Kutchera v Buckingham International Holdings Ltd

• Jurisdiction: Ireland
• Judge: WALSH J.,Henchy J.,McCARTHY J
• Judgment Date: 01 March 1988
• Neutral Citation: 1988 WJSC-SC 409
• Court: Supreme Court
• Docket Number: [1987 No. 625 S.C.],(74/87)
• Date: 01 March 1988

KUTCHERA v. BUCKINGHAM INTERNATIONAL HOLDINGS

BETWEEN

JOHN FRANCIS KUTCHERA

Plaintiff

and

BUCKINGHAM INTERNATIONAL HOLDINGS LIMITED (FORMERLYALLIED VENTURE PROPERTIES LIMITED)

Defendants

1988 WJSC-SC 409

Finlay C.J.

Walsh J.

Henchy J.

Hederman J.

McCarthy J.

(74/87)

THE SUPREME COURT

Synopsis:

PRACTICE

Service

Summons - Service outside jurisdiction - Motion to set aside service - Plaintiff abroad - Enforcement of loan contract - By a contract dated 26/5/78, and made in Canada between two agents of the plaintiff of the one part and the defendant company of the other part, the defendants borrowed 150,000 Canadian dollars from the plaintiff and agreed to repay to the plaintiff in London the amount of the loan with interest, in the manner therein appearing, on or before 26/5/83 - The defendants were a Canadian company which was registered in Alberta but its principal place of business was Ontario and most of its directors lived in Hong Kong - Over 80% of the issued shares of the defendant company was held by a company registered in Hong Kong, but most of the defendants" 500 shareholders lived either in the United States of America or in Canada - The contract stated that the plaintiff lived in Transvaal, South Africa; a guarantor for the repayment of the loan lived in Ireland - One of the plaintiff's agents was an individual who lived in the Bahamas and the other was a company which was registered there - The terms of the contract provided that, if the defendants failed to repay the amount of the loan with interest in accordance with the terms of the contract, the plaintiff would be entitled to receive an allotment of 1,847,380 shares of the defendant company upon demand being made in that behalf - In that event the plaintiff was also entitled to inspect all books, records and accounts of the defendants and to nominate four persons as directors of the defendants - The defendants failed to repay the loan with accrued interest as required by the contract - Paragraph 10 of the contract provided as follows:- "This agreement and all aspects herein shall be construed and governed by the Laws of the Republic of Ireland (Eire) and shall be deemed to have been made in the Republic of Ireland and subject only to the jurisdiction of the Irish Courts and no other jurisdiction and the parties hereto irrevocably submit to the jurisdiction of the Courts of the Republic of Ireland in all or any matter of dispute arising out of this Agreement" - Order 11, r.1(e)(iii), of the Rules of 1986 states:- "Service out of the jurisdiction of an originating summons or notice of an originating summons may be allowed by the court whenever ... (e) the action is one 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 a contract ... (iii) by its terms or by implication to be governed by Irish Law ..." - On 1/12/86 the High Court gave the plaintiff (who was then living in England) leave to issue a plenary summons against the defendants, and also gave him leave to serve notice of the summons on the defendants at an address in Calgary, Alberta, Canada - In the summons the plaintiff claimed a declaration that the defendants were obliged to do everything necessary to effect such allotment, a declaration that the plaintiff was entitled to nominate the four directors, an order directing the defendants to execute all documents necessary for the appointment of the said directors and an injunction restraining the defendant company from disposing its assets - There was no evidence that the defendants had assets in Ireland - The defendants were served with notice of the summons and on 11/2/87 they entered an appearance for the purpose of contesting jurisdiction only - The defendants then applied to have the order dated 1/12/86 discharged and on 22/2/87 the High Court discharged that order on the ground that there was no connection between Irish law and the realities of the contract - The plaintiff appealed against the discharge - The defendants accepted that the contract was governed by Irish law but submitted that the issues should not be determined in an Irish forum - Held, in allowing the appeal, that Irish domestic law was the proper law of the contract since it was made so by the express terms of the contract - Held that the determination of the issues might involve an examination of the constitution and powers of the defendant company under Canadian law but those matters could be proved by expert evidence in the normal manner - Held that no reasons had been given which would justify a refusal to hold the parties to their agreement that an Irish forum was the appropriate forum for the determination of the issues arising under the contract - Held that, in such circumstances, alleged difficulties relating to the enforcement of an order of an Irish court did not furnish grounds for declining jurisdiction - Held that enforcement would be governed by the ~lex fori~ chosen for the purpose of the enforcement - ~Lett v. Lett~ [1906] 1 I.R. 618; ~O'Callaghan v. O'Sullivan~ [1925] 1 I.R. 90; ~MacNamara v. The Owners of S.S. Hatteras~ [1933] I.R. 675; ~International Alltex Corporation v. Lawler Creations Ltd.~ [1965] I.R. 264; ~Grehan v. Medical Incorporated~ [1986] I.R. 528 and ~The Fehmarn~ [1958] 1 All E.R. 333 considered - Rules of the Superior Courts, 1986, order 11, rr.1, 3 - (74/87 - Supreme Court - 1/3/88) - [1988] I.R. 61 - [1988] ILRM 501

|Kutchera v. Buckingham International Holdings|

CONTRACT

Breach

Proper law - Proper forum - Foreign parties - Contract made abroad - Choice of parties - Irish law and Irish forum chosen - Jurisdiction accepted by Irish courts - ~See~ Practice, service - (74/87 - Supreme Court - 1/3/88) - [1988] I.R. 61 - [1988] ILRM 501

|Kutchera v. Buckingham International Holdings|

Citations:

