Judgments - Masri (Respondent) v Consolidated Contractors International Company SAL and others and another (Appellant) and another

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19.  I accept that the existence of a close connection between a subject matter over which this country and its courts have jurisdiction and another person or subject over which it is suggested that they have taken jurisdiction will be relevant in determining whether the further jurisdiction has been taken. It will be a factor in construing, or ascertaining the grasp and intendment of, the relevant legislation or rule. Mr Layton submits that in the present case the connection between the judgment obtained in the proceedings against CCIC and Mr Khoury is weak: no or little stronger than that which exists between the court in ongoing proceedings and a witness who could give important evidence that would assist the court to resolve issues of liability or quantum. He cites In re Tucker (RC) (A Bankrupt), Ex p Tucker [1990] Ch 148, where the Court of Appeal set aside an order obtained by a trustee in bankruptcy for the examination under s.25(1) of the Bankruptcy Act 1914 of the debtor’s brother, a British subject resident in Belgium. S.25(1) gave the court power to summon before it for examination “any person whom the court may deem capable of giving information respecting the debtor, his dealings or property” and to require him to produce relevant documents, while rule 86 of the Bankruptcy Rules 1952 as amended authorised the court to order service out of the jurisdiction of any process or order requiring to be so served. The origin of s.25(1) went back before 1914 to 1883 and the trustee acknowledged that “in the light of the accepted practice of nations and comity in the field of international law and international relations, eyebrows might be raised at the notion that Parliament had in 1914 or 1883 given jurisdiction to any bankruptcy court, which might well be a county court, to summon anyone in the world before it to be examined and produce documents” (pp.156H-157B). He argued in the alternative that it sufficed that the brother was a British citizen. That submission too was rejected. Dillon LJ noted the limitations of RSC O.11 and of the power to subpoena witnesses, and said that against this background he “would not expect s.25(1) to have empowered the English court to haul before it persons who could not be served with the necessary summons within the jurisdiction of the English court” (p.158E-F). He noted first an alternative procedure provided by orders in aid in respect of persons resident in Scotland or Ireland or other British courts and “finally and conclusively” a provision in s.25(6) giving the court power to order the examination out of England of “any person who if in England would be liable to be brought before it under this section".

20.  Mr Rabinowitz relied upon the later case of In re Seagull Manufacturing Co. Ltd. [1993] Ch 345 (para 14 above), in which In re Tucker was distinguished on several grounds. In re Seagull concerned s.133 of the Insolvency Act 1986, authorising the public examination of a narrower category of persons, viz “any person who - (a) is or has been an officer of the company; or (b) has acted as liquidator or administrator of the company or as receiver or manager ….; or (c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company". Failure without reasonable excuse to obey such an order was punishable as a contempt of court under s.134. Rule 12.12 of the Insolvency Rules 1986 authorised the court to order service out of the jurisdiction of any process or order requiring to be so served for the purposes of insolvency proceedings. The Court of Appeal upheld an order made for the public examination of a former director living in Alderney. Peter Gibson J, with whose judgment the other members of the court concurred, said (p. 354F-H) that:

“Where a company has come to a calamitous end and has been wound up by the court, the obvious intention of this section was that those who were responsible for the company’s state of affairs should be liable to be subjected to a process of investigation and that investigation should be in public. Parliament could not have intended that a person who had that responsibility could escape liability to investigation simply by not being within the jurisdiction. Indeed, if the section were to be construed as leaving out of its grasp anyone not within the jurisdiction, deliberate evasion by removing oneself from the jurisdiction would suffice".

21.  Peter Gibson J cited the Cork Committee’s Report (1982) for the importance placed in it on public examination during compulsory winding up proceedings: to form the basis of reports for submission to the department; to obtain material information for the administration of the estate; and to give publicity, for creditors and the community at large. Peter Gibson J distinguished In re Tucker, on the grounds that it involved private examination, that it concerned s.25(1) of the Bankruptcy Act 1914 under which the class of persons who could be “hauled” before the court went notably wider than the three categories identified in s.133 of the Insolvency Act 1986 and that s. 25(6) of the former Act had no parallel in s.133 of the latter Act. The ability to make use of the in aid procedure to procure the private examination of the former director in Alderney was regarded as no adequate substitute for an ability to require an officer abroad to be subject to public examination.

