking to challenge a
judgement on the basis that it had been fraudulently obtained required
to aver fraud extrinsic to the proceedings. Averments of perjury were not
enough, although averments of subornation of perjury would be. Further
it required to be proved that the fraud was not known at the relevant
time and could not then with reasonable diligence have been discovered.
Reference was made to Lockyer v Ferryman 1876 3R. 882 and 1877
4R H.L. 32, Miller v Mac Fisheries Limited 1922 S.C. 157, McCarroll v
McKinstery 1926 S.C. H.L. 1, Phosphate Sewage Company v Lawson 1878
5R. 1125 and 1879 6R. H.L. 113, and McIntosh's Trustees v Stewart's
Trustees 1906 8F. 467. Although it appeared that less stringent tests
were applied at common law in England in respect of foreign judgements
(reference being made to Owens Bank v Bracco 1992 2 A.C. 443 and
Owens Bank v Etoile Commerciale 1995 1 W.L.R. 44) the position, based
on a decision in 1882, namely Abouloff v Oppenheimer & Co 1882 10
QB 295, was now accepted only with apparent reluctance in England,
and there was no reason to suppose that the position was the same
in Scotland. It was not accepted in Canada or Australia. The pursuer's
reference to a collusive agreement might arguably be said to refer to an
extrinsic fraud equivalent to subornation of perjury, but there was no
sufficient specification of the basis on which the pursuer sought to draw
the relevant inference. If it stemmed simply from the fact that the two
relevant witnesses gave the same evidence, there was nothing to suggest
that that could not have been known at the time. The evidence of the new
witnesses did not appear to bear on the critical question of collusion, nor
were there any sufficient averments to indicate why the evidence of these
witnesses could not reasonably have been discovered earlier.
[17] On the question of whether it was open to the Court to hear all these
arguments notwithstanding the previous history of the case, counsel for
the defenders submitted that it was. The arguments which flowed from
the lodging of the irrevocable undertaking were not arguments which
had been advanced before. Having regard to the interlocutors of 10 April
2001 and 18 April 2002 it could not be said that the interlocutor of 28
February 2001 was final. As to the rest, a decision to allow a proof before
answer was final was in respect of the pleadings as they then stood.
After amendment a case could always be sent to the procedure roll.
Reference was made to Bendex v James Donaldson & Sons Limited 1990
S.C. 259. The interlocutor of 18 April 2002 allowed a procedure roll of
new, without qualification. It would be impracticable to restrict argument
to new averments only. The pursuer should have sought to restrict the
debate on 18 April 2002. It was now too late to seek to do so. Reference
was made to Galbraith's Curator ad Litem v Stewart 1997 S.L.T. 418.
Arguments based on alleged waiver were inappropriate in this context, in
particular given the power of the Court to allow amendment.
[18] On behalf of the pursuer counsel submitted at the outset that the
Court should not hear any of the defenders' arguments, save those
directed to the inclusion of the words "and elsewhere" in the two interdict
conclusions. It was, in particular, forcefully submitted that I should not
hear further argument on the question of the relevance and specification
of the pursuer's averments in respect of fraud. The pursuer's pleadings
on this matter had barely changed since the case was last on procedure
roll, the only relevant change being a reference to two further witnesses
who could support the credibility of Mr W.. Similar (albeit not identical)
arguments had been presented by the defenders to the Lord Ordinary in
the first procedure roll. He had adjudicated on these arguments and had
allowed a proof before answer. His interlocutor in that respect was final,
under and in terms of Section 18 of the Court of Session Act 1988. The
defenders had then sought, as was clear from their grounds of appeal, to
reclaim the Lord Ordinary's interlocutor in this respect, but by enrolling
to have the reclaiming motion refused could be said to have waived their
right to any further challenge. In any event the Lord Ordinary, on 18 April
2002, had not directed his mind to the precise scope of the debate which
he allowed. The Court should exercise its discretion to refuse to entertain
arguments which were or could have been made before the Lord Ordinary
in the first procedure roll. There should be no question of two competing
decisions and no prospect of any further reclaiming motion in respect
of the same matter. The cases referred to by the defenders were both
distinguishable.
