Court dismisses stay of execution for foreign judgment due to lack of inherent jurisdiction and unjustified delay.

[*325] 1982 January 21

(BOYADJIS,P.D.C.)

IN THE DISTRICT COURT OF NICOSIA

Anderson & Coltman Ltd.,

Plaintiffs,

v

Sonco Canning Ltd.,

Defendants,

(General Appl. No. I4/1980).

Civil Procedure - Judgment - Stay of execution - Inherent jurisdiction of the Court - The Court does not have an inherent jurisdiction over all judgments, or orders which it has made, under which it can stay execution in all cases.

Civil Procedure - Judgment - Stay of execution - Interim stay of execution. Order 40 rule 11 and Order 48 rule 1(11) of the Civil Procedure Rules,

Civil Procedure - Judgment - Stay of Execution - Principles applicable - Whether the same as those governing stay of execution pending appeal - Order 1+0 rule 7 and Order 35 rule 18 of the Civil Procedure Rules - Foreign judgment - Execution - Application for stay pending determination of an action between the parties – None of considerations put forward by applicants renders it either inexpedient or unjust to enforce the judgment against them - Application refused.

I. Roussos for A. Timothi, (Mrs.) for applicants-defendants.

S. Nathanael for L. Demetriades, for respondents-plaintiffs.

JUDGMENT

The following judgment was delivered by:

BOYAPJIS, P.D.C.: Sonco Canning Limited,[*326]

a company registered in Cyprus, filed an ex-parte application on July 23, 1981, praying for "an order of the Court for stay of execution of the registered foreign judgment in the above action till the final determination of Action No. 350.8/1981". We will hereinafter call it "the Cyprus Company".

Anderson & Coltman Limited is a company registered in U.K. We will hereinafter call it "the English Company". It is accepted that it has no assets within the jurisdiction.

The dispute between the parties dates back to Ig77» Arbitration proceedings instituted in U.K. resulted in an award delivered on May 19, 1978, in favour of the English Company in the sum of STG£I4,247.76 p. plus interest at the rate of 10% (ten per cent). 0n May 3, 1979, by an order of Master Eton of the Queen's Bench Division of the High Court of Justice, the English Company obtained leave to enforce the said award as a judgment or order to the same effect. The said judgment having been satisfied in part only by the Cyprus Company by the payment of a sum of STG£5,286.00 p., the balance of STG£9,466.76 p. plus interest and costa thus remaining due and payable to the English Company, the latter applied successfully in the District Court of Nicosia in the originating proceedings under the above number and title for the registration of the aforesaid foreign judgment in Cyprus under the provisions of the Foreign Judgments (Reciprocal Enforcement) Law, Cap. 10, and for leave to execute the said judgment to the extent in which it was left unsatisfied.[*327]

On July I4, 198O, the Cyprus Company applied to the Court for an order setting aside the registration in Cyprus of the aforesaid foreign judgment, but by its ruling dated March I0, 1981, the Court dismissed the application, whereupon the English Company, in exercise of their right, applied for the issue of a writ of execution of movables in consequence of which the relevant Writ No.267715 was issued directing the sale of the movable property of the Cyprus Company in satisfaction of the judgment debt.

On July 23, 1981, whilst the aforementioned Writ of Execution No. 267715 was still unexecuted, the Cyprus Company took out against the English Company a generally indorsed writ of summons in Action No.3508/81 in the District Court of Nicosia, copy of which was attached to the affidavit filed in support of the present application. The latter was also filed on the day when Action No.3508/81 was filed, i.e., on July 23, 1981.

According to the general indorsement on the aforesaid writ of summons the claim of the Cyprus Company against the English Company is for:-

(a) CY£l6,727.- balance of account between the parties from 1972 until today.

(b) U.S. Dollars 555,000 or their equivalent in Cyprus pounds for damage suffered by the Cyprus Company because of breaches on behalf of the English Company of oral and written agreements between the parties.[*328]

(d) CY£22,000.- being an amount with which the Cyprus Company was debited with and/or paid to the English Company by way of interest and/or fees unlawfully and/or in breach of their agreement.

(e) An order of the Court, ordering the English Company to give accounts for the years Iq72 onwards.

(d) Legal interest and costs.

