England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		10 November 2005

Mr Justice Morison :

1. There are several methods of enforcing an English judgment in England [and Wales]. An action on the judgment may be commenced; but this is subject to the Limitation legislation, and, in general terms cannot be done when more than 6 years after the date of judgment have elapsed. The Limitation legislation does not apply to the other methods of enforcement, including obtaining a writ of execution, or charging orders or third party debt orders [garnishee procedure] or a bankruptcy petition. Thus, an English judgment remains open for enforcement after more than six years has elapsed since the judgment was given, although there are different procedural rules which apply to each method of enforcement. This case is solely concerned with enforcement by way of writ of execution. I am not concerned to deal, in this Judgment, with the availability of other means of enforcement of the judgment by Lloyd's against Judge Longtin.

Background

2. Judge Longtin was one of many Names at Lloyd's who suffered substantial losses. Judgment [Tuckey J.] was entered against him on 11 March 1998 in respect of the premium due from him to Equitas, for £101,409, which with the addition of interest amounted to some £144,000 odd as at 17 August 2005. Enforcement of the judgment was stayed pending an application to the Court of Appeal for permission to appeal against Tuckey J.'s decision. Permission to appeal was refused by the Court of Appeal on 31 July 1998, whereupon the judgment became enforceable, and, subject to the issues which I must determine, it remained enforceable throughout, apart from a period of 6 weeks in January 2001 when Lloyd's agreed to stay enforcement pending consideration of an offer of settlement which they had then made.
3. In anticipation of the Appeal Court's decision, Lloyd's wrote on 27 July 1998 to Judge Longtin's lawyers in Montreal, Maitre Pierre Sebastien QC, as follows:

"Lloyd's has now obtained legal advice that this judgment will be enforceable in Canada, under Quebec Law, and will pursue enforcement procedures against your client and his assets as and when the pending stay of execution is lifted unless Lloyd's receives from your client by 28 August 1998 his proposals to meet this debt in full."

A further letter of a similar nature was sent to Maitre Pierre Sebastien QC by Lloyd's Quebec Attorneys on 8 October 1999. As I understand it, there was no reply to either.

4. At the date of judgment, Judge Longtin was resident in Quebec Province, Canada, and at that time he did not have, and apparently has not since had, any assets within this jurisdiction. There are a number of Canadian Names in a similar position to Judge Longtin, who were mostly resident in Ontario. A decision was taken by Lloyd's to seek recognition and enforcement in Ontario first. Lloyd's appreciated that decisions of the Ontario courts would not bind courts in other Provinces, but hoped that they would be regarded as persuasive and of assistance to Names and courts in other Provinces.
5. On the evidence before me, it appears that the proceedings in Ontario were commenced by Lloyd's in 1999. There were five test cases [with 88 other Names agreeing to be bound]. Recognition of the judgments was accorded by the court of first instance and that decision was upheld on appeal, when recognition was affirmed on 29 August 2001; the Supreme Court refused leave to appeal on 13 June 2002.
6. On 6 March 2003 Lloyd's obtained a certificate under section 10 of the Foreign Judgment (Reciprocal Enforcement) Act 1933, for the purpose of seeking recognition and enforcement of their judgments in Quebec. The certificate stated, amongst other things that

"The enforcement of the judgment is not for the time being stayed or suspended, that the time available for its enforcement has not expired and the judgment is accordingly enforceable."

7. On 8 March 2004, Lloyd's commenced an action in Quebec against the defendant seeking recognition and enforcement of the Judgment in Quebec. A defence was filed in January 2005 when, amongst other things, the point was taken that the judgment dated 11 March 1998 was not, or no longer, enforceable in England because more than 6 years had elapsed since it was granted:

"The foreign judgment … cannot be recognised and declared enforceable by the Quebec authority in that, as of March 11, 2004, the foreign judgment was not enforceable any more in England .."

