Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Spielberg v. Rowley & Ors [2004] IEHC 384 (26 November 2004)
URL: http://www.bailii.org/ie/cases/IEHC/2004/384.html
Cite as: [2004] IEHC 384
[New search] [Printable RTF version] [Help]
[2004] IEHC 384
2004 No. 8578P
2004 No. 21 COM
Between
Plaintiff
Defendants
JUDGMENT of Ms. Justice Finlay Geoghegan delivered on the 26th day of November 2004.
This judgment is given in two motions brought on behalf of the first and second named defendants and on behalf of the third named defendant which were heard contemporaneously but which give rise to different considerations and different issues.
Application of first and second named defendants
The first and second named defendants by notice of motion issued on the 27th July, 2004, applied pursuant to O.12, r. 26 of the Rules of the Superior Courts,1986 or, alternatively pursuant to the inherent jurisdiction of the court, inter alia, for an order setting aside the service of the notice of summons dated 27th May, 2004, on the grounds that the court had no power to permit service thereof on the first and second named defendants outside of the jurisdiction pursuant to O.11 of the Rules of the Superior Courts, 1986. The first and second named defendants are resident in the Isle of Man.
The order of the High Court of the 17th May, 2004, giving liberty to issue an originating plenary summons for service on, inter alia, the first and second named defendants and giving liberty to serve a notice of the said summons on the first and second named defendants was made in reliance on O.11, r. 1(c) and (h) of the Rules of the Superior Courts, 1986. Those rules permit service out of the jurisdiction of an originating summons or notice of an originating summons whenever;
"(c) any relief is sought against any person domiciled or ordinarily resident within the jurisdiction; or
. . .
(h) any person out of the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the jurisdiction; or"
At the time of the application under O. 11, The Registrar of Companies, The Minister for Finance, Ireland and the Attorney General had been joined as fifth to eighth named defendants to these proceedings.
On the 10th November, 2004, immediately prior to the hearing of this application, on an application brought on behalf of the fifth to eighth named defendants, I determined that those defendants were entitled to an order striking them out of the proceedings pursuant to O.15, r. 13 of the Rules of the Superior Courts, 1986 and O.19, r. 28 of the Rules of the Superior Courts, 1986.
Since the making of that order there is now no person resident within the jurisdiction who is joined as a party to these proceedings. In the circumstances, the present application on behalf of the first and second named defendants must succeed.
Counsel for the plaintiff did seek to raise article 22(2) of Council Regulation E.C./44/2001 of 22 December, 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, O.J. L012/1 16.1.2001 and sought to assert that this Court had jurisdiction thereunder to hear and determine the claim as against the first and second named defendants. I ruled that such submission could not now be made in response to the present application on behalf of the first and second named defendants as Council Regulation E.C./44/2001 had not been relied upon at the time of service of the proceedings on the first and second named defendants. Service on the first and second named defendants was effected pursuant to the order of the High Court of the 17th May, 2004, following an application under O.11 of the Rules of the Superior Courts, 1986. The first and second named defendants are now entitled to an order setting aside such service.
Application of the third named defendant
The third named defendant is resident in England. These proceedings were served on him in reliance upon the provisions of articles 6(1) and 22(2) of Council Regulation E.C./44/2001. The present application on behalf of the third named defendant is for an order staying or striking out the proceedings as against the third named defendant upon the basis that this court has no jurisdiction pursuant to Council Regulation E.C./44/2001 to hear and determine the proceedings. By reason of the order made to strike out the fifth to eighth named defendants, counsel on behalf of the plaintiff did not continue to rely upon article 6(1) but did continue to rely on article 22(2). Accordingly, the issue to be determined by this court is whether or not it has jurisdiction under article 22(2) of Council Regulation E.C./44/2001 to hear and determine these proceedings against the third named defendant.
Background facts to the proceedings
The transactions which have taken place do not appear to be in dispute. The validity and/or effect of certain of the transactions are in dispute between the parties. The history of the transactions is relevant to this application. Insofar as I recite them in this recital of facts, I do so without forming any view as to the validity or effect of any of the transactions. The facts which I recite are taken from those pleaded in the statement of claim and the affidavits sworn herein.
The plaintiff is a music publisher and resides in Switzerland. On the 11th January, 1996, there was incorporated in Ireland a company limited by shares under the name Charly Acquisitions Limited ("Acquisitions Ireland"). On the 11th of March, 1996, there was incorporated a company limited by shares in Ireland under the name Charly Trademarks Limited ("Trademarks Ireland"). The first and second named defendants were at all material times directors of each of Ireland Acquisitions and Trademarks Ireland.
