As I was saying, a Chathaoirligh, with regard to method (1) — service within the jurisdiction — it is a fundamental principle of Irish law that a person who is physically present in Ireland and who is validly served with a writ, or its equivalent, is subject to the jurisdiction of the Irish courts. There must normally be personal service, that is, a copy of the writ or its equivalent must be left with the defendant and, if he requests it at that particular time, the original writ must be shown to him. In circumstances where it appears impracticable to serve the writ personally, the court may order substituted service and direct the writ to be brought to the attention of the defendant in other ways, for example, by advertisement.
In essence, therefore, the general common law rule is that jurisdiction depends upon the presence of the defendant in Ireland and if the writ is validly served the defendant is subject to the jurisdiction of the Irish court for the matter complained of in the writ, regardless of any lack of connection between the defendant in Ireland and regardless of any lack of connection between the action and Ireland. For example, in Colt Industries v. Sarlie (1966) a writ was served on the defendant Sarlie, an American who was staying for a few days in a London hotel. The action concerned an American debt and the plaintiff was an American company. The court, however, held that it had jurisdiction because there had been no fraud inducing Sarlie to enter the country for the real purpose of serving the writ. In the Maharanee of Baroda v. Wilderstein (1972), the Maharanee served a writ on a well-known art dealer, Wilderstein, when he was at the Ascot Races on a temporary sojourn from France. I see the Minister smiling at that remark. The action concerned a painting which Wilderstein had sold to the Maharanee called “La Poesie”. He had certified the painting as a genuine Bouchee and had received the equivalent of £32,000. The Maharanee alleged that the painting was worth only about £500, because it was from the school of Bouchee and not by Bouchee himself. Although the gist of this action was clearly French, and although the Maharanee and Wilderstein were based in France, if the jet set can be said to be based in any particular spot, the court held that the service of the writ within the jurisdiction gave the English court jurisdiction. The jurisdiction thus based on the mere service of process is, however, subject to limitations, the effect of which is to render the court incompetent to determine the issue, notwithstanding that the defendant has been properly served.
The limitations had been judicially classified into three main types, (a), limitations that affect the subject matter of the issue-broadly stated these limitations preclude a right of action if the issue relates to foreign immovables, foreign revenue laws or foreign penal laws; (b), limitations that affect the kind of relief sought — these restrict the power of the court to grant relief affecting the matrimonial stance of the parties; in such a case it is not enough that the respondent has been served with process; the competence of the court is conditioned by such factors as the domicile of the parties and (c), the limitations relating to the persons between whom the issue is joined.
There are certain persons against whom the jurisdiction cannot be enforced and others by whom it cannot be invoked. Finally, the court may decline jurisdiction or State proceedings notwithstanding the fact that the jurisdictional rules have been satisfied in situations such as (i) on the ground that to proceed with the case is contrary to a choice of jurisdiction clause, and (ii), that on the basis of the plea of Lis Alibi Pendends which may be raised where the same cause of action between the same parties is sub judice both in Ireland and in some other country.
A similar jurisdictional liberality, of course, extends to companies. Assuming their compliance with the statutory registration requirements, there is little difficulty about the amenability to Irish courts of companies, either incorporated in Ireland or incorporated outside Ireland but establishing a place of business in Ireland. Indeed, the common law displayed its customary inventiveness in treating companies doing business in Ireland as by analogy with individuals resident in Ireland and thus subject to service.
Service of process on companies depends on presence in Ireland, just as in the case of individuals. Under Section 379 (i) of the Companies Act, 1963, a document may be served on a company: (a), by leaving it at the registered office of the company; (b), by sending it by post to the registred office of the company; (c), if the company has not given notice to the Registrar of Companies of the situation of its registered office, by registering it at the office for registration of companies. Regardless of incorporation and registration under the Companies Acts, a company can still be present "in Ireland" and served with a writ. It is regarded as present in Ireland if it carries on business in Ireland. This concept has been developed by the cases, and we can conclude that a company carries on business in Ireland (a), if business is done in Ireland but it must be business and not merely, for example, a share transfer office for the convenience of Irish customers, and it must be business done in Ireland and not merely with Ireland. The distinction is shown most clearly in the case of an agent. The criterion is whether the agent has been employed in Ireland with authority to enter into transactions which bind the company. On the other hand if he is merely as a conduit pipe for orders this is not carrying on business in Ireland. A particular case here is Okura v. Forsbacka (1914). (b) The company must have a fixed place of business in Ireland and a fixed period of time.
