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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Clarke v. Fennoscandia Ltd & Ors [2004] ScotCS 257 (02 December 2004)
URL: http://www.bailii.org/scot/cases/ScotCS/2004/257.html
Cite as: 2005 SCLR 322, 2005 SLT 511, 2005 GWD 13-217, [2004] ScotCS 257
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Clarke v. Fennoscandia Ltd & Ors [2004] ScotCS 257 (02 December 2004)
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SECOND DIVISION, INNER HOUSE, COURT OF SESSION A2149/01 |
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Lord Justice Clerk Lord Clarke Lord Menzies |
OPINION OF THE LORD JUSTICE CLERK in RECLAIMING MOTION by ROBERT A CLARKE Pursuer and Reclaimer; against FENNOSCANDIA LIMITED, SIMON VINCENT FREAKLEY and IAN PETER PHILLIPS Defenders and Respondents; _______ |
Pursuer and Reclaimer: J J Mitchell QC, D O'Carroll; Anderson Strathern WS
Defenders and Respondents: Keen QC, Young; Dundas & Wilson CS
2 December 2004
[1] I agree with the Opinion that is to be delivered by Lord Clarke. I propose that we should refuse the reclaiming motion. [2] This is only the latest stage in nearly fifteen years of litigations, in all of which the pursuer has failed. These litigations have their origin in the removal of the pursuer from the offices of Chairman, Chief Executive Officer and President of DRX Inc (DRX) on 5 December 1989. The pursuer has alleged ever since that he was removed from those offices as a result of a conspiracy by the defenders and others. Having failed to prove the alleged conspiracy at a trial of that issue, he alleges that he failed because of a fraud on the court committed by the defenders and others by means of perjured evidence. [3] Counsel for the pursuer, who was not previously involved in this action, has said all that could reasonably be said in support of the reclaiming motion; but in my opinion his primary submission has a basic flaw, namely that it is in substance an attempt to have this court review competent judgments of the courts of Delaware and Colorado. On that view, his case fails in limine. [4] In Westergaard v Westergaard (1914 SC 977) it was established that the Scottish courts will respect, and if need be enforce, decrees competently granted by courts of other jurisdictions, and that they have no jurisdiction to review such decrees (ibid, Lord Justice Clerk Macdonald at p 980). That decision has stood for 90 years and counsel for the pursuer has given us no reason to doubt its soundness. It sets out a cogent legal principle that has been adopted in modern times in the 1968 Brussels Convention (art 29), to which the Civil Jurisdiction and Judgments Act 1982 gives effect. There is no suggestion in this case that the courts of Delaware and Colorado were not competent to grant the orders of which the puruser complains. In my opinion, the principle in Westergaard v Westergaard (supra) is a sufficient basis for the refusal of the reclaiming motion. [5] In any event, I consider that the declarators sought serve no legal purpose. The declarators were concluded for as a foundation for the granting of interdicts to prevent the enforcement of the Delaware and Colorado orders in Scotland. If the action had any merit when it was raised, it became pointless in early 2001 when the defenders formally and irrevocably undertook not to seek to enforce those orders in Scotland. [6] The pursuer's response to that was an amendment in April 2002 by which he widened the scope of the interdicts sought to cover enforcement of the orders in Scotland "and elsewhere." That only made the case worse, in my view. [7] At the hearing before us counsel for the pursuer was granted leave to delete the words "and elsewhere." With matters now back to square one, counsel for the pursuer accepted that there was no longer any basis on which this court could properly grant the interdicts sought. It follows from that, as counsel for the pursuer also accepted, that the declarators, if granted, would have no legal consequences of any kind within this jurisdiction (cf Maclaren, Court of Session Practice, pp 638, 647; Sime v J & A D Grimond Ltd, 1920 1 SLT 270). That consideration too is fatal to the action. [8] Counsel for the pursuer submitted that the declarators might nonetheless be of significant practical value to the pursuer since they might assist him in pursuing further proceedings in England; or in defending any proceedings that the defenders might bring against him in other jurisdictions such as France, where he now lives; or might assist him in raising finance for business projects or in obtaining high level employment. I agree with the Lord Ordinary (at para [35]) that that submission has no merit. It is not the business of this court to grant a declaratory decree merely to further the ulterior purposes of the party who seeks it. [9] For these reasons I agree that the reclaiming motion should be refused. [10] If we look at this case in its wider setting, a question arises that was referred to by counsel for the respondent, namely whether the pursuit of this action has constituted an abuse of process. So far the pursuer, personally or through Alexandra Mining (Bermuda) Limited (AMC), a company controlled by him, has raised or defended eight actions in five jurisdictions, his case in each being based in one way or another on his allegations of conspiracy and fraud. Two of these actions were abandoned and can be disregarded. Five of them were litigated in other jurisdictions and in all of them the pursuer failed completely. [11] The action referred to in Conclusion 1 (Clarke v DRX Inc, No 90-161-JJF (the first Delaware