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Cite as: 2004 SC 197, 2003 SCLR 894, [2003] ScotCS 209, 2003 GWD 31-855
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Clarke v. Fennoscandia & Ors [2003] ScotCS 209 (23 July 2003)
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OUTER HOUSE, COURT OF SESSION |
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A105/97
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OPINION OF LORD KINGARTH in the cause ROBERT A CLARKE Pursuer; against FENNOSCANDIA LIMITED and OTHERS Defenders:
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Pursuer: Henderson, Q.C., Summers;
Drummond Miller, W.S. (for Hennessy Bowie & Co)
Defenders: Keen, Q.C., Young; Dundas & Wilson
23 July 2003
[1] On 1 February 1991 judgment was given against the pursuer in an action brought by him against Fennoscandia Bank Limited, the former name of Fennoscandia Limited, the defenders. This action was in the United States District Court for the District of Delaware. The pursuer sought to establish that there had been a conspiracy between the defenders and certain businessmen in order to deprive the pursuer of the office of president of a company known as D.R.X. Inc. On 23 March 1992 the pursuer's appeal was refused by the United States Court of Appeals for the Third Circuit. Costs were awarded against the pursuer in both courts. The pursuer then petitioned the Supreme Court of the United States for a Writ of Certiorari to the said Court of Appeals, to review the latter's judgment on the appeal, and made application for a re-hearing. The petition was dismissed on 5 October 1992. Thereafter the pursuer took proceedings to have the judgment against him set aside on the ground that it had been obtained by fraud. This was based on the claim that an executive director and an in-house counsel of the defenders (Messrs Adamson and Hall) had committed perjury at the trial. The Court in Delaware determined that the evidence in support of this claim was not sufficient as a matter of law to establish fraud. As a result the pursuer's challenge was dismissed on 30 December 1994. This decision was affirmed on 24 October 1995 by the Court of Appeals for the Third Circuit. On 18 March 1996 the pursuer's petition to the United States Supreme Court for a Writ of Certiorari to the Court of Appeals to review the latter's judgment was dismissed. [2] In 1993 the defenders sued the pursuer in the District Court City and County of Denver, State of Colorado for sums totalling just under 11 million Canadian dollars. The pursuer relied on the same allegations as in the Delaware action. The Court in Denver decided that since the same issue had been litigated and decided in Delaware, the pursuer was estopped from pleading that defence. Judgment against the pursuer was pronounced on 11 July 1996. [3] In February 1994 the pursuer and another raised an action in the High Court in England seeking inter alia damages for breach of contract and/or misuse of confidential information and/or negligence. On 24 December 1994 on the motion of the defenders, the pursuer's statement of claim was struck out on the basis of issue estoppel, in respect that at its heart lay the same assertions of fact as had been the subject of determination in the action in Delaware. Appeals to a judge of the Queen's Bench Division and to the Court of Appeal (Civil Division) were refused. Costs were awarded against the pursuer. Leave to appeal to the House of Lords was refused. [4] In this action, in which the conclusions and pleadings have been amended from time to time, the pursuer now seeks, in terms of the first and second conclusions, declarators that the costs orders pronounced against him in Delaware and the judgment against him in Colorado respectively are "not enforceable by the defenders in Scotland, the said orders having been obtained through fraud on the Court". He also seeks, in terms of the third and fourth conclusions, interdict against the defenders from "taking any steps in Scotland and elsewhere to enforce the" Colorado judgment and the costs orders pronounced in Delaware respectively. [5] The matter came before me on procedure roll by virtue of an interlocutor pronounced by the Lord Ordinary on 18 April 2002 by which inter alia the case was appointed to the procedure roll "of new". In light of certain arguments advanced before me, in particular, but not only, in relation to what could now competently or properly be debated, it is necessary to refer to certain aspects of the history of the action thus far. [6] In the first place, when the action was raised the pursuer did not seek a declarator or an interdict in relation to the Delaware cost orders. This, it seems, was because the pursuer was already defending an action brought against him in the Court of Session by the defenders for decree conform in respect of those orders. This action was defended on the basis that the orders in question had been obtained by fraud. In that action in due course a proof before answer was allowed by agreement. On 29 May 1998 the present defenders abandoned that action. Since that abandonment was under statute it did not prevent the defenders from re-raising similar proceedings, and by amendment to the present proceedings the pursuer then sought to include conclusions for declarator and interdict in relation to the Delaware cost orders. In the present action, in this connection, he avers inter alia"In an affidavit sworn on 19 June 1998, however, a solicitor acting for the defenders explained that the defenders retained the right to 're-raise' the claim should the need arise. In the whole circumstances hereinbefore condescended on the pursuer is reasonably apprehensive that the defenders will seek to enforce the said orders of the Delaware and Colorado Courts in Scotland by an action of decree conform".
"on their own behalf and on behalf of the company the following irrevocable undertaking to the pursuer and to the court ... that the company and the joint liquidators thereof will not at any time seek to enforce, or take steps which would entitle others to seek to enforce, by action of decree conform in Scotland the orders and judgments referred to in Conclusions 1, 2, 3 and 4 of the present action."
