J U D G M E N T
LORD JUSTICE BELDAM: The defendant appeals to this Court from the
decision of His Honour Judge Hedley QC of 11th February 1997 refusing
to set aside registration of a judgment of the Court at first instance at
Brussels. The judgment, entered on 29th September 1992, was ordered
to be registered by Master Murray on 1st October 1996 pursuant to the
Civil Jurisdiction and Judgments Act 1982 and the 1968 Convention on
Jurisdiction and Enforcement of Judgments.
The Facts
The plaintiff company is now in administrative receivership. In 1991 it
carried on the business of leasing expensive sporting motor cars. The
defendant has addresses in England and in Belgium. By an agreement
dated 13th May 1991 the plaintiff and the defendant entered into a lease
purchase agreement in respect of three Ferrari motor cars and two Aston
Martins. By this agreement, the defendant (whose address was given
as Prince of Wales Mansion, Prince of Wales Drive, Battersea) undertook
to pay 24 monthly payments of £15,265.95 on the 30th of each month
commencing on 30th June 1991, and a final rental amount of £242,500
on 30th June 1993. The agreement was terminable by the plaintiff if the
defendant failed to pay any rental amount under the agreement.
By 13th May 1992 no single payment had been made and the plaintiff
wrote to the defendant terminating the agreement. By 18th June 1992
arrears under the agreement amounted to £183,191.40. In mid-May 1992
the plaintiff managed to recover the most valuable of the motor cars, the
Ferrari F40, and there followed negotiations between the parties which
resulted in the defendant offering to pay £475,000 by 15th December
1992, of which £300,000 was to be paid immediately. The plaintiff was to
keep possession of the Ferrari F40 car until full settlement of the amounts
outstanding.
The £300,000 was not paid. The defendant apparently hoped that it would
be available from a guarantee account which he had with a small bank
called P..
The plaintiff to preserve its position had, on 30th July 1992, issued a writ
of summons in the Brussels Court of first instance to recover £475,000.
The defendant agreed not to oppose the plaintiff's claim. Nothing was
paid under the agreement and the plaintiff entered judgment for the sum
of £475,000 plus interest of 14 per cent on 29th September 1992. The
judgment was entered in the ordinary form of judgment of the Belgian
courts and was enforceable there as a judgment. Still nothing was paid
by the defendant, and on 29th July 1993, after taking considerable steps
to obtain the best price, the plaintiff sold the Ferrari F40 for a sum of
£140,525.
The plaintiff sought to try to claim the £300,000 from the defendant's
account with P. by proceedings comparable to garnishee proceedings, but
they were resisted by the bank and yielded nothing. In the meantime, the
plaintiff had gone into administrative receivership.
Early in 1994 the defendant brought proceedings in the High Court in
this country claiming that the effect of the agreement reached in 1992
was that the plaintiff had agreed to sell him a Ferrari F40 for £475,000,
that the property in the Ferrari F40 motor car had passed to him, that the
plaintiff had wrongfully sold the car interfering with his goods and had
sold it for less than its true value. By its defence and counterclaim, the
plaintiff denied interfering with the defendant's goods and counterclaimed
substantial sums due under the leasing agreement.
In October 1994 the plaintiff sought to register the Belgian judgment in
the High Court, but the affidavit sworn in support of the application to
register was returned to the plaintiff's solicitors because it did not comply
with the requirements of Ord.71,r.3.
For the next fifteen months, the plaintiff pursued fruitless attempts to
obtain some payment from the defendant who had paid nothing under the
agreement or in discharge of the judgment. Apart from the sum realised
on the sale of the Ferrari F40 motor car, the plaintiff had received no
payments. The defendant had not returned the other four cars, nor had
he disclosed what had become of them.
On 15th January 1996 the plaintiff issued a fresh summons for
registration of the Belgian judgment. Attempts to serve the summons
proved difficult, although contact was made with solicitors on the record
for the plaintiff in the proceedings he had brought in this country. They
were sent copies of the plaintiff's affidavits together with exhibits. It
appears that at this time both the parties' solicitors were proceeding
on the assumption that the application for registration of the Belgian
judgment was governed by the rules contained in Ord.71,r.2 and r.3. The
defendant sought to delay these proceedings by saying that he would not
be available until April 1996.