[19] In addition it was argued that even the arguments said to arise
from the giving of the irrevocable undertaking should not be heard. The
defender's motion to dismiss the action on the basis of Minute number 35
of process had been dismissed in the Inner House on 28 February 2001.
That interlocutor was final in terms of Section 39 of the Court of Session
Act 1988. In any event the defenders could be said to have waived
their right to argue these matters, having invited the Court to refuse
the reclaiming motion before the amendment procedure was complete.
Further, in the exercise of its discretion, the Court should refuse to hear
these arguments too.
[20] Further the defenders' arguments based upon the granting of the
irrevocable undertaking were misconceived. The undertaking was not
accepted by the pursuer. He had an absolute right to continue these
proceedings to interdict, notwithstanding the undertaking. Reference
was made to Burn Murdoch on Interdict and in particular to page 103
where, under reference to Smith & Wellstood v Carron Co 1896 3 S.L.T.
223 it was said that "The Court will not accept an undertaking by the
defender at this final stage." In any event the undertaking only related to
potential actions of decree conform. The relevant foreign decrees could
be enforced in Scotland in other ways in which the question of fraud
would be relevant. In particular the defenders could, it was argued, seek
a decree conform or its equivalent in France against the pursuer based
on his residence there and seek to register it in Scotland for enforcement
either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or
the Civil Jurisdiction and Judgments Act 1982. In terms of Section 4(1)(a)
(iv) of the 1933 Act the registering Court could set aside any registration
on the basis that the judgment was obtained by fraud. Although there
was no equivalent provision in the 1982 Act there was nonetheless a
defence of public policy. As was stated in Dicey & Morris on The Conflict
of Laws (13th Edition) at paragraph 14.135 "In continental Europe fraud
in this context generally falls within the exception of public policy".
Further reference was made to Societe D'Informatique Service Realisation
Organisation (S.I.S.R.I.O.) v Ampersand Software B.V. & others 1994
I.L.Pr. 55. The defenders' reading of Article 16(5) was too wide. Properly
construed it related only to proceedings arising from recourse to diligence.
Reference was made to the same passage in the Jenard Report, at page
694, as was referred to by defenders' counsel. Alternatively, it was
submitted, in the final speech, that the defenders could seek to have the
pursuer rendered bankrupt in England and on that basis establish his
apparent insolvency for the purposes of sequestration in Scotland under
Section 5(2)(b) and Section 7(1)(a) of the Bankruptcy (Scotland) Act
1985.
[21] In any event the declarators sought - which related purely to the
enforceability of the foreign decrees in Scotland and did not purport to
seek general review of those decrees - could be of some effect outside
Scotland. In particular they could be registered in France under the 1982
Act and given recognition there in any proceedings for enforcement
brought there by the defenders. Article 27(5) would not be in point -
in particular the cause of action in Delaware being different. Moreover,
should the pursuer prove his averments, it was probable that the issue
estoppel which had hitherto frustrated his action for damages in England
would no longer be an obstacle. In any event, as the pursuer averred on
pages 39 and 40, should he obtain the declarators sought in this action
his ability to raise finance for business ventures from institutional sources
and his ability to regain high level employment in the public company
sector would be materially improved.
[22] As regards the proposed interdicts against enforcement "elsewhere",
it was clear that such interdicts could be pronounced in England.
Reference was made to Ellerman Lines v Read, which could not readily be
distinguished.
[23] Insofar as the defenders sought to articulate any of their arguments
on the basis of no jurisdiction this was now not open to them, jurisdiction
having been established at the outset. In the original summons
jurisdiction was founded on an apprehended wrong in Scotland and the
defenders had submitted to that jurisdiction. It was, as the Lord Ordinary
had previously decided, now too late to suggest otherwise. Reference was
made to Article 18 of the Brussells Convention and to Elefanten Schuh
GmbH v Pierre Jacqmain 1981 E.C.R. 1671.