Without making any attempt to amend, the defenders then by motion sought dismissal of the action having regard to the undertaking which had been lodged. On 28 February 2001 this motion was refused. Notwithstanding this refusal, the Court subsequently, on 10 April 2001, on the unopposed motion of the defenders, allowed their Minute of Amendment No 36 of process to be received, and appointed the pursuer to lodge answers thereto if so advised within fourteen days. In this Minute of Amendment the defenders made averments in relation to the undertaking which had been given, averred that the action was no longer necessary and sought on that basis dismissal in terms of a new eleventh plea-in-law. Answers were in due course lodged on behalf of the pursuer and by interlocutor dated 2 May 2001, parties were allowed a certain time to adjust the Minute of Amendment and Answers. Prior to the expiry of the adjustment period, and before the date fixed for the hearing of the reclaiming motion, the Court, on the unopposed motion of the defenders, refused the motion of the defenders for review of the Lord Ordinary's interlocutor dated 10 March 2000.
[10] Thereafter there was substantial adjustment by both parties to the Minute of Amendment and Answers. In the course of this adjustment period the defenders inter alia developed in the pleadings the argument that the Court did not have the competence to pronounce declarators which were (as now appeared) intended to be founded on elsewhere than in Scotland and in ways unrelated to the obtaining of the interdicts sought. These averments were supported by a new twelfth plea-in-law. The pursuer for his part made it plain that he would seek to found on the declarators elsewhere than in Scotland (and averred that the Lord Ordinary had misunderstood the position in the course of the procedure roll) and sought to include, in the interdict conclusions, interdicts against enforcement of the relevant court orders not only in Scotland but also "elsewhere" (although this was only allowed formally in the interlocutor of 18 April 2002). Little or no material change was made to the pursuer's averments in respect of fraud. [11] When the defenders sought to amend in terms of the Minute of Amendment and Answers as adjusted, this motion was opposed on behalf of the pursuer. Amendment, however, was in due course allowed by the Lord Ordinary on 18 April 2002 and on the same day the cause was re-appointed to the procedure roll. As to what precisely took place before the Lord Ordinary there was some disagreement before me, but parties were agreed that (a) the Lord Ordinary indicated that he wished to hear argument at the procedure roll relating to the effect of the undertaking and in respect of the new pleas and (b) that although in the interlocutor he pronounced the defenders were appointed to lodge a note of argument within 28 days the defenders' note of argument was in fact already drafted and was put before him. This note of argument formed the basis at least of the defenders' submissions before me - to which submissions I now turn. [12] In the first place the defenders advanced arguments in support of their new eleventh and twelfth pleas-in-law to which I have already made reference. [13] Having regard to the irrevocable undertaking which had been given, there was, it was submitted, no live prospect of the relevant foreign decrees being enforced in Scotland by action of decree conform. There thus remained no legal basis for the conclusions for interdict insofar as directed to any such action. Equally there was no continuing need for the declarators insofar as thus directed. There was, further, no live prospect of enforcement of the relevant decrees in Scotland by any other means. The contention that the defenders might seek decree conform or its equivalent in France against the pursuer (where it appeared he was resident) and then seek to register it for enforcement in Scotland either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or the Civil Jurisdiction and Judgments Act 1982 was misconceived. As to the 1933 Act, it did not apply to judgments given by a Court "in proceedings founded on a judgment of a court in another country and having as their object the enforcement of that judgment" (section 1(2A)(c) as substituted by the Civil Jurisdiction and Judgments Act 1982 Schedule 10, para 1). A similar result would be achieved under the Civil Jurisdiction and Judgments Act 1982 which gave force to the Brussels and Lugano Conventions. By virtue of Article 28 of those Conventions a judgment would not be recognised in Scotland if it conflicted with the provisions inter alia of section 5 of Title II. In Section 5 of Title II, Article 16(5) provides that in proceedings concerned with the enforcement of judgments, the courts of the Contracting State in which the judgment has been or is to be enforced "shall have exclusive jurisdiction....". As a matter of construction this would cover any action of decree conform or its equivalent (Jenard Report, page 694). In these circumstances a Scots Court would not recognise any decree conform obtained in France. Insofar as the pursuer suggested that the defenders might seek to obtain a decree conform or its equivalent against him in England and seek to register it under the 1982 Act, a similar result would obtain. [14] The declarators on their own could not be said to have any legal effect outside Scotland. Conclusions for declarator in the abstract with no legal consequences were incompetent (McLaren, Court of Session Practice at p. 647). Properly understood the declarators were confined as a matter of language to the question of enforceability of the relevant decrees in Scotland. It was difficult to see in these circumstances how any such declarators could have any effect elsewhere. Article 28 would prevent their recognition in, for example, France, if founded on in proceedings concerned with the enforcement of the foreign decrees in that country. Further, the declarators would not be recognised by virtue of Article 27(5), insofar as they would be irreconcilable with earlier foreign judgments "given in a non-contracting State involving the same cause of action and between the same parties....". If the declarators were read more broadly as general declarators that the foreign decrees had been obtained by fraud (which they were not), the pursuer was in substance and effect seeking to review the decisions of the Delaware and Colorado Courts. This could not competently be done (or, perhaps, put another way, was something which a Scottish Court had no jurisdiction to entertain). Reference was made to Westergaard v Westergaard 1914 SC 977 and Acutt v Acutt 1936 SC 386. Further if that was what the pursuer was seeking it was arguable that the substantive law should be the law of the foreign courts. In his pleadings the pursuer appeared to accept that he could not