RSC O.11 r1(e)(iii)

O'CALLAGHAN V O'SULLIVAN 1925 IR 90

MACNAMARA & SON V THE OWNER OF THE STEAMSHIP HATTERAS 1933 IR 675

RSC O.11 r3(1)

INTERNATIONAL ALLTEX CORPORATION V LAWLOR CREATIONS LTD 1965 IR 264

OVERSEAS FOOD IMPORTERS & DISTRIBUTORS V BRANDT 1978 93 DLR 317

HILTON V GUYOT 159 US 113

LETT V LETT 1906 IR 618

FRY ON SPECIFIC PERFORMANCE 4ED P52

FEHMARN, THE 1958 1 AER 333 1958 1 WLR 159

GREHAN V MEDICAL INC 1986 IR 528

RSC O.12 r26

CARVALHO V HULL BLYTH (ANGOLA) LTD 1979 3 AER 280

CHESHIRE & NORTH PRIVATE INTERNATIONAL LAW 11ED P4

PERGAMON PRESS LTD V MAXWELL 1970 2 AER 809

BULA LTD V TARA MINES LTD UNREP MURPHY 11.02.87

KINGSTON V IRISH DUNLOP CO LTD 1969 IR 233

RSC O.19 r29

RSC 1905 O.25 r5

GUARANTY TRUST CO OF NEW YORK V HANNAY & CO 1915 2 KB 536

ELLIS V DUKE OF BEDFORD 1899 1 CH 494

CHAPMAN V MICHAELSON 1909 1 CH 238

BURGHES V AG 1911 2 CH 139

OFFIN V ROCHFORD RURAL COUNCIL 1906 1 CH 342

JENKINS V PRICE 1907 2 CH 229

DYSON V AG 1912 1 CH 158

EVANS V LEVY 1915 2 KB 536

DICEY & MORRIS CONFLICTS OF LAWS 11ED P304

HALSBURY'S LAWS V8 PARA 584

VITA FOOD PRODUCTS INC V UNUS SHIPPING CO LTD 1939 AC 277

BOISSEVAIN V WEIL 1949 1 KB 482 1950 AC 387

TZORSZIS V MONARCH LINE 1968 1 WLR 406

HERBERT WAGG & CO, IN RE 1956 CH 323

UNTERWESER REEDERI V ZAPATA OFF-SHORE CO 1968 2 LlLR 158

MACKENDER & ORS V FELDIA AG & ORS 1967 2 QB 590

LIMERICK CORPORATION V CROMPTON 1910 2 IR 416

CHAPARRAL, THE 1968 2 LlLR 158

KUTCHERA V BUCKINGHAM INTERNATIONAL HOLDINGS 1988 ILRM 1

1 JUDGMENT OF WALSH J.delivered on the 1st day of March 1988 [FINLAY C. J. AGREEING, HEDERMAN CONC]

2 By order of the High Court of the 1st December 1986 the plaintiff was given liberty to issue an originating Plenary Summons against the defendants and, as it appeared to the Court that the intended action fell within the class of actions set out in O. 11, r. 1(e)(III) of the Rules of the Superior Courts, it was ordered that the plaintiff be at liberty to serve notice of the said summons on the defendants at suite 1,500, 324 8th Avenue, South West Calgary, Alberta in Canada. In an affidavit ofservice Roger Barrette of the city of Calgary in the province of Alberta, Canada swore that he personally served upon the defendants true copies of the order and the notice of the summons of the High Court referred to, and that the service was effected on the 16th December1986.

3 The defendants are a Canadian public company incorporated in the province of Alberta in Canada. The plaintiff lives in London, England. He is not an Irish citizen.

4 The contract the subject of the proceedings was an agreement for the loan of money to the defendants, described therein as "the borrowers". In the contract Mr. Brian Leigh with an address in Nassau in the Bahamas, and a limited company called Weybridge Properties Limited, and having its registered office in the Bahamas were described as "the lenders". Mr. Michael Sylvester Birrane with an address in Dublin, Ireland, was referred to in the contract as "the guarantor". In the agreement the borrowers acknowledged and thelenders declared that they the lenders acted as agents for the plaintiff, whose address at that time was given as being in Transvaal, South Africa. The defendants borrowed 150,000 Canadian dollars and as a consideration thereof, as well as agreeing to repay this sum, the defendants undertook to engage in certain transactions concerning the transfer of shares in their company to the plaintiff or his assignees. Paragraph 10 of the Agreement which is the final clause in the Agreement reads as follows:-

"This Agreement and all aspects herein shall be construed and governed by the Laws of the Republic of Ireland (Eire) and shall be deemed to have been made in the Republic of Ireland and subject only to the jurisdiction of the Irish Courts and no other jurisdiction and the parties hereto irrevocably submit to the jurisdiction of the Courts of the Republic of Ireland in all or any matter of dispute arising out of this Agreement."

5 Notwithstanding the error in the...