England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY

		Royal Courts of Justice The Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL
		Friday 6th July 2012

I DIRECT THAT PURSUANT TO CPR PD 39A PARA 6.1 NO OFFICIAL SHORTHAND NOTE SHALL BE TAKEN OF THIS JUDGMENT AND THAT COPIES OF THIS VERSION AS HANDED DOWN MAY BE TREATED AS AUTHENTIC

JUDGE PURLE QC:

1. The issue in this case is whether the Defendant is, or ought to remain, amenable to the jurisdiction of this Court in respect of a claim concerning a holiday apartment in El Gouna, Egypt.
2. The Claimant is a British national resident and domiciled here. The Defendant is an Egyptian national who claims to spend around half of his time each year in this country, and around half in Egypt. Egypt is his domicile of origin. By the standards of the common law, he remains domiciled there, though also habitually resident in England, where he is on the electoral roll, living predominantly with a partner, Jill Davey, in Hereford. He holds both Egyptian and UK passports. His main business interests have for many years, he claims, been in Egypt, though his evidence is short on detail. He has business interests here as well. He is a director of an English company, Bindi (London) Ltd ("Bindi") which he says in turn acts as agent for a BVI company, Camarin Holdings Ltd ("Camarin"), though the English company has only filed dormant accounts. Camarin owns the Hereford property in which Jill Davey and he live, and at which the Defendant is registered on the electoral roll. Camarin is also the sole shareholder of Bindi, from whom the property was transferred for no consideration in 1999. Jill Davey appears to have no connection with Camarin or Bindi. The Defendant is the sole director of Bindi. I am not told who the directors of Camarin are, but it appears from the 1999 property transfer that it then had a corporate director as sole director, another BVI company, and that its secretary was R&H Secretaries (BVI) Ltd, which I take to be connected with Rawlinson & Hunter, a well-known firm of accountants, whose London address was given in the transfer as Camarin's address for service within the jurisdiction. It is not stated explicitly anywhere in the evidence who ultimately is behind Camarin, but the dealings with the Hereford property suggest, put at its lowest, no great distance between Camarin and the Defendant.
3. The Defendant has over time been a director of other English companies, and has in documents filed at Companies House claimed to be ordinarily resident here. The Claimant says that the Defendant has understated his connection with this jurisdiction. I cannot resolve that on this application, but the connection is on any footing substantial.
4. The Defendant claims that this court has no jurisdiction over him in relation to the present claim, as the claim raises a disputed question of title to foreign land. Alternatively, he says that these proceedings should be stayed on forum conveniens grounds.
5. The Defendant was served in England at his address here. No issue is taken as to the validity of that service. Jurisdiction is therefore established as of right, unless some exclusionary rule applies, or unless the court is satisfied that some other jurisdiction is clearly more appropriate, in which case it will order a stay.
6. The essence of the claim is that the Claimant says he paid the purchase price of the Egyptian apartment in 2007 to the Defendant on the footing that he would hold the monies pending the formalities of the proposed sale and purchase. The monies were, in the meantime, repayable on demand, or in the event of a failure of purpose. It is said that the purchase initially was to be in the joint names of the Claimant and Martin Shaw ("Mr Shaw"), the Claimant's civil partner. That was later changed. The purchase was to be taken instead in the name of Mr Shaw alone, because same sex relationships are frowned upon in Egypt. The Claimant says that he advanced the monies direct into the Defendant's Egyptian bank account. The arrangement for advancing the whole of the purchase price was, it is said by the Claimant, agreed at a meeting in Hereford between Mr Shaw and the Defendant. It is apparently not unusual in Egypt for the purchase price to be paid in advance. The Defendant claims that he was unaware that the money was coming from the Claimant, and says that his dealings were with Mr Shaw alone, now bankrupt, and all took place in Egypt. He says that the present claim is a device to overcome the impediment of Mr Shaw's bankruptcy, which prevents him from bringing any proceedings himself. The monies, as far as he is concerned, came from Mr Shaw.
