Goshawk Dedicated Ltd and Others v Life Receivables Ireland Ltd

JurisdictionIreland
JudgeDenham J.
Judgment Date30 January 2009
Neutral Citation[2009] IESC 7
Docket Number[Record No: 136/2008]
CourtSupreme Court
Date30 January 2009
Goshawk Dedicated Ltd & Ors v Life Receivables Ireland Ltd
Between/
Goshawk Dedicated Limited and Kite Dedicated Limited formerly known as Goshawk Dedicated (No. 2) Ltd, and Cavell Management Services Ltd, and Cavell Managing Agency Ltd
Plaintiffs/Respondents

and

Life Receivables Ireland Limited
Defendant/Appellant

[2009] IESC 7

[Record No: 136/2008]

THE SUPREME COURT

CONFLICT OF LAWS

Brussels Regulation

Jurisdiction - Proceedings earlier commenced in non Member State - Interpretation of Brussels Regulation - Domicile of defendant - Common law jurisdiction - Lis alibi pendens - Forum non conveniens - Whether discretion to stay proceedings - Whether Brussels Regulation removed discretion under common law - Whether discretion under lis alibi pendens rule - Rationale for rule - International comity - Expense and inconvenience - Mandatory jurisdiction pursuant to Brussels Regulation - Whether guidance available from case law - Whether necessity to refer question to European Court of Justice - Owusu v Jackson [2005] ECR 1-398 - Council Regulation (EC) No 44/2001, arts 2, 28 and 34 - Parties to prepare draft reference for consideration by court (136/2008 - SC - 30/1/2009) [2009] IESC 7

Goshawk Dedicated Ltd v Life Receivables Ireland Ltd

Facts: The plaintiffs were companies incorporated in England and the defendant was an Irish registered company. Proceedings were commenced by the defendant against the plaintiffs in the US for misrepresentation, fraud securities, fraud and other reliefs. The issue arose as to the proper interpretation of Council Regulation EC 44/2001 (Brussels 1). The defendant brought a motion to stay the Irish proceedings, which the Irish High Court had refused. The application of the decision of the European Court of Justice in Case C-281/02 Owusu v. Jackson [2005] ECR I-383 arose.

Held by the Supreme Court per Denham J. (Kearns & Macken JJ. concurring) that there were pending proceedings which were first in time in a non-contractual State and thus was not a situation which was acte clair. The Court was satisfied that it was necessary to refer the question to the European Court of Justice. Thus when a defendant was sued in its country of domicile the issue arose as to whether it was inconsistent with Council Regulation 44/2001 for the court to decline jurisdiction or stay proceedings and also the criteria to be applied by a Member State in coming to a decision whether to stay proceedings in a Member State. The Court would hear submissions on the draft reference, which the parties would prepare.

Reporter: E.F.

OWUSU v JACKSON (T/A VILLA HOLIDAYS BAL INN VILLAS) 2005 ECR I-1383 2005 QB 801 2005 2 WLR 942 2005 1 LLOYD'S 452

EEC REG 44/2001 ART 27

EEC REG 44/2001 ART 28

EEC REG 44/2001 ART 34.4

EEC REG 44/2001 ART 33

EEC REG 44/2001 RECITAL 2

EEC REG 44/2001 RECITAL 4

TREATY OF ROME PART ONE ART 5

EEC REG 44/2001 RECITAL 6

EEC REG 44/2001 ART 2

TREATY OF ROME PART FIVE TITLE I CHAP 1 S4 ART 234

EEC REG 44/2001 RECITAL 15

EEC REG 44/2001 ART 27

Denham J.
1

Judgment of the court delivered by Denham. J.

2

1. Goshawk Dedicated Ltd., and Kite Dedicated Ltd., formerly known as Goshawk Dedicated (No.2) Ltd., and Cavell Management Services Ltd. and Cavell Managing Agency Ltd., the plaintiffs/respondents are referred to as "the plaintiffs", Life Receivables Ireland Limited, the defendant/appellant, is referred to as "the defendant".

3

2. The plaintiffs are companies incorporated in England. The defendant is an Irish registered company and is a subsidiary of International Investment and Underwriting.