action)) is the fateful action. It was founded on the allegation of the conspiracy to which I have referred. It is the only action to have gone to trial. Two of the principal witnesses were the pursuer and a former director of DRX, Peter Webster, whom the pursuer had dismissed and who had come on hard times. The trial judge rejected the pursuer's credibility on all material points. He found that the pursuer had given Webster a financial stake in the litigation and had paid him a substantial sum for his testimony. He held that Webster was not a credible witness. He also found that the pursuer had failed in his duty of candour during the process of discovery and during all stages of the trial. The pursuer appealed unsuccessfully to the United States Court of Appeals for the Third Circuit and to the Supreme Court and costs were awarded against him. [12] In January 1994 the defenders raised the action referred to in Conclusion 2 (Fennoscandia Ltd v Alexandra Mining Co (Bermuda) Ltd and Clarke, No 93-CV-4297 (the Colorado action)). They sought to recover a loan made to AMC and to enforce a guarantee given by the pursuer. In defence, the pursuer raised issues that had been decided against him in Delaware. The court dismissed the defence on the ground of issue estoppel, pronounced summary judgment and assessed the sum due at Can $10,675,519.79. The pursuer appealed unsuccessfully against that decision. [13] In February 1994 the pursuer raised an action against the defenders in the High Court in London in the names of himself and his alter ego, Alexandra Claims Trust. The writ claimed inter alia declarations of the non-liability of AMC and himself under the loan and the guarantee that were the subject of the Colorado action. His case was again based on claims that had been rejected in the first Delaware action. Master Turner struck out the material allegations, holding in his Note dated 5 January 1995 that they were "clearly vexatious, frivolous and an abuse of the process of the court." Mr Roger Titheridge QC, sitting as a Deputy Judge of the High Court, dismissed the pursuer's appeal against the Master's decision. He commented that it was a "clear case for the exercise of the court's discretion to strike out proceedings as an abuse of the process of the court" (Alexandra Claims Trust and Clarke v Fennoscandia Ltd, unrepd, 24 February 1995, at p 9). The Court of Appeal dismissed the pursuer's appeal with costs and refused leave to appeal to the House of Lords (Alexandra Claims Trust and Clarke v Fennoscandia Ltd, unrepd, 17 May 1996). [14] In May 1994 the pursuer raised an action in New York in which he sought to have the judgment in the Delaware action set aside on the ground that it had been obtained by fraud. The New York court transferred the case to the Delaware court on the view that it was a collateral attack on the judgment entered in that court. The Delaware court gave judgment against the pursuer (Clarke v Hall and Others, No 94-185-JJF) The pursuer again appealed unsuccessfully to the United States Circuit Court of Appeals for the Third Circuit and to the Supreme Court. The Court of Appeals commented that the case was "unmeritorious" and "vexatious" (cf Alexandra Claims Trust and Clarke v Fennoscandia Ltd, supra, Hobhouse LJ at p 16) [15] In February 1996 the pursuer raised a further action against the defenders in the High Court in London, again on the same issues. On 18 January 1999 the Court of Appeal held that the action constituted an abuse of process, dismissed it with costs and refused leave to appeal to the House of Lords (Fennoscandia Ltd v Clarke, [1999] EWCA Civ 591). [16] The present action is based on the allegations of conspiracy and fraud that the pursuer has failed to substantiate in any of the litigations to which I have referred. After a long and complex procedural history in which the pursuer has had no material success (cf Clarke v Fennoscandia Ltd, 1998 SLT 1014), the Lord Ordinary has dismissed the action in the interlocutor under review. [17] In the Outer House in Shetland Sea Farms Ltd v Assuranceforeningen Skuld and Others (4 July 2001, unrepd, at paras [143]-[152]), I expressed the view that this court possesses an inherent power similar to that of the High Court in England to strike out an action that amounts to an abuse of process. I discussed the matter in that case in the context of a claim based on false averments of fact supported by fabricated documents; but the concept of an abuse of process need not be confined to fraud. The essential question is whether the action compromises the integrity of the court's procedures. It might do so if it wastefully occupied the time and resources of the court in a claim that was obviously without merit. [18] If this court possesses the power to dismiss an action on the ground that it is an abuse of process, this case might have raised the question whether it should be exercised. However, since the point was not fully debated and since it is unnecessary for us to rest our decision on it, I shall not pursue the matter further.Clarke v. Fennoscandia Ltd & Ors [2004] ScotCS 257 (02 December 2004)
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SECOND DIVISION, INNER HOUSE, COURT OF SESSION |
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Lord Justice Clerk Lord Clarke Lord Menzies
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A2149/01 OPINION OF LORD CLARKE in RECLAIMING MOTION by ROBERT A CLARKE Pursuer and Reclaimer; against FENNOSCANDIA LIMITED, SIMON VINCENT FREAKLEY and IAN PETER PHILLIPS Defenders and Respondents; _______ |
Pursuer and Reclaimer: Mitchell, Q.C., D. O'Carroll; Anderson Strathern, W.S.