Eventually it appears that, following a change of solicitors, the plaintiff
decided to follow the correct procedure and apply for registration ex parte
in accordance with the provisions of Ord.71,r.27 and r.28.
In support of the new application, Miss Sorgo, the plaintiff's solicitor,
swore an affidavit on 30th September 1996 which followed the
requirements of Ord.71,r.28 and in which she exhibited the certified copy
of the original judgment with an English translation certified by a notary
public. Her affidavit also contained the additional statements required by
rule 28, but in one respect she made a statement which was misleading.
Rule 28(1)(d)(ii) requires that evidence in support of the application
should state to the best of the information and belief of the depondent:
"as the case may require, either that at the date of the application the
judgment has not been satisfied, or the part or amount in respect of
which remains unsatisfied."
Miss Sorgo stated that the judgment remained wholly unsatisfied. It had
apparently escaped her notice that the plaintiff company had received a
net sum of approximately £140,000 from the sale of the Ferrari F40 in
1993.
On the basis of this evidence Master Murray ordered that the Belgian
judgment should be registered, subject to the defendant's liberty to
appeal against the registration within one month of receiving notice
that the judgment had been so registered. The judgment was not to be
executed until expiry of that period or disposal of the appeal.
Notice of registration was duly served on the defendant who exercised his
right to appeal. Before His Honour Judge Hedley the defendant supported
his application to have the registration of the judgment set aside by
evidence on affidavit, and he filed supporting affidavits from a Belgian
lawyer. The plaintiff too filed further evidence with the result that all the
facts I have outlined earlier in this judgment were stated in affidavits
before the Judge.
On the basis of those facts, Mr Lord for the defendant first submitted
that the judgment given in the Court of first instance in Brussels and
recorded in documents exhibited by Miss Sorgo, was not a judgment
which was capable of registration under the Convention or under the
Civil Jurisdiction and Judgments Act 1992. He submitted it was a consent
judgment, and that such judgments did not comply with the requirements
of the Convention.
Next he submitted that, even if the judgment was registrable, there
had been a material non-disclosure by the plaintiff in the evidence put
before the Court on the ex parte application to obtain registration of
the judgment. In particular he complained that Miss Sorgo had failed to
disclose receipt of the £140,000 from the sale of the Ferrari F40 motor
car, and had omitted to inform the Court of the existence of the English
proceedings brought by the defendant against the plaintiff for damages
for wrongful sale of the Ferrari motor car.
The Judge held that the judgment was registrable under the Convention
and, although he found that Miss Sorgo when obtaining the order for
registration ex parte had failed to disclose receipt of the £140,000, that
non-disclosure would not have affected the order made by Master Murray.
It was clearly not a deliberate omission and the defendant had not been
prejudiced. Accordingly, he exercised his discretion to allow the order
for registration to stand. He held that the English proceedings were not
material, and accordingly dismissed the defendant's appeal.
The defendant has a right of appeal to this Court on a point of law. To
explain the defendant's arguments, I must briefly refer to the Convention
on Jurisdiction and Enforcement of Judgments in Civil and Commercial
Matters ("the Convention") and the Civil Jurisdiction and Judgments Act
1982.
The aims of the parties to the Convention are succinctly stated in the
preamble. In short, the Contracting States aim to simplify the formalities
of reciprocal recognition and enforcement of judgments, and to that end
introduced an expeditious procedure which was to apply to judgments,
authentic instruments and court settlements. Article 25 of the Convention
stated:
"For the purposes of this Convention 'judgment' means any judgment
given by a court or tribunal of a Contracting State, whatever the
judgment may be called, including a decree, order, decision or writ of
execution, as well as the determination of costs or expenses by an officer
of the Court."