[24] If it was necessary to argue the matter again the pursuer had made
sufficiently specific and relevant averments in relation to fraud. The
authorities relied on by the defenders as indicating certain strict tests
applied only in the case of Scottish decrees. It was enough when a foreign
judgement was being impugned to aver perjury. This was the case at
common law in England, following in particular the case of Abouloff v
Oppenheimer & Co, all as discussed in Owens Bank Limited v Bracco.
It is stated in Greens Encyclopaedia of the Laws of Scotland, Volume 8
at paragraph 924 that "Fraud in the sense of misrepresentation used
deliberately, inducing the foreign Court to grant the decree, is always a
relevant objection to its enforcement", and reference is made to Abouloff
in the footnotes. Although counsel referred to Bain v Shand 1833 11F
688, Boe v Anderson 1857 20 D 11, Gladstone &c v Lindsay 1868 6 S.L.R.
71 and to the Stair Memorial Encyclopaedia, Volume 8 at paragraph 406,
it was accepted that there was no Scottish authority directly in point. The
case of Maltman v Tarmac Civil Engineering Limited 1967 177 suggested
that the tests for impugning even a Scottish decree were perhaps less
strict than contended for by the defenders. In any event the pursuer had
averred enough in seeking to prove "collusion", and he offered to prove
that the evidence of the new witnesses was evidence which he could not
with reasonable diligence have discovered and placed before the Delaware
Court.
[25] The first question is whether the Court should consider all the
arguments which the defenders wished to advance.
[26] I have come to the clear view that I should not consider the
arguments which the defenders sought to advance in respect of the
relevance and specification of the pursuer's averments of fraud. This is
not because I regard it as incompetent for me to do so, the interlocutor
of 10 March 2000 being regarded as final. It seems clear that such an
interlocutor would only fall to be regarded as final in respect of the
pleadings as they were at that stage (Bendex v James Donaldson & Sons
Limited and cases cited therein). Nor, although not without considerable
hesitation, do I think it would be right to refuse to hear the arguments
on the basis of waiver, given in particular the amendment process
which was underway at the time the reclaiming motion was refused.
Rather, I think it would not be right to hear these arguments in the
exercise of my discretion. Given the history of the case and the fact
(which was not disputed) that the pursuer's averments on this matter
remain in all essential respects unchanged, there are strong equitable
arguments, based on the desirability of achieving finality, against allowing
the defenders to advance again broadly the same submissions (albeit
no doubt backed with different authority and presented with different
emphasis) as appears were advanced before. It seems to me that it
would be quite wrong to allow the defenders to achieve a situation in
which a different view could be reached by a different Lord Ordinary in
circumstances where they effectively abandoned their reclaiming motion
against the first decision, or even a situation in which the same view could
be reached by a different Lord Ordinary but capable of further potential
reclaiming procedures. As I understood it, the position of defenders'
counsel was not that the Court had no discretion in this matter but that
it had already been exercised by the Lord Ordinary on 18 April 2002
(when the case was sent to procedure roll of new), or at least that the
pursuer should have raised the matter then and that it was now too late
to do so. As to the first of these points, it seems clear that the Court's
discretion on this matter was not then exercised. Although the defenders'
draft grounds of appeal were before the Lord Ordinary, these, it seems,
were not the subject of detailed discussion (or, I was informed, of detailed
consideration by pursuer's counsel). Rather the focus of debate appears to
have been or whether the amendment and any new procedure roll should
have been allowed at all. This is, perhaps, confirmed by the fact that in
the interlocutor of that date the defenders were appointed "to lodge a
Note of Argument within 28 days of today". Further, it appears from the
Lord Ordinary's reported remarks that he may only have contemplated
argument arising from the lodging of the irrevocable undertaking. More
difficult, in light of Galbraith's Curator ad Litem v Stewart, is whether
it can be said that counsel for the pursuer should have moved the Lord
Ordinary then to restrict the scope of the procedure roll. Given the
history of this case, however, I do not think it unreasonable for counsel
to have thought it appropriate to focus on the question of whether the
amendment or a further procedure roll should be allowed at all, leaving
the question of possible restriction of argument to a time after the formal
lodging of the defenders' proposed note of argument. The present case
can in these circumstances be distinguished from Galbraith's Curator
ad Litem, where inter alia there had been no previous adjudication on
particular arguments. It is not clear in any event that Lord Osborne was
there seeking to lay down any rule of universal application. If he was,
then with that view I would respectfully disagree.