Despite the time which has elapsed from the date of the filing of the aforementioned Action No, 3508/1981 with the District Court of Nicosia, no particulars whatsoever regarding the above claims have as yet been given. The Statement of Claim does not appear to have been filed, or, if it has been filed, it has not been attached to the supplementary affidavit filed in support of the application on November 21, 1981, which does not contain any information regarding the claims of the Cyprus Company additional to the allegations of a very general nature raised in the generally indorsed writ already referred to.

On July 23, 1981, the Court granted on the exparte application an order for interim stay of execution, returnable on August I3, 1981. On being served with notice thereof, the English Company opposed the application and the interim stay of execution and filed in support of their opposition an affidavit to which we shall refer in due course.

The legal foundation of the present application is said to be three-fold; first, the inherent jurisdiction [*329]of the court; secondly, Order 40, r.11 of the Civil Procedure Rules; and lastly, Order 1+0, r.7 thereof. We shall presently examine them in the above order.

The Inherent Jurisdiction of the Court. No authority was cited to us on the extent of the proposed inherent powers of the Court or the circumstance in which such powers are being exercised. In fact we assume that the learned counsel for the Cyprus Company has abandoned this basis of the application as she did not refer to it at all during her address to the Court. In the circumstances, it suffices for us to say that the Court does not have an inherent jurisdiction over all judgments or orders which it has made under which it can stay execution in all cases: Halsbury's Laws of England, 4th Edn. vol. 17, paragraph 451.

Order 40, r.1[1] of the Civil. Procedure Rules. This rule confers on the Court discretionary power to give relief in the form of a stay of execution or otherwise against a judgment upon the. ground of facts which arose too late to be pleaded. The Cyprus Company managed to obtain in the first place the interim stay of execution

Order 40, r.11 reads:- "Any party against whom judgment has been given on an order made may apply to the Court or a Judge for a stay of execution or other relief against such judgment upon the ground of facts which have arisen to late to be pleaded; and the Court or Judge may give relief and upon such terms as may be just."[*330]

in this case on an ex-parte application only, because they were relying on the provisions of Order 40, r.11 and were thus within the ambit of Order 48, r.1

(ll) which allows an application under Order 40, r.II to be made ex-parte. The interim stay of execution could never be granted on an ex-parte application if the applicants relied only on Order 40, r.7 on the inherent jurisdiction of the Court. One would expect, in these circumstances, that in the. affidavit in support of the application the deponent would refer to the facts which have arisen too late to be pleaded. This basic requirement has not been complied with and nobody knows what are the facts which they allege have arisen too late to be pleaded. Such facts, if they ever arose, should be described in detail in as much as the applicants could rely on them only if they were of such a nature that they would or might have prevented the judgment being given or would or might have led. to a stay of execution if they had already occurred at the date of the judgment or order. See in this respect the judgment of Plowman, J., in London Permanent Benefit Building Society v.De Baer (1968),I A11 E.R. 372, decided on R.S.C. Order 45, r. 11 which has since October I, 1966 replaced R.S.C. Order 42, r. 27, the corresponding English rules to our Order 40, r .11.

It follows, in our judgment, that Order 40, r.ll does not enable the Court to grant a stay of execution in this case.

Order 40, r .7 on which the applicants also rely reads:-[*331]

"Every person to whom any sum or money or any costs shall be payable under a judgment or order shall, so soon as the ..money or costs shall be pay able, be entitled to apply for the issue of writs to enforce payment thereof, subject nevertheless as follows:-

(a) If the judgment or order is for payment within a period therein mentioned, no writ shall be Issued until after the expiration of such period;

(b) The Court or Judge may, at or after the time of giving judgment or making an order, stay execution until such time as they or he shall think fit".

It is accepted by both counsel that the above rule confers upon the Court discretionary power to stay execution of a judgment or order in a proper case. Regarding the principles governing the exercise of the Court's discretion in the matter both counsel told us that they could not trace any direct Cyprus authority thereon. They cited to us, however, several Cyprus cases decided on the exercise of the discretionary power of the. Court to stay execution of a judgment or order pending an appeal under Order 35, r.18*

[1] Order 35 r.18 reads:- "An Appeal shall not operate as a .... stay of execution or of proceedings under the decision appe-aled from except so far as the Court appealed from or the Court of Appeal, or a Judge of either Court, may order; and no intermediate act or proceeding shall be invalidated except so far as" the- Court appealed from may direct. Before any order staying execution is entered, the person obtaining the order shall furnish such security (if any) as may have been directed... If the security is to be given by means of a bond, the bond shall be made to the party in whose favour the

decision under appeal was given."[*332]

the Civil Procedure Rules. We shall refer to these cases in due course. They also cited to us several English cases on the. discretion of the Courts in England to stay execution in a number of different sets of circumstances.