meet the relevant legal test in the United States. In particular he averred (at page 25A) "The threshold for fraud on the court in the United States is higher than in Scotland, as it must involve an officer of the Court". Although the pursuer averred that should he obtain the declarators sought, his ability to raise finance for business ventures from institutional sources and his ability to regain high level employment in the public company sector would be materially improved, these supposed collateral benefits could not help to answer the question of whether the orders sought could competently be granted. [15] Further, insofar as the interdicts sought included interdicts against enforcement not only in Scotland but "elsewhere", such orders were not competent. Any such interdicts, which would prevent the defenders from enforcing the orders even in Delaware and Colorado, on the basis of allegations of fraud already repelled in those jurisdictions, would be wholly contrary to any notions of comity. Such interdicts would be tantamount to orders reviewing the decisions of those courts. Further, such orders would be unlawful in relation to the courts of contracting state under the Brussels Convention - being orders in effect directing such courts not to exercise the exclusive jurisdiction in relation to enforcement which they have by virtue of Article 16(5). Nor would a Scots Court make an order which it could not enforce. The defenders were not personally present in Scotland, only being convened on the basis of an apprehended wrong in Scotland of which there were now no prospects. Although similarly wide interdicts were pronounced in England in Ellerman Lines v Read 1928 2 KB 144, that case was readily distinguishable. The defendants were personally subject to the jurisdiction of the court and enforcement of the decree in question would ipso facto have been a breach of a contract with which England had some substantial connection. Further, even in England, such an interdict would probably now be regarded as being in breach of Article 16(5) of the Brussels Convention. Reference was made to Collins, The Civil Jurisdiction and Judgments Act 1982, at page 83 where it is said: "Article 16(5) may have the effect of preventing an English Court from enjoining the enforcement of a judgment in the courts of another contracting state" [16] Secondly, the defenders advanced certain arguments challenging the relevance and specification of the pursuer's averments in respect of the alleged fraud. These arguments were advanced under and in terms of plea-in-law 6, in respect of which the Lord Ordinary had previously allowed a proof before answer. The essential basis of the pursuer's case was that two of the defenders' witnesses, Messrs Adamson and Hall, had perjured themselves in the court in Delaware in denying that a non-renewal letter in respect of a loan had been exhibited at a meeting on 28 April 1989 and further that Adamson had also perjured himself in denying that he had met with the pursuer and agreed to renew the loan until 31 December 1989. The critical averments of the pursuer are that "The pursuer believes and avers that their perjured evidence was a result of a collusive scheme agreed prior to the hearing of the Delaware action in which officers of the defenders, namely Adamson and Hall, conspired to give perjured evidence and to mislead the Delaware Court." These averments are supported by claims that the evidence of five witnesses had since come to the attention of the pursuer; witnesses whose evidence would support the credibility of a witness - Mr Webster - who had given evidence contradictory of the defenders' witnesses Adamson and Hall in respect of the exhibiting of the non-renewal letter. These averments were insufficient. In Scotland a party seeking to challenge a judgement on the basis that it had been fraudulently obtained required to aver fraud extrinsic to the proceedings. Averments of perjury were not enough, although averments of subornation of perjury would be. Further it required to be proved that the fraud was not known at the relevant time and could not then with reasonable diligence have been discovered. Reference was made to Lockyer v Ferryman 1876 3R. 882 and 1877 4R HL 32, Miller v Mac Fisheries Limited 1922 S.C. 157, McCarroll v McKinstery 1926 S.C. H.L. 1, Phosphate Sewage Company v Lawson 1878 5R. 1125 and 1879 6R. H.L. 113, and McIntosh's Trustees v Stewart's Trustees 1906 8F. 467. Although it appeared that less stringent tests were applied at common law in England in respect of foreign judgements (reference being made to Owens Bank v Bracco 1992 2 A.C. 443 and Owens Bank v Etoile Commerciale 1995 1 W.L.R. 44) the position, based on a decision in 1882, namely Abouloff v Oppenheimer & Co 1882 10 QB 295, was now accepted only with apparent reluctance in England, and there was no reason to suppose that the position was the same in Scotland. It was not accepted in Canada or Australia. The pursuer's reference to a collusive agreement might arguably be said to refer to an extrinsic fraud equivalent to subornation of perjury, but there was no sufficient specification of the basis on which the pursuer sought to draw the relevant inference. If it stemmed simply from the fact that the two relevant witnesses gave the same evidence, there was nothing to suggest that that could not have been known at the time. The evidence of the new witnesses did not appear to bear on the critical question of collusion, nor were there any sufficient averments to indicate why the evidence of these witnesses could not reasonably have been discovered earlier. [17] On the question of whether it was open to the Court to hear all these arguments notwithstanding the previous history of the case, counsel for the defenders submitted that it was. The arguments which flowed from the lodging of the irrevocable undertaking were not arguments which had been advanced before. Having regard to the interlocutors of 10 April 2001 and 18 April 2002 it could not be said that the interlocutor of 28 February 2001 was final. As to the rest, a decision to allow a proof before answer was final was in respect of the pleadings as they then stood. After amendment a case could always be sent to the procedure roll. Reference was made to Bendex v James Donaldson & Sons Limited 1990 S.C. 259. The interlocutor of 18 April 2002 allowed a procedure roll of new, without qualification. It would be impracticable to restrict argument to new averments only. The pursuer should have sought to restrict the debate on 18 April 2002. It was now too late to seek to do so. Reference was made to Galbraith's Curator ad Litem v Stewart 1997 S.L.T. 418. Arguments based on alleged waiver were inappropriate in this context, in particular given the power of the Court to allow amendment. [18] On behalf of the pursuer counsel submitted at the outset that the Court should not