7. The purchase of the apartment never formally completed, though the Claimant and Mr Shaw did enjoy possession for some time. It has now apparently been onward sold to a third party. On that footing, the Claimant reclaims his monies on the basis of the Defendant's unjust enrichment. That seems a straightforward enough claim, at least under English law. Part payments (unlike deposits) are always recoverable, even in the event of default by the purchaser, and money held for a particular purpose has to be returned on a failure of that purpose. There is presently no evidence that Egyptian law would lead to a different result. There is no shortage of Egyptian lawyers around, so it would have been relatively easy for the Defendant to put in evidence of Egyptian law, if relevantly different.
8. The Defendant also claims that he received the money in question for the account of Camarin, who he says owned the Egyptian property. He also claims to have paid the money over to Camarin. The Claimant disputes that the arrangement was with Camarin. Again, I cannot resolve that on this application. There is however some documentary evidence indicating that the Defendant acted ostensibly as owner in his dealings with Orascom, the Egyptian management company of the development in which the apartment is located. Assuming that the monies were paid over by the Defendant to Camarin, that may not override the arrangement asserted by the Claimant (if established on the evidence). Alternatively, a full examination of the facts at trial may reveal that the connection between the Defendant and Camarin is such that its receipt may be treated as enriching the Defendant. Whilst the Defendant says he acted on the instructions of Camarin's directors in declining to complete the transaction, he has not identified them or explained their independence (if any) from himself.
9. The Defendant claims that Camarin was owed other monies by Mr Shaw and that the apartment was handed back to settle that indebtedness, or that there is a right of set-off. All of this is disputed. Again, that is a matter I cannot resolve on this application. This is a simple issue of fact which will have to be resolved at the trial, wherever it takes place. None of that alters the simple fact that the purchase of the apartment has not completed, for whatever reason.
10. From that brief summary, it is impossible, in my judgment, to characterise the claim, whether in form or in substance, as one relating to title to foreign land. Everyone agrees that the purchase was never completed, and has now been onward sold. The Claimant is not raising a claim as owner of the apartment, nor is the Defendant saying in his defence that the apartment has been transferred.
11. It is well established that in personam claims are not covered by the exclusionary rule of jurisdiction. Thus, the English court can order specific performance of an agreement to sell foreign land. That is not sought in this case, but I do not see any distinction in principle in this context between seeking completion by specific performance and seeking instead recovery of the purchase price of a property sale which has not completed. Any judgment will have no effect on title, and will not involve the court adjudicating upon a disputed claim of title.
12. It follows that the jurisdictional challenge fails.
13. I turn to the question of whether the proceedings should be stayed. The onus is on the Defendant to persuade me that some other jurisdiction is more appropriate. The Defendant contends that Egypt is more appropriate.
14. The Claimant takes a preliminary point. Judgment has been entered in this case in default of acknowledgment of service. It is said that it is premature to consider a stay unless and until steps are taken to set the judgment aside. I do not accept that submission. The application for a stay was made within the period which the rules provide from the filing of the acknowledgement of service, though the acknowledgement of service may have been late (hence the default judgment).
15. In this case, an acknowledgement of service was filed before the default judgment was entered, but considerably after the Claimant's request for a default judgment. The delayed entry of judgment was therefore the Court's fault, not the Claimant's. The request for a default judgment was received by the Court on 17^th November 2011 but no judgment was entered until 15^th December 2011. An Acknowledgement of Service was received by the Court on 2^nd December 2011.
16. It presently seems to me that once the Acknowledgement of Service was filed, the condition for the entry of a default judgment was no longer met, and that judgment should not have been entered.
17. The court officer, in entering judgment, relied upon a direction of the District Judge, given on 25^th November 2011, before the acknowledgment of service was filed, that judgment should be entered in accordance with the Claimant's request. The Claimant's solicitors, who by then were pressing, were subsequently told over the telephone that judgment had been awarded by the District Judge. This was wrong. The District Judge had merely given a direction to the court's officer. The District Judge had not made an order. Unless and until the court's officer acted in accordance with that direction, there was no default judgment, and no award of any kind.
18. When the Acknowledgment of Service was filed, the court initially acted appropriately, sending out a Notice that Acknowledgement of Service had been filed. This was understandably queried by the Claimant's solicitors, in the light of the earlier telephone indication that judgment had already been given. The court's officer then entered a default judgment, backdating it to the date of the District Judge's direction, and the Court wrote to the Claimant's solicitors saying that the Notice had been sent in error (which it had not).