Defenders and Respondents: Keen, Q.C., Young; Dundas & Wilson, C.S.
2 December 2004
Introduction
[19] These proceedings, and the background to them, have a long history. In the conclusions, the pursuer seeks the following declarators:"1. For declarator that the costs order dated 1 February, 1991 and 23 March, 1992 pronounced against the pursuer by the United States District Court for the District of Delaware dated 1 February, 1991 in the Civil Action No.90-161-JJF between Robert A Clarke (plaintiff) v DRX. Inc. Howard Butcher IV, George G. Blakey, Rudi P. Fronk, George J. Hartnett, Warren H. Hinks, Jr., James R. Martin, Paul R. Sutton, James Messegee, Henry Colen and Fennoscandia Bank Limited (Defendants) are not enforceable by the defenders in Scotland the said orders having been obtained through fraud on the Court.
2. For declarator that the judgment obtained against the pursuer on 11 July, 1996 in Action (No.93CV4297) in the District Court of the City and County of Denver, Colorado sub nom Fennoscandia Bank Limited (Plaintiff) v Alexandra Mining Company (Bermuda) Ltd and Robert A Clarke (Defendants) is not enforceable by the defenders in Scotland, the said judgment having been obtained through fraud on the Court."
The pursuer also seeks interdict against the defenders taking any steps in Scotland, and elsewhere, to enforce the said judgment of 11 July 1996 and for interdict against them from taking any steps in Scotland and elsewhere to enforce cost orders resulting from the proceedings in the Delaware Court referred to in first conclusion, and on appeal therefrom. The defenders have, among others, two pleas-in-law, which are numbered 11 and 12, and which are in the following terms:
"11. In respect that the defenders have given an irrevocable undertaking to the pursuer and to the Court that they will not seek to enforce in Scotland by action of decree conform the said orders and judgments of the Delaware and Colorado Courts, the present action is no longer necessary and should be dismissed.
12. The Court of Session having no jurisdiction to entertain the present proceedings et separatim the action being incompetent, the action should be dismissed."
The Lord Ordinary, Lord Kingarth, on 23 July 2003, after a procedure roll debate, sustained those two pleas-in-law and dismissed the action. Against that interlocutor the pursuer now reclaims.
[20] The background to the present proceedings and their procedural history, prior to the Lord Kingarth's interlocutor of 23 July 2003, is related, in some detail, in Lord Kingarth's opinion. The following is a summary of the position.Background and procedural history
[21] As has been seen, from the terms of the conclusions, the proceedings relate to judgments given against the pursuer in American courts. In those proceedings the pursuer had sought, unsuccessfully, to establish that there had been a conspiracy between the first defender, under it former name, and others in order to deprive him of the office of president of a company known as D.R.X. Inc. [22] In 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. The pursuer's statement of claim, in these proceedings, was struck out on the basis of issue estoppel, the court taking the view that the matter which formed the true basis of the English proceedings had been the subject of decision by the court in Delaware, which pronounced the judgment referred to in the first conclusion of the present proceedings. Appeal against that decision was refused, and leave to appeal to the House of Lords was also refused. [23] The present proceedings were raised in late 1997. The pleadings have been the subject of significant amendment from time to time. On 22 December 1997, the Lord Ordinary, Lord Bonomy, refused a motion of the pursuer for interim interdict in terms of what were then the second and third conclusions of the summons. The motion made in terms of the then second conclusion was for interim interdict "against the defenders from taking any steps in Scotland to enforce the Judgment obtained on 11 July 1996... in the District Court of.... Denver." The motion in terms of the then third conclusion was for interim interdict "against the defenders from taking any steps to enforce against the pursuer by way of bankruptcy or other proceedings against him in Scotland the taxed costs, together with interest thereon, allowed against him" in respect of the proceedings brought by him in the High Court in London. The Lord Ordinary refused both motions for interim interdict. His decision was reclaimed and on 20 February 1998 the Second Division refused the reclaiming motion. [24] After protracted and sundry procedure, during which each side amended their respective pleadings, the case came before the Lord Ordinary, Lord Johnston, in February 2000, for debate on the procedure roll, at which hearing the defenders sought dismissal of the action. Questions of competency, jurisdiction and relevancy and specification were discussed before the Lord Ordinary who, in the event, repelled certain of the defenders' pleas and, quoad ultra, allowed a proof before answer. The defenders reclaimed. [25] Some time in early 2001 the defenders lodged a minute, which is No.35 of process. It is in the following terms:"McCormack for the Defenders and Reclaimers stated and hereby states to the Court:-
(FIRSTLY) That the Joint Liquidators of Fennoscandia Limited ('the Company') - being desirous of bringing the liquidation of the Company to a conclusion and having considered that the benefits of proceeding to complete the liquidation without further delay outweigh any potential benefit to the Company of seeking to recover in Scotland by action of decree conform the sums found due to the Company by the Pursuer and Respondents ('the Pursuer') in terms of the orders and judgments forming the subject-matter of Conclusions 1, 2, 3 and 4 of the present action having regard to the potential costs of the present action, the potential recoverability of these costs, and the delay in the completion of the liquidation likely to be occasioned if this action continues - hereby give, 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.