However, in the words of Professor Cheshire:
Neither the impermanency of the place nor the brevity of time during which the business was done in Ireland is in itself sufficient to render the company immune from process.
Thus, in Dunlop Pneumatic v. Action Gesellschaft (1902) the defendants were held to be present in England where they hired a stand for nine days at an exhibition in London and employed an agent to explain and take orders.
In a further case Littaur Glove Corporation v. Millington (1920) a director of the defendant English company, having no place of business in the United States, was staying at a hotel in New York and was making occasional use of an office belonging to a customer of the defendant. A writ was served on him in this office in his capacity as a director of the defending company. Salter J. held that the company was not in any true sense of the term carrying on business in the State of New York. “A corporation is not present in a country if it is merely an agent there to seek customers and to transfer correspondence between them and the corporation in England but has no power to make contracts on the corporation's behalf.”
The second way in which an Irish court assumes jurisdiction is where there is submission by the defendant. Despite the fundamental principle that a court cannot entertain an action against the defendant who is absent from Ireland, it has long been recognised that an absent defendant may confer jurisdiction on the court by submitting thereto. This may be done in a variety of ways such as (1) entering a non-conditional appearance; (2) instructing a solicitor to accept service on his behalf; (3) where a defendant commences an action as a plaintiff he is deemed to submit to a counterclaim and an Irish court would have jurisdiction over the counterclaim; (4) although a defendant who appears to contest the case on its merits will be held to have submitted to the jurisdiction an appearance merely to protest that the court does not have jurisdiction does not amount to an implied submission. In the words of Lord Denning in Re Dulles' Settlement (No. 2) (1951):
I cannot see how anyone can fairly say that a man has voluntarily submitted to jurisdiction of a court when he has all the time been vigorously protesting that it has no jurisdiction.
The third method whereby an Irish court assumes jurisdiction is by service of the writ or notice of the writ out of the jurisdiction under Order XI of the Rules of the Superior Courts. We have seen that the service of the writ is the foundation of jurisdiction in the Irish courts. However, the common law rule that an action in personam will not lie against the defendant unless he was properly served with the writ or its equivalent and was in Ireland at the time of service has been found to be inadequate.
For example, an Irish person could commit a tort in Ireland and escape liability in Ireland by going abroad, or in the case of a foreigner by returning to his own country. This happened even if the tort feasor had property in Ireland. The only remedy of the aggrieved party was to follow the wrongdoer to his place of residence in accordance with the maxim, actor sequitur forum rei.
Owing to considerations of this nature exceptions to the common law rule were introduced by the Common Law Procedure Act, 1952. This Act introduced an entirely new kind of jurisdiction called the "assumed jurisdiction" which gave the Irish courts the discretionary power to summon an absent defendant, whether Irish or sovereign, and who was unwilling to submit to the jurisdiction of the Irish court. The exercise of this jurisdiction is now governed by Order XI of the Rules of the Superior Courts which empowers the courts, on application being made, to permit the issue and service of a summons upon absent defendants in specific circumstances. Notice of the writ, instead of the writ, of course, is served on non-citizens. The issue of the writ or the notice of the writ is under the judge's discretion. Application is made ex parte to a judge on a motion paper founded on an affidavit. In all applications the plaintiff applies for leave to issue the writ and to serve the writ out of the jurisdiction. The long-arm jusisdiction of Order XI has been referred to an “exorbitant jurisdiction” by Lord Diplock in Amin Rasheed Shipping Corporation v. Kuwait Insurance (1984) and per Webster J. in Amanuel v. Alexandros Shipping, (1986).
