Jersey Unreported Judgments

Appeal against Order of Judicial Greffier giving leave to serve Order of Justice out of Jurisdiction.

1999/90

Royal Court

(Samedi)

28 May 1999

Before     :

Sir Philip Bailhache, Bailiff, with Jurats Potter and Le Brocq

 

Appeal against the Order of the Judicial Greffier of 9^th November, 1997, giving the Plaintiff leave to serve the Order of Justice on the First Defendant out of the Jurisdiction.

Advocate N. F. Journeaux for the defendant

Advocate P. M. Livingstone for the plaintiff

judgment

the bailiff:

On 9th November, 1998 the Deputy Bailiff made an Order ex parte at the instance of the State of Qatar restraining the defendant (inter alia) from removing any of his assets from the jurisdiction save to the extent that those assets exceeded £913 million.  The history of the matter, as it appears from the Order of Justice, is as follows.  The defendant was Emir of Qatar from 1972 until 1995.  On 27th June, 1995, he was removed from office.  The Government of Qatar opened an enquiry into the defendant’s use of public funds entrusted to him whilst he was Emir.  It is alleged that substantial amounts of public funds had been transferred during his reign to accounts around the world in violation of Qatari law.  A significant part of those funds is said to have come from overdrafts of the defendant in the accounts of the Emiri Diwan at the Qatar National Bank.  In June, 1996, the plaintiff commenced proceedings against (inter alia) the defendant and obtained a Mareva injunction against his assets with certain third parties in Jersey.  Parallel proceedings were commenced against the defendant in a number of other jurisdictions.  In October, 1996, the action was settled upon terms which were amended by an addendum in February 1997.

 

The plaintiff now claims that the defendant has failed to comply with the terms of the settlement.  In November 1998 the plaintiff commenced attachment proceedings against the defendant in Switzerland as well as bringing proceedings before this Court and elsewhere. 

 

Following the imposition of the injunctions the defendant has issued a number of summonses.  We are presently concerned only with the fourth summons, and indeed with only part of that.  During the course of the hearing, as a result of concessions made by both parties, the issues have narrowed.  The defendant now seeks to set aside the order of the Greffier Substitute of 9th November, 1998 giving the plaintiff leave to serve the Order of Justice upon him out of the jurisdiction.  The grounds upon which the order is attacked are that the plaintiff’s case does not fall within Rule 7(b) of the Service of Process (Jersey) Rules 1994 (“the 1994 Rules”) and/or that the Court does not have jurisdiction over the defendant.  It was common ground that the defendant is not resident in Jersey and can only be made amenable to the jurisdiction of the Court by virtue of Rule 7(b) of the 1994 Rules, if at all.

 

Rule 7(b) provides:-

 

“7.       Service out of the jurisdiction of a summons may be allowed by the Court whenever -

…

 

(b)        an injunction is sought ordering the defendant to do or refrain from doing anything within the jurisdiction (whether or not damages are also claimed in respect of the doing of or failure to do that thing);”

 

            The Court considered the proper interpretation of this sub-rule in Krohn v Varna (1997) JLR 194, the Court declined to follow the conclusion of the House of Lords in The Siskina that the equivalent paragraph of the English rules was inapplicable to Mareva injunctions.  Instead the Court adopted the reasoning of Lord Nicholls in his dissenting judgment in Mercedes-Benz AG v Leiduck [1996] AC 284.  That reasoning was adopted because in Solvalub Limited v Match Investments Limited (1996) JLR 361 Court of Appeal,  the Court of Appeal, in considering the question of “power” jurisdiction to issue a Mareva injunction against a non-resident defendant,  had preferred Lord Nicholls’ reasoning to the judgments of the majority in Mercedes-Benz and the judgment in The Siskina.  The Court stated:

 

“We have to construe r.7(b) of the 1994 Rules and we have to do so in accordance with the current state of the law.  The Court of Appeal in Solvalub adopted the reasoning of Lord Nicholls and held that this court had the “power” jurisdiction to issue a Mareva injunction in aid of proceedings overseas.  The court decided, in effect, that a Mareva injunction in such circumstances was the substantive relief sought.  As Lord Nicholls stated in relation to the Rules of the Supreme Court in the passage from his judgment cited above, this undermines the basis upon which the conclusion was reached in The Siskina that the relevant sub-paragraph was inapplicable to Mareva injunctions.  We can see no logical reason for holding ourselves bound by the ruling in The Siskina on the question of territorial jurisdiction when its substructure has been so fatally weakened by the Court of Appeal in Solvalub.”

