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England and Wales High Court (Queen's Bench Division) Decisions
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Cite as:  EWHC 1820 (QB)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| LASERPOINT LIMITED
|- and -
|(1) THE PRIME MINISTER OF MALTA
(2) THE MINISTER OF TOURISM OF MALTA
(3) THE COMMISSIONER OF LANDS OF MALTA
(4) KENNETH SPITERI (as the Chairman of the Management Committee of the Mediterranean Conference Centre, Malta)
Donald Lilly (instructed by Seymours) for the Respondents
Hearing date: 28-29 June 2016
Crown Copyright ©
Mrs Justice Patterson:
"It appeared that the fire was caused by a laser brought to Malta by a British firm involved in the conference at which a model of a new car was to have been introduced."
The report added that the laser appeared to have been focused on the wooden emblem of Malta which caught fire. The fire spread to the velvet curtain and the soffit of the Republic Hall. The damage caused to the MCC was heavy and the Government was taking the necessary steps so that whoever was responsible would make good for the damage.
"We understand that in an article in the Maltese Times newspaper today, 27 March, the lasers were being blamed as the cause of the fire. Our chief engineer on site, Mr Romano Malocca, has already explained to your police on the night of the fire that the laser equipment in use could not have caused the fire in any circumstances… I would like to assure you that there is no possibility of this equipment causing a fire in these circumstances and therefore, that the individuals in my employ are being wrongly held in Malta at this time…"
i) a garnishee order of up to 2 million lira against the employees of the appellant and a Mr Cave, who was employed by Daihatsu. That application included an application for appointment of curators (legal representatives) for the appellant.
ii) warrants of impediment to prevent the employees and Mr Cave from leaving the island.
"Made clear first position:
(a) three persons may leave Malta if a deposit of security is made.
(b) sum claimed LM 2 million. If a lesser sum is later assessed the security will be reduced.
(c) not possible for two to leave and one stays behind.
(d) exclude compassionate ground for one of them as this is not a criminal but a civil matter."
i) A delay in appointing a court appointed expert;
ii) A delay in appointing a technical expert in laser technology. One, Kenneth Abala, was found in 1993 and appointed in 1994;
iii) A delay to allow Mr Abala to compile his submissions;
iv) Delay on the part of the parties not attending sittings and on the part of the court appointed expert until 1996. On 29 April 1996, at a hearing at which Victor Grech, was present the court ordered collection of evidence to continue;
v) There were further delays in compiling the evidence on the part of the parties;
vi) From 1997 to 1998 a number of sittings were held when the plaintiff's lawyers failed to attend. The case was deferred on 6 February 1998 to allow the plaintiff to declare that it still had an interest in the case. The case was deferred again until 14 October 1998 for the last time to allow the plaintiffs to prove and show that they had an interest in the case;
vii) In 2000 the court was told that sittings would be scheduled;
viii) On 18 January 2001 Victor Grech explained that the appellant had been dissolved on 18 November 1997 and struck off. He repeated that information on 23 November 2001;
ix) The case was postponed until 2003;
x) On 3 November 2003 the curator repeated again that the appellant had been struck off the register and told the court that his presence was futile. He sought directions for his release. The court took no steps;
xi) During 2003 to 2005 more deferrals took place as no party attended the court hearings. On 8 April 2005 the Attorney General's office filed a note of the magisterial inquiry conducted in March 1987 immediately after the incident;
xii) In 2006 the Attorney General's office requested that the case was deferred until the evidence collected by the judicial assistants and the court appointed expert was found. The case was deferred until 2007. When it was first called on no-one appeared;
xiii) On 16 May 2007 the Attorney General requested the court adjourn for final judgment;
xiv) On 6 December 2007 an application was filed with the court asking for a delay in the decision as a UK law firm acting on behalf of one of the defendants had asked for a summary of the proceedings. The court deferred judgment;
xv) On 22 February 2008 the lawyer filed an application to represent Daihatsu instead of the previous curator. The court accepted that application;
xvi) On 16 April 2008 the same lawyer asked the court to be allowed to file a defence. That request was accepted and the defence was ordered to be filed within 20 days;
xvii) An appeal was lodged by the plaintiffs against that ruling. The Court of Appeal declared, amongst other things, that:"It results from the facts of the case that although the case has been going on for the past 23 years, the case is still not mature enough for a judgment to be handed out, and this due to the very confusing way in which the plaintiffs (see the repetition in the exhibited documents, exhibited once, twice, three times) dealt with the case, where in 23 years it appears that the plaintiffs did not even definitively close their submission of evidence. On the other hand the court feels that the defendant company is not justified in asking at this stage, after 23 years, and when it was always represented by curators, to present additional defences when it has been fully aware of this case for all this time and has done nothing about it."