hear any of the defenders' arguments, save those directed to the inclusion of the words "and elsewhere" in the two interdict conclusions. It was, in particular, forcefully submitted that I should not hear further argument on the question of the relevance and specification of the pursuer's averments in respect of fraud. The pursuer's pleadings on this matter had barely changed since the case was last on procedure roll, the only relevant change being a reference to two further witnesses who could support the credibility of Mr Webster. Similar (albeit not identical) arguments had been presented by the defenders to the Lord Ordinary in the first procedure roll. He had adjudicated on these arguments and had allowed a proof before answer. His interlocutor in that respect was final, under and in terms of Section 18 of the Court of Session Act 1988. The defenders had then sought, as was clear from their grounds of appeal, to reclaim the Lord Ordinary's interlocutor in this respect, but by enrolling to have the reclaiming motion refused could be said to have waived their right to any further challenge. In any event the Lord Ordinary, on 18 April 2002, had not directed his mind to the precise scope of the debate which he allowed. The Court should exercise its discretion to refuse to entertain arguments which were or could have been made before the Lord Ordinary in the first procedure roll. There should be no question of two competing decisions and no prospect of any further reclaiming motion in respect of the same matter. The cases referred to by the defenders were both distinguishable. [19] In addition it was argued that even the arguments said to arise from the giving of the irrevocable undertaking should not be heard. The defender's motion to dismiss the action on the basis of Minute number 35 of process had been dismissed in the Inner House on 28 February 2001. That interlocutor was final in terms of Section 39 of the Court of Session Act 1988. In any event the defenders could be said to have waived their right to argue these matters, having invited the Court to refuse the reclaiming motion before the amendment procedure was complete. Further, in the exercise of its discretion, the Court should refuse to hear these arguments too. [20] Further the defenders' arguments based upon the granting of the irrevocable undertaking were misconceived. The undertaking was not accepted by the pursuer. He had an absolute right to continue these proceedings to interdict, notwithstanding the undertaking. Reference was made to Burn Murdoch on Interdict and in particular to page 103 where, under reference to Smith & Wellstood v Carron Co 1896 3 S.L.T. 223 it was said that "The Court will not accept an undertaking by the defender at this final stage." In any event the undertaking only related to potential actions of decree conform. The relevant foreign decrees could be enforced in Scotland in other ways in which the question of fraud would be relevant. In particular the defenders could, it was argued, seek a decree conform or its equivalent in France against the pursuer based on his residence there and seek to register it in Scotland for enforcement either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or the Civil Jurisdiction and Judgments Act 1982. In terms of Section 4(1)(a)(iv) of the 1933 Act the registering Court could set aside any registration on the basis that the judgment was obtained by fraud. Although there was no equivalent provision in the 1982 Act there was nonetheless a defence of public policy. As was stated in Dicey & Morris on The Conflict of Laws (13th Edition) at paragraph 14.135 "In continental Europe fraud in this context generally falls within the exception of public policy". Further reference was made to Societe D'Informatique Service Realisation Organisation (S.I.S.R.I.O.) v Ampersand Software B.V. & others 1994 I.L.Pr. 55. The defenders' reading of Article 16(5) was too wide. Properly construed it related only to proceedings arising from recourse to diligence. Reference was made to the same passage in the Jenard Report, at page 694, as was referred to by defenders' counsel. Alternatively, it was submitted, in the final speech, that the defenders could seek to have the pursuer rendered bankrupt in England and on that basis establish his apparent insolvency for the purposes of sequestration in Scotland under Section 5(2)(b) and Section 7(1)(a) of the Bankruptcy (Scotland) Act 1985. [21] In any event the declarators sought - which related purely to the enforceability of the foreign decrees in Scotland and did not purport to seek general review of those decrees - could be of some effect outside Scotland. In particular they could be registered in France under the 1982 Act and given recognition there in any proceedings for enforcement brought there by the defenders. Article 27(5) would not be in point - in particular the cause of action in Delaware being different. Moreover, should the pursuer prove his averments, it was probable that the issue estoppel which had hitherto frustrated his action for damages in England would no longer be an obstacle. In any event, as the pursuer averred on pages 39 and 40, should he obtain the declarators sought in this action his ability to raise finance for business ventures from institutional sources and his ability to regain high level employment in the public company sector would be materially improved. [22] As regards the proposed interdicts against enforcement "elsewhere", it was clear that such interdicts could be pronounced in England. Reference was made to Ellerman Lines v Read, which could not readily be distinguished. [23] Insofar as the defenders sought to articulate any of their arguments on the basis of no jurisdiction this was now not open to them, jurisdiction having been established at the outset. In the original summons jurisdiction was founded on an apprehended wrong in Scotland and the defenders had submitted to that jurisdiction. It was, as the Lord Ordinary had previously decided, now too late to suggest otherwise. Reference was made to Article 18 of the Brussells Convention and to Elefanten Schuh GmbH v Pierre Jacqmain 1981 ECR 1671. [24] If it was necessary to argue the matter again the pursuer had made sufficiently specific and relevant averments in relation to fraud. The authorities relied on by the defenders as indicating certain strict tests applied only in the case of Scottish decrees. It was enough when a foreign judgement was being impugned to aver perjury. This was the case at common law in England, following in particular the case of Abouloff v Oppenheimer & Co, all as discussed in Owens Bank Limited v Bracco. It is stated in Greens Encyclopaedia of the Laws of Scotland, Volume 8 at paragraph 924 that "Fraud in the sense of misrepresentation used deliberately, inducing the foreign Court to grant the decree, is always a relevant objection to