Practice and procedure – Registration and enforcement of judgments – Court in Cyprus making order against appellant – That order registered on “without notice” application by respondent to English court – Article 43 (5) of Council Regulation EC 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 persona 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, jointly and severally with her husband, to pay more than €2.2m, 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 by a deputy master for enforcement pursuant to Council Regulation EC 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 court determined preliminary issues as to whether it had power to extend the time for appealing a registration order and whether it was appropriate to do so in the appellant’s case.
Held: The preliminary issues were decided in favour of the respondent.
Article 43(5) of the Judgments Regulation had to be construed in light of the policy underpinning the Regulation and its predecessors, which was to establish an autonomous and complete system for the recognition and enforcement of judgments, including for appeals, which excluded the possibility of any separate challenges to an enforcement order under domestic law. Article 43(5) struck a balance between the right of a defendant to challenge the recognition order by appeal, on one of the limited grounds permitted by the Judgments Regulation, and the need for expedition. The language used indicated that the time limits which it set were intended to be mandatory, thus according with the underlying policy that enforcement should be rapid and that there should therefore be a limited, and relatively short, time for appealing. Article 43(5) recognised that a defendant domiciled in a contracting state other than the state of enforcement might be disadvantaged in preparing a challenge within a month and two express modifications were made to cater for those perceived disadvantages: first, time did not start to run until there had been actual service of the order for enforcement on the party concerned or at their residence and, second, such a person was given twice the normal time for appealing, namely two months instead of one.
The Jenard Report, commenting on matters relating to jurisdiction and enforcement in the Brussels Convention, contemplated that the procedural rules of the state of enforcement might be used to extend time so as to cater for the disadvantages suffered by a person domiciled in a non-EU state. The Judgments Regulation and the Conventions that preceded it were concerned to ensure that the right of appeal was not unfairly impeded, or rendered nugatory, by the defendant’s distance from the state of enforcement. However, that concern did not apply to parties who were domiciled in the state of enforcement, and parties domiciled elsewhere in the EU were expressly catered for and needed no further concessions. The power to extend time had to be confined to non-EU defendants, because fairness to the other categories of defendant was already sufficiently catered for. A general discretion to extend time for appealing would subvert the policy of the Judgments Regulation by introducing uncertainty as well as departing from the intention of creating a uniform and self-contained system of speedy and simple enforcement throughout the EU. The time limits were designed to strike the necessary balance between effective and speedy enforcement and protection of the legitimate rights and interests of the defendant.
Where there was a mandatory time limit for appealing under a domestic statute, and no power to extend time, the law recognised a limited class of case in which the courts could entertain an appeal out of time, namely cases where the application of the time limit would impair the very essence of the right of appeal and strict adherence to it would infringe Article 6 of the European Convention on Human Rights: R (on the application of Adesina) v Nursing and Midwifery Council [2013] EWCA Civ 818 applied. By parity of reasoning, a similar exception would probably apply to the mandatory time limits under the Judgments Regulation, since the underlying policy was designed to be compatible with Article 6.
The court was therefore obliged to enforce the time limit for EU-domiciled defendants 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 Convention: Hoffmann v Krieg Case 145/86 [1988] ECR 645, Verdoliva v BM Van der Hoeven BV Case C-3/05 [2006] ECR I-1579, TSN Kunstoffrecycling Gesellschaft v Jurgens unreported 16 February 2001 and Taylor-Carr v Howkins & Harrison LLP [2014] EWHC 3479 (QB) applied; Citibank NA v Rafidian Bank [2003] EWHC 1950 (QB) considered.
(2) Per curiam: Even if a power to extend time existed, it would not be appropriate to exercise it in the appellant’s favour in the instant case. Her failure to meet the time limit was serious. The time for appealing was deliberately short. A delay of three weeks in the context of a two-month time limit, which was twice the time allowed to a party domiciled within the jurisdiction and which was regarded as being sufficient to safeguard the legitimate interests of a party domiciled elsewhere in the EU, was serious regardless of whether it made any material difference to the date on which the respondent would otherwise have had its hearing of the application for final charging orders over the property, or on which the appeal was listed for hearing. There was no good reason for the delay. The appellant’s solicitors in the UK were well aware of the deadline for appealing. The seriousness of the delay and the absence of any excuse for it both militated strongly against the grant of relief and, while the court could nevertheless exercise a discretion in favour of an extension of time if the justice of the case required it in all the circumstances, it was not appropriate to do so in the instant case. Given that the balance between the competing interests was already fairly struck by the terms of the Judgments Regulation itself, any interference by the court with that balance in the present circumstances would be unwarranted and unprincipled: Denton v TH White [2014] EWCA Civ 906; [2014] 1 WLR 3926 applied.
Daniel Warents (instructed by Fletcher Day) appeared for the appellant; Camilla Lamont (instructed by Charles Russell Speechlys LLP) appeared for the respondent.
Sally Dobson, barrister
Click here to download the transcript of Christofi v National Bank of Greece (Cyprus) Ltd