xviii) On 2 June 2010 four affidavits were filed by Daihatsu. The case was deferred for cross-examination. Because there was discussion about settlement no cross-examination took place until 6 June 2011. No representation or submission was made by the appellant;
xix) On 15 November 2011 a hearing occurred when the case was deferred until 23 January 2012. Again, no representation or submission was made by the appellant. On 23 January 2012 the case was adjourned;
xx) Cross-examination then took place and, on 29 May 2012, the court ordered the plaintiff to submit final submissions which it did. On 22 October 2012 Daihatsu filed its final submissions;
xxi) On 29 October 2012 the curator appointed on behalf of Andrew Creighton asked to make submissions which were filed on 4 December 2012;
xxii) In January 2013 the curator, Victor Grech, died;
xxiii) On 30 January 2013 the First Civil Court of Malta handed down its judgment. That held:"If it appears that the fire was caused by the use of the laser, and this was being operated by another company (Laserpoint Ltd, today liquidated and represented in these proceeding by deputy curators), this company was undoubtedly appointed to operate this laser for the company Daihatsu Motors (now called MFPS Ltd) and for certain there transpires to be legal solidarity between the two companies which are both commercial companies and therefore commercial law applies to them which presumes solidarity as opposed to civil dues… It is clear from the evidence that the fire which caused the damages was due to the operation of the lasers which had been focused on one spot for too long. Nevertheless, the experts who led the inquiry found that it was also evident that the fire caused extensive damage because 'there were no means for this to be controlled'… Therefore whereas it is evident that the instant was caused by the defendants, there was an element of considerable contributory factors in the extent of damages. Therefore the company shall divide the fault for the damages that occurred that is one half for the plaintiffs and one half for the defendants according to the relevant provisions of the civil code regarding damages. …this court finds that the companies MFPS and Laserpoint jointly responsible for what occurred."
Damages were awarded in the amount of approximately €6.7 million but were reduced by one half because of the contributory negligence of the plaintiffs.
"A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;
2. where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so;…"
The appellant's submissions
i) applies in exceptional cases;
ii) applies to the recognition or enforcement of a judgment which infringes a fundamental principle of the legal order of the state in which enforcement is sought. Such an infringement has to constitute a manifest breach of a rule of law regarded as essential in the legal order of the state or of a right recognised as being fundamental within that legal order;
iii) the rights enshrined in the European Convention for the Protection of Human Rights and Freedoms ("ECHR") are of particular significance in the context of Article 34(1);
iv) where the adjudicating court acted in breach of the principles of the ECHR the court in which recognition is sought is entitled to hold that recognition be contrary to its public policy.
v) reliance is placed on the case of Krombach v Bamberski Case C-7/98. Although that decision is on the predecessor provision to Article 34(1) that established that the right to be defended was one of the fundamental rights deriving from the constitutional traditions common to member states. A national court of a contracting state was entitled to hold that a refusal to hear the defence of an accused person who is not present at the hearing constitutes a manifest breach of a fundamental right.
"We find it surprising that, having regard to the fact that Mr Larmer was unaware that the action had been reactivated, the three month limit for appealing renders the judgment 'unassailable' without the court apparently having any discretion to reopen the matter."
Accordingly, on the facts before the court it was driven to the conclusion that Mr Larmer was denied a fair trial in Rotterdam because he was unaware that the proceedings had been reactivated until even the time for an appeal had passed.
"57. In my judgment, when the court says that there is a presumption of compliance, it is not using the word 'presumption' in its usual sense. Courts must for reasons of practicality proceed on the basis that until the contrary is shown they can assume that procedural steps were done properly. Likewise, courts attach no significance to procedural irregularities that have no material effect. In my judgment, they are entitled to do the same in relation to violations of article 6. Such a presumption is not inconsistent with the rule of law.