its enforcement", and reference is made to Abouloff in the footnotes. Although counsel referred to Bain v Shand 1833 11F 688, Boe v Anderson 1857 20 D 11, Gladstone &c v Lindsay 1868 6 S.L.R. 71 and to the Stair Memorial Encyclopaedia, Volume 8 at paragraph 406, it was accepted that there was no Scottish authority directly in point. The case of Maltman v Tarmac Civil Engineering Limited 1967 177 suggested that the tests for impugning even a Scottish decree were perhaps less strict than contended for by the defenders. In any event the pursuer had averred enough in seeking to prove "collusion", and he offered to prove that the evidence of the new witnesses was evidence which he could not with reasonable diligence have discovered and placed before the Delaware Court. [25] The first question is whether the Court should consider all the arguments which the defenders wished to advance. [26] I have come to the clear view that I should not consider the arguments which the defenders sought to advance in respect of the relevance and specification of the pursuer's averments of fraud. This is not because I regard it as incompetent for me to do so, the interlocutor of 10 March 2000 being regarded as final. It seems clear that such an interlocutor would only fall to be regarded as final in respect of the pleadings as they were at that stage (Bendex v James Donaldson & Sons Limited and cases cited therein). Nor, although not without considerable hesitation, do I think it would be right to refuse to hear the arguments on the basis of waiver, given in particular the amendment process which was underway at the time the reclaiming motion was refused. Rather, I think it would not be right to hear these arguments in the exercise of my discretion. Given the history of the case and the fact (which was not disputed) that the pursuer's averments on this matter remain in all essential respects unchanged, there are strong equitable arguments, based on the desirability of achieving finality, against allowing the defenders to advance again broadly the same submissions (albeit no doubt backed with different authority and presented with different emphasis) as appears were advanced before. It seems to me that it would be quite wrong to allow the defenders to achieve a situation in which a different view could be reached by a different Lord Ordinary in circumstances where they effectively abandoned their reclaiming motion against the first decision, or even a situation in which the same view could be reached by a different Lord Ordinary but capable of further potential reclaiming procedures. As I understood it, the position of defenders' counsel was not that the Court had no discretion in this matter but that it had already been exercised by the Lord Ordinary on 18 April 2002 (when the case was sent to procedure roll of new), or at least that the pursuer should have raised the matter then and that it was now too late to do so. As to the first of these points, it seems clear that the Court's discretion on this matter was not then exercised. Although the defenders' draft grounds of appeal were before the Lord Ordinary, these, it seems, were not the subject of detailed discussion (or, I was informed, of detailed consideration by pursuer's counsel). Rather the focus of debate appears to have been or whether the amendment and any new procedure roll should have been allowed at all. This is, perhaps, confirmed by the fact that in the interlocutor of that date the defenders were appointed "to lodge a Note of Argument within 28 days of today". Further, it appears from the Lord Ordinary's reported remarks that he may only have contemplated argument arising from the lodging of the irrevocable undertaking. More difficult, in light of Galbraith's Curator ad Litem v Stewart, is whether it can be said that counsel for the pursuer should have moved the Lord Ordinary then to restrict the scope of the procedure roll. Given the history of this case, however, I do not think it unreasonable for counsel to have thought it appropriate to focus on the question of whether the amendment or a further procedure roll should be allowed at all, leaving the question of possible restriction of argument to a time after the formal lodging of the defenders' proposed note of argument. The present case can in these circumstances be distinguished from Galbraith's Curator ad Litem, where inter alia there had been no previous adjudication on particular arguments. It is not clear in any event that Lord Osborne was there seeking to lay down any rule of universal application. If he was, then with that view I would respectfully disagree. [27] In these circumstances I do not think it appropriate to indicate what decision I would have reached on the arguments advanced on behalf of the defenders. I have, however, thought it right to record, above, reasonably fully, what these arguments were; arguments which - as the pursuer now has notice (if he did not before) - would be likely to feature strongly at the end of any proof before answer of the present averments. [28] I turn now to deal with the arguments which can be said to arise from the lodging of the irrevocable undertaking. [29] Again a preliminary point arises as to whether the Court should consider these arguments at all. In this case however I see no reason not to consider them fully. Although a motion for dismissal based on the fact that the undertaking had been lodged was refused, this was at a time when the defenders' pleadings made no reference to it, and it is clear that a short time later the Inner House allowed the matter to be raised when the relative Minute of Amendment was - without any opposition - allowed to be received, and further that the Lord Ordinary on 18 April 2002, allowed the matter to be introduced fully into the pleadings, notwithstanding opposition, when the Minute of Amendment was allowed, including the new pleas-in-law numbers 11 and 12. Moreover it seems clear that on the same date when he allowed a procedure roll of new he anticipated that arguments would be advanced in relation to the undertaking and its effects. Although it appears consideration was given by the pursuer to reclaiming the Lord Ordinary's interlocutor of 18 April 2002 he did not do so. That interlocutor must be regarded as final. [30] Turning to the merits of the matter, the first question is whether the lodging of the undertaking could be said to have made any difference to what counsel for the pursuer described as his right to interdict. I consider that it does make a significant difference. The undertaking has been given not only to the pursuer but to the Court. Although, as I was informed, the pursuer himself did not accept it, it was not suggested that this was because he did not accept that the defenders would not seek to enforce the relevant decrees by action of decree conform. Rather it was because, as I understood it, he wished