In December, 1999 the first and second named defendants applied to the regulatory authorities on the Island of Nevis to transfer the domicile of each of Acquisitions Ireland and Trademarks Ireland to the Island of Nevis pursuant to the Nevis Business Corporation Ordinance 1984 as amended.
On the 30th December, 1999, the Registrar of Companies of the Island of Nevis issued a certificate of transfer of domicile to Nevis in respect of each of Charly Acquisitions Limited and Charly Trademarks Limited. Each of the certificates certifies that Charly Acquisitions Limited and Charly Trademarks Limited respectively "has made a permanent transfer of its domicile into Nevis effective as of the date below stated and shall have continued corporate existence in Nevis." A further certificate was issued by the Registrar of Companies of the Island of Nevis in respect of each of Charly Acquisitions Limited and Charly Trademarks Limited on the 26th October, 2001, which certifies in respect of each of the companies that it "was duly incorporated and existence commenced under the provision of the Nevis Business Corporation Ordinance 1984 as amended on 30th December 1999". For the sake of clarity I will refer to the companies referred to in those certificates as "Acquisitions Nevis" and "Trademarks Nevis". It is further certified that in accordance with the records of the office of the Registrar of Companies of the Island of Nevis that "the said corporation is in Good Standing and has a legal corporate existence as of the date shown below [i.e. 26th October 2001]".
On the 25th August, 2000, and 21st July, 2000, Acquisitions Ireland and Trademarks Ireland were struck off the register of companies in Ireland for failure to file annual returns. Notice of such facts was published in Iris Oifigiúil on the 18th August, 2000, and 14th June, 2000, respectfully whereupon it is asserted by plaintiff and not disputed on behalf of third named defendant, Acquisitions Ireland and Trademarks Ireland were dissolved. The dates referred to are those pleaded.
The first, second and third named defendants are each now directors of Charly Acquisitions Limited and Charly Trademarks Limited which they maintain are Acquisitions Nevis and Trademarks Nevis and companies incorporated on the Island of Nevis on 30th December, 1999.
Acquisitions Ireland and Trademarks Ireland were the owners of copyright and trademarks, respectively, in musical recordings. The defendants maintain that such copyright and trademarks are now owned by Acquisitions Nevis and Trademarks Nevis.
On 3rd April, 2002, proceedings were commenced in the English High Court (record No: HC 2002/C00861) in which the claimant is Charly Acquisitions Limited and one of the defendants is the plaintiff herein. Those proceedings seek a declaration that the claimant therein is the owner of copyright in certain master sound recordings and injunctions restraining the defendants from infringing such copyright and consequential relief. Those proceedings have not yet been served on the plaintiff herein.
Proceedings were instituted by the plaintiff herein on the Island of Nevis against Charly Acquisitions Limited in 2004, (Claim No: 2004/0084) seeking, inter alia, an injunction restraining that company from prosecuting the proceedings in the English High Court. An interim injunction was granted by the High Court of Justice of the Island of Nevis on the 16th June, but that was subsequently vacated and set aside upon the basis that it ought not to have been granted. Those proceedings were struck out on the 15th September, 2004.
Applicable law
The third named defendant is domiciled in the United Kingdom. In accordance with articles 2 and 3 of Council Regulation E.C./44/2001 the third named defendant must be sued in a court of the United Kingdom unless he may be sued in the courts of another member state where the rules set out in ss. 2-7 of chapter II of the Regulation so permit.
The plaintiff relies on article 22(2) which is contained in s.6 of chapter II. This provides that the courts specified therein shall have exclusive jurisdiction regardless of domicile:
"2. in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law;"
The exclusive jurisdiction provided for in article 22(2) is an exception to the general rule in article 2 that persons are sued in the courts of their domicile. The principles set out by Finlay C.J. (with whom all the other members of the court agreed) in Handbridge Limited v. British Aerospace Communications Limited [1993] 3 I.R. 343 apply. The first such principle stated at p. 358 is:
"(1) The onus is on the plaintiff who seeks to have his claim tried in the jurisdiction of a contracting state other than the contracting state in which the defendant is domiciled to establish that such claim unequivocally comes within the relevant exception".