(SECONDLY) For the avoidance of doubt, the Joint Liquidators of the Company warrant that neither they nor the Company have taken any steps which would allow any other person 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."
On 28 February 2001 an Extra Division heard a motion, on behalf of the defenders, to dismiss the proceedings "in respect of the Minute No.35 of process". That motion was heard on the Single Bills. It was refused. On 10 April 2001, the court, on the unopposed motion of the defenders, allowed a Minute of Amendment, No.36 of process, to be received and appointed the pursuer to lodge answers thereto within 14 days. That Minute of Amendment, inter alia, set out averments relating to the undertaking contained in the Minute No.35 of process and the defenders' position in relation thereto. On 10 May 2001, the court, on the unopposed motion of the defenders, refused the motion of the defenders for review of Lord Johnston's interlocutor, dated 10 March 2000, and eo die remitted the cause to the Lord Ordinary to proceed as accords. The amendment procedure continued, thereafter, for almost a year. On 18 April 2002, Lord Johnston pronounced the following interlocutor:
"The Lord Ordinary having heard Counsel By Order, on the motion of the defenders, allows the Closed Record to be opened up and amended in terms of the Minute of Amendment and Answers thereto Nos.36 and 37 of process, both as adjusted, but under exception of Answer 1 and the Answer No.37 of process and, on pursuer's motion made at the Bar allows conclusions 3 and 4 of the Summons to be amended by addition of the words 'and elsewhere' after the word 'Scotland' therein, of new closes the Record; of new, appoints the cause to the procedure roll and appoints the defenders to lodge a Note of Argument within 28 days of today, reserves meantime the question of expenses of the amendment procedure."
A motion for leave to reclaim against that interlocutor, at the instance of the pursuer, was refused on 1 October 2002. The matter then came before the Lord Ordinary, Lord Kingarth, for debate on the procedure roll, in May 2003, and it is against Lord Kingarth's interlocutor, following that debate, that the present reclaiming motion is brought.
The pursuer's submissions
[26] In opening his submissions, senior counsel for the pursuer invited the court to repel the defenders' eleventh and twelfth pleas in law and quoad ultra to allow a proof before answer. He informed the court that lengthy discussion had taken place before the Extra Division when the defenders sought dismissal of the proceedings, in the light of the minute, No. 35 of process. The defenders had not taken their eleventh and twelfth pleas in law until they amended, after the Inner House had refused to dismiss the action, in the light of the undertaken contained in the minute, No. 35 of process. When the case came before Lord Kingarth, for debate, the defenders, as Lord Kingarth notes in his opinion, sought to reopen all questions which had previously been rehearsed before Lord Johnston and which he had dealt with in allowing a proof before answer. Those included questions directed at the relevancy and specification of the pursuer's pleadings, regarding the alleged conduct by the first defenders and others, which it was said had resulted in the judgments in question being obtained. Lord Kingarth had decided, in an exercise of his discretion, not to allow these matters of relevancy and specification to be reopened. He had, however, decided that it would be appropriate for him to hear the defenders in relation to their pleas 11 and 12, dealing with competency and jurisdiction. Senior counsel for the pursuer initially, in his submissions, contended that the Lord Ordinary had gone further than he was entitled to do in dealing with either of these pleas. In relation to the defenders' twelfth plea in law, in so far as it is to the effect that the Court of Session had no jurisdiction to entertain the present proceedings, senior counsel submitted that Lord Johnston had dealt with issues of jurisdiction when he allowed a proof before answer. The pursuer's pleadings were essentially as they had been before Lord Johnston. He had determined that jurisdiction against the defenders could be based either on a wrong threatened to be committed by them in Scotland or by the fact that they had, themselves, in the circumstances, submitted to the jurisdiction of the court. Senior counsel for the pursuer, however, had to accept that, at the time Lord Johnston dealt with the question of jurisdiction the conclusions for interdict had not included the words "and elsewhere". In his judgment, Lord Kingarth, had observed, at para. 37, that it was 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 declarator sought, which appears to be the underlying justification) in the nature of 'judgments on judgments'".