19. The District Judge's direction was given on 25^th November 2011 but no default judgment was entered until 15^th December 2011. In the meantime, the court received the Acknowledgement of Service on 2^nd December 2011. In the circumstances, the court's officer knew that the circumstances had changed and, if left in doubt, should have referred the file back to the District Judge, who would have recognised that a default judgment was no longer appropriate in the light of the intervening Acknowledgement of Service. Further, the default judgment should not have been backdated, but should have borne the date when judgment was actually entered, thus recognising that the entry of judgment was the act of the officer in question, and not an order of the District Judge (whose name, correctly, does not feature on the default judgment) made earlier.
20. It presently seems to me, therefore, that the judgment as entered was irregular, and that I should set it aside of my own initiative. I will not, however, make that order without giving the parties an opportunity to be heard on the point, as the matter has not yet been the subject of detailed argument.
21. As, moreover, the stay is sought on forum conveniens grounds, I do not see how, in principle, the entry of a default judgment stands in the way of a stay application. If the court decides that it should not exercise jurisdiction in this case, the appropriate order would be both to set aside the judgment and order a stay.
22. I now turn to consider the merits of the stay application.
23. The Defendant contends that Egypt is the more appropriate forum as the claim arises out of an agreement to buy an Egyptian apartment, made (he says) in Egypt, and seeks recovery of monies paid in Egypt to an Egyptian who resides and has an established business in Egypt. There are witnesses in Egypt, and Egyptian law will apply. All that points towards Egypt as the appropriate forum.
24. Against that, the Claimant says that the issues are essentially factual. The main witnesses (himself, Mr Shaw and the Defendant) are either here or (in the case of the Defendant) often here. There may be a handful of witnesses from Egypt who are not here, but it is more inconvenient for the main witnesses to travel to Egypt, rather than the reverse. The Egyptian witnesses can give evidence by video link, if necessary through an interpreter. He also contends that no question of title to foreign land arises, and that Egyptian law is unlikely to be relevant, especially as (on his contention) the case is governed by English law.
25. I am prepared for present purposes to assume that Egyptian law will apply, as that appears to be the system of law with which the unjust enrichment claim has the closest connection. Nevertheless, the Defendant has not identified any principle of Egyptian law different from English law which is relevant to the issues which would have to be determined to resolve the unjust enrichment claim. In many cases, the potential significance of the differences between two systems of law may be obvious. But there is no such obviousness here on the particular issues raised by this dispute, and the burden is on the Defendant to establish by evidence that there are or may be relevant differences. If any relevant differences ultimately emerge, the English court is accustomed to dealing with evidence of foreign law, but the evidence before me is silent on the point, and establishes nothing.
26. Questions of foreign law apart, the factors seem to be more in favour of England as the more convenient forum than Egypt. The evidence of witnesses from Egypt (apart from the Defendant) - mainly members of the local management team responsible for amongst other things arranging completion – may be of some relevance, but is unlikely to be central, given that it is not disputed that there has been no formal completion. There may be an issue as to the circumstances in which the keys of the apartment were given back to the Defendant. That involves one Egyptian witness (the Defendant's driver) and one English witness (Mr Shaw's father). In convenience terms, they balance each other out. So far as the Defendant is concerned, on his own evidence, he divides his time equally between Egypt and England, so that there is no pronounced convenience one way or the other.
27. Issues relating to Camarin may involve the BVI witnesses. It is, however, not suggested that Egypt would be a more convenient forum for them.
28. So far as the Claimant and Mr Shaw are concerned, England is obviously the more convenient forum.
29. It is also said on behalf of the Defendant that a claim against Orascom in Egypt may be necessary. However, no readily intelligible claim has been articulated. The potential for a claim seems to rest on the assumption that some of the money claimed was paid to Orascom. But that is a hypothesis, and is not actually said to have occurred. Moreover, on the Defendant's case, the money, if paid over, would have been so paid by Camarin, so it would be Camarin's claim.
30. I can see also that Camarin, on the Defendant's case, may turn out to be a proper party to these proceedings, either as an alternative Defendant, to be joined on the application of the Claimant, or as a third party, to indemnify the Defendant, if there is a real distinction between Camarin and himself. There is no reason to suppose, in that event, that Camarin would find Egypt more convenient.
31. In all the circumstances, the Defendant has not persuaded me that Egypt is the more convenient forum. I therefore decline to order a stay.