Our order 40, r.7 copies almost verbatim the corresponding English R.S.C. Order 42, r.I7 before, it was replaced in 1966 by-R.S.C. Order 47, r.I(l)(a). This latter rule empowers the Court in England to stay-execution of its judgments either absolutely or subject to such terms as the Court thinks fit whenever there are special circumstances "which render it inexpedient to enforce the judgment or order".

Even before, however, express, reference to "special circumstances" was first made in R.S.C. Order 1+7, r.l(l)(a), although the matter was one in the absolute discretion of the Court, an order for stay of execution was not made in the absence of special circumstances shown:- Becker v. Earles Court Ltd. (1911), 56 Sol. Jo. 206, C.A.

The learned counsel for the applicants submitted that the Court should apply in this, case the same principles which govern the discretion of the Court in. dealing with an application for judgment without trial under our Order 18 of the Civil Procedure Rules. We are in disagreement with the learned counsel. Her proposition is. contrary to the authority of Ferdinand-Wagner (A. Firm) v. Laubscher Bros & Co (A.Firm) (1970) 2 Q.B. 313, C.A., in which Sachs, L.J., said this at page 319 of the report.[*333]

"For my part I too, with all respect to the approach of the judge in chambers, consider the tests to be applied when an application is made under R.S.C. Order., 47, r.I are quite different from those applicable to Order I4 proceedings."

The learned counsel for the respondents submitted that the principles governing the exercise of the discretion of the Court in granting stay of execution of a judgment pending appeal under Order 35, r18 (supra) should govern by analogy the exercise of the Court’s discretion under Order 40, r.7. We are inclined to agree that cases decided on the former rule may afford the necessary guidance to the Court dealing with case under the latter rule in as much as both rules refer to stay of execution of judgments, they both confer upon the Court a discretionary power without any conditions or prerequisites for the exercise of the discretion one way or. the other and the words employed in the two rules are sufficiently similar.

Our attention was drawn in this respect inter alia to Katarina Shipping Inc. v. The Cargo on Board the Ship "Poly" (1978) I C.L.R. 355, where it was stressed that whether to grant or refuse stay of execution pending appeal is purely a matter of discretion depending on the particular circumstances of the case. Referring to the principles governing the exercise of judicial discretion in such matters, Triantafyllides, P. said at pp. 360-61:-

" In

brief, they are that though it is not the practice[*334] to deprive a successful litigant of the fruits of his litigation pending an appeal, on the other hand, when a party is appealing, exercising his. Undoubted right of appeal, this Court ought to see that, the appeal, if successful, is not nugatory; thus there will be granted a stay of execution, pending appeal, where the special circumstances of the case so require."

The same principles were reiterated by Malachtos, J., in London and Overseas (Sugar) Co. and Another v. Tempest Bay Shipping Co. Ltd. , (1978) I C.L.R.367.

We have also considered the only English case cited to us which was decided on R.S.C. Order 42, r. I7 (supra). This is the case of Marine and General Mutual Life. Assurance Society v. Fdtwell Fen Second District Drainage Board (1945) I.K.B. 394, where the defendants, a statutory body under certain private Acts charged with the duty of draining an area of Pen lands, against whom the plaintiffs proposed to levy execution in satisfaction of their judgment, applied for a stay on the grounds (I) that execution on their property would make it impossible for them to perform their duty of draining the land; (2) that they were insolvent, and ought to be treated as an insolvent company in liquidation; (3) that the levying of execution would result in giving to the plaintiffs a preference over other creditors of the same class. It was held that it was not a proper case where the Court’s discretion should be[*335]exercised in defendants’ favour, and that the plaintiffs could not properly be deprived of their right to levy execution on any of the grounds put forward by the defendants.