22.  Peter Gibson J also laid some emphasis on the fact that the issue before the court was the scope of the Act and the court was not concerned with whether the order for public examination could be effectively enforced out of the jurisdiction. I have some difficulty with this aspect of his judgment. Peter Gibson J cited Theophile v. Solicitor-General [1950] AC 186, 195. That was a case concerned with the legitimacy of making bankrupt, on the basis of debts unpaid in respect of his English trading, a foreigner who had left the jurisdiction. Lord Porter observed in that context that the person concerned could not take exception to such an order “though it may be he will escape from compliance with its terms because he is out of the jurisdiction and cannot be reached by English process". Making a bankruptcy order in respect of English trading against a debtor who has gone abroad is a different matter to making a mandatory order against someone abroad with no personal connection with England for attendance within the jurisdiction to be examined as a witness. Impracticality of enforcement is in my opinion a factor of greater relevance than Peter Gibson J’s words suggest. It is in particular a relevant factor when considering whether CPR 71 covers officers abroad.

23.  The present case stands between In re Tucker and In re Seagull. The category of persons embraced by CPR 71 is confined to “an officer” of the company or other corporation - on the face of it probably only a current officer at the time of the application or order, whereas s.133 extended (unsurprisingly since it deals with a company being wound up) to past officers and some other closely connected persons. There is in the context of CPR 71 no equivalent of the provision in s.25(6) which was for Dillon LJ “conclusive” in In re Tucker. On the other hand, CPR 71 is concerned with obtaining information in aid of the enforcement of a private judgment. The public interest that “those responsible for the company’s state of affairs should be liable to be subjected to a process of investigation and that investigation should be in public” (In re Seagull, at p 354) is absent. The universality of a winding up order, in the sense that it relates at least in theory to all assets wherever situate, is also absent. Private civil litigation is different. A fair and efficient legal system is of course a cornerstone of the rule of law, and it can also be said that there is a public interest in a court getting to the bottom of litigation and ensuring that parties have the means of obtaining full information to enable it to do so. Yet the parties have no right to ask the court to summon witnesses from abroad for that purpose. While a judgment crystallises rights and establishes an unsuccessful defendant’s liability, the court is still acting in aid of private rights after judgment, and it may be questioned whether, in terms of public interest, there is a very great difference between the importance of evidence for the trial of liability and quantum and for the enforcement of a judgment. A judgment which is mistaken because of a lack of full information or documentation could even be seen as a greater miscarriage of justice than a judgment which is not enforced because of the same lack.

24.  In my view Dillon LJ’s observation in In re Tucker that “eyebrows might be raised” at the notion that Parliament had in 1914 or 1883 given jurisdiction to any bankruptcy court to summon anyone in the world before it to be examined and produce documents has weight also in the context of CPR 71. The historical origin of CPR 71 consists in an amendment of the Rules in 1883 made in the light of the decision in Dickson v Neath and Brecon Railway Co in 1869. The Court of Exchequer there held that the pre-existing power to order oral examination of a judgment debtor did not enable examination of the company’s three directors, about whose presence within the jurisdiction there was clearly no doubt. The rules committee in 1883 is likely to have been focusing on domestic judgments and domestically based officers. If it thought at all about foreign judgments, which might be enforced in England, it is unlikely to have contemplated that a judgment creditor, having come here for that purpose, would then need assistance abroad to make the enforcement effective. The extreme informality of the process by which the rules enable an order for examination to be obtained continues to point towards a purely domestic focus. An application for an order may under CPR 71 be made without notice, may be dealt with ministerially by a court officer and will lead to the automatic issue of an order (albeit with the general safeguard of the right to apply to set aside which exists under CPR 23.10 in the case of any order made without service of the relevant application notice). These considerations all tend to point against the application of CPR 71 to company officers outside the jurisdiction.

25.  Sir Anthony Clarke MR, with whose judgment the other members of the Court of Appeal in the present case agreed, said ([2008] EWCA Civ 876; [2009] 2 WLR 699, para. 16) that it would “defeat its object” if CPR 71.2 were restricted to persons within the jurisdiction. That is, I think, to put matters substantially too high. Small though the world may have become, relatively few officers of companies are likely to contemplate, let alone be able to undertake, emigration or flight to a different country in order to avoid giving information about their company’s affairs. For the same reason, the deployment in In re Seagull of the possibility of “deliberate evasion” by an officer removing himself from the jurisdiction seems to me a factor of greater forensic than real weight, although such weight as it may have may be greater after the calamity of compulsory winding-up (when something has evidently gone wrong and may require embarrassing or even potentially incriminating investigation) than in the context of an unpaid judgment debt.

26.  In my view CPR 71 was not conceived with officers abroad in mind, and, although it contains no express exclusion in respect of them, there are lacking critical considerations which enabled the Court of Appeal in In re Seagull to hold that the presumption of territoriality was displaced and that the relevant statutory provision there, on its true construction and having regard to the legislative grasp or intendment, embraced a foreign officer. Although CPR 71 is limited to officers of the judgment debtor company, I regard the position of such officers as closer to that of ordinary witnesses than to that of officers of a company being compulsorily wound up by the court. I conclude that CPR 71 does not contemplate an application and order in relation to an officer outside the jurisdiction.