58. So, when a court is asked to enforce a foreign judgment, it need not actively inquire whether the foreign court was entitled to make the order it made. It is entitled to assume that the court acted in a proper way unless the contrary is proved. It should not simply judge the foreign court's procedure by reference to its own. It should require a clear breach of the finality principle to be shown. In practice it will probably be easier to review compliance with that principle by Convention states than by non-Convention states.
59. In my judgment, the question whether the court should apply a strong presumption of compliance with article 6 for Convention states should be read in the light of this explanation."
"The first ground is that recognition of the foreign judgment would be manifestly contrary to public policy in the State where its recognition or enforcement is sought. The public policy exception is to operate only in exceptional circumstances, a fact which is reinforced by the incorporation of the word 'manifestly' into Art.34(1)… Before it may find recognition contrary to public policy, the court addressed must conclude that recognition would conflict, to an unacceptable degree, with the legal order in the State of recognition because it would infringe a fundamental principle, or would involve a manifest breach of a rule of law which is regarded as fundamental within that legal order."
"As I say, these are all reasons for doubt rather than irrefutable proof that the lasers had not caused the fire, but none of this seems to have figured in the recent court cases in Malta as no attempt was made to include any former Laserpoint personnel in those cases. These issues did not feature at the time of the incident mainly because of the plight of the hostages that the Maltese Government had taken to try to extract insurance money to repair their conference centre. A great deal of pressure was put on Laserpoint by the relatives of the 3 staff members held on the island and the company was not in a position to influence the insurer's attitude. Huge costs were incurred by Laserpoint that were not recoverable. These costs included subsistence of the 3 staff on the island for many months and the damage done to the company's reputation by the allegation that we had caused the fire. I mention this solely because, once the insurance company took over the situation, I/Laserpoint had no power to influence what happened, and were left paying the uninsured costs whilst the insurers denied that we were responsible. The impasse that this created was only broken when the elections (the ones mentioned above) took place and a new pro Europe government came to power and within a few days the 3 staff were released."
Discussion and conclusions
"A judgment shall not be recognised:
1. if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;"
By "manifestly contrary to public policy" the words used mean, in my judgment, a judgment that is plainly or obviously contrary to public policy.
i) Allegations were being made that it was responsible for causing the fire which had caused a great deal of damage – see telex from Mr Holmes dated 30 March 1987 in which he refuted liability for causing the fire; and
ii) Three of the appellant's employees were being detained as a result of warrants issued on 3 April 1987 by the Maltese court.
In my judgment, it is inconceivable in those circumstances that the appellant was not alert to the risk of legal proceedings.
"The 18 watt laser used was far more powerful than that regularly used in places of entertainment and that there was nothing else that could have caused the fire except for the laser; there was no electrical power nearby which could have caused a short circuit. The fire started high up and there was no equipment in place, like ladders, for somebody to start the fire. The location was far from the stage catwalk and therefore the fire could not have started manually. When one considers where the fire started I could not see anything else which could have been the source of the fire apart from the laser."
i) That there was no evidence that the curator sought direct instruction from the company;
ii) That the company was dissolved in 1997;
iii) That the court gave no directions on the curator's application to be released from the case;
iv) That the case was revived in 2007 in an important way which directly affected the interest of the appellant but who knew nothing about it;
v) That there was no contact between the court, the curators or any party with the appellant prior to handing down of the judgment.
Although there is a presumption of compatibility in the application of Convention Rights I find, on the facts here, that that presumption has been rebutted. I have been driven to conclude that the legal process was unfair so far as the appellant was concerned. The overall delay which was not the responsibility of the appellant and the other factors set out (above) mean that the appellant was deprived of its right to a fair trial.
Article 34 (2)
"A judgment shall not be recognised:
2. where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so…"
i) Judgment was given in default of the appellant's appearance; and
ii) The appellant was not served with the writ or an equivalent document in sufficient time and in such a way as to enable it to arrange for its defence; and
iii) The appellant has not failed to commence proceedings to challenge the judgment when it was possible for it to do so.
