Practice and procedure – Registration and enforcement of judgments – Court in Cyprus making order against appellant – Order registered on “without notice” application by respondent to English court – Article 43(5) of EC Council Regulation 44/2001 – Appellant failing to appeal against registration order within time limit prescribed for person domiciled in EU – Whether courts having power to extend time for appeal by such person – Appeal dismissed
In July 2006, the respondent bank issued proceedings against the appellant and her husband in Cyprus claiming sums alleged to be due under a loan agreement secured by the appellant’s personal guarantee and by a mortgage over certain properties. The proceedings were served personally on the appellant’s husband. A firm of advocates, ostensibly acting on behalf of both the appellant and her husband, later compromised the proceedings by a consent order in the Cypriot court, which ordered the appellant to pay more than €2.2m (£1.9m), plus interest, to the respondent.
No payment was made and the respondent took action, first in Cyprus and then in the UK, to enforce the terms of the consent order. In May 2014, following a “without notice” application made by the respondent pursuant to CPR 74.3, the consent order was registered for enforcement pursuant to EC Council Regulation 44/2001 (the Judgments Regulation). By that time, the total amount due under the consent order exceeded €7m.
The appellant sought to appeal, contending that she had not been aware of the proceedings until she was served with notice of the registration order, that the Cypriot advocates had no authority to act on her behalf and that her signature on their letter of retainer had been forged. However, the appeal was filed 22 days after the expiry of the time limit prescribed by article 43(5) of the Judgments Regulation and CPR 74.8(4); since the appellant was domiciled in Cyprus, that limit was two months from the date when the order was served on her.
The judge determined preliminary issues in favour of the respondent, concluding that the court had no power to extend the time for appealing save in exceptional circumstances in which a refusal to do so would breach article 6 of the European Convention on Human Rights (ECHR) but went on to hold that, if she did have jurisdiction to extend time, she would have declined to exercise her discretion in favour of the appellant: see [2015] EWHC 986 (QB); [2015] PLSCS 118. The appellant appealed.
Held: The appeal was dismissed.
(1) Article 43(5) had to be interpreted in accordance with the policy underpinning the Regulation, which had as its objective the “free movement of judgments” between member states, so enhancing the sound operation of the internal market. When the judge described the Regulation establishing an autonomous, complete, uniform, self-contained and simple system for the recognition and enforcement of judgments throughout the European Union, she was correctly reflecting the policy, principles and principal objective of the Regulation. However, respect for the rights of the defence meant that the defendant had to be able to appeal in an adversarial procedure against a declaration of enforceability. Any such right of appeal had to be effective and would be rendered nugatory if defendants were not accorded an adequate opportunity to exercise that right. A balance had to be struck between the objective of simplicity and expedition in the recognition and enforcement of judgments and permitting a defendant to exercise an effective right of appeal against a declaration of enforceability. Autonomous, complete and uniform though the Regulation system was intended to be for the recognition and enforcement of judgments, it was manifestly not exhaustive, in the sense of leaving no scope for local procedural law of individual member states. Article 43(3) stipulated that the appeal should be dealt with in accordance with the national lex fori. The Regulation system (or code) was thus supplemented by local procedural rules and the judge had not overlooked the role of national procedural law. There was no general power to extend the mandatory two-month time limit for appealing in this case. The court was obliged to enforce that time limit strictly, subject only to the residual power to extend a mandatory time limit in the rare case where its application would impair the very essence of the right of appeal, and strict adherence to it would infringe article 6 of the ECHR. That conclusion protected article 6 rights and furnished no scope for a discrimination claim under article 14 of the ECHR, even on the most favourable assumptions for the appellant: Deutsche Genossenschaftsbank v Brasserie Du Pecheur SA (Case 148/84) [1986] 2 CMLR 496 and Verdoliva v Van der Hoeven (Case C-3/05) [2006] ECR I-1579 considered.
(2) If that conclusion was wrong, and there was a discretion vested in the national court to extend time in accordance with national procedural law, an application for an extension of time for filing a notice of appeal had to be approached in the same way and with the same rigour as an application for relief from sanctions under CPR 3.9. A judge had to address the application in three stages: (i) identify and assess the seriousness and significance of the failure to comply with any rule, practice direction or court order; (ii) consider why the default occurred; and (iii) evaluate all the circumstances of the case, so as to enable the court to deal justly with the application informed by the policy and principles of the Regulation. The appeal court should only interfere if the judge failed to consider relevant factors, or took into account irrelevant factors, or was plainly wrong. In the present case, there was no proper basis for impugning the judge’s exercise of her discretion, so that no question of exercising the discretion afresh arose. In any event, the court would have had no hesitation reaching the same conclusion as the judge. In all the circumstances, informed by the context and even assuming, without deciding, that there would be no harm done, there was no warrant for granting a substantial extension of time, so cutting across the policy and principles of the Regulation: Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 WLR 3926 and R (Hysaj) v Home Secretary [2014] EWCA Civ 1633; [2015] 1 WLR 2472 applied.
Daniel Warents (instructed by Fletcher Day Ltd) appeared for the appellant; David Elvin QC and Camilla Lamont (instructed by Charles Russell Speechlys LLP) appeared for the respondent.
Click here to read transcript: Christofi v National Bank of Greece (Cyprus) Ltd