Article 27 provides:
"A judgment shall not be recognised:
(1) if such recognition is contrary to public policy in the State in which
recognition is sought;
(2) 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;
(3) if the judgment is irreconcilable with a judgment given in a dispute
between the same parties in the State in which recognition is sought..."
Paragraphs (4) and (5) of Article 27 are not germane to this case. By
Article 29 it is provided that:
"Under no circumstances may a foreign judgment be reviewed as to its
substance."
Articles 30 and 38 provide for power to stay judgments pending appeal
against them and, pending registration and enforcement. Article 34
encapsulates the nature of the procedure on the initial application for
registration. It states:
"The court applied to shall give its decision without delay; the party
against whom enforcement is sought shall not at this stage of the
proceedings be entitled to make any submissions on the application.
The application may be refused only for one of the reasons specified in
Articles 27 and 38.
Under no circumstances may the foreign judgment be reviewed as to its
substance."
Article 36 then provides:
"If enforcement is authorised, the party against whom enforcement is
sought may appeal against the decision within one month of service
thereof..."
Article 42:
"Where a foreign judgment has been given in respect of several matters
and enforcement cannot be authorised for all of them, the court shall
authorise enforcement for one or more of them.
An applicant may request partial enforcement of a judgment."
Title III, section 3 of the Convention provides the common provisions, and
by Article 46:
"A party seeking recognition or applying for enforcement of a judgment
shall produce:
(1) a copy of the judgment which satisfies the conditions necessary to
establish its authenticity;
(2) in the case of a judgment given in default, the original or a certified
true copy of the document which establishes that the party in default
was served with the document instituting the proceedings or with an
equivalent document."
By Article 47:
"A party applying for enforcement shall also produce-
(1) documents which establish that, according to the law of the State
[in which it has been given] the judgment is enforceable and has been
served;
(2) ..."
In a separate title, Title IV, the Convention makes equivalent provision
for registration of authentic instruments and court settlements. Article
50 provides for registration of formally drawn up and enforceable
authentic instruments, and Article 51 for Court approved settlements to
be registered and enforced under similar conditions and safeguards.
Although the Convention refers to both registration and enforcement, no
clear dividing line appears between the two concepts. Effect was given to
the Convention in England and Wales by the Civil Jurisdiction (Judgments)
Act 1982 which by section 2 provided that the Convention was to have
the force of law in the United Kingdom and that judicial notice was to be
taken of the text of the Conventions contained in schedule 1. Further, by
section 3 the Court is required to take into account any decision of the
European Court or expression of opinion by that Court on any question as
to the meaning or effect of a provision of the Convention, and in addition
it is to have regard to reports on the Convention by Mr P Jenard, and on
the Accession Convention by Professor Dr Peter Schlosser in ascertaining
the meaning or effect of any provision of the Conventions.
Section 4 of the Act provides for the enforcement of judgments other than
maintenance orders in these terms:
"(1) A judgment, other than a maintenance order, which is the subject of
an application under Article 31 ... for its enforcement in any part of the
United Kingdom shall, to the extent that its enforcement is authorised
by the appropriate court, be registered in the prescribed manner in that
court...
(2) ...
(3) A judgment registered under this section shall, for the purposes of its
enforcement, be of the same force and effect, the registering court shall
have in relation to its enforcement the same powers, and proceedings for
or with respect to its enforcement may be taken, as if the judgment had
been originally given by the registering court and had (where relevant)
been entered.
(4) ..."
Section 48 contains powers to make rules of Court in connection with any
provision of the Act or the Convention.
Under the Act the dividing line between registration and enforcement
is more clearly defined, so that registered foreign judgments may be
enforced in the same manner as domestic judgments.
In this appeal Mr Lord for the defendant renewed his argument that the
judgment for which recognition and enforcement was sought was not
a judgment within the meaning of Article 25. He also argued that His
Honour Judge Hedley ought to have set aside the order for recognition
made by Master Murray on the ground that the plaintiff had obtained
it by non-disclosure of a material fact. He argued that this Court could
review the exercise by the Judge of his discretion because he had applied
a wrong principle and had taken irrelevant matters into account.