8. I have heard no argument about the law of Canada or Quebec, but both parties have proceeded on the basis that the law of recognition and enforcement in that Province is governed by Title 4 of Book 10 of the Civil Code of Quebec. The relevant Article for present purposes is Article 3155 which provides, so far as is relevant that:

"A Quebec authority recognises and, where applicable, declares enforceable any decision rendered outside Quebec, except in the following cases:

….

(2) the decision is … not final or enforceable at the place where it was rendered."

9. As part of their preparation for the trial in Quebec, Judge Longtin's lawyers applied to put before the court some correspondence which had taken place with members of the court's administrative staff. Lloyd's opposed this application but their opposition was over-ruled by the court. The relevant correspondence is in the evidence presented to me. It shows a certain state of confusion as to what the law is. Master Miller, a judicial officer, had said, in his certificate of March 2003 [paragraph 5 above] that "the time available for .. enforcement has not expired and the judgment is accordingly enforceable." This statement could lead to misunderstanding. 'Time available for enforcement' implies that time for enforcement might run out. That is true in relation to an action to enforce the judgment, where the Limitation Act applies, but not necessarily true in relation to seeking to enforce a judgment through the issue of a writ of execution; and not true in relation to enforcing by means of a charging order or garnishment proceedings. Thinking, no doubt, that there was a time bar which effectively prevented enforcement, on 26 August 2004, Judge Longtin's lawyers wrote to Master Miller enclosing a draft of a new certificate for him to sign which said that

" .. the time available for enforcement of the judgment has expired as of the 11 March 2004, that no other judgment before the High Court of Justice, Queen's Bench Division, Commercial Court has been obtained to extend the period of enforceability of the judgment and that the judgment is accordingly not enforceable."

I infer that the letter was passed to the Commercial Court Registry and to the clerical staff who work there. One such officer responded saying that a court officer could search the files

"and notify you in writing whether on such and such a date an application to extend [time] has or has not been made and if made, whether a judgment has or has not been given thereon."

The Canadian Lawyers then asked for the files to be searched and in due course a clerical officer wrote stating that

"A search has been made of the Court file in this case. As at today's date no Application to extend the time for enforcement of the Judgment dated 11 March 1998 has been made by the Plaintiff."

Again, the language used is capable of implying that an application for an extension of time was a pre-requisite to the enforcement of this judgment; it was not.

10. The parties in the Canadian case prepared for trial, which was due to be heard in late September 2005. On 23 August 2005 Lloyd's decided to demonstrate that the judgment was still enforceable in this jurisdiction by making an application to enforce it. They thought it was advantageous that this court should rule on its enforceability rather than leave the Canadian courts to decide what are matters of English law and practice, on the basis of expert evidence. They therefore applied to the court for leave to issue a writ of execution. The Law and Practice in relation to a writ of execution is to be found in RSC O.46 [Rules of the Supreme Court, Order 46].
11. Under O.46 Rule 2 it is provided that a writ of execution to enforce a judgment "may not issue without the permission of the court in the following cases". The first such case is "where 6 years or more have elapsed since the date of the judgment or order." The other cases are where a party has died or where the judgment was conditional or where a receiver holds the goods sought to be seized. Sub-rule 3 provides

"Where the court grants permission, whether under this rule or otherwise, for the issue of a writ of execution and the writ is not issued within one year after the date of the order granting such permission, the order shall cease to have effect, without prejudice, however, to the making of a fresh order."

12. An application for permission need not be served on the other party, but in any such case where the other party wishes to have the order varied or set aside then they must apply to the court within 7 days after they were served with it.
13. In this case, Master Ungley granted the application made by Lloyd's for leave to issue a writ of execution against Judge Longtin and that order was drawn up and sealed on 9 September 2005. Although late, Judge Longtin has made an application to set aside the order granting permission and it is his application that comes before me.