[27] In these circumstances I do not think it appropriate to indicate what
decision I would have reached on the arguments advanced on behalf
of the defenders. I have, however, thought it right to record, above,
reasonably fully, what these arguments were; arguments which - as the
pursuer now has notice (if he did not before) - would be likely to feature
strongly at the end of any proof before answer of the present averments.
[28] I turn now to deal with the arguments which can be said to arise
from the lodging of the irrevocable undertaking.
[29] Again a preliminary point arises as to whether the Court should
consider these arguments at all. In this case however I see no reason
not to consider them fully. Although a motion for dismissal based on the
fact that the undertaking had been lodged was refused, this was at a time
when the defenders' pleadings made no reference to it, and it is clear
that a short time later the Inner House allowed the matter to be raised
when the relative Minute of Amendment was - without any opposition -
allowed to be received, and further that the Lord Ordinary on 18 April
2002, allowed the matter to be introduced fully into the pleadings,
notwithstanding opposition, when the Minute of Amendment was allowed,
including the new pleas-in-law numbers 11 and 12. Moreover it seems
clear that on the same date when he allowed a procedure roll of new
he anticipated that arguments would be advanced in relation to the
undertaking and its effects. Although it appears consideration was given
by the pursuer to reclaiming the Lord Ordinary's interlocutor of 18 April
2002 he did not do so. That interlocutor must be regarded as final.
[30] Turning to the merits of the matter, the first question is whether the
lodging of the undertaking could be said to have made any difference to
what counsel for the pursuer described as his right to interdict. I consider
that it does make a significant difference. The undertaking has been given
not only to the pursuer but to the Court. Although, as I was informed,
the pursuer himself did not accept it, it was not suggested that this was
because he did not accept that the defenders would not seek to enforce
the relevant decrees by action of decree conform. Rather it was because,
as I understood it, he wished to retain the chance to "clear his name".
Be that as it may, the undertaking having been given irrevocably to
the Court, that would effectively bar any attempt by the defenders to
bring an action of decree conform. In these circumstances the pursuer
cannot be said, in my view, to have any reasonable apprehension of that
happening, such as would entitle him to interdict against the defenders
taking that step. The case of Smith & Wellstood v Carron Co referred
to in Burn Murdoch does not, it respectfully seems to me, vouch the
general proposition which appears to be taken from it. Rather it is an
example of a case where the Court plainly entertained substantial doubt
in the circumstances of that case, as to whether the undertaking which
the defenders sought to give could afford the same protection which
the pursuer would obtain by way of interdict. In particular there was
a history of the defenders seeking to take advantage of the pursuer's
rights and the undertaking which they sought to give was in terms
restricted to fewer matters than were covered by the interdict which
the Court pronounced. In this case, where the circumstances are very
different, I consider the defenders are right to argue that the lodging of
the irrevocable undertaking has effectively rendered the conclusions for
interdict (and the declarators apparently underlying the pursuer's right
to seek interdict) unnecessary in so far as directed to potential actions
of decree conform. Put another way, I consider there are no relevant
averments to support the pursuer's basic averment at page 38B that he
"is reasonably apprehensive that the defenders will seek to enforce the
said orders of the Delaware and Colorado Courts in Scotland by an action
of decree conform".