He argued two further points: that the presence of the proceedings in
England between the same parties in which the defendant averred that
the judgment was unenforceable by reason of the terms of an agreement
between the parties prevented an order for enforcement being made in
respect of the judgment. Further, that proceedings for enforcement had
already been taken in Belgium and were a bar to enforcement in England.
I come now to the first ground of appeal. The terms of the judgment of
29 September 1992 are clear. It records that the judgment is pronounced
after due consideration, the Court having seen the summons served on
30th July 1992, the plaintiff's submissions filed at the public hearing on
25th August 1992, and having heard at the hearing the oral arguments
of the parties' barristers. It recites that the defendant had relied on
the Court for the current final balance presented in submissions by the
plaintiff, and that it appeared to the Court that the final balance was
justified. The Court gave judgment after hearing both parties and found
the claim to be admissible and well-founded. It ordered the defendant to
pay the plaintiff £475,000 in Sterling, plus agreed interest at 14 per cent
per annum from 1st July 1992, and judicial interest, and the Court made
an order for costs. Further, the Court authorised provisional execution of
the judgment, notwithstanding any recourse without security or division.
Such a judgment was on its face a judgment within the wide definition
of Article 25, but Mr Lord cited the decision of the European Court in
Solo Kleinmotoren Gmbh v. Emilio Boch Case No. C414/92 to found his
submission that a judgment entered into as part of an agreement reached
between the parties in the course of proceedings is a court settlement and
as such not a judgment within the meaning of Article 25.
That case arose from disputes between a German company, Solo, and an
Italian businessman, Mr Boch. Mr Boch had bought an action against Solo
in Milan for breach of contract. He recovered Lira 48 million, with interest.
The judgment had been registered in Germany but Solo appealed, and
before the Court hearing the appeal, the parties had reached a court
settlement suggested by the court for payment by Solo to Mr Boch of
Marks 160,000. The settlement apparently included a statement that all
the parties' claims against one another were resolved.
Mr Boch had brought other proceedings in Italy in the Court of Bologna in
respect of a different claim against Solo. Solo had argued that Mr Boch's
claim ought to be regarded as being satisfied by the earlier agreement in
the German proceedings. The Italian court rejected the submission of the
ground that the settlement had never been declared enforceable in Italy,
and was unrelated to the dispute being heard in Bologna. Although there
was a Minute of Settlement, it was not clear what procedure had been
adopted before the German Court. Mr Boch obtained judgment in this
action too and later sought to enforce his second judgment in Germany.
His application to obtain enforcement was granted. It was later confirmed
by a higher Court but Solo appealed, and on appeal contended that the
judgment in the second case should not be recognised because, under
Article 27(3) of the Convention, the judgment was irreconcilable with "a
judgment given in dispute between the same parties in Germany". Solo
contended that the settlement reached in the earlier proceedings should
be treated as a judgment barring recognition under Article 27(3). This
question was referred to the European Court which ruled that the word
"judgment" in Article 27 had to be given the same meaning as in Article
25 and that the Court settlement was clearly not within the definition
in Article 25. Advocate-General Gulmann in his opinion for the court
emphasised the distinction between judgments in Article 25 on the one
hand and authentic instruments and court settlements under Articles 50
and 51 in Part IV on the other. He also said:
"Furthermore, there is the point that the settlement will typically not be
afforded all the guarantees of a judgment and the authority of the law
does not lie behind a court settlement as it does in the case of a court
judgment."
The agreement between Solo and Mr Boch which compromised the first
proceedings is set out in the court's judgment, but the court does not
state whether it was authenticated or amounted to a court settlement,
though apparently it regarded some of the terms as enforceable under
Article 51. Mr Lord founds his argument on paragraphs 17 and 18 of the
Court's judgment which state:
"17. It follows from the foregoing that in order to be a 'judgment' for the
purposes of the Convention the decision must emanate from a judicial
body of a Contracting State deciding on its own authority on the issues
between the parties.