 

 

            Mr. Journeaux for the defendant submits that this Court’s decision in Krohn was wrong and should not be followed.  Counsel contends that it was wrong on three bases.  First, it is said that the Royal Court in Krohn did not give due weight to the doctrine of precedent;  upon a proper consideration of authority the Court should have held itself bound by the construction given to the English equivalent of Rule 7(b) by the House of Lords in The Siskina, which was applied by the majority of the Privy Council in Mercedes-Benz.  Secondly, it is said that the Royal Court was not bound by the decision on “power” jurisdiction of the Court of Appeal in Solvalub, and should not have followed the reasoning of Lord Nicholls in Mercedes-Benz.  Thirdly, it is argued that the majority judgment of the Privy Council in Mercedes-Benz was right in characterising a free-standing Mareva injunction as being outside the scope of Rule 7(b).

 

            The first contention gives rise to an interesting question about the nature and force of precedent in Jersey law.  It is an issue which was not addressed by counsel or by the court in Krohn.  Mr. Journeaux referred us to the judgment of Lord Diplock in de Lasala v de Lasala [1979] 2 All ER 1146.  This was an appeal to the Judicial Committee of the Privy Council from Hong Kong where the Court of Appeal in that colony had held that it was free to depart from a decision of the English Court of Appeal on a matter of statutory interpretation where the statutory provisions were essentially identical.  Before the appeal was heard, the House of Lords had endorsed the interpretation of the English Court of Appeal in that case.  Lord Diplock held that the Hong Kong Court of Appeal was right in holding that it was not bound to follow the decision of the English Court of Appeal.  He continued however:-

 

“Different considerations, in their Lordships’ view, apply to decisions of the House of Lords on the interpretation of recent legislation that is common to Hong Kong and England.  Here there is no question of divergent development of the law.  The legislature in Hong Kong has chosen to develop that branch of the law on the same lines as it has been developed in England, and, for that purpose, to adopt the same legislation as is in force in England and falls to be interpreted according to English canons of construction.  What their Lordships have already said about the common membership of the Judicial Committee of the Privy Council and the Appellate Committee of the House of Lords applies a fortiori to decisions of the House of Lords on the interpretation of recent English statutes that have been adopted as the law of Hong Kong.  Since the House of Lords as such is not a constituent part of the judicial system of Hong Kong it may be that in juristic theory it would be more correct to say that the authority of its decisions on any question of law, even the interpretation of recent common legislation, can be persuasive only:  but looked at realistically its decisions on such a question will have the same practical effect as if they were strictly binding, and courts in Hong Kong would be well advised to treat them as being so.”

 

            On that basis Mr. Journeaux submitted that the Court was bound to follow The Siskina and to hold that Rule 7(b) did not apply to a free-standing Mareva injunction.  This submission presumes that the rigours of the English doctrine of precedent apply equally in this jurisdiction.  We are not persuaded that that presumption is correct.  Almost all legal systems acknowledge the persuasive force of judicial precedent.  But the English doctrine of precedent is perhaps unique in its inflexible application.  Counsel referred us to an extract from the decision of the House of Lords in R v Knuller (Publishing etc.) (1973) AC 435 at page 455 where Lord Reid stated:-

 

“I dissented in Shaw’s case.  On reconsideration I still think that the decision was wrong and I see no reason to alter anything which I said in my speech.  But it does not follow that I should now support a motion to reconsider the decision.  I have said more than once in recent cases that our change of practice in no longer regarding previous decisions of this House as absolutely binding does not mean that whenever we think that a previous decision was wrong we should reverse it.  In the general interest of certainty in the law we must be sure that there is some very good reason before we so act …  I think that however wrong or anomalous the decision may be it must stand and apply to cases reasonably analogous unless or until it is altered by Parliament.”

