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Lord Justice
Mance :
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This is
the judgment of the court.
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Introduction
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| 1. |
This is an appeal, with
Tomlinson J's permission, from his judgment dated 23rd January
2001 and order dated 2nd February 2001 refusing to make absolute
a garnishee order dated 4th April 2000 and setting it aside subject
to a stay pending the present appeal. The parties are a judgment creditor,
Societe Eram Shipping Company Limited ("Eram") and the garnishee, The Hong
Kong and Shanghai Banking Corporation ("HSBC"), incorporated in Hong Kong
with branches in England. The judgment debtors are Societe Oceanlink Limited
and Yoon Sei Wha, a company and individual resident in Hong Kong. The garnishee
order relates to the credit balance on a bank account (No. 002.66.372.64)
held by one or both of the judgment debtors with HSBC at its Queens Road,
Central, Hong Kong branch.
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| 2. |
The garnishee bank's
objection to the order being made absolute was, shortly stated, that (a) the
debt garnisheed (the credit balance) is sited in, and subject to the law of,
Hong Kong, (b) the Hong Kong courts will not give effect to an English garnishee
order by reciprocal enforcement or by making a Hong Kong court order based
on the English court order and (c) there was or would be a real risk of HSBC
being liable twice.
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| 3. |
The judgment debt relates,
we are told, to demurrage. Eram sued the judgment debtors and obtained judgment
in the Tribunal de Commerce of Brest, France on 11th July 1997.
The judgment was by order dated 5th November 1998 registered in
England under s.4 of the Civil Jurisdiction and Judgments Act 1982Acts, which
gives effect to the Brussels Convention of 1968 and associated protocols and
conventions. The order gave the judgment debtors liberty to appeal against
the registration within two months after service of notice thereof upon them,
and stayed execution in the meanwhile. Notice of the registration was given
to the judgment debtors by letters dated 25th January 2000. No
appeal against registration was made within two months. Registration having
thus been validly effected, little if any significance can attach to the origin
of the present English judgment in a French judgment. It was a main object
of the Brussels Convention "to facilitate the free movement of judgments"
(cf e.g. Société d'Informatique Service Réalisation Organisation v Ampersand Software B.V.[ [1995] A.E.R. (E.C.) 783, paras. 30-31 and 39])
and to create in that respect a single European legal space.
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| 4. |
After registration, application
was made, supported by witness statement dated 3rd April 2000,
for a garnishee order to show cause. Such an order was made by Master Trench
on 4th April 2000, directed to HSBC at its Lower Thames Street,
London branch as well as to the judgment debtors. The return date for determination
whether it should be made absolute was fixed for 28th April 2000
before Master Prebble, but the application came ultimately before Tomlinson
J. in the Commercial Court, leading to his judgment dated 23rd
January 2001, against which the present appeal is brought. Only HSBC appeared
on the application.
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| 5. |
Tomlinson J. had before
him a witness statement from Mr Bassu of HSBC's English solicitors, Stephenson
Harwood. Mr Bassu submitted that
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"there
is a real risk that the effect of the attachment of any debt owed by HSBC
to the Judgment Debtors will not relieve HSBC from any liability it may have
to the Judgment Debtors pursuant to any account. HSBC therefore has a real
risk of being liable twice".
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| 6. |
In support, he produced
a letter dated 27th April 2000 from Mr Martin Reed, a partner in
Stephenson Harwood & Lo, an associated firm. This was the only positive
evidence of Hong Kong law adduced on either side before Tomlinson J. Mr Reed
is a solicitor (we understand, an English solicitor) practising in Hong Kong.
He records that he was asked to advise
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"whether
there is a real risk that the Garnishee will not be relieved from its liability
to the Judgment Debtors by the attachment of the debt owed by the Garnishee
to the Judgment Debtors and what proceedings the Judgment Creditor could start
in Hong Kong to recover the judgment debt".
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| 7. |
On the assumption that
HSBC's obligations in respect of the account were governed by Hong Kong law,
as well as sited in Hong Kong, Mr Reed advised that:
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| "(a) |
the
Garnishee has a contractual obligation, governed by Hong Kong law, to pay
the amount of any credit balance on such account to the account holders according
to the terms applicable to such account; and
| | (b) |
because
an order of an English court has no automatic effect under Hong Kong law,
such payment obligation cannot be affected by any such English court order,
unless such order becomes enforceable under Hong Kong law because of (1) the
operation of reciprocal procedures or (2) the making of a Hong Kong court
order based on the English court order. In our opinion, a garnishee made by
a foreign court is not a type of order which would be given effect to by the
Hong Kong courts under such procedures.
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Accordingly,
in the absence of the Judgment Creditor's English or French related court
orders being given effect under Hong Kong law, the Garnishee would be in breach
of contract, and there is a real risk of a debt claim by the account holder
for the amount of any credit balance on the relevant account (or possibly
a damages claim for at least such amount) if the Garnishee were either to
freeze such balance or to pay such balance to the Judgment Creditor in purported
reliance on such English or French court orders".
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| 8. |
Mr Reed went on to point
out that, since 1st July 1997, no arrangement for reciprocal enforcement
of English judgments has been in force in Hong Kong – the only procedure now
available there in respect of an English judgment being to commence proceedings
upon it at common law. Alternatively, proceedings could be taken to register
the French judgment under the Foreign Judgments (Reciprocal Enforcement) Ordinance
(Cap. 319). Thereafter, in each case a garnishee order could be sought from
the Hong Kong courts against any balance remaining on the judgment debtors'
HSBC account.
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| 9. |
In response to the issues
thus raised by HSBC, Mr Matthison of the judgment creditors' solicitors, Penningtons,
produced HSBC's standard terms applicable to the judgment debtors' account,
and said in a witness statement dated 7th July 2000:
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| "(a) |
In
English law, the payment of the debt by the bank will give the bank a [sic]
implied contractural [sic] or restitutionary right to recover the sum paid
from the Judgment Debtor;
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It
is also a demand for payment by the Judgment Debtor, compliance with which
even in the absence of an account in this country, entitles the bank to reimbursement;
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There
is therefore an English law liability created in favour of the bank against
the Judgment Debtor;
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This
debt the bank is entitled to set against the credit balance pursuant to clause
1(I) of the terms and conditions ....."
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| 10. |
No additional evidence
of Hong Kong law was put in by either side in the ensuing period of five or
so months before the matter was argued in front of Tomlinson J. We were informed
that HSBC had not sought any further advice about Hong Kong law. Eram's case
is that English law applies to determine whether HSBC would acquire any such
restitutionary right.