Under reference to the recent decision of the European Court of Justice in the case of Turner v. Grovit (ECJ 27/4/04-C-15/02) (2004) All ER (EC) 485, senior counsel for the pursuer had to accept that it is now established that the courts of all contracting States are precluded by the Brussels Convention from granting an "anti-suit injunction", that is an injunction where a party is prohibited from commencing or continuing proceedings before another judicial authority, even one abroad. It follows, senior counsel had to accept, that the interdicts, as now worded, could not competently be granted by this court. In the light of that, senior counsel for the pursuer sought leave to amend to delete the words "and elsewhere" from the interdict conclusions. It was contended, on behalf of the pursuer, that to allow such an amendment would not result in any prejudice to the defenders. It would simply involve the recognition that the law had moved on and would restore the conclusions to the terms they were in when considered by Lord Johnston.
[27] Senior counsel for the defenders did not oppose the motion to amend but drew the court's attention to the history of how the pursuer's pleadings had developed and how, in particular, the addition of the words "and elsewhere" came to be made. The defenders had originally entered the process on the basis that the alleged wrongs were ones which were said to be threatened to be committed in Scotland. They had argued that an action for decree conform could not constitute a legal wrong and it was this argument which was rejected by Lord Johnston. It was in light of that decision that the defenders had given to the pursuer, and the court, the undertaking contained in the minute No. 35 of process. Once the defenders' pleadings were amended to embody references to the undertaking, the pursuer appeared to appreciate that there was no longer any threatened wrong in Scotland and that was his reason for seeking to expand the interdicts sought with the insertion of the words "and elsewhere". While not opposing removal of those words now, senior counsel for the defenders, maintained that their removal rendered paragraphs 36-37 of Lord Kingarth's opinion redundant. Senior counsel for the defenders moved the court, in the event of it allowing the amendment, to reserve all questions of expenses arising therefrom. The court allowed the amendment and reserved any question of expenses arising therefrom. [28] Senior counsel for the pursuer appeared to maintain that the position, after the words "and elsewhere" were removed from the conclusions for interdict, was that it was not open to the defenders to argue their twelfth plea in law, in so far as it was a plea of no jurisdiction, since Lord Johnston had determined there was jurisdiction, by submission, after hearing full argument based on the pleadings "as they now stand". The only remaining issue, it was submitted, was whether or not Lord Kingarth was correct in sustaining the defenders' eleventh plea in law. On this matter senior counsel for the pursuer submitted, in the first place, that Lord Kingarth had failed to have proper regard to the fact that the Extra Division had dealt with the point raised by that plea when, by their interlocutor of 28 February 2001, they refused the defenders' motion to dismiss the proceedings in the light of the minute, No. 35 of process. The defenders' plea in law 11, and supporting averments, it was contended, had added nothing to the effect of the minute and the undertaking contained therein. Lord Kingarth should not have revisited the question and this court should not now do so. If, however, the court considered that it was appropriate to consider the merits of the plea, then it was the pursuer's position that the question was whether the tendering of the minute, containing the undertaking, had rendered the present proceedings totally unnecessary. Senior counsel for the pursuer accepted that the undertaking did have the effect of rendering the conclusions for interdict (as now amended) redundant since the pursuer was no longer in a position, in the light of the amendment, to submit that there was any reasonable apprehension of the defenders committing the alleged wrongs referred to in the conclusions for interdict. The position, it was submitted, however, in respect of the declarators was different. Notwithstanding the undertaking contained in the minute, the declarators, if granted, might have some practical utility for the pursuer. It appeared to be accepted by senior counsel for the pursuer that the declarators, if granted, would have no legal consequences in this jurisdiction. His position was that they might be of some assistance to the pursuer in seeking to have matters revisited in the English courts, or in seeking to defend proceedings that the defenders might bring against him in other jurisdictions such as France, where the pursuer is resident. Moreover, as averred by the pursuer at pages 39-40 of the reclaiming print, the declarators, if granted, might assist him in obtaining finance for his business interests and more generally improve his prospects, financially, and in the pursuit of his business career. The declarators sought, if granted, would provide "a means to an end" and might allow him to raise fresh proceedings in England. It was these possible practical consequences of the declarators which justified them, rather than any legal effect they would have. These submissions were made under reference to the decision in the case of Wilson v. Inverclyde Council 2003 S.C. 366. In that case the pursuer sought a declarator that a public trust, set out in a feu contract, was currently lawful and active, that the defenders were the statutory trustees ex officio by virtue of the terms of the feu contract and a number of succeeding documents, and Acts of Parliament, and that the pursuers were the heritable beneficiaries of the trust. The pursuer argued that the feu contract set up a distinct trust whereby a harbour was to be held by the original disponees and their successors in office, separately