[31] Leaving aside for the moment the question of the competence of
the pursuer seeking interdict against enforcement "elsewhere", could
there nevertheless still be said to be a reasonable apprehension of
enforcement of the decrees by the defenders in Scotland by other means
(and means capable of being the subject of interdict, and of declarator
as to their unenforceability in Scotland, on the basis that the decrees
were obtained by fraud)? I have come to the view that there could not.
Notwithstanding that at the time of the last debate an undertaking
was given that a Minute of Amendment would be lodged showing that
the conclusions were directed only against potential actions of decree
conform, the primary suggestion now made by the pursuer in argument
(and in the pleadings) is that the defenders could seek an order of the
nature of a decree conform against him in France, where, it is accepted
in the pleadings, he has a home and business interests and then seek to
register the French decree and enforce it in Scotland under and in terms
of either the Foreign Judgments (Reciprocal Enforcement) Act 1933 or
the Civil Jurisdiction and Judgments Act 1982. As to the 1933 Act, it is
at least clear in the pursuer's favour that if such a French decree could
be registered, it would be possible for the registering Court to set aside
that registration on the basis that the judgment was obtained by fraud
(Section 4(1)(a)(iv)). It seems clear, however, that any French decree
of the type envisaged could not be registered under the Act. By virtue
of Section 1(2A) it is provided in effect that the Act's provisions do not
apply to "a judgment given ..... in proceedings founded on a judgment
of a court in another country and having as their object the enforcement
of that judgment". This provision, added by the Civil Jurisdiction and
Judgments Act 1982, Schedule 10, Paragraph 1, was no doubt added,
as many commentators have concluded, to avoid the "laundering" of
judgments obtained in countries to which the 1933 Act did not apply -
ie. to prevent a party from obtaining a decree conform in respect of a
"foreign" judgment in a country to which the Act did apply and thereafter
seeking enforcement by formal registration procedures under the Act in a
country or countries which would not themselves otherwise contemplate
the recognition of the "foreign" judgment in question (see eg. Elizabeth B.
Crawford International Private Law in Scotland, paragraph 19.26, footnote
19). This, I did not understand, ultimately to be disputed by counsel for
the pursuer.
[32] The same result would, I consider, obtain under the 1982 Act. That
Act inter alia gave force and effect in the United Kingdom to the Brussels
and Lugano Conventions. By virtue of Article 25 the Conventions were
to apply to "any judgment given by a Court or tribunal of a Contracting
State ..." As authoritatively interpreted in the Court of Justice of the
European Communities, this would not, it seems, include so-called
"judgments on judgments" obtained in non-contracting states, and
would thus not include any decree conform or its equivalent pronounced
in France in respect of the decrees originally obtained in the United
States. In particular, at a later stage in Owens Bank v Bracco, to which
I was referred, this particular matter was the subject of a reference by
the House of Lords to the European Court of Justice. In its judgement
(reported at Owens Bank Limited v Bracco &c 1994 Q.C. 509) the Court
made it plain (at para. 25), having considered inter alia Articles 25, 26
and 31, that "The conclusion must therefore be that the Convention does
not apply to proceedings for the enforcement of judgments given in civil
and commercial matters in non-contracting states." The Court further
rejected an argument that any distinction could be made between an
order for enforcement simpliciter and a decision of a court of a contracting
state on an issue arising in proceedings to enforce a judgment given
in a non-contracting state, such as the question whether the judgment
in question was obtained by fraud. The effect of this decision is plainly
recognised in Dicey & Morris Conflict of Laws 13th Ed. (to which I was
referred with approval by both parties) at paragraph 14-186, and in the
second supplement at paragraph S14-188, and elsewhere. It is stated,
for example, in Cheshire & North's Private International Law, (Thirteenth
Edition) page 484,
"A Court order in one Contracting State for the enforcement of a
judgment given in another State, whether a Contracting or non-
contracting State, falls outside title III of the Convention. To decide
otherwise would mean, in effect, that a Court in Contracting State A
would have to recognise a judgment given in a non-contracting state
(X) simply because a Court in Contracting State B had recognised the
judgment given in State X and had granted an enforcement order in
respect of it. This would be contrary to one of the basic principals of
the Convention; the Convention is only concerned with recognition of
judgments given in Contracting States and is not intended to affect the
recognition of judgments given in non-contracting states".