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| 11. |
The bank's standard terms
and conditions, to which Mr Matthison's statement refers, provided amongst
other things:
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| "1. |
GENERAL
(applicable to all accounts)
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| i. |
The
account holder agrees that the Institution's indebtedness to the account holder
shall not exceed the net amount owing by the Institution to the account holder
after deducting from any credit balance held by the Institution or providing
for the aggregate of all the account holder's liabilities ..... whether such
liabilities be actual, present, future, deferred, contingent, primary, collateral,
several, joint or otherwise (together the "account holder's aggregate liabilities").
Without prejudice to the generality of the foregoing and in addition to
any general lien, right of set-off or other right by way of security which
the Institution may have on any account whatsoever, the account holder agrees
that the Institution shall have the right, at its sole and absolute discretion
and without notice to the account holder. to refuse to repay when demanded
or when the same falls due any of the Institution's indebtedness to the account
holder if and to the extent that the account holder's aggregate liabilities
at the relevant time are equal to or exceed the Institution's indebtedness
at that time. ..."
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| 12. |
HSBC has subsequently
produced its special Assetvantage/Powervantage terms, which also applied to
the account and which contain a corresponding provision and further expressly
applied Hong Kong law to the account.
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Garnishee
relief
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| 13. |
The garnishee procedure
goes back to the Common Law Procedure Act 1854. It was incorporated into the
Rules of Court by the Supreme Court of Judicature Act (1873) Amendment Act
of 1875, and in 1967 it achieved its present place and wording in RSC O.49,
which became part of Schedule 1 to the CPR by virtue of CPR 50.1. RSC O.49
provides:
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| "1.- |
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| (1) |
Where a person (in this order referred to as "the judgment creditor") has
obtained a judgment or order for the payment by some other person (in this
order referred to as "the judgment debtor") of a sum of money amounting in
value to at least £50, not being a judgment or order for the payment of money
into court, and any other person within the jurisdiction (in this order referred
to as "the garnishee") is indebted to the judgment debtor, the court may,
subject to the provisions of this order and of any enactment, order the garnishee
to pay the judgment creditor the amount of any debt due or accruing due to
the judgment debtor from the garnishee, or so much thereof as is sufficient
to satisfy that judgment or order and the costs of the garnishee proceedings.
| | (2) |
An
order under this rule shall in the first instance be an order to show cause,
specifying the time and place for further consideration of the matter, and
in the meantime attaching such debt as is mentioned in paragraph (1) or so
much thereof as may be specified in the order, to answer the judgment or order
mentioned in that paragraph and the costs of the garnishee proceedings.
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| | 3.- |
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| (1) |
Unless the court otherwise directs, an order under rule 1 to show cause must
be served --
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| (a) |
on
the garnishee personally, at least 15 days before the time appointed thereby
for the further consideration of the matter; and
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on
the judgment debtor, at least 7 days after the order has been served on the
garnishee and at least 7 days before the time appointed by the order for the
further consideration of the matter.
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| | (2) |
Such
an order shall bind in the hands of the garnishee as from the service of the
order on him any debt specified in the order or so much thereof as may be
so specified.
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| | 8. |
Any
payment made by a garnishee in compliance with an order absolute under this
order, and any execution levied against him in pursuance of such an order,
shall be a valid discharge of his liability to the judgment debtor to the
extent of the amount paid or levied notwithstanding that the garnishee proceedings
are subsequently set aside or the judgment or order from which they arose
reversed."
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| 14. |
The express wording of
RSC O.49 requires that the garnishee be "within the jurisdiction". It is not
disputed that HSBC is within the jurisdiction. It is a foreign company carrying
on business here, and has duly provided details of persons authorised to accept
service of proceedings on its behalf in this jurisdiction. Under the previous
rules, it was once considered that not only the garnishee, but also the debt
garnisheed must be within the jurisdiction: see Richardson v Richardson[ [1927]
P.228, where at p.235] Hill J. held:
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"The Order
deals with the case where "any person is indebted to the judgment debtor and
is within the jurisdiction". But both in principle and upon authority, that
means indebted within the jurisdiction and is within the jurisdiction". The
debt must be properly recoverable within the jurisdiction. In principle, attachment
of debts is a form of execution, and the general power of execution extends
only to property within the jurisdiction of the Court which orders it. A debt
is not property within the jurisdiction if it cannot be recovered here."
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| 15. |
Hill J's decision on
this point has not been accepted as correct. In S.C.F. Finance Co Ltd v Masri[ [1987] 1 QB 1028, 1043H-1044C], Ralph Gibson LJ giving the judgment of
the court saw no reason to read into the language of RSC O.49 words to the
effect that the garnishee must be indebted within the jurisdiction, although
the court went on to "accept that in a case where the garnishee is not "indebted
within the jurisdiction" this may be relevant to the exercise of the court's
discretion". Ralph Gibson LJ cited in this regard Scrutton LJ's explanation
in Swiss Bank Corp. v Böhmische Industrial Bank[ [1923] 1 KB 637, 680-1]
of the earlier Court of Appeal decision in Martin v Nadel[ [1906] 2 KB 26]
as a
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"decision
.... that the court will not make absolute a garnishee order where it will
not operate to discharge the garnishee in whole or pro tanto from the debt;
it will not expose him to the risk of having to pay the debt or part of it
twice over. That is well established as a principle of discretion on which
the court acts."
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| 16. |
In the event, the court
held, on the facts in the S.C.F case, that the debt there garnisheed was properly
recoverable in England and capable of being discharged under English law.
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| 17. |
In Deutsche Schachtbau- und Tiefbohrgesesellschaft m.b.H. v Shell International Petroleum Co Ltd[
[1990] 1 AC 295], Sir John Donaldson MR, giving the one full judgment in the
Court of Appeal, accepted that the only jurisdictional requirements for garnishee
relief are that the garnishee should be "within the jurisdiction" and that
the subject matter should be a "debt due or accruing due to the judgment debtor
from the garnishee". He went on to say, however, that:
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"....
as a matter of discretion, a garnishee order will not be made against such
a person if it would not operate to discharge the garnishee in whole or pro
tanto from his liability in respect of the debt. Such a situation can arise
where the garnishee, although himself within the jurisdiction, is not indebted
within the jurisdiction"
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| 18. |
He then referred to the
S.C.F. and Swiss Bank cases, but added, with reference to citations from Dicey
& Morris, that the problem of double jeopardy was much less serious than
it otherwise might be:
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"because
garnishment is a process which is recognised internationally and most nations
will give effect to a rule similar to that of English law, namely that "the
validity and effect of an attachment or garnishment of a debt are governed
by the lex situs of the debt" .... and that debts "generally are situate in
the country where they are properly recoverable or can be enforced".