18. That condition is not fulfilled in the case of a settlement, even if it was
reached in a court of a Contracting State and brings legal proceedings to
an end. Settlements in court are essentially contractual in that their terms
depend first and foremost on the parties' intention ..."
He therefore argues that as the judgment in this case was entered as
part of an agreement in the Court proceedings, the judgment did not
emanate from a judicial body deciding the issue between the parties
on its own authority. In my view, those observations of the European
Court, though relevant to the case in which they were made, were not
intended to attenuate the meaning of judgement in the Convention, nor
are they capable of the interpretation that the judgment entered in the
present case was not a judgment within Article 25. A judgment entered
by consent or in default is nonetheless a judgment. Under the Convention,
the substance of the judgment can under no circumstances be reviewed.
If a party agrees to a judgment being entered by conceding the issues,
the judgment is no less an authoritative judgment than a judgment
entered in default, which is quite clearly within Article 25 (see for example
Article 27(2) and Article 46(2).)
Mr Lord also referred us to paragraph 220 in the opinion of Professor Dr
Peter Schlosser in his report on the Convention to which reference may be
made for its meaning. In that paragraph he said:
"The appeal provided for in Article 26 can be based, inter alia , on the
grounds that the judgment does not come within the scope of the 1968
Convention, that it is not yet enforceable, or that the obligation imposed
by the judgment has already been complied with. However, the substance
of the judgment to be enforced or the procedure by which it came into
existence can be reviewed only within the limits of Article 27 and 28."
Thus Mr Lord argued that the Judge was wrong to disregard evidence
from the Belgian lawyer which he sought to put before the Court, that
a judgment entered in the circumstances asserted by the defendant
was not enforceable. Those circumstances (which are not referred to in
the judgment itself) included the disputed statement that the plaintiff
had agreed only to enforce the judgment against the amount said to be
available in the defendant's account with P.. The defendant was seeking
by this evidence to add to the substance of the foreign judgment and so
to undermine its enforceability. It seems to me clear from the wording
repeatedly used in the Convention that the judgment is not to be open
to review on such grounds. To allow such evidence would be contrary to
the stated purposes of the Convention. Accordingly, I would support the
Judge's decision that the evidence tendered was not admissible. There
may of course be cases in which the evidence of a foreign lawyer would
be admitted to explain the precise meaning of a foreign judgment if that
is not sufficiently clear from the certified translation. But in this case the
terms of the judgment are in my view unequivocal. They include the clear
implication that it is an enforceable judgment because the Court itself
authorised provisional execution of it. I would therefore reject the first
ground of appeal.
I now the come to Mr Lord's second ground: should the Judge have set
aside the order for registration and enforcement obtained before Master
Murray on grounds of non-disclosure? Mr Lord accepted that the Judge
had a discretion whether to do so, but he said that he had exercised it
on a wrong principle. Further, that he had relied on matters which he
should not have taken into account. Insofar as he applied the wrong
principle, Mr Lord submitted that where there is non-disclosure, then
unless the case is exceptional the order obtained ex parte should be
discharged. Whilst the Court in the exercise of its discretion can make a
fresh order, nevertheless, a party who has obtained an order ex parte by
failing to disclose a material fact, ought not to be allowed to retain the
benefit of that order. Mr Lord further argued that the judge had drawn
an invalid distinction between an ex parte application for discretionary
relief such as an interim injunction, and the present proceedings in which
the plaintiff was required by the rules to apply ex parte to obtain the
order for registration. The Judge was wrong to take such a distinction into
account. Further he was wrong to conclude that the Master would have
made the same order had the receipt of the £140,000 from the sale of
the Ferrari F40 been disclosed to him. He would have been bound to have
made an order that although the judgment was registered, it should not
be enforced to its full extent. He referred us to section 4 of the Act which
provides that a judgment shall:
"... to the extent that its enforcement is authorised by the appropriate
court [the High Court] be registered in the prescribed manner in that
court."