In these circumstances it is, I think, unnecessary to decide the dispute
between the parties as to the scope of Article 16(5). As to that, however,
there must, it seems to me, be at least a doubt as to whether the Article
would be as widely interpreted as contended for by the defenders (see
eg. the Opinion of the Advocate General in Owens Bank Limited v Bracco
at paragraph 39 (page 530) and the passage on page 563 of the Jenard
Report to which I was referred, although c.f. the second footnote to the
latter passage.) Nor is it clear, I consider, even with a wide interpretation
of Article 16(5), that the first paragraph of Article 28 could be invoked to
prevent the recognition in Scotland of the envisaged French decree which,
ex hypothesi, that court had jurisdiction to pronounce. Article 28 is not on
the face of it concerned with the use which might be made of decisions for
which there was such original jurisdiction. However, as indicated above,
the broad contention for the defenders is, it seems to me, unanswerable
by virtue of Article 25.
[33] Even if I am wrong on this, and the envisaged French decree could
be recognised and registered in Scotland under the 1982 Act, there is
nevertheless (unlike under the 1933 Act) no express right given to the
registering Court to refuse recognition on the basis that the original
decree was obtained by fraud. Although it was suggested by pursuer's
counsel that such registration could be refused on the basis that do so
would be contrary to public policy, if the question of fraud could be raised
against the relevant decrees both in the United States and in France (and
it was not suggested that it could not) there would it seems be no basis
upon which the Scottish Court could refuse recognition of the French
decree as being contrary to public policy. As is said later on in the passage
in Dicey & Morris at paragraph 14-135 to which I was referred, "But if
means of redress against the alleged fraud were available in the country
of judgment, it would not be contrary to English public policy to recognise
and register a judgement which was subject to those means of redress".
That being so, it is difficult to see how the pursuer could competently
seek interdict against a course of action expressly authorised by the 1982
Act (or pronounce declarators apparently denying that right). For the
same reasons the original declarator which the pursuer sought against
enforcement of the English costs order was refused in the Inner House.
[34] An alternative method of enforcement in Scotland suggested
(although with less apparent conviction given uncertainties as to whether
the defenders could establish jurisdiction against the pursuer) was that
the defenders might obtain a decree conform or its equivalent in England
and seek to register that under the 1982 Act. No indication, however, is
given in the pleadings, nor was any submitted in argument, as to how
the defenders would establish jurisdiction against him in England in the
first place. Further, any such decree of the English Court would, it seems,
be governed by Part II of the 1982 Act and not by Part 1. In terms of
Section 18, which deals with the "enforcement of UK judgments in other
parts of UK", a judgment means inter alia: "(a) any judgment or order
(by whatever name called) given or made by a Court of law in the United
Kingdom". Although this matter was not addressed by counsel (or in
any authority to which I have been referred or of which I am aware)
there must, I consider, be a real question as to whether (by parity of
reasoning with the approach of the European Court of Justice) a decree
conform pronounced in England in respect of a foreign judgment would
fall to be regarded for the purposes of Section 18 as a judgment given
or made by the English Court (as opposed to being a "judgment on a
judgment" of a foreign Court). The view of Dicey & Morris, for example,
would appear to be that any such judgment on a judgment would not be
covered (see paragraph 14-232). Be that as it may, there is no reason, in
my view, to suppose that a Scots Court could competently interdict steps
for enforcement which the defenders would ex hypothesi be entitled to
take by statute (or to pronounce declarators seeking to deny that right).