The parties' arguments

14. For Judge Longtin, Ms Robertson made the following submissions [and I have summarised them]

a. Judge Longtin is entitled to apply to set aside the order which was made against him without notice. The question before the court is whether Lloyd's have shown adequate grounds for obtaining leave to issue a writ of execution more than 6 years after the date of the judgment. It is for Lloyd's to show that the test for giving leave is satisfied, rather than on Judge Longtin to show that it was not: Duer v Frazer [2001] 1 WLR 919, paragraph 25.

b. As a matter of principle the court will not generally extend time beyond 6 years and, ordinarily, the lapse of 6 years will in itself justify refusing leave: Patel v Singh [2002] EWCA Civ 1938, paragraphs 12 – 14.

c. It must be shown that it is "demonstrably just" to depart from the general rule and give leave more than 6 years after judgment.

d. The judgment creditor must explain the reasons for the delay; any unexplained period of delay will normally lead to his application being dismissed. Whilst prejudice may be a factor to take into account where it exists, its absence does not deprive the judgment debtor of his right to rely upon delay alone.

15. Applying those principles, the defence filed in Quebec took the point about the lack of enforceability of the judgment due to lapse of time and that was explicit in January 2005, if not before when the original defence was filed. If the reasons advanced by Lloyd's are valid, they have been valid for 8 or 9 months and there is no explanation for the delay in applying to issue the writ of execution during that time.
16. There is an air of 'ambush' about the way that Lloyd's have proceeded. The trial had had to be postponed as a result of the late application by Lloyd's. There is no good reason why the application was made so later: either Lloyd's were engaged in a deliberate attempt at a last minute ambush before trial, or Lloyd's simply failed to wake up to a point that was staring it in the face. Neither explanation would justify the granting of leave. Why weren't enforcement proceedings issued promptly when the Canadian enforcement action was started or at the very latest after the defence had been filed raising the issue of enforceability due to lapse of time.
17. Judge Longtin is elderly and a retired judge "with relatively modest means" and he should not be subjected to a last minute moving of the goalposts in relation to Canadian proceedings which have been extant since March 2004.
18. For Lloyd's, Mr Stephen Robins, submitted:

a. Lloyd's accept that obtaining permission to enforce by execution a judgment over six years old is no mere formality. Every case must be decided on its own facts: in Patel the court decided that a delay of ten years from the date of judgment was not satisfactorily explained; in The Good Challenger [2004] 1 Lloyd's Law Reports 67, permission was granted in relation to a judgment which was 11 years old. For a significant part of that time the creditor was seeking to enforce the judgment in Romania, the debtor's principal place of business.

b. This is not the usual case of a creditor seeking to enforce a judgment with a view to execution in this jurisdiction; indeed, so far as Lloyd's are aware Judge Longtin has no assets here. Rather, Lloyd's have applied for permission "for the purpose of preventing Mr Longtin from attempting to convince the Quebec court that the judgment was wholly unenforceable in England."

c. Lloyd's waited until the Ontario courts had decided recognition and enforcement issues before starting similar proceedings in other Provinces.

d. Lloyd's have a large number of judgments to enforce all round the world and this has been a substantial undertaking.

19. As to ambush, Ms Robertson's submissions were unfair. That is inconsistent with Lloyd's approach. They consented to the adjournment of the Canadian proceedings to enable Judge Longtin to apply to this court; Maitre Sebastien QC received a copy of Master Ungley's order on 13 September and Lloyd's tried to serve the order on English solicitors but without success. Mr Longtin's present solicitors were fully instructed by 16 September yet did not contact Lloyd's so that they were still writing to the firm whom they believed had taken over the case for Mr Longtin on 7 October 2005. Lloyd's consented to the application to this court being made out of time. None of that conduct is compatible with the 'ambush' theory.