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| 19. |
In Interpol Ltd v Galani[
[1988] 1 QB 738], the Court of Appeal dismissed an appeal against an order
that a judgment debtor answer questions and disclose documents relating to
any debts owed to him or other property or means belonging to him outside
the jurisdiction. In doing so, it observed that Richardson v. Richardson was
no longer good law, in the light of the S.C.F. and (in the Court of Appeal)
Deutsche Schachtbau cases. Balcombe LJ spoke of the court not exercising its
discretion to grant garnishee relief "if to do so might expose the garnishee
to to the risk of having to pay the debt or part of it twice over" and of
the court having "jurisdiction to garnish a debt recoverable outside the jurisdiction,
even though as a matter of discretion it is unlikely to exercise that jurisdiction".
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| 20. |
In the House of Lords
in Deutsche Schachtbau, the reasoning of Lord Goff (with whose speech Lords
Keith and Brandon expressly agreed) implicitly accepts a similar approach.
At p.353B-D, Lord Goff indicated that the issue whether it would be inequitable
to make a garnishee order absolute depended in turn upon the question "whether
there was any real or substantial risk that the garnishee, having paid the
judgment creditor under a garnishee order absolute in this country, would
be required to pay the amount over again in proceedings in a foreign country".
He regarded it as established law, that the English courts would, in the first
instance, consider whether their decision was one to which foreign courts
might be expected to give effect, and that there was an assumption that it
was, if three criteria were satisfied:
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| "(1) |
The
underlying judgment by the English court in favour of the judgment debtor
has been entered by a court which is, by generally accepted principles of
international law, a court of competent jurisdiction.
| | (2) |
The situs of the
attached debt, owing by the garnishee to the judgment debtor, is England.
| | (3) |
Payment of the attached debt by the garnishee pursuant to the garnishee
order absolute has the effect of discharging that debt."
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| 21. |
Because of the effect
of the English legislation, now embodied in RSC 49, Lord Goff said "there
can really be no difficulty about the third", and that previous litigation
had therefore been concerned with the first two criteria. At p.354E-H, Lord
Goff addressed situations where one or more of these criteria were not satisfied.
He said:
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"But the
question arises whether cases of this kind are to be solved by exclusive reference
to this assumption. The point may arise in two ways. First, let it be supposed
that one or other of the two criteria is not fulfilled, i.e. that the English
court is not, by accepted principles of international law, competent with
regard to the underlying judgment against the judgment debtor, or alternatively
that the situs of the attached debt is not England. Will the English court
in such circumstances automatically decline to make the garnishee order absolute,
on the ground that there is a real risk that a foreign court may, despite
payment by the garnishee pursuant to such a garnishee order absolute, nevertheless
enforce the attached debt against the garnishee overseas? Second, let it be
supposed that both criteria are fulfilled. Will an English court, in such
circumstances, make a garnishee order absolute in accordance with the assumption,
and exclude as irrelevant and inadmissible any evidence that a foreign court
will nevertheless not recognise payment under the English order as effective
to discharge the attached debt?"
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Lord Goff
continued at pp.354H-355B:
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"I have
mentioned that there are these two questions, for the sake of completeness;
but I doubt whether the answer to the first question has much bearing on the
answer to the second question with which your Lordships' House is here concerned.
In fact, Martin v Nadel indicates that, in that case at least, there
was consideration whether the courts in Berlin (the situs of the attached
debt) would or would not recognise a payment under a garnishee order absolute
in England as effective to discharge the attached debt. It was taken to be
the fact that they would not, though this was by admission. In any event,
the court was there concerned with a situation where the assumption was not
available to provide a solution with reference to the position in this country.
All that can be said of the case is that the question whether there was a
real risk of the garnishee being compelled to pay twice over was being answered
by reference to the factual situation."
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| 22. |
In Deutsche Schachtbau
the second question was relevant, and Lord Goff and the majority of the House
held that, although all three criteria were fulfilled, nonetheless on the
facts there remained an actual risk of double jeopardy, arising from the failure
of the civil court in R'As al-Khaimah to follow generally accepted principles
of jurisdiction and law.
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| 23. |
Lord Goff's reasoning
in these passages assumes that jurisdiction to make a garnishee order exists,
although one or more of his three criteria is not fulfilled; and that whether
to make a garnishee order in such a case involves an exercise of discretion.
This is so, although Lord Goff's unanswered first question opens a possibility
that the discretion would "automatically" be exercised to decline to make
the garnishee order absolute, on the ground that there was a real risk that
a foreign court might, despite payment by the garnishee pursuant to such a
garnishee order absolute, nevertheless enforce the attached debt against the
garnishee overseas. Had there been no jurisdiction at all to make the order
absolute in circumstances where, for example, his second criterion was not
fulfilled, Lord Goff's first and unanswered question could not have arisen.
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The judge's
reasoning
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| 24. |
Tomlinson J. found it
unnecessary to decide the circumstances (although he thought that they must
be very rare) in which the English court will permit attachment of a foreign
debt pursuant to the garnishee procedure of RSC O.49 r.1. That was because
he considered that the unchallenged evidence of Hong Kong law demonstrated
there was here a real risk that, if the garnishee order was made absolute,
HSBC might be required to pay twice.
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| 25. |
Tomlinson J. was satisfied
that Eram's reliance on restitutionary principle did not eliminate that risk,
since such reliance was "founded on a mistaken premise as to the nature of
the garnishee jurisdiction". He analysed the case-law and principles governing
relief by way of garnishee order; and concluded that it was of the essence
of the garnishee process, at the initial stage, that the garnisheed debt was
"attached" and impressed with a charge in favour of the judgment creditor
(cf RSC O.49 r.1(1) and 3(2)), and, on the order being made absolute, that
the garnishee became obliged to pay the debt garnisheed (up to the amount
of the judgment debt) to the judgment creditor. It was not a process "properly
to be analysed as one which compels the garnishee to pay his own unencumbered
funds thereby generating a right to repayment" (transcript p.13). Its rationale
was that payment to the judgment debtor released the garnishee from further
liability to the judgment debtor (transcript p14 and cf O.49 r.8). In this
paradigm case, no restitutionary claim could arise (because none would be
necessary), and--
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"If in
the paradigm case no restitutionary claim arises, it would be odd if such
a claim could nonetheless arise in the atypical case. The conclusion to be
drawn from such a case is surely not that a restitutionary remedy would in
that case, unusually, arise, but rather that the process of execution by way
of garnishee order is likely to be unavailable unless it brings about a virtually
automatic discharge of liability as between garnishee and judgment debtor.
