Act: Weir; McClure Naismith, Petitioner and Respondent

Alt: Party, Respondent and Reclaimer

29 April 2009

[1] We have before us an application by Baden-Wurttembergische Bank AG, a bank incorporated under the laws of Germany, for an order under section 4 of the Civil Jurisdiction and Judgments Act 1982 for registration of an authentic instrument dated 26 August 1997. The 1982 Act gives effect to the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Article 50 of which is in the following terms:

"A document which has been formally drawn up or registered as an authentic instrument and is enforceable in one Contracting State shall, in another Contracting State, be declared enforceable there, on application made in accordance with the procedures provided for in Articles 31 et seq. The application may be refused only if enforcement of the instrument is contrary to public policy in the State addressed. The instrument produced must satisfy the conditions necessary to establish its authenticity in the State of origin. The provisions of Section 3 of Title III shall apply as appropriate."

[2] The instrument in question is described in the application in the following terms:

".... the authentic instrument which is sought to be registered is a land charge created by Immofinanz Finanzierungs-und Unternehmensberatung GmbH in favour of the petitioners dated 26 August 1997, notarised by Dr Ludwig Funk, Notary Public, Stuttgart and entered in the Wahren land registry ..... In terms of Clauses VII and X of the land charge the debtor under the land charge, David Ferrier, residing at [an address in Scotland], assumed personal liability for all sums due by him to the petitioners up to the amount of the land charge, namely 198,000 German Marks (approximately 101,234 Euros). In terms of said clauses, David Ferrier submitted to immediate compulsory execution against his entire assets in respect of the sums due by him to the petitioners. As at 26 August 1997 David Ferrier owed the sum of 198,000 German Marks to the petitioners. Interest is due on said sum at the rate of 15 per cent per annum from the said date until payment."

[3] The procedure to be followed in such an application is prescribed by Rules of Court 62.26 and following. In accordance with Rule 62.28 the application must be made by petition, and certain documents must be produced with the petition, including an authentic copy of the instrument and a document establishing that the instrument is enforceable in its country of origin. An application in the appropriate form was duly lodged in August 2008. It is not in dispute that the requirements of Rule 62.28 were complied with. On 19 August 2008 Lord Malcolm accordingly pronounced an interlocutor, in accordance with Rule 62.30, granting warrant to the Keeper of the Registers of Scotland to register a certified copy of the authentic instrument, appointing the petitioners to serve notice in writing of its registration upon Mr Ferrier in accordance with Rule of Court 62.33, and allowing him if so advised to apply to this court to set aside that registration. The respondent, Mr Ferrier, then exercised his right of appeal by way of motion in accordance with Rule 62.34. The basis of the appeal was summarised by the Lord Ordinary in his Opinion dated 12 February 2009 as follows:

"For Mr Ferrier, Counsel invoked the public policy exception in the above quoted statutory provision and submitted that the prayer of the petition for registration should be refused. She accepted under reference to Hoffmann v Krieg [1988] ECR 645 that the public policy exception could only apply in exceptional circumstances. She further submitted that the circumstances of the present case were exceptional in that there had been inordinate, unexplained and inexcusable delay on the Bank's part in making the application to the Scots Court. Having regard to this delay, it was submitted that to grant the order sought by the Bank would involve a violation of the appellant's rights under Article 6 of the European Convention on Human Rights. It followed that this Court would be in breach of its duty in terms of section 6 of the Human Rights Act 1998 to act in a manner compatible with the Convention rights if registration of the authentic instrument were to be permitted."

[4] On 12 February 2009 the Lord Ordinary refused the appeal. His Lordship proceeded on the basis that Article 6 of the European Convention on Human Rights was engaged. Having regard however to the approach adopted by Lord Bingham of Cornhill in Dyer v Watson 2002 SC (PC) 89 at paragraphs 52 to 55 his Lordship held that, in the circumstances, the delay in seeking registration of the authentic instrument had not violated the reasonable time requirement in Article 6. The respondent has reclaimed against that decision in accordance with Rule 62.35. Such an appeal can only be on a point of law. That is made clear by the rule of court, reflecting the terms of section 6 of the 1982 Act and Article 37 of the Brussels Convention.