The same would apply, as the defenders (afforded a right of reply on this
point) argued, to the only other suggestion made, (albeit late on in the
debate) namely that the defenders might seek to sequestrate the pursuer
in England on the basis of an English decree and then to sequestrate
him in Scotland under and by virtue of the provisions of the Bankruptcy
(Scotland) Act 1985. As to that there must too be some doubt, in my
view, as to whether the proposed course of action would properly be
regarded as a means of enforcement of the foreign decrees (although this
was not a position which, as I understood it, counsel for the defenders
sought to take).
[35] Still for the moment leaving aside the competence of the pursuer
seeking interdict against enforcement "elsewhere", the question remains
as to whether bare declarators could nevertheless be pronounced even
if there was no basis for pronouncing interdict against enforcement in
Scotland. Parties were agreed, under reference to McLaren on Court of
Session Practice, page 647, that actions of declarator in the abstract
with no legal consequences were incompetent. Nothing was said, in the
circumstances of this case, which persuades me that bare declarators
of the kind sought could be said to have such consequences. Counsel
for the pursuer appeared to accept that the language of the declarators
was restricted to the question of the enforceability of the United States
decrees in Scotland and that he was not seeking in substance any general
review of those decrees. If he had been there would, in my view, be no
answer to the defenders' argument based on the principles referred to
in cases such as Westergaard v Westergaard and Acutt v Acutt (and also
perhaps to the argument based on the question of proper law). It was
nevertheless argued that the declarators could be registered in France
under the 1982 Act and used to support the pursuer's position if the
defenders sought decree conform in France. As to that, in the first place,
given that the declarators sought are restricted as a matter of language
to the question of enforceability in Scotland, it is difficult to see how they
could be thought to be of assistance in France. Further, although I agree
with counsel for the pursuer's submission that Article 27(5) would not
prevent recognition in France, given the different nature of the action in
Delaware, there is no reason to suppose that the declarators would or
could be recognised and registered in France under the 1982 Act, being
in the nature of judgments on judgments. Although it was argued that
the declarators could assist the pursuer in any further damages action
which he might bring in England, there is similarly reason to doubt that
such judgments on judgments could be registered in England under
the 1982 Act. In addition no clear argument was advanced as to how
such declarators could assist where the English Courts have already
decided against the pursuer (over eight years ago) on a full consideration
of the history of the litigations in the United States and where, as the
pursuer accepts in the pleadings, Hobhouse L.J., with whom the other
members of the Court agreed, concluded that the evidence relied on
(including new material said to bolster Mr W.'s credibility) did not begin
to show that Hall and Adamson had committed perjury. In any event
it is difficult to accept that any potential advantage which the pursuer
might possibly gain in any further action of damages which might possibly
be brought in England at some possible future date would be regarded
as a sufficiently direct consequence to render competent of itself the
declarators sought. A number of averments (and submissions) were also
made to the effect, broadly, that should the pursuer obtain the declarators
sought in this action, his ability to raise finance for business ventures
from institutional sources and his ability to gain high level employment
in the public company sector was materially improved. The fact that the
pursuer might obtain such ancillary benefits would not, in my view, make
the declarators competent. If so, then no doubt it could be argued that
it would be competent for him to seek declarators which in substance
sought reduce or set aside the United States decisions, from which
outcome these hoped for ancillary benefits would most likely flow. That
is something, however, which the pursuer accepts he cannot competently
do. It is moreover, not at all clear how these ancillary benefits would flow
from the narrow terms of the declarators sought - restricted as they are
to the question of enforceability in Scotland.