 

            The rigid nature of precedent in English law as described by Lord Reid was explained by Professor Hart in “The English Doctrine of Precedent”, (1st Ed’n) at page 4 in these terms:-

 

“The peculiar feature of the English doctrine of precedent is its strongly coercive nature.  English judges are sometimes obliged to follow a previous case although they have what would otherwise be good reasons for not doing so.  In other words, a precedent may be binding and not merely persuasive in Englandbecause stare decisis is, generally speaking, a hard-and-fast rule in this country.  It is a great deal more than a mere maxim of judicial conduct to be followed if other things are more or less equal.

 

This rigid adherence to the principal of stare decisis on the part of the English judges is rendered all the more significant by the vast scope of case-law in England.  Some branches of our law are almost entirely the product of the decisions of the judges whose reasoned judgments have been reported in various types of law report for close on 700 years.  Other branches of our law are based on statutes, but, in many instances, case-law has played an important part in the interpretation of those statutes.”

 

            Even in Scotland, the rules are more supple.  In Beith’s Trustees v Beith [1950] SC 66 at page 70 (cited by Professor Hart, op. cit. page 14) the Scottish Court stated:-

 

“If it is manifest that the ratio decidendi upon which a previous decision has rested has been superseded and invalidated by subsequent legislation or from other like cause (our emphasis), that  ratio decidendi ceases to be binding.”

 

 

            In France the position is quite different.  Professor Hart states (op. cit. at page 8):-

 

“One of the most significant differences between English and French case-law lies in the fact that the French judge does not regard himself as absolutely bound by the decision of any court in a single previous instance.  He endeavours to ascertain the trend of recent decisions on a particular point - la jurisprudence.”

 

            What then is the law of Jersey in relation to the doctrine of precedent?  In our judgment there are at least three reasons why the rigours of the English system should be held not to apply here.

 

(1)        Although the judicial committee of the Privy Council is our ultimate court of appeal, Jersey is not, and never has been a colony to which the corpus of English law has been exported.  The original source of Jersey law was the Très Ancien Coutumier followed by the Grand Coûtumier of Normandy.  In 1861 the Royal Commissioners appointed to enquire into the Civil, Municipal and Ecclesiastical Laws of the Island recorded at page iii of their report:

 

                        “From a very early period [Jersey has] … retained [its] ancient Norman Law, except so far as it has in the course of time been modified or corrupted by subsequent enactments or usages.  It was indeed contended before us, that the common law of Englandhas been introduced into Jersey.  We do not see any proof of this …”. 

 

Since 1861 the influence of English law in some areas has been more pervasive, but we do not consider that this influence has changed the fundamental jurisprudence (in the English sense) of the Island.

 

(2)        As part of the pays de droit coutumier, our jurisprudence (in the same English sense) may be said to have more in common with France than with England.  Like the Parlement de Normandie (which was in fact a law-court) the Royal Court was until the end of the 18th century a law-making body as well as a law-enforcing body.  The Code of 1771 abolished the power of the Royal Court to legislate, ante-dating by some 20 years the abolition of the equivalent power of the Parlements in France.  Until the Revolution these courts had the power to establish legal rules.  The Act of 16-24 August 1790 forebade the Parlements from issuing general rules which henceforth became the responsibility of the legislative body.  It is true that Jersey has no equivalent of Article 5 of the Civil Code which expressly prohibits the establishment of rules of precedent by the judges.  But until relatively recently the Royal Court could resolve cases before it, as judges in France are required to do, only by recourse to one of the primary sources of law, i.e. the Customary Law or legislation, and by giving an interpretation which accorded with the contemporary situation of society.  Of course in Jersey, as in France, a line of cases deciding a point in a similar way could establish what in France is called jurisprudence constante (settled jurisprudence) which resembles a rule of precedent.  The jugements motivés contained in the records of this Court prior to 1950 contain many instances of references to the settled law and custom of the Island.

 

(3)        The mass of case-law which underpins the English doctrine of precedent does not exist in Jersey.  Professor Hart has noted that the strict rule of precedent to which we have referred above was the creature of the 19th and 20th centuries when law reporting reached its present high standard in that country.  The position is quite different in Jersey.  In 1861 the Royal Commissioners recorded, again at page iii of their report:-

 

                        “There is no system of published Reports such as exists in England, the demand in a small jurisdiction like Jersey being too limited to make an undertaking of the kind remunerative.  From the constitution of the tribunals, (except the Supreme Court of Appeal before Your Majesty in Council), and the want of means of notoriety, judicial precedents are less consistent, and altogether of less weight than in England.”  