[5] The first ground of appeal is in the following terms:

"The Lord Ordinary failed to recognise that the circumstances of the present case disclosed such inordinate, inexcusable and unreasonable delay that (a) registration of the authentic instrument for enforcement involved the breach of the reclaimer's right under Article 6(1) of the European Convention on Human Rights to have his civil rights and obligations determined within a reasonable time and (b) accordingly the 'public policy exception' contained in Article 50 of the Convention set out in Schedule 1 to the Civil Jurisdiction and Judgments Act 1982 was engaged."

Reference is made to S.A. Marie Brizzard et Roger International v William Grant & Sons Limited (No.2) 2002 SLT 1365 and Krombach v Bamberski [2000] E.C.R.

I-1935. The remaining grounds expand upon that proposition. Ground 2 is concerned with the question whether the lapse of time was such as to give rise to "real concern", as that expression was used by Lord Bingham in Dyer v Watson. Ground 3 asserts that the Lord Ordinary failed to consider, in accordance with Dyer v Watson, whether the delay in the present case was explicable or justifiable. Ground 4 asserts that the Lord Ordinary failed to give appropriate weight to a number of arguments advanced on behalf of the respondent. Finally, ground 5 states:

"These were considerations to which the Lord Ordinary should have had regard at the second stage of the test in Dyer. Had he taken these considerations into account, he would and should have concluded that the reclaimer's appeal against the interlocutor of Lord Malcolm should be allowed."

[6] The respondent, who appeared before us in person, has addressed us in support of each of these grounds of appeal. It appears to us however that they face a fundamental difficulty. We are not persuaded that Article 6 of the European Convention on Human Rights is engaged by a delay by a creditor in applying for the registration of an instrument of debt. Article 6(1) of the Convention states in its first sentence:

"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law."

The reasonable time guarantee, as it is often referred to, is thus concerned, so far as relating to civil matters, with delay in the determination of civil rights and obligations by a court or tribunal which is seised with a dispute. That is made even clearer by the equally authentic French version, which guarantees every person a right that his cause should be heard within a reasonable time by a tribunal which will decide contestations sur ses droits et obligations de caractère civil. That guarantee is not in our opinion engaged by a lapse of time between the execution of an authentic instrument and an application by the creditor under the deed for its registration in accordance with the Brussels Convention.

[7] In the course of his submissions the respondent also referred to two common law principles concerned with delay. The first was the principle, as held in the case of Tonner v Reiach & Hall 2008 S.C. 1, that inordinate delay in the course of pending proceedings may entitle the court to dismiss the action as an abuse of process. That principle however has no application to the circumstances of the present case, where the delay complained of occurred prior to the institution of any proceedings in this court. It is not suggested that that delay would in itself enable this court to exercise its inherent jurisdiction to prevent abuses of process. The second principle referred to was that delay might give rise to personal bar under Scots private law on the basis of mora, taciturnity and acquiescence. A possible defence of personal bar under private law would not however fall within the scope of the public policy exception to the court's duty to register an authentic instrument under Article 50 of the Brussels Convention which, as we have explained, applies only where "enforcement of the instrument is contrary to public policy".

[8] In his submissions the respondent raised two other matters which had not been argued before the Lord Ordinary and were not mentioned in the grounds of appeal. First, it was said that under German law, before the Bank could apply to register the deed in Scotland, they required to obtain an order from the German courts. It was said that the German proceedings in question had not been conducted fairly. Counsel for the petitioners had no prior notice of this point and was not in a position to deal with it. In the circumstances we are not prepared to allow this point to be advanced at this stage as an additional ground of appeal. It does not in any event appear to us to raise a relevant point of public policy within the meaning of Article 50 of the Convention. In particular, the case of Marie Brizzard to which the respondent referred is distinguishable, in that it was concerned with the enforcement of a judgment said to have been unfairly obtained, whereas the unfairness alleged in the present case does not bear directly on the acceptability, as a matter of public policy in the United Kingdom, of registering the authentic instrument itself. Secondly, the respondent submitted that he had not been fully informed in certain respects before entering into the agreement to which the authentic instrument gave effect. This is a further matter which has been advanced today for the first time and raises questions of fact of which counsel for the petitioners had no prior notice. We are not prepared to allow this to be advanced as an additional ground of appeal at this late stage. Again it does not, in any event, appear to us to raise a question of public policy, or indeed any point of law arising from the Lord Ordinary's decision.

[9] For the foregoing reasons we shall refuse the reclaiming motion.