The justification for the epithet lies in the fact that the Irish courts are not prepared — and, indeed, the English courts are not prepared —mutatis mutandis to concede a similar competence to other courts.
Indeed, the Order XI jurisdiction can be excused only on the ground that a significant connection exists between the cause of action and Ireland, or between the absent defendant in Ireland. Prima facie is sufficient to attract the litigation to Ireland as an interested forum. Moreover, the Order XI jurisdiction is a jurisdiction that may — not which must — be exercised. In other words, the order is not imperative, but discretionary. It merely confers upon the court the power which it is enabled to exercise in cases which come within the spirit and the letter of Order XI. The ultimate question, therefore, in regard to Order XI is will justice in all probability be obtained in the foreign court?
The following are the main headings in which Order XI, rule 1, may be made to an Irish court for leave to serve and issue a writ or notice of a writ on a defendant who is out of the jurisdiction; (a) Where an action is being brought to enforce, rescind, dissolve, annul or otherwise affect a contract or to recover damages or other relief for or in respect of the breach of the contract in the following cases:
(i) Where the contract was made in Ireland rule 1 (e) (i).
(ii) Where the contract was made by or through an agent trading or residing in Ireland on behalf of a principal trading or residing out of Ireland, rule 1 (e) (ii).
(iii) Where the contract is by its terms or implication governed by Irish law or is one brought in respect of a breach committed in Ireland of the contract wherever made, rule 1 (e) (iii).
It is sufficient for rule 1 (e) (i) to apply if the contract was substantially made in Ireland — B.P. Exploration v. Hunt (1976). Rule 1 (f) applies if “the action is founded on a tort committed in Ireland.” It was held in Krochan v. Russell and CIE (1937) that leave to serve notice of a writ under rule 1 (f) would not be granted unless the tort had a substantial connection with Ireland. Rule 1 (g) applies “if any injunction is sought as to anything to be done in Ireland or any nuisance in Ireland is sought to be prevented or removed whether damages are or are not also sought.” To come within rule 1 (g) the injunction must be part of the substantive relief to which the plaintiffs cause of action entitled him. Rosbery v. Hilbery, (1925) and The Siskina (1977).
This, then, in general terms is the present jurisdiction of the Irish courts in civil and commercial matters. Under the convention, jurisdiction will be determined in accordance with Title II of the convention. The scope of the convention is defined by the Preamble and also in Article 1 of the convention. The Preamble provides that the member states of the European Communities have concluded this convention desiring to implement the provisions of article 220 of the Treaty of Rome whereby they undertake to secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and to strengthen in the Community the legal protection of persons therein established and for this purpose to determine the international jurisdiction of their courts, to facilitate recognition and to introduce an expeditious procedure for securing the enforcement of judgments, authentic instruments and court settlements.
The first paragraph of Article 1 provides that the convention "shall apply in civil and commercial matters whatever the nature of the court or tribunal." It shall not extend in particular to revenue, customs and administrative matters. The second paragraph of Article 1 provides that the convention shall not apply to four specific areas: (i) The status or legal capacity of natural persons, rights and property arising out of a matrimonial relationship, wills, succession; (ii) bankruptcy, proceedings relating to the winding up of insolvent companies, etc.; (iii) social security; (iv) arbitration. The scope of the convention has been summed up by the Jenard report in the words: "It governs international and legal relations, applies automatically and covers all civil and commercial matters apart from certain exceptions which are exhaustively listed."