 

            The English system of law reporting was introduced in Jersey only in 1950 when the publication of the series called the “Jersey Judgments” began.  But even then the quality of the reporting was variable.  It was not until 1985 with the inauguration of the Jersey Law Reports that a professional system of Law Reports identifying the rationes decidendi can be said to have been established.  There is no basis in this jurisdiction upon which a system of rigid precedent could be founded. 

 

            In our judgment the doctrine of stare decisis as expounded by the English Courts is not part of the law of Jersey.  But that conclusion is not as heretical nor revolutionary as it might at first blush appear.  We have already stated that nearly all legal systems acknowledge the persuasive force of judicial precedent.  The importance of judicial precedent has increased not only with the availability of law reports but also with the creation of the Jersey Court of Appeal in 1961.  An hierarchical structure of courts requires that deference be accorded by lower courts to higher courts.  Even in France judges of lower courts will in practice follow the decisions of higher courts in most cases.  This court is generally bound by the decisions of the Court of Appeal and of course, as it always has been, by the decisions of the Judicial Committee of the Privy Council sitting on appeal from the courts of this jurisdiction.  We qualify the proposition only because, in our judgment, it is open to the Royal Court, as it would be to a Scottish court, to decline to follow a decision which has been invalidated by subsequent legislation or some such compelling change of circumstance.  A warning note as to the duty to respect the Island’s judicial hierarchy was sounded by Le Quesne JA in Clarkin v Att. Gen. (1991) JLR 213 Court of Appeal at page 220:

 

“Before parting with these cases we wish to make two comments upon what was said by the Royal Court when it sentenced Pockett.  The words used by the Royal Court might be read as suggesting that the Royal Court would be entitled to vary or to depart from principles of sentencing laid down by this court.  We do not believe that the Royal Court meant to express such a view, which would be inconsistent with the structure of courts established by the law of this Island.  Both in Fogg v Att. Gen. and in this case, this court has laid down guidelines which the Royal Court thought to be desirable.  We refer to the words quoted earlier in this judgment which the Royal Court used when deferring sentence upon Clarkin.  We have no doubt that these guidelines will now be followed in all cases to which they apply.”

 

            The Court is not bound by the decisions of the Judicial Committee of the Privy Council sitting on appeal from some other jurisdiction.  Authority for that proposition stems not only from the conclusion at which we have arrived having regard to the nature of the doctrine of precedent in Jersey but also, and more succinctly, from the judgment of the Court of Appeal in Hall v Att. Gen. (1996) JLR 129 at page 148.  Gloster JA stated:

 

“The appellant now contends that Kong Cheuk Kwan, as a decision of the Privy Council is binding upon this Court.  We reject that submission.  The decisions of the Privy Council, in so far as they decide the law of Jersey, are of course binding on all Jersey courts.  But a decision of the Privy Council which decides the law of Hong Kong, New Zealand or any other country is not binding.  Such decisions are persuasive, but the degree of persuasiveness will depend on the similarity of the point of issue between the law of Jerseyand the law of the country from which the appeal is being brought.”

 

 

            We would respectfully add that the degree of persuasiveness may also depend upon social and policy considerations particular to this jurisdiction.

 

            We have found therefore that we are not bound, in the strict sense, by the interpretation of territorial jurisdiction given to the English equivalent of Rule 7(b) by the Privy Council sitting on appeal from Hong Kong in Mercedes-Benz nor by the House of Lords in The Siskina.  That was recognised by Lord Diplock in De Lasala v De Lasala when he stated that as a matter of juristic theory decisions of the Privy Council on appeal from another jurisdiction and of the House of Lords on the interpretation of English statutes adopted in Hong Kong, could only be persuasive in Hong Kong.  But when his Lordship continued that Hong Kong courts would be well advised practically speaking to treat such decisions “as if they were strictly binding” he was, in our judgment, applying the English doctrine of precedent to a colony which had accepted that doctrine as part of its law.  We do not wish to imply that decisions of the House of Lords and of the Judicial Committee of the Privy Council should not always be treated with the greatest respect.  But there may be circumstances, if the point is open in Jersey, where the Court may wish to apply a different interpretation to a statutory provision, assuming that it is grammatically and legally proper to do so, than that which has been adopted in England. 