Service out of the jurisdiction

27.  This conclusion is reinforced by a consideration of the position relating to service. Mr Salzedo advances two alternative bases upon which he submits that an order made against a non-party under CPR 71 could be served: under CPR 6.30(2), or alternatively under CPR 6.20(9). The Court of Appeal accepted the former, and found it unnecessary to consider the latter.

28.  The primary purpose of CPR 6.30(2) is, on any view, to require leave for service out of the jurisdiction on a defendant to proceedings of documents requiring to be served during such proceedings on such defendant, where the original claim form required such leave. It is an understandable provision. By inference, it indicates that if the claim form did not require leave for service out of the jurisdiction, then ancillary documents requiring to be served on the defendant during the proceedings do not require such leave. The Court of Appeal interpreted CPR 6.30(2) as having a second and much wider effect, that of enabling any non-party on whom it might be appropriate to serve any document during the course of proceedings to be served, with leave if the proceedings against the original defendant required leave for service out, without leave if they did not.

29.  The wider interpretation put by the Court of Appeal on CPR 6.30(2) leads to a surprising result. In a case where service of the original proceedings took place abroad with leave using one of the gateways in CPR 6.20, there would be an open discretion to grant leave for service out of the jurisdiction of any ancillary document on a non-party. Still more surprisingly, if the original proceedings did not require leave to serve out (e.g. because the defendant was domiciled in a Brussels Regulation State), a non-party could be served abroad (on the face of it in any country in the world) without leave.

30.  The Court of Appeal relied upon two cases under O.11 r.9 of the previous Rules, which read (as amended):

“(1) Rule 1 of this Order shall apply to the service out of the jurisdiction of an originating summons, notice of motion or petition as it applies to service of a writ.


(4) Service out of the jurisdiction of any summons, notice or order issued, given or made in any proceedings is permissible with the leave of the court but leave shall not be required for such service in any proceedings in which the writ, originating summons, motion or petition may by these rules or under any Act be served out of the jurisdiction without leave” (italics added).

In Union Bank of Finland Ltd. v Lelakis [1997] 1 WLR 590, the Court of Appeal held that it was sufficient to engage O.11 r.9(4) if the proceedings against the defendant were proceedings which could have been served out of the jurisdiction. They did not actually have to be so served. (In that case, the proceedings had in fact been served within the jurisdiction under submission to jurisdiction clauses contained in the guarantees upon which suit was brought against the defendant.) The issue under O.11 r.9(4) arose in relation to the service on the defendant of an order for his examination as a judgment debtor. So there was no question of service on a non-party. The case does not help on the present issue.

31.  The second case is The Ikarian Reefer, where the Court of Appeal was concerned that there might be a lacuna in the rules in relation to a non-party whom the successful defendant sought to hold liable for costs ordered against the unsuccessful claimant company. However, the court considered, first, that O. 11 r.9(4) enabled leave to be given for service of an application for such costs on Mr Comninos, and opined, second, that there must anyway be an inherent power to give leave to join a non-party and serve him out of the jurisdiction.

32.  The latter proposition is at odds with the generally understood position accepted by the court in the Lelakis case (at p.593H). It has long been established that service out of the jurisdiction requires express authorisation either by statute or in the Rules. Thus, in In re Aktiebolaget Robertsfors and La Société Anonymes des Papeteries de l'Aa [1910] 2 KB 727, where the Court of Appeal had to construe O.XI r.8A made in 1909 to extend the power to serve out to summonses, orders or notices, the court held that this power was only exercisable in situations where service out of a writ was permissible under O.XI r.8 and so did not cover a summons to set aside an arbitration award. There was no suggestion that the heads of O.XI r.8 were anything other than exclusive. O.11 r.9(1) which replaced O.XI r.8A confirmed the exclusive nature of the heads of jurisdiction to serve out provided by O.11 r.1.

33.  As to the former proposition, The Ikarian Reefer may be viewed as a special case, since Mr Comninos was the alter ego of the claimant company whose proceedings he had instigated, controlled and financed. In such circumstances it may be legitimate to assimilate the party and non-party, and to treat any means of service available against the former as available also against the latter. As Waller LJ put it, at p.613E, “…. if what is alleged ….. is that the non-party in reality brought the main proceedings, the English court has jurisdiction to decide whether there has in effect been a submission to the jurisdiction by the non-party". Nothing equivalent can be or is alleged in respect of Mr Khoury in the present case, and Waller LJ’s statement was by way of coda to the primary basis on which the Court of Appeal held that there was jurisdiction to serve out on a non-party. That involved reliance upon the Court of Appeal’s previous decision in Mansour v Mansour [1989] 1 FLR 418.