Decision

20. I am grateful to both counsel for their help. This is an unusual application, as Mr Robins made clear. The permission sought is not because Lloyd's want to execute against assets here but rather because they want to have decided the question whether the judgment is still enforceable here. No submissions have been made to me as to the meaning of "enforceable" in Article 3155, and I make no complaint about it. For example, I do not know whether a judgment might be considered to be 'enforceable' if permission to enforce it were a pre-requisite, or whether it would only be 'enforceable' if permission were actually granted. Again, I can imagine cases where a judgment debtor had no assets within this jurisdiction, so as to make attempts at enforcement uneconomic, but after a significant period of time acquired by inheritance assets which made an old judgment worthwhile to enforce. Does a judgment become 'enforceable' only when it is worthwhile enforcing or does it remain 'enforceable' throughout? I had some misgivings about dealing with this application since the answer to it is not required for the purpose for which it is apparently being sought. Should this court answer what in a sense is a hypothetical question to assist another court?
21. The academic nature of the application is similar to the position in the case of Duer where at paragraph 15 the Judge said this:

"It seems that the application to Master Hodgson for permission to issue execution in England is only capable of being of indirect benefit to the claimant in the absence of evidence of the existence of any assets of the defendant within the jurisdiction on which that execution could operate. I was told that an order in England giving permission to execute the German judgment in this country would greatly assist the passage of a similar execution in Nevis."

Whilst the Judge said nothing more about this point, he went on to consider the merits of the application despite the fact that it had only an indirect benefit, as here. Both parties submitted that I should deal with the application, and I have done so.

22. In my judgment, the words of the Order are clear and it is undesirable to put any gloss on them. With respect, it seems to me that Ms Robertson has overstated the requirements for permission. She has taken words from a judgment when applying the test and elevated them into legal principle. The law is this: are there facts which take the case out of the general rule that execution will not be allowed after 6 years? The exercise of my discretion must be directed to doing justice between the parties, having regard to all the circumstances of the case. I take this approach based upon the Court of Appeal's decision in the case of The "Good Challenger" at paragraphs 105 and 107 and 108.
23. It seems to me that in this case there are facts which take this case out of the ordinary. From the very outset, Judge Longtin must have known that Lloyd's remained intent on enforcing their rights against him. There can be no prejudice to him. Lloyd's have remained active in seeking to have recognised and enforced the many judgments which they have obtained. In the course of this massive task they must be allowed time to consider their position and to adopt stances which reasonably appear to them to be the best way of proceeding. Their decision to start in Ontario cannot be criticised, and within a reasonable time thereafter they tried to get Judge Longtin to agree his liability and avoid litigation. They started the Quebec action reasonably promptly. The chief period of delay upon which Ms Robertson relies is from the beginning of January 2005 until September of this year. I can see the force of her point that for a period of 9 months Lloyd's did less than might have been expected of them. On the other hand, the decision to make the application, which is of indirect benefit only, will have required analysis and decision time. Looked at overall, a period of inexcusable delay of some 6 months at most does not disentitle Lloyd's to the relief they seek. It is, with respect, a misreading of Patel to suggest that any period of unexplained delay thereby disentitles an applicant to relief. In that case the overall delay was ten years from the date of judgment; and it was in that context that the appeal was allowed. Had that been the law, the Good Challenger case would have been decided differently. Here the judgment is 7 ½ years old and proceedings to enforce it in Quebec have been in existence for 1 ½ years. It is pertinent to point out that in many jurisdictions, the time limit for enforcing judgments is considerably longer than 6 years [e.g. Germany where the time is 30 years]; indeed 6 years is not a limit; it is simply a hurdle which can be jumped more than once, as sub-rule (3) makes clear. As to the submission that there has been deliberate delay to produce the ambush, in my view that went much too far, for the reasons given by Mr Robins. As far as I can tell from the papers before me, Lloyd's have behaved appropriately, firmly and promptly in seeking to enforce their judgment against Judge Longtin.
24. Accordingly, despite the forceful and clear submissions of Ms Robertson, I dismiss the application before me. In my view the decision of Master Ungley was right and I affirm the permission he gave to issue a writ of execution.