Article 1 has given rise to several important judgments of the European Court of Justice. It is clear from the report of the drafters of the convention and from the judgments of the ECJ that the term "civil and commercial matters" was intended to be, and will be, interpreted broadly, whereas the exceptions will be interpreted more restrictively. The first of these four areas expressly excluded from the scope of the convention by the second paragraph of Article 1, namely that the convention shall not apply — and I quote: "... To the status or legal capacity of natural persons, rights in property arising out of matrimonial relationships..." came up for interpretation by the European Court of Justice in De Cavel v. De Cavel (No. 1), (1979), case 143-78. In that particular case Mr. De Cavell, a French man, and Mrs. De Cavell, his German wife, were resident in Frankfurt, Germany. They had a flat there as well as an apartment in France. Mr. De Cavell instituted divorce proceedings against his wife in Paris. One of his allegations was that his wife had taken from their apartment in France some valuable carpets which belonged to him and had also taken some items of furniture and furnishings from their flat in Frankfurt. The husband, therefore, applied to the French court for interim protective measures against his wife preventing her from dealing with their joint property until the court had given its judgment. This was granted and, among other things, the court ordered the placing of seals on the furniture and effects in the couple's Frankfurt flat and the freezing of the two bank accounts in the wife's name in Germany. The interim orders were made, of course, in compliance with French law. The husband applied to a German court for enforcement of the orders under Article 31 of the convention. The German court had its doubts as to whether the interim protective orders could be enforced in Germany and it, therefore, referred the matter to the European Court.
Two grounds in particular were put forward against the enforcement of the orders: (1) since the divorce itself clearly related to status and was consequently outside the scope of the convention, and since the interim orders were ancillary to the divorce proceedings, ought they not to be regarded as outside the scope of the convention as well? And (2), even if they were not to be excluded because they were linked to the divorce proceedings should they not be regarded as relating to "rights and property arising out of a matrimonial relationship" and consequently, ought they not to be regarded as outside the scope of the convention as well?
The European Court of Justice held that such matters were excluded but the judgment is, perhaps, rather obscure. In one passage it states:
The enforced settlement on a provisional basis of proprietary legal relationships between spouses in the course of proceedings for divorce is inseparable from questions relating to the status of persons and from the settlement of rights in property arising out of matrimonial relationships.
This suggests that all such orders are automatically excluded. However, in a later passage in the judgment it is stated that such orders may, in some cases, fall within the scope of the convention.
The court said that disputes related to the assets of spouses in the course of divorce proceedings may, depending on the circumstances, concern or be closely connected with (1) questions relating to the status of persons, (2) proprietary legal relationships between spouses resulting directly from matrimonial relationship or the dissolution thereof, and (3) proprietary legal relationships between the spouses which have no connection with the marriage. Disputes relating to Articles 1 and 2 would be excluded from the scope of the convention but disputes relating to category (3) would fall within the scope of the convention. Thus it seems reasonable to conclude that disputes concerning proprietary legal interests between spouses only fall within the scope of the convention where they have no connection with the marriage itself.
Finally, the court said that for the purposes of the convention interim protective measures should be treated in the same way as final measures and that, in the case of interim protective measures relating to property, the important question is not the nature of the interim measure itself but the nature of the right it is intended to protect.
The main jurisdictional effect on Irish law of the convention will be that it will no longer be possible for an Irish court to assume jurisdiction over a domiciliary of another contracting state by reason only of the service on him of a summons during his temporary presence in Ireland. Article 3 declares:
Persons domiciled in a contracting state may be sued in the courts of another contracting state only by virtue of the rules set out in sections 2 to 6 of Title II, and in particular the following provisions shall not be applicable as against them. In Ireland the rules which enable jurisdiction to be founded on the document instituting the proceedings having been served on the defendant during his temporary presence in Ireland.
Therefore, the Wilderstein case and the other cases in regard to temporary sojourns from one country to another would seem to be about to be brought to an end.
The primary or general jurisdictional case of the convention is, as the Minister has indicated, based on domicile. Article 2 lays down the basic rule for determining general jurisdiction. It provides that:
Persons domiciled in a contracting state shall, whatever their nationality, be sued in the courts of that State ... except where the Convention... specifically allows them to be sued elsewhere.
The convention does not define what "domicile" is to mean but Article 52 of the convention indicates how it may be defined. Title II, Articles 2 to 18, contain: (1) special jurisdictional rules which supplement the general jurisdiction based on domicile, for example. Article 5 sets out several instances where the plaintiff has a choice of jurisdiction; (2) exclusive jurisdictional rules which exclude the general jurisdiction based on domicile, for example, in the case of immovable property. Article 16 gives exclusive jurisdiction to the courts of the contracting state in which the property is situated. These rules correspond broadly to the grounds on which leave to serve out of the jurisdiction may be granted at present under Order XI of the Rules of the Superior Courts.