"Thus the defendant's behaviour cannot automatically rule out the possibility of taking into account exceptional circumstances which warrant the conclusion that service was not effected in sufficient time. Instead, such behaviour may be assessed by the court in which enforcement is sought as one of the matters in the light of which it determines whether service was effected in sufficient time. It will therefore be for that court to assess, in a case such as the present, to what extent the defendant's behaviour is capable of outweighing the fact that the plaintiff was apprised after service of the defendant's new address."
"11. …The provisions of the Judgments Regulation are technical provisions but need to be construed sensibly in order to promote free movement of judgments…
12. 'Appearance' may have two separate meanings. Usually, once court proceedings have begun, a Defendant will have to decide whether to ignore the proceedings or defend them or challenge the jurisdiction of the court. If he decides to defend he will at some stage have to lodge with the court a formal document of some kind; so will he if he challenges the jurisdiction of the court. Once that formal document has been lodged, he would in most legal systems, be said to have 'appeared'. If, however, he decides to ignore the proceedings he will not lodge any formal document with the court; in that sense he will not have 'appeared' but, if he has been served with the proceedings, he will be at risk of having an enforceable judgment being entered against him.
13. Once proceedings come before a court for a hearing a Defendant will again have to choose whether to be present in court or not. If he does choose to be present he will, on any view, have 'appeared'; if he chooses not to be present he will not, in one sense, have 'appeared'. But if he has already chosen to take part in the proceedings by defending them or even by challenging the jurisdiction, he may (in some legal systems) be said to have already 'appeared' and thus not be in default of appearance.
14. Mr Tavoulareas did not 'appear' in either of the meanings of the word; he neither lodged any formal document with the court in Greece nor was he present when the proceedings came to trial. On any view, therefore, the judgment against him was given in default of appearance. In the Hendrikman case it was said that 'appearance' should be given an autonomous meaning rather than the meaning given by any individual legal system. Since Mr Tavoulareas did not 'appear' on any possible meaning of the word, this is not an appropriate case to decide what that autonomous meaning should be."
"13 By this question, the national court is essentially asking whether Article 27(2) of the Convention applies to judgments delivered against a defendant who was not duly served with, or notified of, the document instituting proceedings in sufficient time and who was not validly represented during those proceedings, albeit the judgments given were not given in default of appearance, because someone purporting to represent the defendant appeared before the court first seised.
18 Where proceedings are initiated against a person without his knowledge and a lawyer appears before the court first seised on his behalf but without his authority, such a person is quite powerless to defend himself. That person must therefore be regarded as a defendant in default of appearance, within the meaning of Article 27(2), even if the proceedings before the court first seised became, in point of form, proceedings inter partes. It is for the court from whom recognition is sought to ascertain whether those exceptional circumstances exist."
"51. Furthermore, the provisions of EU law, such as those of Regulation No 44/2001, must be interpreted in the light of fundamental rights which, according to settled case-law, form an integral part of the general principles of law whose observance the Court ensures and which are now set out in the Charter (see, to that effect, Google Spain and Google, C-131/12, EU:C:2014:317, paragraph 68 and the case-law cited). In that respect, it must be borne in mind that all the provisions of Regulation No 44/2001 express the intention to ensure that, within the scope of the objectives of that regulation, proceedings leading to the delivery of judicial decisions take place in such a way that the rights of the defence enshrined in Article 47 of the Charter are observed (see Hypotecní banka, C-327/10, EU:C:2011:745, paragraphs 48 and 49, and G, C-292/10, EU:C:2012:142, paragraphs 47 and 48 and the case-law cited).
52. It is in the light of those considerations that it is appropriate to examine the question whether an appearance entered by a court-appointed representative amounts to an appearance entered by the absent defendant, for the purposes of Article 24 of Regulation No 44/2001.
55. Furthermore, an absent defendant who is unaware of the action brought against him or of the appointment of a representative to act on his behalf cannot provide that representative with all the information necessary, for the purposes of determining whether the court seised has international jurisdiction, which would enable him effectively to contest that jurisdiction or to accept it in full knowledge of the facts. Nor, accordingly, may an appearance entered by a court-appointed representative be regarded as tacit acceptance, by the defendant, of the jurisdiction of that court.