This provision he said makes it clear that the High Court can grant
recognition of the judgment only to the extent that its enforcement is
authorised by the High Court.
Finally he contended that, in addition to the failure to disclose receipt
of £140,000 from the sale of the Ferrari F40, the plaintiff had failed to
disclose the existence of the English proceedings to Master Murray.
I would reject these submission. Non-disclosure does not automatically
result in the party who has obtained ex parte relief being deprived of his
order. The first consideration of essential importance is whether the non-
disclosure was due to an oversight or mistake, or whether the Court has
been deliberately deceived. In the present case it is transparent that Miss
Sorgo's error was a mere oversight.
The Court of course requires good faith in applications for ex parte relief.
It is bound to see that its process is not abused. If the Court considers
that it has been deliberately misled, it would no doubt set aside the order
so obtained. Where there has been a simple mistake, the Court in the
exercise of its discretion takes account, not only of the need to encourage
compliance with the rules, but also considers whether injustice would
be caused if the order obtained were continued, or if a new order was
made. In the present case the only purpose of discharging the original
order would be to compel the plaintiff to incur the considerable expense of
reapplying to register the judgment. Mr Lord could point to no injustice,
inconvenience or disadvantage to the defendant in such a course. The
plaintiff would merely be subjected to a substantial financial penalty
through an oversight of his solicitors, which had caused no injustice
whatever. I cannot believe that such a course would be regarded as a
proper exercise of judicial discretion.
I would not however accept that the distinction drawn by the Judge
between the ex parte procedure in this case and in the case where an
injunction or other discretionary relief is sought ex parte, is a material
distinction. I would reject the suggestion that the failure to tell the Master
of the proceedings in the High Court between the same parties was a
material non-disclosure. Nor do I think that the judge misdirected himself
in saying that the Master would have made the same order. Whilst it is
true that under Article 42 the court has power to authorise enforcement
in respect of one or more of several matters in respect of which the
judgment has been given and that under that Article an applicant may
request partial enforcement of the judgment. In the present case I can
see a substantial argument for saying that Master Murray might well have
made the same order, notwithstanding that the plaintiff had received
£140,000, for there was no reason for him to suppose that credit would
not be given for that sum on enforcement of the judgment. In any event,
it would appear that the defendant has disputed that the plaintiff was
entitled to take credit for that sum. Be that as it may, I am not satisfied
that the matters to which Mr Lord referred would necessarily have entitled
this Court to review the exercise of Judge Hedley's discretion. But if it did
entitle this Court to do so, or indeed if they were such as to require the
Court to do so, I would have had no hesitation in exercising my discretion
in the same way and with the same result as Judge Hedley did.
It is a curious paradox that in the legal arena of ex parte relief those who
complain of non-disclosure most bitterly are often the least candid in their
own disclosure. The defendant in the present case remains mute. He has
made no disclosure where the remaining four cars are to be found or what
he has done with them, nor has he made any proposals to return them.
He appears happy to make no payment at all for them.
I now come to ground three. In my view there was no reason for the
Court to refuse to register the Belgian judgment because proceedings
are pending in the High Court. If the existence of proceedings between
the same parties was to be regarded as a sufficient ground for refusal
of recognition, there would seem to be no reason why Article 27(3)
should provide that a foreign judgment should not be recognised if it was
irreconcilable with a judgment between the same parties in the country
in which recognition is sought. If proceedings in that country were to be
sufficient to prevent the registration, it would not in my view be necessary
to have referred to judgment.
In the English proceedings the defendant seeks to claim the difference
between the value obtained for the Ferrari F40 and its true value, but he
has failed entirely to say what price the plaintiff ought to have got for it.
He further contends that the plaintiff in this action had agreed to sell the
Ferrari F40 to him in return for £475,000, the amount of the judgment.
He says that the property in the car passed to him and the plaintiff had
no right to sell it, and presumably no lien on it or power of sale, though
by agreement the plaintiff was admittedly entitled to retain possession of
the car. Consequently, the defendant argues that the plaintiff has wrongly
interfered with his goods.