to retain the chance to "clear his name". Be that as it may, the undertaking having been given irrevocably to the Court, that would effectively bar any attempt by the defenders to bring an action of decree conform. In these circumstances the pursuer cannot be said, in my view, to have any reasonable apprehension of that happening, such as would entitle him to interdict against the defenders taking that step. The case of Smith & Wellstood v Carron Co referred to in Burn Murdoch does not, it respectfully seems to me, vouch the general proposition which appears to be taken from it. Rather it is an example of a case where the Court plainly entertained substantial doubt in the circumstances of that case, as to whether the undertaking which the defenders sought to give could afford the same protection which the pursuer would obtain by way of interdict. In particular there was a history of the defenders seeking to take advantage of the pursuer's rights and the undertaking which they sought to give was in terms restricted to fewer matters than were covered by the interdict which the Court pronounced. In this case, where the circumstances are very different, I consider the defenders are right to argue that the lodging of the irrevocable undertaking has effectively rendered the conclusions for interdict (and the declarators apparently underlying the pursuer's right to seek interdict) unnecessary in so far as directed to potential actions of decree conform. Put another way, I consider there are no relevant averments to support the pursuer's basic averment at page 38B that he "is reasonably apprehensive that the defenders will seek to enforce the said orders of the Delaware and Colorado Courts in Scotland by an action of decree conform". [31] Leaving aside for the moment the question of the competence of the pursuer seeking interdict against enforcement "elsewhere", could there nevertheless still be said to be a reasonable apprehension of enforcement of the decrees by the defenders in Scotland by other means (and means capable of being the subject of interdict, and of declarator as to their unenforceability in Scotland, on the basis that the decrees were obtained by fraud)? I have come to the view that there could not. Notwithstanding that at the time of the last debate an undertaking was given that a Minute of Amendment would be lodged showing that the conclusions were directed only against potential actions of decree conform, the primary suggestion now made by the pursuer in argument (and in the pleadings) is that the defenders could seek an order of the nature of a decree conform against him in France, where, it is accepted in the pleadings, he has a home and business interests and then seek to register the French decree and enforce it in Scotland under and in terms of either the Foreign Judgments (Reciprocal Enforcement) Act 1933 or the Civil Jurisdiction and Judgments Act 1982. As to the 1933 Act, it is at least clear in the pursuer's favour that if such a French decree could be registered, it would be possible for the registering Court to set aside that registration on the basis that the judgment was obtained by fraud (Section 4(1)(a)(iv)). It seems clear, however, that any French decree of the type envisaged could not be registered under the Act. By virtue of Section 1(2A) it is provided in effect that the Act's provisions do not apply to "a judgment given ..... in proceedings founded on a judgment of a court in another country and having as their object the enforcement of that judgment". This provision, added by the Civil Jurisdiction and Judgments Act 1982, Schedule 10, Paragraph 1, was no doubt added, as many commentators have concluded, to avoid the "laundering" of judgments obtained in countries to which the 1933 Act did not apply - ie. to prevent a party from obtaining a decree conform in respect of a "foreign" judgment in a country to which the Act did apply and thereafter seeking enforcement by formal registration procedures under the Act in a country or countries which would not themselves otherwise contemplate the recognition of the "foreign" judgment in question (see eg. Elizabeth B. Crawford International Private Law in Scotland, paragraph 19.26, footnote 19). This, I did not understand, ultimately to be disputed by counsel for the pursuer. [32] The same result would, I consider, obtain under the 1982 Act. That Act inter alia gave force and effect in the United Kingdom to the Brussels and Lugano Conventions. By virtue of Article 25 the Conventions were to apply to "any judgment given by a Court or tribunal of a Contracting State ..." As authoritatively interpreted in the Court of Justice of the European Communities, this would not, it seems, include so-called "judgments on judgments" obtained in non-contracting states, and would thus not include any decree conform or its equivalent pronounced in France in respect of the decrees originally obtained in the United States. In particular, at a later stage in Owens Bank v Bracco, to which I was referred, this particular matter was the subject of a reference by the House of Lords to the European Court of Justice. In its judgement (reported at Owens Bank Limited v Bracco &c 1994 Q.C. 509) the Court made it plain (at para. 25), having considered inter alia Articles 25, 26 and 31, that "The conclusion must therefore be that the Convention does not apply to proceedings for the enforcement of judgments given in civil and commercial matters in non-contracting states." The Court further rejected an argument that any distinction could be made between an order for enforcement simpliciter and a decision of a court of a contracting state on an issue arising in proceedings to enforce a judgment given in a non-contracting state, such as the question whether the judgment in question was obtained by fraud. The effect of this decision is plainly recognised in Dicey & Morris Conflict of Laws 13th Ed. (to which I was referred with approval by both parties) at paragraph 14-186, and in the second supplement at paragraph S14-188, and elsewhere. It is stated, for example, in Cheshire & North's Private International Law, (Thirteenth Edition) page 484,"A Court order in one Contracting State for the enforcement of a judgment given in another State, whether a Contracting or non-contracting State, falls outside title III of the Convention. To decide otherwise would mean, in effect, that a Court in Contracting State A would have to recognise a judgment given in a non-contracting state (X) simply because a Court in Contracting State B had recognised the judgment given in State X and had granted an enforcement order in respect of it. This would be contrary to one of the basic principals of the Convention; the Convention is only concerned with recognition of judgments given in Contracting States and is not intended to affect the recognition of judgments given in non-contracting states".