56. Secondly, it should be observed that, within the scheme of Regulation No 44/2001, the international jurisdiction of the court seised is not subject to judicial scrutiny by the court of its own motion or on the application of the defendant, as is clear from Article 26 and point (2) of Article 34 of that regulation, unless the defendant can be regarded as not having entered an appearance. Accordingly, respect for the rights of the defence requires that the legal representative should be unable validly to enter an appearance on behalf of the defendant, for the purposes of Regulation No 44/2001, unless that measure does in fact ensure that an absent defendant's rights of defence are respected. However, as is made clear by the case-law of the Court relating to Article 27(2) of the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (OJ 1972 L 299, p. 32), as amended by the later conventions relating to the adherence of new Member States to the Brussels Convention, and by the case-law on point (2) of Article 34 of Regulation No 44/2001, where proceedings are initiated against a person without his knowledge and a lawyer or 'representative' appears on his behalf but without his authority, such a person is quite powerless to defend himself and must therefore be regarded as a defendant in default of appearance, for the purposes of point (2) of Article 34 of Regulation No 44/2001, even if the proceedings have become inter partes (see, to that effect, as regards the interpretation of the Convention of 27 September 1968, as amended, Hendrikman and Feyen, C-78/95, EU:C:1996:380, paragraph 18, and the judgment in Hypotecní banka, EU:C:2011:745, paragraphs 53 and 54)."
"…The opportunity to apply for a legal remedy after the making of the order may not be equivalent, but may instead be inferior, to having the right to be heard before the order is made. If, however, the defendant has had and has exercised the opportunity to challenge the judgment, was under no handicap in doing so, and was entitled as part of that challenge to argue that he had not been served in time to make his defence, Art.34(2) will no longer be available, and the question whether the judgment is still to be regarded as one given in default of appearance is without substance. The overriding question is whether the procedure of the foreign court was sufficient to protect the rights of the defendant to defend. …"
"While we do not dispute the interpretation of this case we note that we are currently not aware of any court decision ever being given by the Maltese courts which actually applied this principle in practice. We therefore believe that the chances of Laserpoint ever making this argument and obtaining a successful outcome on these grounds are slim at best, and would require Laserpoint to bring forward evidence and proof which would strongly justify the taking of such extraordinary measures allowing Laserpoint to appeal a judgment after three years, rather than 20 days."
i) Article 6;
ii) Within the 20 day time limit which can be extended where there has been a grave breach of a fundamental right. All Article 34(2) is about is service.
"The 20 day period for an appeal serves as a cut-off point in the interest of ensuring the certainty of the judgment; once the judgment delivered as first instance is read out in open court even the curator is deemed to be aware of it and he can appeal within the 20 days just like any other party. This 20 day time limit cannot be extended saving perhaps any remedy which a court of constitutional jurisdiction may grant."
That is footnoted by a reference to the Amabile Zammit case decided in March 2014 although the court refused to extend time on the basis of the applicant's illness but in its reasoning was not adverse to the fact that there could be other cases where restitutio in integrum would be called for in order to sanction a late appeal. On appeal the Constitutional Court confirmed the judgment but added that there might be circumstances where it was exceptional, and independent of the will of the party where it could be in the interests of justice to grant restitutio in integrum so that the normally rigid approach to the time limit for lodging an appeal could be relaxed. The rights existed although they had yet to be allowed in any case.
i) The writ was served at its registered office;
ii) It was personally served on the three employees in Malta. They instructed lawyers, as can be seen in their defence. It would be surprising if the appellant was not aware of their defence.
Discussion and conclusions
i) Judgment given in default of the appellant's appearance; and
ii) That the appellant was not served with the writ or an equivalent document in sufficient time and in such a way as to enable the appellant to arrange its defence; and
iii) The appellant had failed to commence proceedings to challenge the judgment when it was possible for it to do so.
Default of appearance
Service of the writ
"3. insurance does not go that high, but Laserpoint has their insurance.
If Laser produce guarantee their men may go as well as Cave."
Failure to commence proceedings to challenge the judgment
"The 20 day period for an appeal serves as a cut-off point in the interest of ensuring the certainty of the judgment; once the judgment delivered as first instance is read out in open court even the curator is deemed to be aware of it and he can appeal within the 20 days just like any other party. This 20 day time limit cannot be extended, saving perhaps any remedy which a court of constitutional jurisdiction may grant."