4

3. These proceedings were commenced in Ireland by the plaintiffs by way of a plenary summons issued on the 6th September, 2007. Proceedings had already been commenced by the defendant against the plaintiffs on 29th June, 2007, in the United States District Court for the Northern District of Georgia, Atlanta Division, a federal court. In those proceedings the defendant, as plaintiff, seeks certain reliefs against the plaintiffs (as defendants) and against others who are not party to these Irish proceedings. Those proceedings seek relief for, inter alia, alleged misrepresentation, fraud, securities fraud, and other relief. A series of negative declarations are sought in the Irish proceedings brought by the plaintiffs, which mirror the relief sought in the United States District Court, save that the parties are reversed. For example, a declaration that none of the plaintiffs made any misrepresentations of material fact to the defendant or failed to disclose any material facts that they were obliged to supply to the defendant, whether in relation to (a) the defendant's purchase of a partnership interest in Life Receivable II, LLP; (b) a series of contingent cost insurance policies underwritten and issued by the first and second named plaintiffs from September, 2000 until early 2003, or (c) in the management of the run off of Syndicate 102. The prior proceedings commenced in the U.S.A. by the defendant therefore relate to the same matters. The court will return to these matters later in the judgment.

5

4. The issue which arises at this stage between the parties concerns the proper interpretation of the Council Regulation E. C./44/2001 of 22 December, 2000 on jurisdiction and the recognition and enforcement of judgments of civil and commercial matters, O.S. L012/7 16.1.2001 "Brussels I" Regulation. The defendant brought a motion to the High Court seeking an order staying these Irish proceedings, pending the final determination of the proceedings which it had commenced in the United States District Court for the Northern District of Georgia, Atlanta Division. The High Court (Clarke J.) refused the application by order of the 22nd April, 2008, following upon the judgment delivered on the 27th February, 2008.

6

5. This is an appeal by the defendant from the order and judgment of the High Court.

7

2 6.1 The High Court found that the issue between the parties related to the proper interpretation of the Brussels I Regulation and its application to the circumstances of the case. It also involved a consideration of what the learned High Court judge referred to as the common law doctrine offorum non conveniens, and more particularly, in light of the argument of the defendant, as eventually refined, the extent and application of the doctrine of lis alibi pendens applicable to the case under the Brussels I Regulation. The learned trial judge noted that the traditional common law jurisdiction on forum non convenienshad been substantially eroded by the provisions of the Brussels Convention and the Brussels I Regulation, which neither the United Kingdom nor Ireland had sought to retain, in its traditional common law form, upon their accession. He stated that in reality the issue which arises in this case is as to just how far that process of erosion has gone, and the extent of the application of the doctrine of lis alibi pendens under the Brussels I Regulation to proceedings concerning the same cause of action when the earlier proceedings, as here, have been commenced in a non-Member State.

8

3 6.2 In the High Court the defendant submitted that it would be appropriate under the common law for the Irish Courts to decline to deal with this litigation because of the existence of the earlier proceedings in Georgia, U.S.A., relating to the same matters in which the defendant is the plaintiff and other parties, including the plaintiffs in these proceedings, are defendants. The learned High Court judge pointed out that if neither the Brussels Convention nor Brussels I Regulation existed it would be necessary to consider under established common law rules whether it was more appropriate that these proceedings be conducted in the U.S.A. rather than Ireland. However, the primary submissions of the plaintiffs were that the Brussels I Regulation removes the discretion of the Court under common law, and, that in accordance with the Brussels I Regulation properly construed, the courts of Ireland are obliged to deal with the case.

9

The facts were found by the learned High Court judge as follows. The defendant is incorporated in Ireland and has its principal place of business in Ireland. The plaintiffs are companies incorporated in England and have their principal places of business in London. In June 2005 the defendant purchased a partnership interest in a Delaware partnership known as Life Receivables II LLP in which the defendant and Life Receivables Holdings are the only partners but in which the defendant would appear to be the only partner with a financial stake. The partnership is, in turn, a beneficiary of Life Receivables Trust whose commercial value derives from trust property, being life insurance policies purchased in the early years of this decade together with a contingent cost insurance issued by Goshawk in respect of those policies. The defendant, as plaintiff in the U.S. proceedings, alleged that it was induced into buying into the partnership as a result of misrepresentation on the part of the defendants in the U.S. proceedings. The defendant has commenced proceedings in Georgia, U.S.A., as referred to earlier, against the plaintiffs and a number of others who were involved in a series of transactions which were at the heart of the dispute between the parties.

10

The complaint in those proceedings, briefly, alleges securities fraud, common law fraud, negligent misrepresentation and conspiracy to commit fraud in connection with a transaction valued at a figure in excess of U.S.$14 million. The primary jurisdiction invoked is in respect of the securities fraud pursuant to United States law, and a supplemental jurisdiction is alleged of the common law claims, again pursuant to United States law, on the grounds that the same facts and circumstances give...

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