In these circumstances it is, I think, unnecessary to decide the dispute between the parties as to the scope of Article 16(5). As to that, however, there must, it seems to me, be at least a doubt as to whether the Article would be as widely interpreted as contended for by the defenders (see eg. the Opinion of the Advocate General in Owens Bank Limited v Bracco at paragraph 39 (page 530) and the passage on page 563 of the Jenard Report to which I was referred, although c.f. the second footnote to the latter passage.) Nor is it clear, I consider, even with a wide interpretation of Article 16(5), that the first paragraph of Article 28 could be invoked to prevent the recognition in Scotland of the envisaged French decree which, ex hypothesi, that court had jurisdiction to pronounce. Article 28 is not on the face of it concerned with the use which might be made of decisions for which there was such original jurisdiction. However, as indicated above, the broad contention for the defenders is, it seems to me, unanswerable by virtue of Article 25.
[33] Even if I am wrong on this, and the envisaged French decree could be recognised and registered in Scotland under the 1982 Act, there is nevertheless (unlike under the 1933 Act) no express right given to the registering Court to refuse recognition on the basis that the original decree was obtained by fraud. Although it was suggested by pursuer's counsel that such registration could be refused on the basis that do so would be contrary to public policy, if the question of fraud could be raised against the relevant decrees both in the United States and in France (and it was not suggested that it could not) there would it seems be no basis upon which the Scottish Court could refuse recognition of the French decree as being contrary to public policy. As is said later on in the passage in Dicey & Morris at paragraph 14-135 to which I was referred, "But if means of redress against the alleged fraud were available in the country of judgment, it would not be contrary to English public policy to recognise and register a judgement which was subject to those means of redress". That being so, it is difficult to see how the pursuer could competently seek interdict against a course of action expressly authorised by the 1982 Act (or pronounce declarators apparently denying that right). For the same reasons the original declarator which the pursuer sought against enforcement of the English costs order was refused in the Inner House. [34] An alternative method of enforcement in Scotland suggested (although with less apparent conviction given uncertainties as to whether the defenders could establish jurisdiction against the pursuer) was that the defenders might obtain a decree conform or its equivalent in England and seek to register that under the 1982 Act. No indication, however, is given in the pleadings, nor was any submitted in argument, as to how the defenders would establish jurisdiction against him in England in the first place. Further, any such decree of the English Court would, it seems, be governed by Part II of the 1982 Act and not by Part 1. In terms of Section 18, which deals with the "enforcement of UK judgments in other parts of UK", a judgment means inter alia: "(a) any judgment or order (by whatever name called) given or made by a Court of law in the United Kingdom". Although this matter was not addressed by counsel (or in any authority to which I have been referred or of which I am aware) there must, I consider, be a real question as to whether (by parity of reasoning with the approach of the European Court of Justice) a decree conform pronounced in England in respect of a foreign judgment would fall to be regarded for the purposes of Section 18 as a judgment given or made by the English Court (as opposed to being a "judgment on a judgment" of a foreign Court). The view of Dicey & Morris, for example, would appear to be that any such judgment on a judgment would not be covered (see paragraph 14-232). Be that as it may, there is no reason, in my view, to suppose that a Scots Court could competently interdict steps for enforcement which the defenders would ex hypothesi be entitled to take by statute (or to pronounce declarators seeking to deny that right). The same would apply, as the defenders (afforded a right of reply on this point) argued, to the only other suggestion made, (albeit late on in the debate) namely that the defenders might seek to sequestrate the pursuer in England on the basis of an English decree and then to sequestrate him in Scotland under and by virtue of the provisions of the Bankruptcy (Scotland) Act 1985. As to that there must too be some doubt, in my view, as to whether the proposed course of action would properly be regarded as a means of enforcement of the foreign decrees (although this was not a position which, as I understood it, counsel for the defenders sought to take). [35] Still for the moment leaving aside the competence of the pursuer seeking interdict against enforcement "elsewhere", the question remains as to whether bare declarators could nevertheless be pronounced even if there was no basis for pronouncing interdict against enforcement in Scotland. Parties were agreed, under reference to McLaren on Court of Session Practice, page 647, that actions of declarator in the abstract with no legal consequences were incompetent. Nothing was said, in the circumstances of this case, which persuades me that bare declarators of the kind sought could be said to have such consequences. Counsel for the pursuer appeared to accept that the language of the declarators was restricted to the question of the enforceability of the United States decrees in Scotland and that he was not seeking in substance any general review of those decrees. If he had been there would, in my view, be no answer to the defenders' argument based on the principles referred to in cases such as Westergaard v Westergaard and Acutt v Acutt (and also perhaps to the argument based on the question of proper law). It was nevertheless argued that the declarators could be registered in France under the 1982 Act and used to support the pursuer's position if the defenders sought decree conform in France. As to that, in the first place, given that the declarators sought are restricted as a matter of language to the question of enforceability in Scotland, it is difficult to see how they could be thought to be of assistance in France. Further, although I agree with counsel for the pursuer's submission that Article 27(5) would not prevent recognition in France, given the different nature of the action in Delaware, there is no reason to suppose that the declarators would or could be recognised and registered in France under the 1982 Act, being in the nature of judgments on judgments. Although it was argued that the declarators could assist the pursuer in any further damages action which he might bring in England, there is similarly reason to doubt that such judgments on judgments could be registered in England under the 1982 Act. In addition no