from any other property in the burgh, and, in particular from any common good and that the subjects were to be inalienable. The pursuer maintained that the defenders would be entitled to vindicate their right in the property, despite a third party being in possession of the subjects under a registered title. The defenders argued that the feu contract had not constituted a trust, and that the property carried by the deed had simply become a part of the common good of the burgh in question. The defenders, furthermore, argued that the action could serve no useful purpose, given the difficulties surrounding rectification of registered titles in the absence of fraud or carelessness by the proprietor in possession. An Extra Division held that the feu contract did not create any trust, separate from the common good of the burgh, and refused the declarator sought. In the course of their judgments, however, the judges of the Extra Division were unanimous, in opining obiter, that had they held that the feu contract had constituted a trust, separate from the common good of the burgh, they would not have accepted the defenders' argument that the declarator should not be granted because it would have no useful purpose - see the Opinion of Lord Osborne at page 384, paras. 39 and 40, the Opinion of Lord Drummond Young at page 391, para. 53 and the Opinion of Lord Coulsfield at page 394, para. 64. While senior counsel for the pursuer accepted that the use to which the pursuer might put the declarators he sought in other jurisdictions must be, of necessity, a matter of speculation, at this stage, the pursuer, it was submitted, had made averments which asserted that the declarators could have a practical effect to his advantage. The mere fact that some of the aims of the litigation, as they had existed previously, had been removed, did not produce a sufficient reason for the pursuer not being allowed to continue to seek the declarators in question and for those declarators to be granted. [29] When asked by the court if there was any authority for the proposition that it was competent for this court, when it was not concerned with any question of enforcement or recognition of a foreign judgment, to embark on a review of such a judgment, senior counsel for the pursuer at first replied that such authority did exist. In the event no such authority was cited by senior counsel for the pursuer. The pursuer had made full and relevant averment as to why the foreign judgments in question should be impugned, and, it was submitted, was entitled to have an enquiry into these matters. In conclusion, counsel for the pursuer invited the court to allow the reclaiming motion and to allow a proof before answer in relation to the declaratory conclusions now sought.The defenders' reply
[30] In opening his submissions, in reply, senior counsel for the defenders, submitted that senior counsel for the pursuer had incorrectly characterised the nature of the defenders' twelfth plea in law. In so far as it dealt with jurisdiction, it was in different terms from the plea as to jurisdiction which Lord Johnston had dealt with. The plea which was before Lord Johnston and which was the defenders' plea in law No. 1 was in the following terms:"The defenders not being subject to the jurisdiction of the court in respect of the conclusions of the summons, the action should be dismissed".
The new twelfth plea in law for the defenders now focused on the jurisdiction of the court to deal with the proceedings, in their present form, and went on to attack the competency of those proceedings. The purpose of that plea was to raise the question as to whether the court could competently grant the declarators in the terms sought. The issue of competency was very much at the forefront of Lord Kingarth's opinion, as can be seen from paras. 34 and 35 of his opinion. Senior counsel drew the court's attention to certain passages in the judgment of Hobhouse L.J., as he then was, in the Court of Appeal in the English proceedings, which are referred to in the pursuer's pleadings and which themselves sought to attack the judgment which is the subject-matter of the declarator sought in the first conclusion of the present proceedings. The court's attention, in particular, was drawn to a quotation made by Hobhouse L.J. (at pp. 15-16) from the judgment of the United States Court of Appeals for the Third Circuit, to which the judgment which is the subject-matter of the first declarator sought in the present proceedings, was appealed. The quotation in question is as follows:
"Exercising plenary review, we have concluded that, without regard to how Clarke's action is characterised, the district court appropriately dismissed his unmeritorious, vexatious complaint".
Hobhouse L.J. went on to discuss the decision of the judge from whose decision the pursuer had appealed in the English proceeding. At page 16 of his judgment his Lordship said this:
"The Judge in chambers, Mr. Titheridge Q.C., dismissed the plaintiff's appeal. He concluded that this action is an abuse of process and vexatious. He considered all the arguments, which are effectively the same arguments as have been raised before us. His conclusion was expressed in strong terms as a decision on the question of abuse of process, not merely on the question of technical issue estoppel. Having referred to issue estoppel he said (at the top of page 9 of his judgment). If however I am wrong in that view, this, in my judgment, is a clear case for the exercise of the court's discretion to strike out proceedings as an abuse of process of the court".
At the end of his judgment, at page 24, Hobhouse L.J. said this:
"My conclusion is that the points which have been raised on this appeal, ... do not alter the conclusion arrived at by the Judge in chambers. This action is, in substance, an attempt by Mr. Clarke to relitigate issues which have already been the subject of exhaustive proceedings in the United States and which have been determined against him there on the basis which, as far as I can detect, is open to no criticism whatsoever".