34.   Waller LJ noted that Sir John Donaldson MR in Mansour had been addressing a version of O.11 r.9(4), which omitted the words “out of the jurisdiction” which I have italicised in quoting its language above. In fact Sir John Donaldson was in error in omitting those words. Waller LJ, believing that they had been added subsequent to Mansour, said that; “With the insertion of those words it is not possible to argue that, simply because the action was started by a writ where service of the same could be made without leave, any summons in the action which is to be served on a person outside the jurisdiction can be served without leave". But he continued by finding in Sir John Donaldson’s reasoning support for “the view that, where there is an action pending before the English court, then a summons in that action can be served on a person domiciled and resident outside the jurisdiction", whether or not he or she was already a party. Bearing in mind that the proceedings in The Ikarian Reefer were brought by writ served on insurers within the jurisdiction by Mr Comninos’s shipowning company, I find it difficult to discern the distinction between the proposition rejected and the proposition accepted in these two sentences. Leaving aside situations where the non-party is the alter ego of a party to existing litigation, any suggestion that any non-party can be served without leave under CPR 6.30(2) with any ancillary summons issued by either party in any proceedings properly brought and served within the jurisdiction clearly cannot be right. It is not without interest that the Rules Committee, following The Ikarian Reefer, concluded that the rules should be supplemented by adding CPR 6.20(17) in order expressly to permit service out of a claim for an order for costs against a non-party.

35.  Mr Salzedo also referred to dicta of Galliher JA and, on one view, Martin JA in Sostad v. Woldson [1925] 3 DLR 779 as supporting the view that the British Colombian equivalent of O.XI r.8A was not subject to restrictions in O.XI r.1. But the dicta do not appear to have been necessary for the decision. Galliher JA made clear that the case had been argued, and Macdonald JA decided the case, on the basis that the relevant obligation arose within the jurisdiction, and so within O.XI r.1(e) (now CPR 6.20(6)). Mr Salzedo also relied upon In re Liddell’s Settlement Trusts [1936] 1 Ch 365 as a case where the Court of Appeal had upheld an injunction issued against Mrs Liddell who was not a party to the proceedings and who had taken her children to the United States. But the court was careful to distinguish In re Aktiebolaget Robertsfors on the ground that Mrs Liddell was domiciled or ordinarily resident within the jurisdiction (see per Slesser LJ at pp.370-371, per Romer LJ at p.374 and per Greene LJ agreeing with both judgments at p.375); and that there was accordingly an independent head of jurisdiction under O.XI r.1 (now CPR 6.20(1)). The case therefore supports, rather than undermines Mr Khoury’s case.

36.  The scope of CPR 6.30(2) has been comprehensively reviewed by Tomlinson J in Vitol AS v Capri Marine Ltd. [2009] Bus LR 271, in a context paralleling the present - service on an officer resident in Greece of an order for his examination under CPR 71. Tomlinson J held that CPR 6.30(2) was concerned with documents requiring to be served on parties to the proceedings. The Court of Appeal in the present case disagreed and thought that CPR 71 was not “naturally limited” in this way. In my opinion, Tomlinson J was right, and I agree with his clear reasons (including those he gave for distinguishing The Ikarian Reefer) and his conclusion.

37.  Although there may have been lacunae in the Victorian rules regarding service out of the jurisdiction, the continuing absence in the modern rules of any provision enabling service out of an order under CPR 71 is both consistent with and in my opinion supportive of the view that CPR 71 was not contemplated, any more than its differently worded predecessors were, as applying to officers outside the jurisdiction.

38.  Finally, Mr Salzedo submitted that, all else failing, the case could be brought within one of the heads of CPR 6.20, that is “(9) a claim …. made to enforce any judgment or arbitral award". In my view, this submission also fails. An application to enforce a judgment within the jurisdiction is distinct from an application to order examination of a witness who is abroad with a view to enforcing the judgment wherever assets may prove to exist. The former does not trespass outside the jurisdiction of the English courts. The latter would, in a manner which was clearly not in mind in CPR 6.20(9). Nothing in the history of CPR 6.20(9), discussed in Tasarruf Mevduati Sigorta Fonu v Demirel [2006] EWHC 3354 (Ch), [2007] 2 All ER 815 (Lawrence Collins J) and [2007] EWCA Civ 799, [2007] 1 WLR 2508 suggests any wider intention.


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