clear argument was advanced as to how such declarators could assist where the English Courts have already decided against the pursuer (over eight years ago) on a full consideration of the history of the litigations in the United States and where, as the pursuer accepts in the pleadings, Hobhouse L.J., with whom the other members of the Court agreed, concluded that the evidence relied on (including new material said to bolster Mr Webster's credibility) did not begin to show that Hall and Adamson had committed perjury. In any event it is difficult to accept that any potential advantage which the pursuer might possibly gain in any further action of damages which might possibly be brought in England at some possible future date would be regarded as a sufficiently direct consequence to render competent of itself the declarators sought. A number of averments (and submissions) were also made to the effect, broadly, that should the pursuer obtain the declarators sought in this action, his ability to raise finance for business ventures from institutional sources and his ability to gain high level employment in the public company sector was materially improved. The fact that the pursuer might obtain such ancillary benefits would not, in my view, make the declarators competent. If so, then no doubt it could be argued that it would be competent for him to seek declarators which in substance sought reduce or set aside the United States decisions, from which outcome these hoped for ancillary benefits would most likely flow. That is something, however, which the pursuer accepts he cannot competently do. It is moreover, not at all clear how these ancillary benefits would flow from the narrow terms of the declarators sought - restricted as they are to the question of enforceability in Scotland. [36] This leaves finally the question of the competence of the interdicts which the pursuer now seeks against the defenders enforcing the relevant judgments not merely in Scotland but also "elsewhere". It is not clear from the pleadings upon what legal basis such broad interdicts are now sought. The declaratory conclusions, which might be thought to be the foundation for the interdicts, only refer to the question of enforceability in Scotland. Counsel for the pursuer, however, nevertheless founded strongly upon the case of Ellerman Lines v Read. In that case, however, the defendant, over whom the Court had personal jurisdiction as a naturalised British subject, had obtained a decree in Turkey not merely by fraud but in direct breach of a contract made in standard form approved and published by the Committee of Lloyds. These factors were plainly critical to the decision in the Court of Appeal. In particular, as Scrutton L.J. said at page 151:"Here we have an English contract, considerable portions of which were to be formed in England, entered into by a naturalised British subject; a naturalised British subject is proved to have broken that contract and by fraud obtained a foreign judgement which he proposes to enforce against the property of the other contracting party ... In such a case, as I understand the decisions, the English Courts have always professed, and asserted, their power to act."
It was further emphasised by him, and by Atkin L.J. more than once, that important to the decision was the fact that the defendant was a person within the jurisdiction of the English Court. It seems plain to me that the facts of the present case are readily distinguishable. Jurisdiction was sought and obtained (and is apparently maintained) against the defenders on the basis of an apprehended wrong in Scotland for which apprehension there is, as I have found, now no basis. The defenders are otherwise not subject to the jurisdiction of the Scottish Courts. For them to enforce the relevant decrees would not be in breach of any contract, far less one with which Scotland had any intimate connection. Absent any clear Scots authority relevant to circumstances such as the present, the question of the competence of what the pursuer seeks appears to be at large. I emphasise the particular circumstances of this case, because it seems clear that there may be circumstances in which a Scots Court would be prepared to interdict the taking of court action abroad, for example where the defenders were subject to the Scottish jurisdiction of the Scottish Court and the subject matter of the proposed action had a close connection with Scotland eg. Shell (UK) Exploration & Production v Innes 1995 S.L.T. 807.
[37] I have come to the clear view that in the circumstances of the present case the interdicts sought against enforcement "elsewhere" could not competently be pronounced. The interdicts would have the effect of preventing the defenders from seeking to enforce the relevant decrees even in the United States where they were obtained. As defenders' counsel argued, this, in my view, would represent a gross interference with principles of comity and indeed would be tantamount to the court pronouncing orders which in substance sought to review or set aside the foreign decrees themselves. In addition, not only is it by no means clear that such interdicts could or would be recognised in any country which was party to the Brussels Convention, being (when taken along with the latter part of the declarators sought, which appears to be the underlying legal justification) in the nature of "judgments on judgments", but also it is strongly arguable that they would in any event be orders, in relation to such countries, which the Scottish Courts would have no jurisdiction to make by virtue of Article 16(5) of the Convention, however it is interpreted. It is to be noted that Collins, in the Civil Jurisdiction and Judgments Act 1982, observes at page 83 that Article 16(5) "may have the effect of preventing an English Court from enjoining the enforcement of a judgment in the Courts of another Contracting State". Nor, in addition, are the interdicts sought against enforcement "elsewhere" interdicts which the Scots Court itself could enforce, not having personal jurisdiction against the defenders. [38] For the avoidance of doubt, I find against the pursuer on this last matter on the basis both of competence and lack of jurisdiction. At the end of the day, none of the other arguments presented which could arguably have been presented as matter of competence or jurisdiction were, it seemed to me, strongly pressed on the basis of lack of jurisdiction. As to lack of jurisdiction in respect of the interdicts sought against enforcement "elsewhere", I see no reason (and nothing in Article 18 or Elefanten Schuh v Jacqmain) why the defenders cannot plead no jurisdiction in relation to entirely new conclusions recently added by amendment. It is to be noted that not only was jurisdiction originally claimed against the defenders on the basis of an apprehended wrong in Scotland, but it still is (p 7AB of the Closed Record (as amended)). [39] In all the circumstances I shall sustain the defenders' eleventh and twelfth pleas-in-law and dismiss the action.