Senior counsel for the defenders then drew the court's attention to the fact that the pursuer had raised other proceedings in England, arising out of the Delaware judgment, in which he sought damages against the defenders. That claim was struck out by the Court of Appeal (1999) E.W.C.A. Civ. 591 (18 January 1999). It was contended, in those proceedings, on behalf of the defenders, that the issues raised in the proceedings could have been raised in the action in Delaware, which resulted in the judgment which is the subject-matter of the first conclusion in the proceedings before this court. In giving the principal judgment, in the Court of Appeal, Kennedy L.J. referred, at pages 6 to 7, to the judgment of Sir Thomas Bingham M.R., as he then was, in the case of Barrow v. Bankside Agency and Others (1996) 1 W.L.R. 257, at 260, where his Lordship, referring to the rule of English law set out in the case of Henderson v. Henderson (1843) 3 Hare 100 said this:
"The rule in Henderson v. Henderson is very well known. It requires the parties, when a matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the court so that all aspects of it may be finally decided (subject, of course, to any appeal) once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed".
Kennedy L.J., had decided that the proceedings before the Court of Appeal should be struck out as disclosing no reasonable cause of action but, applying the rule in Henderson v. Henderson, as explained in Barrow, he went on to say, at page 7:
"Even if, contrary to my view, it were to be held that the amended statement of claim does disclose a reasonable cause of action I would regard it as an abuse of process of the court and I would dismiss the action on that ground".
The other judges of the Court of Appeal agreed with Kennedy L.J. on this point. Senior counsel for the defenders pointed out that at pp. 7-8 Kennedy L.J. referred to the present proceedings. He did so in the following terms:
"Finally Mr. Philipps invited our attention to the proceedings instituted by Mr. Clarke in Scotland, in which he seeks to undermine the Delaware judgment contending that it was obtained by fraud. Mr. Philipps recognises that the evidence relied upon is evidence which this court in 1996 found inadequate to lead it to that conclusion, but, as Mr. Philipps contends, the 1996 decision does not bind the Scottish courts. Mr. Philipps submits that if his primary submission does not succeed we should at least stay the proceedings to await a decision by the Scottish courts. In my judgment the history of this matter is such that there is no reason why the bank should not now have in this jurisdiction the relief it seeks".
"We may be called on to assist to make the decree of a foreign court effective against a party resident in this country, but we cannot be called upon to review it or to give to any person authority to do what is contrary to its terms. In other words, we can aid the enforcement of a foreign decree, but we cannot set it aside or authorise anyone, who is under its order, to act contrary to it".
Senior counsel for the defenders submitted that that was, and remains, an accurate statement of principle in the law of Scotland. It was a principle which had its equivalent in the Brussels Convention on Enforcement of Judgments where, in Article 29, it is provided that "under no circumstances may a foreign judgment be reviewed as to its substance".
[32] The proceedings, as they now stand, were, furthermore, incompetent because the declarators that were sought by the pursuer had no legal consequences. In Maclaren Court of Session Practice at page 638 that point is made clear where the learned writer states:"A declaratory action is one in which some right of property, servitude or status, or of some inferior right, which is contested or imperfectly defined, is sought to be declared in favour of the pursuer, but where nothing is demanded to be paid or performed by the defender. It must have certain legal consequences, otherwise it is incompetent".
In Gifford v. Traill (1829) 7 S. 854 it was held that an action of declarator to have a fact declared, without any consequential right, is incompetent. Reference was also made to the case of Sime v. J and A.D. Grimond (1920) 1 S.L.T. 270 where the Lord Ordinary, at page 272, did not favour a submission that a declarator appropriately be granted for the effect it might have on public opinion. The present case, it was submitted, was distinguishable from the case of Wilson. In that case the declarator sought could have had legal consequences, in particular, affecting the legal status of the respondents. In the present case Lord Kingarth, at para. 35, was well-founded in concluding that "the fact that the pursuer might obtain some such ancillary benefit would not, in my view, make the declarators competent".
[33] The reclaimer's argument that the Inner House interlocutor of 28 February 2001 dealt conclusively with the defenders' case that the undertaking rendered the action incompetent was misconceived. That interlocutor dealt simply with the motion heard on the single bills to have the action dismissed. The full merits of the matter had not been gone into at that time. [34] Senior counsel for the defenders submitted that, in substance, the pursuer's case, as it now stood, involved seeking a very significant innovation in our law, namely, a review by this court of foreign decrees pronounced by courts of competent jurisdiction. [35] In concluding his submissions senior counsel for the defenders said that he did not accept that, in a case like the present one, the court did not have the power to refuse to entertain the proceedings on the basis that they involved an abuse of process, having regard to the kind of consideration as discussed by Kennedy L.J., and in the English authorities referred to by him in the previous litigation, at the instance of the pursuer and another against the defenders. Senior counsel in this respect referred to a dictum of Lord Diplock in the case of Hunter v. Chief Constable of the West Midlands Police and Others (1982) AC 529, at page 536, where his Lordship said:"My Lords, this is a case about abuse of process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people. The circumstances in which abuse of process can arise are very varied ... It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power".
