FOREIGN JUDGMENTS, EXTENSIONS OF TIME AND RELIEF FROM SANCTIONS

In Christofi -v- National Bank of Greece (Cyprus) Ltd [2015] EWHC 986 (QB) Mrs Justice Andrews DBE considered whether the court had power to extend time in relation to an application to set aside registration of a foreign judgment. She also made some important observations in relation to relief from sanctions.

THE CASE

The bank registered a judgment following a compromise agreement in the Cypriot court.  The applicant was one of two defendants in that action.  Payments were never paid under the agreement and judgment was registered for €7,868,044.88. The applicant sought to appeal the registration of the settlement order. The prescribed time for appealing was two months from date of service on the applicant. The time for appealing expired on the 11th September 2014, however the appeal was not made until the 30th September 2014, 22 days out of time.

THE DECISION

The judge held that there was no general power to extend time for appeal. There were only very limited grounds for extending time. [For posts on this limited ground of appeal see the links section below].

  1. The answer to the first question is therefore that there is no general power to extend the mandatory two month time limit for appealing in this case. The Court is obliged to enforce that time limit strictly, subject only to the residual power to extend a mandatory time limit in the rare case where its application would impair the very essence of the right of appeal, and strict adherence to it would infringe Article 6 ECHR.

THE JUDGES OBSERVATIONS AS TO HOW THE DISCRETION WOULD HAVE BEEN EXERCISED IF THE “DENTON” PRINCIPLES APPLIED

  1. The domestic case law on relief from sanctions, most notably Denton v TH White [2014] 1 WLR 3926, does not directly address failure to comply with a time limit prescribed by a statute or by a directly applicable EU regulation which has the same effect as a statute. I am not persuaded that the guidance given in cases concerning non-compliance with a court order or procedural direction or with the rules of court pertaining to domestic litigation, including appeals, is wholly apposite in this context, though of course it is of some relevance. The underlying policy considerations in a case such as this, to which I have already referred, go well beyond those affecting decisions on matters of pure case management.
  2. In the present case, the failure to meet the time limit was serious; this is plain when one places the delay of around three weeks in the context of a two month time limit which is twice the time allowed to a party domiciled within the jurisdiction and which is regarded, as a matter of policy, as being sufficient to safeguard the legitimate interests of a party domiciled elsewhere in the EU. The period for appealing is deliberately short. Whilst the delay was nothing like as long as it was in Taylor-Carr or Citibank, it cannot be described as minor.
  3. Mr Warents contended that the delay has had no practical impact on the execution of the judgment, because the Bank had agreed that the hearing of its application for the charging orders to be made final would not take place until after 30 October 2014, and the consent order provided that the Court would not be informed whether or not an appeal had been lodged until 30 September at the earliest. There was no evidence that the 22 days’ delay in appealing would have had any impact upon the listing of the hearing to make the charging orders final, let alone that it would be delayed by three weeks.
  4. That may well be right. However, if the appeal had been brought within time, the hearing of the appeal may have been listed earlier than 26 March. Even if it could not have been listed earlier, there would have been no necessity to deal with these preliminary issues, with the substantive appeal being adjourned to a later date pending the outcome of any appeal against my decision, an inevitable concomitant of the appeal being out of time. All of this delay is bound to have a knock-on (and adverse) effect on the Bank’s ability to enforce its judgment and is directly contrary to the policy underlying the Judgments Regulation. It is nothing to the point, though it affords the Bank some comfort, that in the meantime its position is protected to some extent by having security in the form of the interim charging orders over Mrs Christofi’s English properties.
  5. In any event, as the Court of Appeal made clear in Denton v White at [26], the seriousness of a breach or failure to comply with an order or rule of court is not to be determined exclusively by its impact on the efficient progress of litigation (or, by analogy, on the expeditious enforcement of an EU judgment). The requirement is that the delay is serious or significant (or both). I regard the delay as serious whether or not it was significant in the sense of making a material difference to the date on which the Bank would have had its hearing of the application for final charging orders over the property, or the date on which the appeal was listed for hearing.
  6. There was no good reason for the delay, as Mr Warents realistically accepted, though he submitted that the muddle by Fletcher Day was a relevant factor at the third stage of the analysis when looking at all the circumstances and determining whether it was fair to grant the extension of time. The Bank’s opposition to the application for an extension of time cannot be characterised as opportunistic; this was no technical slip, and no blame can be attached to the Bank or its legal representatives for what happened. If Mrs Christofi’s solicitors thought they had until 30 September to file the appeal that still does not explain why they apparently left matters until the very last minute.
  7. Although the seriousness of the delay and the absence of any excuse for it both militate strongly against the grant of relief, the Court may nevertheless exercise a discretion in favour of an extension of time if in all the circumstances the justice of the case requires it. The merits of the underlying appeal are irrelevant to that consideration, because this is not a case in which they are sufficiently clear to justify their being taken into account. So, would the justice of the case require an extension of time for appeal if I had the power to grant it?
  8. Mr Warents relied upon R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, in which the parties had agreed to an order adjourning the application for permission to appeal (which was later granted) without also seeking an extension of time for filing the appellant’s notice, as they should have done. Relief was granted despite a similar period of around 3 weeks’ delay, for which there was no good reason, chiefly on the basis that the delay had no significant effect on the proceedings [51]. It was also found to be of “critical importance” that the respondent had suffered no prejudice (see [53]). However, the exercise of judicial discretion in a given case is highly fact-sensitive. Hysaj was a case in which the point raised on the appeal was one of considerable importance not only to the parties but to the wider public, permission to appeal had been granted, and where it was clear that the respondent was labouring under the same misunderstanding as to the effect of the agreed order for an adjournment as the appellant. That was not the case here; and unlike Hysaj, this was not a case in which there was an understandable but inexcusable oversight or misapprehension as to what the rules required, but a case in which Mrs Christofi’s solicitors were not only aware of the two month limit for appealing, but initially proposed a consent order premised on the correct assumption that time ran out on 11 September 2014.
  9. Hysaj was also a case concerning the normal rules pertaining to appeals from first instance decisions to the Court of Appeal. There was no background of a complex and supposedly self-contained international Treaty or directly effective European regulation with the policy of simple, expeditious recognition and enforcement of judgments of other Contracting States at its heart, a deliberately tight timetable set for appeals on very restricted grounds, and a regime that was designed to strike a fair balance between the rights of the judgment creditor and protection of the legitimate interests of the defendant. Viewed in that context, there is no obvious justification for condoning a three week delay by someone who knows of the existence of the Enforcement order in ample time to appeal. Indeed, given that the balance between the competing interests is already fairly struck by the terms of the Judgments Regulation itself, in my judgment any interference by the Court with that balance in circumstances such as this would be unwarranted and unprincipled. It is not good enough to say “there was no harm done” because, even if that were true (which it is not) it loses sight of the bigger picture.
  10. For those reasons, even if I had a discretion to extend the time for appealing, I would decline to exercise it in favour of Mrs Christofi. The second preliminary issue must also be answered in the negative. It follows that the application for an extension of time must be dismissed.

THE LIMITED RIGHT OF APPEAL

The reference in the judgment to the extremely limited right of appeal is considered in two posts on this blog:

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