More broadly, why should there be available to a judgment creditor a process
of execution which casts onto an innocent stranger to the relationship between
judgment creditor and judgment debtor the risk of non-recovery of the judgment
debt from the judgment debtor?"
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| 26. |
Tomlinson J's analysis
of the paradigm or typical case and its effects under English law is, we think,
indisputably correct. His reasoning regarding any other, atypical case was,
in substance, that the garnishee process should not be operated "unless it
brings about a virtually automatic discharge of liability as between garnishee
and judgment debtor". Tomlinson J. did not consider that a restitutionary
remedy could cure this problem. His phrase "virtually automatic discharge"
may, perhaps, offer a very limited, though undefined flexibility as to mechanism
for discharge. But it appears to have been central to his reasoning that,
unless the court of the situs would recognise the effects (attachment/equitable
charge and then discharge) which garnishee relief attracts under English law,
the English courts should not grant garnishee relief in respect of a foreign
debt. The fact that payment under an order granting garnishee relief would
have such effects under the relevant procedural rules of English subordinate
legislation (cf. O.49) could be of no avail, unless the order and its effects
in these respects would be recognised by the law of the country where the
foreign debt was located. Inferentially, there might be a clash between the
attitudes of two different legal systems.
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The appropriate
test
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| 27. |
Tomlinson J's reasoning
raises at the outset a point of principle, as he recognised when granting
permission to appeal. Should the exercise of jurisdiction to grant garnishee
relief in respect of a foreign debt be effectively confined by the answer
to the question whether the law of the situs of that debt would recognise
the English order or its characteristics under English law?
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| 28. |
In this connection, it
is, as we have indicated, implicit in the judge's reasoning that it is insufficient
that in the eyes of English law any garnishee relief would discharge
the foreign debt. In the case of a foreign law, the "virtually automatic discharge
of liability" which he considered necessary before granting garnishee relief
must also arise from recognition of the garnishee order itself by the
court of the situs of the foreign debt. Hence (as we read his judgment) his
refusal to attach any relevance to the submission that HSBC would, upon payment
under an English garnishee order, acquire a restitutionary remedy which would
itself pro tanto discharge any liability which HSBC might otherwise on the
judgment debtor's bank account. The question arises whether this is too narrow
a focus.
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| 29. |
The alternative approach,
which Eram advocates, poses a broader question. It asks (taking Lord Goff's
words in his second, unanswered question in Deutsche Schachtbau at p.354E-G)
whether "there is a real risk that a foreign court may, despite payment by
the garnishee pursuant to such a garnishee order absolute, nevertheless enforce
the attached debt against the garnishee overseas"? This approach acknowledges
that an English garnishee order in respect of a foreign debt is likely to
exceed any jurisdiction which the court of the situs of such a debt would
be likely to recognise the English court as having; and that, if matters stopped
there, garnishee relief would not be granted as a matter of discretion. But
it allows the circumstances and the risks to be looked at more widely; and
in this connection (consistently with Lord Goff's formulation) it permits
consideration of the effects of payment under a garnishee order absolute
upon the garnishee's exposure to the judgment debtor as a matter of private
law, and of the reality of any risk that the garnishee may after such payment
be obliged to pay a second time.
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| 30. |
Tomlinson J., in the
passage quoted above, did go on to address the issue "more broadly", in terms
of risk. But he did not explicitly analyse whether, on the evidence before
him, HSBC was or would be at any actual risk, following payment under a garnishee
order. It seems likely that he simply concluded that the point did not arise,
in view of the requirement, which he identified, of "virtually automatic discharge"
by the garnishee order itself. It is possible, however, that he considered
that the evidence of Hong Kong law settled this point also in HSBC's favour.
That was certainly HSBC's submission before us; and we will have, later in
this judgment, to consider what the evidence of Hong Kong law establishes,
and on whom the onus lay to adduce any further evidence of that law.
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| 31. |
The force of the judge's
approach is to offer a bright-line rule for the exercise of discretion, taking
principles of private international law of general acceptance, at least in
common law countries; and to avoid any conceivable risk of double jeopardy,
except in cases like Deutsche Schachtbau itself, where the risk arose from
the foreign state's failure to comply with generally accepted principles of
private international law. The cost at which this approach may come would
be to require the English courts to refrain from granting garnishee relief
in circumstances where there was no real risk of double jeopardy. Further,
by insisting that the garnishee's liability to the judgment debtor should
not merely be discharged in the eyes of English law (cf O.49 rr. 1(1), 3(2)
and 8), but also be discharged in the eyes of whatever may be the law of the
situs, the judge's approach in effect introduces a limitation on jurisdiction.
The statements of principle in the authorities disclaim such a limitation.
We do not consider that these statements can be explained by reference to
the hypothesis that a foreign debt might be sited in a country whose law might
be prepared to recognise the proprietary effects attributed by English law
(O.49) to English garnishee relief. The statements contemplate that jurisdiction
to garnishee a foreign debt exists, although the effect will not be to discharge
the debt in the eyes of the law of the situs, but that the court will as a
matter of discretion refuse to exercise the jurisdiction if to do so will
expose the garnishee to the risk of having to pay twice over: see in particular
per Ralph Gibson LJ in S.C.F., Balcombe LJ in Interpol Ltd v Galani and
Lord Goff in Deutsche Schachtbau cited above.
|
| 32. |
According to generally
accepted principles of private international law, at least in common law countries,
all assets have a location or situs, which in the case of intangibles such
as a debt is generally the place of the debtor's residence. Operations of
a proprietary character, such as state acts affecting title, are recognised
as valid if taking place under the law of the situs and not otherwise: see
Dicey & Morris, The Conflict of Laws (13th ed.) Rules 112 and
120. The rationale for taking the debtor's residence is that this is traditionally
regarded as the place where the creditor can enforce payment: see Dicey &
Morris Rule 112 para. 22-26. But, as Dicey & Morris point out, this is
not necessarily the only place where payment can be enforced. Indeed, in some
cases, it may not even be possible in the first instance to litigate in the
country of the debtor's residence (e.g where there is an exclusive jurisdiction
clause pointing to another jurisdiction - it seems unsettled where the situs
would then be: see Dicey & Morris, para. 22-26 footnote 61), while in
many others there may not be any assets in the country of the debtor's residence.