These allegations in no way impugn the validity of the Belgian judgment
and, as the judge said, the defendant has made no attempt to appeal that
judgment in Belgium or to set it aside or to take any proceedings there to
prevent its enforcement. He said, and I agree with him, that the case has
"all the look of a man who has simply not paid for very valuable goods of
which he has had the use and probably still retains".
Finally, I would reject the submission that because the plaintiff failed to
obtain part satisfaction of its judgment in Belgium against the money
held in the guarantee account by P., the judgment cannot be registered
here. I can find no support for such a submission in the Convention or in
principle. Accordingly, I would dismiss this appeal.
LORD JUSTICE SCHIEMANN: I agree that this appeal ought to be
dismissed, and I only add a few words as to the relationship between
recognition and enforcement. As is made clear by the Convention and
its preamble, one aim of the Convention is to make it as easy in each
signatory country to enforce a judgment delivered by the courts of a
fellow signatory as it is to enforce a judgment given by its domestic
courts. The problems posed by the enforcement of foreign judgments are
tackled in the United Kingdom, amongst other things, by the device of
registration (see the Administration of Justice Act 1920, section 9; the
Foreign Judgments (Reciprocal Enforcement) Act 1933, section 2; and the
Civil Jurisdiction and Judgments Act of 1982, section 4(3)).
Our domestic regime provides in RSC Ord.45-52 for the enforcement of
domestic judgments. It can of course happen that, after a judgment has
been entered, the judgment debtor pays some or all of the judgment
debt, or the parties enter into an agreement whereunder the judgment
creditor agrees not to enforce all or part of his judgment. The rules
provide various methods whereby such facts can be brought to the
attention of the courts, who will then inhibit further action to enforce
the judgment. If there is a dispute between the parties as to what has
happened after the judgment, the rules provide various means whereby
these disputes can be resolved.
Where one is concerned with a foreign judgment, the first thing to do is
to establish that it deserves the same treatment as a domestic judgment.
That is what is achieved by the procedures set out in RSC Ord.71. Of
course it is important that a judgment debtor has an opportunity to
prevent his goods or land being seized in execution if he has meanwhile
paid or there is some post-judgment agreement between him and the
judgment creditor. Under English procedural rules, the sort of point
which the judgment debtor seeks to make which all relate to matters
occurring after the judgment, are points that can be effectively made
after a domestic judgment has been pronounced, or a foreign judgment
has been registered. There is no policy reason for inhibiting registration in
order to allow the judgment debtor to inhibit enforcement.
One notes that the order made by Master Murray in the present case
specifically gives, as is envisaged by the Convention, the defendant
liberty within one month after service upon him of notice of registration
of the judgment, to appeal against such registration, and provides that
execution shall not issue to enforce the judgment until after the expiry of
that period or until after any such appeal has been determined. So there
is an opportunity for the defendant to take such points as he wishes.
One notes that Article 26 of the Convention implies that the recognition
procedure is to be adopted in circumstances where recognition is the
principal issue in a dispute. One should note that a litigant may just want
recognition, in which case it is enough to conform with Article 46 of the
Convention. For instance, in an international loan agreement (and indeed
domestic ones) it is often a term that if the debtor has judgment entered
against him anywhere in the world, then the creditor is entitled to call in
the loan. In such a case the creditor may well want to have the foreign
judgment recognised, although he would not necessarily be entitled, or
want, to enforce it.
Although a declaration of enforceability is a precondition for enforcement,
it is not a sufficient condition. That principle is recognised in the
Convention as is shown by the contrast between Articles 46 and 47.
The Jenard Report in its commentary on section 3 of Title III of the
Convention refers to the recognition stage and the enforcement stage,
showing that these can be separate stages. They may not be in all
signatory states, but they are in this country.
As I have indicated, I agree that this appeal ought to be dismissed.
SIR CHRISTOPHER SLADE: I also agree that this appeal should be
dismissed. I wish to add a few observations of my own principally on the
non-disclosure issue.