 

            Prior to Krohn Rule 7(b) had not been the subject of close judicial interpretation by any Jersey court, including the Judicial Committee of the Privy Council.  In England the sub-rule had been interpreted by the House of Lords in The Siskina and by the majority in Mercedes-Benz in one sense, and by Lord Nicholls in Mercedes-Benz in another.  As Professor Matthews pointed out in his article “Still no Black Holes” [1997] 1 JL Review 240 that represented a clear arithmetical advantage for the first interpretation.  But what were the social and policy considerations particular to this jurisdiction?  They were referred to by Le Quesne JA in Solvalub (at page 369 et. seq.) and by this Court in Krohn (at page 201 et. seq.), and it is unnecessary to repeat them here.  Suffice it to state that there were sound reasons of public policy for preferring the second interpretation espoused by Lord Nicholls.  In England too the world has moved on.  Admittedly as the result of statutory intervention, the dissenting judgment of Lord Nicholls has become law.  On the assumption that, as a matter of authority, the point is open, why should the Court maintain a stance which has been discarded in England and which does not accord with the court’s own preferred judicial policy?  Mr. Livingstone, for the plaintiff, submitted that Krohn had been followed in Yachia v Levi, (26th March 1998, Jersey Unreported), and in several other unreported cases.  It would, he contended, create chaos if we were now to reverse our policy.  The position of this Court is that we have a duty to follow Krohn unless we are convinced that that decision was wrong. 

 

            We have already found that the decisions in The Siskina and Mercedes-Benz are not binding upon us.  Despite the able arguments of counsel for the defendant we have not been persuaded that Krohn was wrongly decided.  We accordingly dismiss the fourth summons and affirm the Order of the Greffier Substitute giving leave under Rule 7(b) to serve the Order of Justice upon the defendant outside the jurisdiction.

 

Authorities

Australian Consolidated Press v Uren [1969] 1 AC 590

Noble v Southern Railway [1940] AC 583

In re Harper v National Coal Board [1974] QB 614

Fatuma Binti Mohamed Bin Salem Bakhshuwan v Mohammed Bin Salim Bakhshuwen [1952] AC 1

T A Picot Ltd (CI) v Michel, Crill & Hamon [1995] JLR 33

Hall v Attorney General [1996] JLR 129

Attorney General v Hall [1995] JLR 102

Attorney General v Weston [1979] JJ 141

De Lasala v De Lasala [1979] 2 All ER 1146

In the Matter of Lampaert, De Smet and Celi, [1990] JLR 290

4 Halsbury 26: paras 573-587

Ogden Industries v Lucas [1970] AC 113

Paisner v Goodrich [1955] 2QB 353

Jones v Secretary of State for Social Services [1972] AC 944

Director of Public Prosecutions v Knuller [1973] AC 435

Bennion:  Statutory Interpretation (3^rd Ed’n) pp 13-16, 71-80, 194, 343-379

F.A. Mann, “Foreign Affairs in English Courts” (1986), chapter 7, “Comity”

Dicey & Morris, “The Conflict of Laws” (12^th Ed’n) p.5-6

Mercedes Benz v Leiduck [1995] 3 All ER 929

Naviera S.A. (The Siskina) [1977] 3 All ER, 803

Elliott v C [1983] 1 W.L.R. 939

Paul Matthews “Still no Black Holes:  Krohn GmbH v Varna Shipyard” [1997] Jersey Law Review Volume 1, 240

R.S.C. (1995 Ed’n), Ord 11 r.1(1)

Solvalub Limited v Match Investments Limited, [1996] JLR 361

Krohn GmbH v Varna Shipyard (2), [1997] JLR 194

Yachia v Levi, (26^th March 1998), Jersey Unreported

Qatar v Al-Thani (15^th August, 1996) Jersey Unreported.