While, in the case of British Airways plc v. Boyce 2001 S.C. 518 an Extra Division had doubted whether there existed in Scotland a general discretionary power to prevent a multiplicity of proceedings, the court was not invited, in that case, to consider the possibility of applying the principle of abuse of process, in an appropriate case, in relation to such situations. Standing the number of proceedings in which the pursuer had sought to raise the same question, it would not be inappropriate, it was submitted, for this court to view the pursuer's insistence on the present proceedings, as they now stand, as an abuse of process. Senior counsel invited the court, for all the foregoing reasons, to refuse the reclaiming motion.
Decision
[36] Standing the fact that the pursuer now accepts that there is no longer any basis for the court pronouncing the interdicts sought, in terms of the third and fourth conclusions, I am of the opinion that the declaratory conclusions have now been, as far as the proceedings in this jurisdiction are concerned, emptied of content. They were required by the pursuer to establish threatened wrongs in respect of which the interdicts were sought. That purpose no longer exists and it, therefore, appears to me that this court should not be pronouncing declarators which are truly bare or academic in that the legal purpose for which they were sought no longer arises. That would, in my judgment, be sufficient reason to refuse the reclaiming motion. [37] The matter goes even further, however, since senior counsel for the pursuer was ultimately forced to accept that the declarators themselves, if pronounced, would have no legal effect or consequences in this jurisdiction. They were being sought for some practical utility which it was considered they might have, in the future, for the pursuer. They were, as has been noted, said to be "a means to an end". For this court to consider that it was competent for it to pronounce declarators simply for the potential practical benefit it was perceived they might confer on those seeking them, would, in my judgment, go well beyond its proper function and has no support whatsoever in authority. The case of Wilson, in which the obiter remarks relied upon by the pursuer, were made, is clearly distinguishable from the present case. The declarator sought in that case had possible legal consequences in this jurisdiction relating to the status of the respondents as trustees and the continued existence of a public trust. In the present case, I agree entirely with Lord Kingarth's view at para. 35 of his Opinion where he said:"The fact that the pursuer might obtain such ancillary benefits would not, in my view, make the declarators competent".
Clarke v. Fennoscandia Ltd & Ors [2004] ScotCS 257 (02 December 2004)
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SECOND DIVISION, INNER HOUSE, COURT OF SESSION A2149/01 |
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Lord Justice Clerk Lord Clarke Lord Menzies |
OPINION OF LORD MENZIES in RECLAIMING MOTION by ROBERT A CLARKE Pursuer and Reclaimer; against FENNOSCANDIA LIMITED, SIMON VINCENT FREAKLEY and IAN PETER PHILLIPS Defenders and Respondents; _______ |
Pursuer and Reclaimer: J J Mitchell QC, D O'Carroll; Anderson Strathern WS
Defenders and Respondents: Keen QC, Young; Dundas & Wilson CS
2 December 2004
[41] I am in complete agreement with the Opinions of your Lordship in the Chair and of Lord Clarke and have little further to add. My views can be summarised concisely as follows: [42] First, this action is an attempt to seek review of decisions of competent courts in other jurisdictions. Where no question of recognition or enforcement of a foreign judgment arises, it is not competent for this court to review the decision of a foreign court (Westergaard v. Westergaard 1914 S.C. 977). [43] Second, as a result of the undertaking contained in the minute No. 35 of process, the declarators sought by the pursuer and reclaimer have no legal consequences under our law. This renders the declaratory conclusions incompetent (see McLaren on Court of Session Practice at page 638; Sime v. J. & A.D. Grimond (1920) 1 S.L.T. 270). The pursuer and reclaimer's perception that the granting of these declarators may result in some possible ancillary benefit to him, falling short of legal consequences, is not sufficient to render this action competent. [44] Third, although it is not necessary for me to base my decision on this ground, I agree with your Lordships that this court possesses the inherent power to control abuse of process to which Lord Diplock referred in Hunter v. Chief Constable of West Midlands [1982] AC 529. Having regard to the procedural history of the various litigations between these parties and referred to in your Lordships' Opinions, this might be an appropriate case in which to use such powers, were it necessary to do so. However, for the reasons noted above I consider that it is unnecessary to do so in this case. I agree that the orders which the pursuer now seeks are incompetent and that the reclaiming motion should be refused.