The Supreme Court in that case was considering the Brussels Convention and the exception provided for in article 5(1) thereof. I am satisfied that the same principle applies to the exception in article 22(2) relied upon herein.
The Court in determining what is the "object" of the proceedings for the purposes of article 22 should, it appears, consider what is the principal subject matter of the proceedings. Layton and Mercer, European Civil Practice, 2nd Ed., (London, 2004) at p.625 states:
"Proceedings will be subject to the exclusive jurisdiction provisions of Art. 22 if their principal subject matter falls within the article."
One further issue arose in the course of this application. Counsel for the third named defendant submitted that insofar as Article 22(2) confers exclusive jurisdiction in respect of proceedings which have as their object the validity of decisions of organs of companies, that this envisages the validity of the decisions of organs having regard to the internal management rules of a company. In the Irish context this would mean the validity of a decision of an organ of an Irish company having regard to the memorandum and articles of association of the company when construed in accordance with the relevant Companies Acts.
Counsel for the plaintiff contended that it was not so limited but included the validity of a decision of an organ having regard to the capacity of the company to carry out that decision in accordance with the relevant Companies Acts.
For reasons which will become apparent, it appears to me unnecessary to resolve this conflict in the present application.
The final question is how the court is to determine on this application what is the principal subject matter of the proceedings. I have concluded that the court should primarily look at the statement of claim and any other pleadings delivered but may also have regard to the facts set out in the affidavits sworn in the application.
Conclusions
Applying the above principles to the pleadings, and in particular to the statement of claim herein and the facts set out in the affidavits sworn, I have concluded that the plaintiff has failed to discharge the onus on him of unequivocally establishing that the object in the sense of the principal subject matter of these proceedings is the validity of a decision of an organ of Acquisitions Ireland or Trademarks Ireland.
Counsel for the plaintiff identified the relevant decision as being a decision of the board of directors of Acquisitions Ireland and Trademarks Ireland to apply to the regulatory authorities of the Island of Nevis to transfer the domicile and place of incorporation of the companies to the Island of Nevis. Whilst it was accepted that the pleading in this regard lacked specificity, it was contended that the burden and import of paragraphs 10 and 11 of the statement of claim is that such decision was null and void and it was further contended that the plaintiff intended asserting that such decision was null and void by reason of a lack of a capacity of an Irish company to seek to transfer its domicile and place of incorporation to another jurisdiction.
The present pleading asserts that the first and second named defendants were the persons registered as the directors of Acquisitions Ireland and Trademarks Ireland and further that they "purported to apply" to transfer the domicile and place of incorporation of both companies to the Island of Nevis. I have concluded that even if the statement of claim had more expressly pleaded that the decision to make such application was a decision of the board of directors and null and void by reason of a lack of capacity of Acquisitions Ireland and Trademarks Ireland to change their domicile, that it would not alter my conclusion.
Considering the entire of the statement of claim and the factual background referred to above, I have concluded that the plaintiff has failed to establish that the principal subject matter of the proceedings is the validity of a decision of the board of directors of either Acquisitions Ireland or Trademarks Ireland. Rather, it appears to me that the principal subject matter of these proceedings is the question as to whether the company, Charly Acquisitions Limited which is the claimant in the English High Court proceedings, is a company validly incorporated and registered on the Island of Nevis and continues to have a corporate existence notwithstanding the dissolution of Acquisitions Ireland. It may be that it also includes the issue of whether such company is now the owner of the copyright in musical recordings previously owned by Acquisitions Ireland, but nothing turns on this.
The determination of the relevant issues as to the principal subject matter of the proceedings undoubtedly includes the validity of the transactions which took place on the Island of Nevis in December, 1999. I accept that it is envisageable that a consideration of such issues may include a consideration as to whether Acquisitions Ireland had the capacity to make an application to the Registrar of Companies on the Island of Nevis to change its domicile. However, even if the resolution of that issue were to be considered to include a determination as to the validity of a decision of an organ of Acquisitions Ireland within the meaning of Article 22(2) (without necessarily deciding that it does so), it does not appear to me that the determination of such issue could be considered to constitute the principal subject matter of the proceedings. It is simply one of a number of issues which may have to be determined by a court in reaching conclusions in relation to the principal subject matter of the proceedings.
Accordingly, I have concluded that this court does not have jurisdiction to hear and determine the plaintiff's claim against the third named defendant herein under Article 22(2) of Council Regulation E.C. / 44/2001. I will hear Counsel on the appropriate form of Order.