Article 5 (1), mentioned by the Minister in detail, provides that in matters relating to a contract a person domiciled in the contracting state may be sued in another contracting state in:
... the courts for the place of performance of the obligation in question.
Article 5 (1) has given rise to a number of important interpretations by the European Court of Justice. In de Bloos v. Bouyer (1976), case 14/76, the French defendant company granted a Belgian company an exclusive right to distribute their products in Belgium, Luxembourg and the Belgian Congo. The plaintiff, de Bloos complained that there had been a unilateral breach of contract without any notice by Bouyer and they brought an action in the Belgian court seeking the dissolution of the contract and damages. Bouyer objected to the jurisdiction of the Belgian court and the court upheld this objection. De Bloos then appealed to the court of appeal of Mans which formulated the following question for the European Court of Justice:
In any action brought by the grantee of an exclusive sales concession against the grantor in which he claims that the latter has infringed the exclusive concession, may the term "obligation" in Article 5 (1) of the Convention be applied to the obligation in dispute or forming the basis of legal proceedings?
The European Court of Justice held as follows:
(1) As stated in the preamble the Convention is intended to determine the international jurisdiction of the courts of the contracting States, to facilitate the recognition and to introduce an expeditious procedure for securing the enforcement of judgments.
(2) These objectives imply the need to avoid, as far as possible, creating a situation in which a number of courts have jurisdiction in respect of one and the same contract.
(3) Because of this Article 5 (1) of the Convention cannot be interpreted as referring to any obligation whatsoever arising under the contract in question. On the contrary, the word "obligation" in Article 5.1 confers the contractual obligation forming the basis of the legal proceedings.
Article 5.3 which the Minister dealt with in great detail, provides that in matters relating to a contract, a person domiciled in the contracting state may be sued in the courts of another contracting state where the harmful event occurred. Of course the phrase "where the harmful event occurred" is ambiguous for if the tort feasor acts in country A, for example, and causes harm in country B, it is not clear whether the harmful event should be regarded as having occurred in Country A or country B. In Bier v. Mines De Potasse d'Alsace, 1976, the European Court of Justice was called upon to clarify this matter. The defendants in this case, a very topical case, were a French concern operating in Alsace. They discharged approximately 11,000 tonnes of chloride each day into the river Rhine which considerably increased the salinity of the water. Bier was a nursery man living near Rotterdam who used water from the river Rhine for irrigation purposes. Because the water was so polluted, he was obliged to take expensive measures to purify it. Thus the defendant's action in discharging pollutants into the river Rhine in France had caused harm to the plaintiff in Holland. The question arose: which court had jurisdiction under Article 5.3, the French Court or the Dutch Court? The European Court of Justice held that the phrase in Article 5.3 “where the harmful event occurred” must be understood as being intended to cover both the place where the damage occurred and the place of the events giving rise to it. Thus the plaintiff has two choices of jurisdiction.
This decision must be seen in the light of the recent decision on Greham v. Medical Incorporated and Pine Valley Associates, where our Supreme Court formulated jurisdictional rules for the determination of the locus of a tort different from those set out by the European Court of Justice in the Bier v. Mines De Potasse case. However, when this convention, which is derived from the EC Treaty, becomes law, it will have supremacy over the provisions of our national law or any national law which conflicts with it. Under the convention also, the jurisdiction of our courts will be enlarged, as the Minister has said, in cases concerning insurance and consumer contracts.
Sections 3 and 4 of Title III give the policy holder and the consumer a choice of jurisdiction not presently available. It has been excellently summed up in the Minister's speech when he says "as in the case of maintenance, these provisions reflect concern for the weaker party — that is the policy holder and the consumer respectively." I certainly welcome that. The doctrine of forum non-conveniens, which enables an Irish court to decline jurisdiction in favour of a foreign court which it considers would be more suitable to determine the issue, will cease to have application in actions, including domiciliaries of contracting states.