Judge Hedley apparently regarded the passage which he cited from
Donaldson LJ's judgment in Bank Mellat v. Nikpour [1985] FSR 87 at
pages 90-91, as establishing the proposition that, if an applicant on an ex
parte application for an injunction fails to make full and frank disclosure
of all material facts, the court will have no discretion otherwise than to
discharge the injunction if subsequently asked to do so by the person
enjoined. Having cited that passage (at pages 6 to 7 of the transcript) the
Judge (at page 15) expressed the view that different considerations arise
in a case such the present where an ex parte order could by virtue of a
statutory provision only have been obtained ex parte.
With respect to the Judge I do not think this was quite the right way
of looking at the matter. As was held by this Court in Brinks Mat Ltd. v.
Elcombe [1988] 1 WLR 1350 the Court, notwithstanding proof of material
non-disclosure where an injunction was originally obtained on an ex parte
application, has still a discretion to continue the injunction or to grant a
fresh injunction in its place.
This is, however, a discretion which will be exercised with great caution.
It will rarely, if ever, be exercised in a case where the material non-
disclosure was deliberate, or where it has caused prejudice to the party
enjoined by enabling the applicant to obtain interim relief which he would
not otherwise have obtained.
The reasoning behind the rule which requires full and frank disclosure
by an applicant on an ex parte application, is of course that the Court is
being asked to grant relief without the person against whom the relief
is sought having the opportunity to be heard. Differing from the Judge
on this particular point, I do not think that any different considerations
arise merely because the order obtained ex parte in the present case
was not the grant of an injunction, but an order for the registration of a
judgment, application for which the Rules of the Supreme Court require
to be made ex parte (see Ord.71,r.27). Ord.71, r.28(1)(d)(ii) placed on
the plaintiff an explicit obligation to inform the Court that the relevant
judgment had been satisfied in part, and as the Judge rightly held, its
failure so to inform the Court constituted a failure to disclose a material
fact.
In my judgment the obligation of disclosure imposed on an applicant by
Ord.27,r.28(1) is no less weighty and serious than the obligation imposed
on any ex parte applicant. The duty of full and frank disclosure and the
potential consequences of a failure to perform that duty are in my opinion
of the same degree as in all other ex parte applications. There is no
logical reason for distinguishing different types of ex parte application in
this context.
Reverting to the present case, however, Mr Lord for the appellant, as
I understood him, conceded that the court would have a discretion to
overlook the material non-disclosure in the present case, and that it could
properly exercise that discretion in the respondent's favour, if satisfied
that:
(a) the material non-disclosure was innocent;
(b) the Master would still have made the order for registration if full
disclosure had been made;
(c) the failure to overlook the non-disclosure would result in injustice.
In my judgment, on the authorities this concession was rightly made. But
for the reasons appearing in the judgment given by Lord Justice Beldam, I
think that these three conditions are satisfied on the facts of the presence
case. In my judgment, on such facts the only purpose of depriving the
respondent of the benefit of the order for registration because of the non-
disclosure would be to penalise it. The fact that in cases of this type the
non-disclosure may have been innocent is by no means decisive when the
Court comes to exercise its discretion, having regard to the duty falling on
the ex parte applicant and his advisers to make all proper inquiries and
to give careful consideration to the case being presented (see Brinks Mat
at page 1357D per Ralph Gibson LJ). The importance of this duty must
never be overlooked. Nevertheless, on the facts of the present case, I
think that to set aside the order for registration merely on account of the
non-disclosure would be to impose a penalty on the respondent out of
proportion to the gravity of the offence and would result in injustice.
On the other points in this appeal, which has been very well argued
on both sides, I have nothing to add to what has already been said by
Lord Justice Beldam and Lord Justice Schiemann, save to stress that
the Belgian judgment in the present case was clearly not on its face a
judgment given by consent. It was expressed to be given after hearing
"the oral arguments of the parties' barristers", and must in my opinion be
treated as such by any English court.
I would concur in dismissing this appeal.
ORDER: Appeal dismissed with costs.