[36] This leaves finally the question of the competence of the interdicts
which the pursuer now seeks against the defenders enforcing the relevant
judgments not merely in Scotland but also "elsewhere". It is not clear
from the pleadings upon what legal basis such broad interdicts are now
sought. The declaratory conclusions, which might be thought to be the
foundation for the interdicts, only refer to the question of enforceability in
Scotland. Counsel for the pursuer, however, nevertheless founded strongly
upon the case of Ellerman Lines v Read. In that case, however, the
defendant, over whom the Court had personal jurisdiction as a naturalised
British subject, had obtained a decree in Turkey not merely by fraud
but in direct breach of a contract made in standard form approved and
published by the Committee of Lloyds. These factors were plainly critical
to the decision in the Court of Appeal. In particular, as Scrutton L.J. said
at page 151:
"Here we have an English contract, considerable portions of which were
to be formed in England, entered into by a naturalised British subject;
a naturalised British subject is proved to have broken that contract and
by fraud obtained a foreign judgement which he proposes to enforce
against the property of the other contracting party ... In such a case, as I
understand the decisions, the English Courts have always professed, and
asserted, their power to act."
It was further emphasised by him, and by Atkin L.J. more than once,
that important to the decision was the fact that the defendant was a
person within the jurisdiction of the English Court. It seems plain to me
that the facts of the present case are readily distinguishable. Jurisdiction
was sought and obtained (and is apparently maintained) against the
defenders on the basis of an apprehended wrong in Scotland for which
apprehension there is, as I have found, now no basis. The defenders are
otherwise not subject to the jurisdiction of the Scottish Courts. For them
to enforce the relevant decrees would not be in breach of any contract,
far less one with which Scotland had any intimate connection. Absent
any clear Scots authority relevant to circumstances such as the present,
the question of the competence of what the pursuer seeks appears to be
at large. I emphasise the particular circumstances of this case, because
it seems clear that there may be circumstances in which a Scots Court
would be prepared to interdict the taking of court action abroad, for
example where the defenders were subject to the Scottish jurisdiction of
the Scottish Court and the subject matter of the proposed action had a
close connection with Scotland eg. Shell (UK) Exploration & Production v
Innes 1995 S.L.T. 807.
[37] I have come to the clear view that in the circumstances of the
present case the interdicts sought against enforcement "elsewhere" could
not competently be pronounced. The interdicts would have the effect of
preventing the defenders from seeking to enforce the relevant decrees
even in the United States where they were obtained. As defenders'
counsel argued, this, in my view, would represent a gross interference
with principles of comity and indeed would be tantamount to the court
pronouncing orders which in substance sought to review or set aside
the foreign decrees themselves. In addition, not only is it by no means
clear that such interdicts could or would be recognised in any country
which was party to the Brussels Convention, being (when taken along
with the latter part of the declarators sought, which appears to be the
underlying legal justification) in the nature of "judgments on judgments",
but also it is strongly arguable that they would in any event be orders,
in relation to such countries, which the Scottish Courts would have no
jurisdiction to make by virtue of Article 16(5) of the Convention, however
it is interpreted. It is to be noted that Collins, in the Civil Jurisdiction and
Judgments Act 1982, observes at page 83 that Article 16(5) "may have
the effect of preventing an English Court from enjoining the enforcement
of a judgment in the Courts of another Contracting State". Nor, in
addition, are the interdicts sought against enforcement "elsewhere"
interdicts which the Scots Court itself could enforce, not having personal
jurisdiction against the defenders.
[38] For the avoidance of doubt, I find against the pursuer on this
last matter on the basis both of competence and lack of jurisdiction.
At the end of the day, none of the other arguments presented which
could arguably have been presented as matter of competence or
jurisdiction were, it seemed to me, strongly pressed on the basis of lack
of jurisdiction. As to lack of jurisdiction in respect of the interdicts sought
against enforcement "elsewhere", I see no reason (and nothing in Article
18 or Elefanten Schuh v Jacqmain) why the defenders cannot plead no
jurisdiction in relation to entirely new conclusions recently added by
amendment. It is to be noted that not only was jurisdiction originally
claimed against the defenders on the basis of an apprehended wrong in
Scotland, but it still is (p 7AB of the Closed Record (as amended)).
[39] In all the circumstances I shall sustain the defenders' eleventh and
twelfth pleas-in-law and dismiss the action.