More importantly for present purposes, a corporation may be "present", and
subject to the personal jurisdiction of different courts, in many different
places. But the situs of a debt will be assigned to the place where the debt
is expressly or impliedly payable or, failing any such place, where it would
be paid in the ordinary course of business. A demand for repayment of a credit
standing to a bank account is thus located in the country where the account
is kept: Dicey & Morris, para. 22-029.
|
| 33. |
Despite some academic
criticism (cf P.J. Rogerson, The Situs of Debts in the Conflict of Laws –
Illogical, Unnecessary and Misleading; [1990] CLJ 441), the authorities cited
earlier in this judgment indicate that situs has an established and important
role in relation to the exercise of discretion to grant garnishee relief.
Further, even if Dr. Rogerson's preference for the proper law of the contract
had been adopted by the courts, it would not matter in the present case, where
both the situs and the proper law of HSBC's banking relationship with the
judgment debtors were Hong Kong.
|
| 34. |
To the extent that Eram
seeks garnishee relief in respect of a debt which is sited outside England,
the English court may thus be said to be being invited to act outside the
jurisdiction afforded to any national court under generally accepted principles
of private international law. The characteristics of English garnishee relief
typically include an attachment/charging order at the initial stage of a garnishee
order to show cause – see RSC O.49 r.1(1) and 3(2) - and a discharge of liability
upon payment under a garnishee order absolute – see O.49 r.8. The court of
the situs would not be expected to recognise those particular characteristics,
and that opens a prospect of conflicting claims and duties and of a risk of
double jeopardy. Caution must on any view be required before ordering garnishee
relief in respect of a foreign debt. But is the fact that a debt has a foreign
situs necessarily a bar to garnishee relief? Leaving aside the apparent disclaimer
in the authorities of any such limitation, it seems to us possible to identify
some cases where such a limitation on jurisdiction might appear obviously
unfortunate. Suppose, for example, that the judgment debtor was owed a debt
by a Panamanian shipping company, that the debt was, accordingly, sited in
Panama but that the sole assets of the potential garnishee, the Panamanian
company, consisted of monies held in London: an absence of any possibility
or risk of enforcement against the Panamanian company outside England ought,
in such a case at least, to outweigh any significance attaching to the law
of the situs.
|
| 35. |
As to a garnishee order
to show cause, the reality is that if the garnishee is or will be under any
real risk of double jeopardy, then either the garnishee order to show cause
will not be made at all, or, if it has been made, it can at any time be set
aside and not made absolute. If the garnishee is and remains under no such
risk, then a garnishee order to show cause can be issued and made absolute
without injustice. If the terms of the garnishee's relationship with the judgment
debtor themselves protect the garnishee against any risk of double jeopardy
during the period when a garnishee order to show cause is in force in respect
of a foreign debt, that may exclude any possible risk. Once a garnishee order
is made absolute, the obligation to pay arises. It is payment under an English
garnishee order that is under English law provided to discharge the garnishee's
indebtedness to the judgment debtor: see RSC O.49 r.8. If payment under an
English garnishee order relating to a foreign debt gives rise to restitutionary
relief which, under the terms of the garnishee's relationship with the judgment
debtor, extinguishes pro tanto the garnishee's foreign liability to the judgment
debtor, there is an equally conclusive discharge. Any risk of double jeopardy
is excluded in either case.
|
| 36. |
This is not to say that
consideration might not in some circumstances be given to modifying the wording
of a garnishee order to show cause relating to a foreign debt. This might
be possible by excluding any provision for attachment at that stage, or by
introducing a proviso protecting the garnishee similar to that protecting
third parties in the case of freezing injunctions: cf Babanaft International Co SA v Bassatne[ [1990] Ch. 13] and the now standard clause included in freezing
injunctions "Effects of this Order outside England and Wales": Civil Procedure
2001 Vol. 2 para. 2C-210. We did not hear argument about these as possibilities.
If we are wrong to identify them as possibilities, their absence cannot mean
that there was any real risk of double jeopardy. With or without them, we
would, for our part, also discount any risk (also not suggested in argument
before us) that conduct abroad contrary to an English garnishee order to show
cause could, in a case like the present, render those acting vulnerable to
contempt proceedings in England: see further The Territorial Reach of Mareva
Injunctions by Lawrence Collins (1989) 105 LQR 262, 281-6.
|
| 37. |
Returning to the central
point, if there is no real risk of injustice or double jeopardy, one may ask
why the English courts should deprive themselves of a simple and efficacious
means of enforcing an English judgment against a person who is within its
personal jurisdiction. The English court is concerned with the enforcement
of a judgment. The judgment has not been challenged, either as to its making
or as to its registration here. The judge acknowledged as the starting point
that the court "should and will obviously do everything within its power to
assist the Judgment Creditor in recovering from the Judgment Debtor what is
due to it". The considerations which we have so far identified seems to us
to point towards a pragmatic test, based on the reality of any risk of injustice,
rather than a more formalistic approach based on the effect of a garnishee
order as such, ignoring the effect of payment under it. The language of O.49
and the reasoning of this court in S.C.F. and Interpol Ltd v Galani and
of Lord Goff in Deutsche Schachtbau also appear to us to point in the same
direction.
|
| 38. |
HSBC submits that the
English courts should not involve HSBC at its London branch with the affairs
of a customer banking at HSBC's Hong Kong head office. We were referred to
the decision of Hoffmann J. (as he was) in Mackinnon v Donaldson, Lufkin & Jenrette[ [1986] 1 Ch 482], where the issue in an English action was whether
an American bank, which was not party to the action, should be required through
an officer of its London branch to produce under subpoena duces tecum documents
held at its head office relating to an account of one of the originally intended
defendants, a Bahamian company, which had ceased to exist, having been struck
off the Bahamian register.
|
| 39. |
Hoffmann J. held that
an order requiring a foreigner, particularly a foreign bank, not party to
the English litigation, to produce documents outside the jurisdiction relating
to business transacted outside the jurisdiction should not be made, save in
exceptional circumstances. He said [ at p. 493G]:
|
| |
| |
"The principle
is that a state should refrain from demanding obedience to its sovereign authority
by foreigners in respect of their conduct outside the jurisdiction."
|
And at
[ at p. 494C]:
|
| |
| |
"The need
to exercise the court's jurisdiction with due regard to the sovereignty of
others is particularly important in the case of banks. Banks are in a special
position because their documents are concerned not only with their own business
but with that of their customers. They will owe their customers a duty of
confidence regulated by the law of the country where the account is kept.