Under existing Irish law, the first and over-riding essential for the effectiveness of a foreign judgment in Ireland is that the adjudicating court should have had jurisdiction in the international sense over the defendant. There are three conditions which must be satisfied for the enforcement in Ireland of a foreign judgment in common law: (1) the judgment must have been given by a court of competent jurisdiction; (2) the judgment must be final and conclusive; and (3) the judgment must be for a definite sum of money.
However, despite the fact that a foreign judgment upon which the defendant is sued is final and conclusive, it is still open to the defendant to escape liability not only by pleading that the foreign court had no jurisdiction but also by pleading one of three further defences: (1) that the foreign judgment was obtained by fraud; (2) that the enforcement of the foreign judgment would be contrary to public policy of Irish law; and (3) that the foreign judgment was contrary to natural justice. Under the convention. Title III deals with the recognition and enforcement of foreign judgments. The intention of the drafters of the convention is summed up in the following statement from the Jenard report:
As a result of the safeguards granted to the defendant in the original proceedings, Title III of the convention is very liberal on the question of recognition and enforcement. It seeks to facilitate as far as possible the free movement of judgments and should be interpreted in this spirit.
The Jenard report continues:
This liberal approach is evidenced in Title III, first by a reduction in the number of grounds which can operate to prevent recognition and enforcement of judgments and second, by the simplification of the enforcement procedure which will be common to the member states.
Recognition is governed by Articles 26 to 30. The effect of Article 26 is that a judgment given in one contracting State shall be automatically recognised in another contracting state without any special procedure being required.
The Jenard report states:
Under Article 26, there is a presumption in favour of recognition which can be rebutted only if one of the grounds for refusal listed in Article 27 is present.
The Jenard report highlights two novel developments: (1) that judgments no longer have to be Res Judicarta; and (2) in general, the jurisdiction of the original court does not have to be investigated. There are two main exceptions to recognition. Under Article 27.1, a judgment need not be recognised where recognition would be contrary to the public policy of the state in which recognition is sought. The Schlosser report, referred to by the Minister, adverted to the fact that fraud is regarded in the Irish courts as a special ground separate from public policy and it has been suggested by the Schlosser report that the obtaining of a judgment by fraud “can, in principle, constitute an offence against the public policy of the State addressed.” Furthermore:
... that a court in the State addressed must always ask itself whether a breach of its public policies still exists in view of the fact that proceedings for redress can be or could have been lodged in the courts of the State of origin against the judgment allegedly obtained by fraud.
Under Article 27.2 a judgment will not be recognised:
... where it was given in default of appearance, if the defendant was not duly served with the document which instituted the proceedings or with an equivalent document in sufficient time to enable him or her to arrange for his or her defence.
There does not appear, however, to be any objective standard of what constitutes "sufficient time" and it is stated in the Jenard report that it is for the court in which recognition is sought to decide whether the defendant was given sufficient time to arrange for his defence.
Finally, in regard to enforcement the drafters of the convention clearly realised that the progress made by the jurisdictional provisions of Title II would in the words of the Jenard report "be rendered nugatory if a party seeking enforcement in a contracting State of a judgment given in his favour were impeded by procedural obstacles." Because the recognising court is strictly limited in its powers to look into the judgment and because the defendant is adequately protected in the original proceedings, the Jenard report considers that "it is proper that the application for enforcement be enabled to proceed rapidly" and "that enforcement be obtained without unnecessary complications."
In conclusion, I believe the convention will have far-reaching implications for the Irish legal system and, indeed, the Irish legal profession. Irish lawyers will have to familiarise themselves with the provisions of the convention in many disputes which have an international aspect. Our judges will have to apply the rules contained in the convention regardless of whether they had been pleaded or not. A great lot of the discretion formerly exercised by our judges in fact will be restricted. Be that as it may, in general I welcome this Bill. Go raibh maith agat.