..... If every country where a bank happened to carry on business asserted
a right to require that bank to produce documents relating to accounts kept
in any other such country, banks would be in the unhappy position of being
forced to submit to whichever sovereign was able to apply the greatest pressure."
|
|
| 40. |
Hoffmann J. went on to
distinguish cases "concerned with the enforcement of private rights arising
out of matters properly subject to the jurisdiction of the court". Mr Page
submitted before us that the present case fell within this category. As between
Eram and the judgment debtor no doubt it would. But we are concerned with
an issue of execution between Eram and HSBC, in which HSBC's only involvement
is as a third party to which the judgment debtor happens to have owed money.
HSBC is involved by virtue of the state's sovereign authority over persons
within its jurisdiction. We do not therefore accept Mr Page's suggested distinction.
|
| 41. |
In Mackinnon the application
was to use the state's sovereign power over someone within its jurisdiction
to compel that person to identify and locate documents in, and produce them
from, the United States. In this connection, the theme of the passage from
Dr Mann's article "The Doctrine of Jurisdiction in International Law (1964)
111 Recueil des cours 146, which Hoffmann J. cited, was that a state's exercise
of its power to regulate the conduct of persons abroad required the state
to have not merely personal jurisdiction over that person, but also substantive
jurisdiction to regulate conduct in the manner undertaken. oHoffmThe ultimate
aim of garnishee relief is not, however, to require HSBC to do anything
in Hong Kong. It is to require HSBC in England to pay the judgment debt, or
so much of it as can be met, out of the monies owed by HSBC to the judgment
debtor in Hong Kong. It is true that the garnishee order to show cause required
HSBC in terms to refrain from paying the judgment debtor and purportedly charged
the Hong Kong bank account with the amount of the judgment debt. To that extent
the garnishee order to show cause can, in this case, be said to have required
HSBC to act in a particular way outside the jurisdiction. This is however
a significantly less intrusive requirement than that in issue in Mackinnon
itself; and, if it had proved problematic, application could have been made
to discharge the garnishee order to show cause and there would have been good
cause to refuse a garnishee order absolute. The real aim of garnishee relief
is to obtain an order absolute requiring HSBC to meet the judgment debt in
England. On Eram's case, payment will of itself, and by reason of private
law principles and contractual terms, provide HSBC with a discharge in Hong
Kong. There will be no question then of the English court requiring
HSBC to act in any particular way in Hong Kong.
|
| 42. |
Mackinnon stands as authority,
which we would not question, relating to the use of English jurisdiction over
a local branch to obtain documents from the foreign branch of an international
bank. But it provides no exact analogy when considering the jurisdiction of
an English court to enforce an English judgment by insisting that an international
bank, which owes money at a foreign branch, should make it available here
to discharge the English judgment. We accept that caution is necessary about
exercising jurisdiction over an international bank, with reference to assets
held abroad, and this is the aspect of this appeal which has caused us the
greatest doubt. But we would conclude that, in the enforcement of an established
English judgment against a judgment debtor, the English court is entitled
to go further than it would generally go when authorising evidential steps
in relation to pending litigation, if it can do so without any risk of injustice
or, in particular, double jeopardy for HSBC.
|
| 43. |
For these reasons, we
consider that a "virtually automatic discharge" by the order for garnishee
relief itself (as distinct from the payment under the order) should not be
viewed as an effective pre-condition to the exercise of jurisdiction to grant
garnishee relief. The test should be the wider one, whether there is, as a
practical matter, a real risk of the garnishee having to pay twice, if garnishee
relief is granted.
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| |
Is there
a real risk of double jeopardy?
|
| 44. |
Eram's case, on this
appeal, is that a combination of factors means that the garnishee relief sought
would not place HSBC at any actual risk of having to pay the judgment debtors
twice. Eram relies in particular upon (a) the restitutionary claim which HSBC
would on payment acquire, (b) HSBC's terms and conditions and (c) the absence
of any evidence of any actual risk or exposure towards, or indeed threat from
the judgment debtor.
|
| 45. |
As to (a), the law applicable
to determine whether such a restitutionary right arose is either the law of
England, on the basis that the benefit was conferred on the judgment debtors
by the discharge here of their liability under the English judgment, or the
law of Hong Kong, if one treats the benefit as arising there, where the judgment
debtors reside. The former may not be the appropriate analysis (cf Dicey &
Morris paras. 22-038/9), and we are prepared to assume for present purposes
that the latter applies. The usual principle is that, absent proof of foreign
law, any otherwise applicable foreign law is presumed to be the same as English
law (or, putting the point in a way which is perhaps preferable, English law
is applied): see Dicey & Morris, para. 9-025. Applying this principle,
the law of Hong Kong is to be treated as the same as English law. The fact
that it is well known that the law of Hong Kong is based on the common law
merely adds comfort as to the underlying reality of that approach, as well
as a likely explanation why the evidence of Hong Kong law before us is limited.
For reasons which will appear, we see no ground for departing from the usual
approach in the present context.
|
| 46. |
Mr Harrison did not dispute
that, as a matter of English law, payment by HSBC would give it a restitutionary
right to reimbursement as against the judgment debtors. The basis of the restitutionary
right would be that HSBC had been compelled by operation of English law to
discharge the liability of the judgment debtors: Goff & Jones, The Law
of Restitution (5th ed.) pp.438 and 455-6. Compulsion by a foreign
system of law is in this context sufficient: Liberian Insurance Agency Inc. v Mosse[ [1977] 2 Ll.R. 560]. What matters in this context would be HSBC's
compulsion under an English garnishee order to meet the judgment debtors'
liability to Eram under the English judgment. That would be a personal liability
of HSBC to Eram imposed by English law, which has unquestionable personal
jurisdiction over HSBC. The fact that an English garnishee order could not
be "given effect" in Hong Kong, by reciprocal enforcement procedures or action,
or recognised there in different, proprietary contexts (in particular in so
far as it purports to attach or discharge HSBC's liability to the judgment
debtors) is irrelevant. Thus far, therefore, it follows (a) that payment
by HSBC in England under compulsion of an English garnishee would give HSBC
a personal restitutionary right in like amount against the judgment debtors,
and (b) that Hong Kong law would recognise this right.
|
| 47. |
Mr Harrison suggested
that such a restitutionary right could constitute no more than a cross-claim,
which could not be regarded as a discharge. That is incorrect, even at common
law. HSBC would be entitled to recover the amount of any restitutionary claim,
by deducting the same from any credit balance due to the judgment debtors,
so discharging its liability on any credit balance to that extent: see Goff
& Jones, The Law of Restitution (5th ed.) pp. 438 and 455-6.
But the position is confirmed with exceptional clarity by HSBC's terms. The
"account holder's liabilities" are defined in the broadest terms, to include
not merely actual and present, but future, deferred and contingent liabilities.
Even the making of a garnishee order to show cause would create a contingent
liability, while the making of a garnishee order absolute would give rise
to an actual and present liability. Even before payment therefore, HSBC would
be protected from having to pay its judgment debtor customers on demand. Once
HSBC had paid, any liability on its part to the judgment debtors would be
permanently discharged.
|
| 48. |
HSBC submits that there
is undisputed evidence undermining these conclusions, and demonstrating that
Hong Kong law would not recognise any discharge of HSBC's liability to its
customers, arising from any payment made by HSBC under compulsion of an English
garnishee order, and that HSBC would therefore remain in double jeopardy.
We turn therefore to consider the effect of the limited positive evidence
that there is of Hong Kong law. The issue which Mr Reed considered was whether
"a contractual obligation, governed by Hong Kong law" in respect of a bank
account sited in Hong Kong could be affected by an English garnishee order.
His advice was that such an order (i) had no automatic effect in Hong Kong
and (ii) was not a type of order that would be given effect in Hong Kong either
(1) under reciprocal enforcement procedures (there being in any event no such
procedures in relation to English judgments since 1997) or (2) by the making
of a Hong Kong court order based on the English court order. "Accordingly",
his advice proceeds, in the absence of either the English or the French court
orders being given effect under Hong Kong law, the garnishee would be in breach
of contract if it "were either to freeze such balance or to pay such balance
to [Eram] in reliance on such English or French court orders".
|
| 49. |
This advice was given
both before any question of restitutionary relief was raised and before any
reliance was placed on HSBC's standard or special terms. The advice was directed
at the (lack of) effect in Hong Kong of an English garnishee order. Not surprisingly,
in our view, what it says was and remains entirely uncontroversial. Mr Reed
cannot be read as advising that Hong Kong common law does not or would not
recognise the restitutionary right which would, under English law, arise in
HSBC's favour against the judgment debtors if HSBC was compelled by an English
court to discharge the judgment debtors's liability to Eram. He was not directing
his mind to this at all. We would only add that HSBC has had plenty of time
to do so since, if it was thought that there was any prospect of establishing
that the common law of Hong Kong does not recognise precisely the same basic
restitutionary principles as English common law.
|
| 50. |
Mr Reed's assumption
- heralded by the word "Accordingly" - that, so long as the English and French
court orders were not given effect in Hong Kong, the garnishee would be in
breach of contract if it were to freeze the credit balance or to pay such
balance to Eram in reliance on either court order, is unreasoned and unsupported
by any reference to Hong Kong law, and once again made before any reference
to restitutionary principles or to HSBC's terms. It is one thing to say that
Hong Kong courts would not give effect to an English garnishee order, by reciprocal
enforcement or action. It is quite another to suggest that they would not
recognise either the discharge of the judgment debt by HSBC under compulsion
of English law as giving HSBC any personal restitutionary remedy against the
judgment debtor or the express effect of HSBC's standard terms in giving HSBC
a defence at the stages both of a garnishee order to show cause and of a garnishee
order absolute. If, as we have concluded, the Hong Kong courts would recognise
both HSBC's entitlement to restitutionary relief on payment and the effect
of HSBC's standard terms, the effect is that HSBC was and is protected, and
will on payment be discharged, in the eyes of Hong Kong law, just as effectively
as if the garnishee relief had related to a debt sited in England.
|
| 51. |
Addressing the question
whether any English garnishee order (whether the order made to show cause
or a garnishee order absolute) would expose HSBC to any real risk of having
to pay twice, we are in these circumstances unable to detect any real risk
of that nature at all. HSBC is protected against any such risk by established
principles of common law and by its own very broadly expressed account terms.
|
| 52. |
A further note of realism
is also admissible. This litigation has been vigorously conducted over a substantial
period. The garnishee order to show cause dated 4th April 2000
was, as required by the rules, served both on the garnishee and on the judgment
debtors. Only the garnishee, HSBC, has in the event appeared to resist its
making absolute. But the judgment debtors must be well aware of the proceedings.
Indeed, at the stage of disclosure, HSBC indicated that the judgment debtors,
as its customers, had refused voluntarily to waive confidentiality in, or
therefore to allow disclosure of, the terms of their contract with HSBC. There
is nothing to indicate, one way or the other, whether Eram's suggestion (by
letter dated 20th March 2001, responding to a claim for security
for the costs of this appeal) that the judgment debtors have agreed to indemnify
HSBC for the costs of these proceedings is well-founded. However that may
be, if there was a real risk of HSBC being in breach of contract, or of being
asked to pay twice, one could have expected it to have emerged by now. On
HSBC's own case it remains exposed to a risk of double jeopardy, despite any
English order granting garnishee relief. Yet no such risk has ever manifested
itself, although the English order to show cause and meanwhile attaching the
debt has been in force for (now) some 16 months. It seems probable that either
the judgment debtor has taken no steps to demand repayment of any credit balance
or, if any such demand has been made, HSBC has been able to resist it, very
probably by relying on HSBC's standard terms. Whatever the position, if there
has been no or no successful attempt to recover the credit balance during
the currency of the garnishee order to show cause, this gives comfort that
HSBC is unlikely to be at any real risk of double jeopardy if and when it
is compelled to pay under a garnishee order absolute.
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| |
The burden
of proof
|
| 53. |
Tomlinson J. did not
regard the burden of proof as critical. He said that:
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| |
| |
"If the
burden lies on the Garnishee, it has discharged it by reliance on the law
of Hong Kong. The Judgment Creditor's argument by reference to restitutionary
principles is misconceived. If the burden lies on the Judgment Creditor it
has failed to discharge it."
|
|
| 54. |
For reasons which we
have given, we would reach a different conclusion to the judge on each of
these points. The judge went on, however, to give his views on the burden
of proof, and we propose to say a word about this also. The judge referred
to Lord Goff's dictum at p.354F-G in Deutsche Schachtbau as indicating that,
in the case of a foreign debt, garnishee relief is, at least, exceptional,
and that the onus must be on the garnishor to show some basis for the grant
of such exceptional relief. That seems to us correct, in so far as (a) the
normal assumption, having regard to the generally accepted principles of private
international law to which Lord Goff referred, would be that an English garnishee
order would be ineffective to bind or discharge a foreign debt in the eyes
of a foreign court and (b) absent other factors, a real risk of the garnishee
having to pay twice would therefore appear likely. In practical terms, the
onus would thus shift to the applicant for garnishee relief to show some basis
for concluding that there was no such risk and for granting such relief.
|
| 55. |
Tomlinson J. also expressed
the view that an applicant for garnishee relief would ordinarily only be able
to satisfy the English court that garnishee relief was appropriate and would
not lead to a real risk of double jeopardy, by adducing positive evidence
that the foreign law differed from English law. We do not understand Tomlinson
J. to have been suggesting that the present situation constituted an exception
to the general principle that, absent proof of foreign law, any otherwise
applicable foreign law is presumed to be the same as English law or, more
simply, English law is applied (see above). Rather, he was pointing out that
Lord Goff's willingness to afford garnishee relief in circumstances where
his three basic criteria were fulfilled took as its premise that foreign courts
would recognise those criteria and any garnishee relief based upon them. The
corollary is that, in circumstances where those criteria were not fulfilled,
foreign courts would not normally recognise English garnishee relief as binding
or discharging any debt sited outside the English jurisdiction.
|
| 56. |
In practical terms, therefore,
an applicant for garnishee relief relating to a foreign debt has to show some
good cause why such relief should be ordered. This is perhaps especially,
though not exclusively, obvious at the initial stage of an application without
notice for a garnishee order to show cause. But this is because of the presumption
equating English and foreign law, not as an exception to it. One way of overcoming
the difficulty could be to show that the foreign law would (unlike English
law in the equivalent situation) recognise an English garnishee order in respect
of a foreign debt. But there may be other ways. An applicant for garnishee
relief might, for example, be able to show that, although the debt was sited
in a country whose law was, or was assumed to be the same as English law,
the only jurisdiction in which the garnishee was in reality exposed to the
judgment debtor was England. This might (for example) be because the garnishee's
only assets were held in England, or because of an exclusive jurisdiction
clause binding the judgment debtor to pursue all claims against the garnishee
in the English jurisdiction. Finally, in a case like the present, the applicant
may be able to rely upon the combination of a restitutionary claim and wide-ranging
contractual terms, as between the garnishee and judgment debtor, to negative
any real risk of double jeopardy.
|
| 57. |
We do not have to decide
what might be the appropriate attitude of a court if, at the stage of an application
to show cause, an applicant for garnishee relief in respect of a foreign debt
simply invoked the presumption of identity between English law and the law
of the situs, and submitted that this alone sufficed to establish that a restitutionary
claim would arise on payment under compulsion of an English garnishee order.
The court, at the stage of an application without notice, might insist on
something more concrete, particularly if the foreign situs was not a common
law country like Hong Kong. Although a garnishee can always apply to set aside
a garnishee order to show cause, the court might not feel it appropriate even
to put it to that expense, unless the court had before it some more positive
confirmation of the absence of any real risk of double jeopardy than one depending
on the presumed equation of the common law and some other foreign law. Before
Tomlinson J. and before us the position is, however, different; both parties
have been represented, and have had full opportunity to investigate Hong Kong
law, if they wished, and to demonstrate any relevant respect in which its
common law differs from English law.
|
| |
The availability
of alternative relief
|
| 58. |
Tomlinson J. did not
rely upon this in arriving at his conclusion, though he took some comfort
from the availability of another "perfectly straightforward" route to enforcement.
This route consists in reverting to and seeking to register in Hong Kong the
French judgment, or in suing on the present English judgment in Hong Kong.
Each course would involve taking proceedings in a jurisdiction other than
that of the relevant judgment, unlike the garnishee relief presently sought.
However, there is, on the evidence, no reason to believe that either would
involve any substantial difficulty or delay. Should Eram be remitted to elect
between one or other of these uncontroversial procedures? The availability
of alternative relief is a relevant factor, and may be decisive if there is
a possible risk of double jeopardy and the court is in any doubt about how
real it is. But, if the basic test for the grant of English garnishee relief
is, as we think, whether there is a real risk of the garnishee having to pay
twice, and if the court is, as we think here, able to reach a clear conclusion
that there is no such risk, then it seems to us that the existence of an alternative
course should not preclude English garnishee relief. The seeking of English
garnishee relief is in such a case of itself a legitimate course.
|
| |
Conclusion
|
| 59. |
In our judgment, the
correct approach to the application before the judge is to ask whether HSBC
would be at any real risk of having to pay twice, if a garnishee order absolute
were made against it. For the reasons we have given, we would answer this
question in the negative on the facts of this case. To summarise the relevant
considerations: (a) HSBC would on payment acquire a restitutionary claim with
which it could extinguish pro tanto any liability to the judgment debtors;
(b) HSBC's terms and conditions afford it, in this connection, the widest
conceivable protection; that protection precludes HSBC from having to pay
the judgment debtors while any garnishee order to show cause is in force and
after the making of any garnishee order absolute; and will finally extinguish
HSBC's liability pro tanto if and when it makes any payment under a garnishee
order absolute; and (c) there is an absence of any evidence of any actual
risk or exposure towards, or indeed threat from the judgment debtor, at any
time since the service of the garnishee order to show cause in Spring 2000;
had the suggested risk been a real one, one could have expected it to emerge
by December/January 2001 when Tomlinson J. heard argument and gave judgment;
and, had any such risk or threat emerged since, we may be confident that we
would have been informed.
|
| 60. |
This case therefore turns
on a particular combination of considerations. In their light, we have come
to the conclusion that the English court should be prepared to make a garnishee
order absolute. This should not encourage judgment creditors to seek a similar
order in every case where they believe that their judgment debtor has amounts
on credit with the foreign branch of a bank which also has an English presence.
We would, in this connection, agree with Tomlinson J. that a court should
pay particular attention to the issue of double jeopardy, if and when asked,
without notice to the garnishee or judgment debtor, to make a garnishee order
to show cause in respect of a foreign debt. Here, however, the matter has
progressed beyond that stage, and, both before us and before the judge, the
combination of circumstances which we have identified is now clearly established.
In view of this combination of circumstances, and since there are no other
countervailing considerations, we consider that the English court can appropriately
order garnishee relief, although the relief relates to a foreign debt, and
that we should now do so. We would therefore allow this appeal and make absolute
the garnishee order to show cause dated 4th April 2000.
|