Mrs. Timothi for the Cyprus Company has also directed our attention to Ferdinand Wagner (A,Firm) v. Laubscher Bros (A.Firm) (supra) where stay of execution under R.S.C. Order 47, r.(I)(a) of a German judgment registered in England pending the determination of an action before the English Courts, raising substantially the same issues, was refused. We were urged by Mrs.Timothi to distinguish that case from the case now under consideration mainly on the ground that (I) the defendants in that action, unlike the Cyprus Company here, had not applied to have the registration in England of the German judgment set aside; and (2) the. issues raised in the defendants’ action before the English Courts were the same with those raised before and decided by the German Court, whereas in the present case the claims’ of the Cyprus Company in the Cyprus action, although arising from the same transactions upon which the English judgment against them was based and could have been raised by way of counterclaim before the English Court, yet no judgment has been pronounced upon them by the foreign court.

Although the facts in Wagner’s case are not identical with those of the present case, yet they are similar enough so as to entitle this Court to derive help and guidance from what was said by the Court of Appeal in that case. It is pertinent, therefore, to note that Lord Denning, M.R., said at page. 317.-[*336]

"Here

is a German judgment which is equivalent to an English judgment. If the plaintiffs had obtained an English judgment, we should not, for one moment, grant a stay simply because the defen-

"dants had brought a cross-claimin another action against the plaintiffs. So. here we should not stay execution in this German judgment simply because Laubscher’s have brought a cross-action in England against Wagner"

And Phillimore, L.J., has this to say at page 320:-

"If such a judgment had been obtained in the Courts of this country, it is very difficult to think that a judge of the High Court here would have stayed its execution simply on the ground that the respondents here say they have got some sort of counterclaim which they should have put forward before but which they now really want to pursueI think this appeal is right."

Those are, therefore, the principles upon which we should approach the present situation. With them in mind let us revert to the facts of our case.

The English Company commenced proceedings to recover the amount due to them in 1977. After prolonged litigation before the English as well as the Cyprus Courts a final judgment was issued in their favour in Cyprus in 1981. The. alleged claim of the Cyprus Company against them,[*337]which we grant them to be a bona-fide claim, could have been put forward in the English Courts since 1977, or in any case much earlier than July 23, 1981. The English Company is entitled to the fruits of the judgment in their favour unless very good reason is shown for depriving them of their right. If the interim stay of execution is allowed to continue it means that they will be held up and not. be able to enforce their judgment for an indefinite time - until the. recent action in Cyprus is decided. What are the considerations which it is said would justify the Court to interfere with the rights of the judgment creditors to enforce their judgment in this case? They are only two. First, Mrs. Timothi says that, if the English Company is allowed to enforce its judgment against the Cyprus Company, and the latter later succeeds in Action No. 3508/81, it will be impossible to execute their judgment in Cyprus and very difficult and expensive to enforce it in England against the English Company. In answer to that the English Company says in the affidavit sworn in opposition that they are ready and willing to furnish a bank guarantee to repay to the Cyprus Company any amount collected from executing their judgment, in case the Cyprus company succeeds in the Cyprus action. Secondly, Mrs. Timothi says, that if execution is laid. against her clients’ assets, the rights of several other creditors of her clients whose claims have been stayed pursuant to an application by the Cyprus Company against them under the Debtors Relief Law, would be prejudiced.[*338]

In the circumstances of the present case none of the considerations put forward by the Cyprus Company renders it either inexpedient or unjust to enforce the judgment against them; nor is there any allegation that the enforcement of the judgment now against the Cyprus Company will either prejudice the latter in the proper prosecution of their Cyprus action, or render nugatory any judgment given in their favor in Action No.3508/81, especially in view of the offer by the English Company to furnish security against such eventuality.

In the proper exercise of our discretion we feel we shall lift the stay by dissolving the order granting interim stay of execution.

In the circumstances we make the following order:

The present application is dismissed with costs against the Cyprus Company applicants. The order dated July 23, 1981 granting interim stay of execution is dissolved. Any amount or amounts to be recovered in execution of the judgment against the Cyprus Company to be deposited in Court and be paid out to the English Company upon their furnishing security in the form of a Cyprus Commercial Bank's guarantee whereby payment is secured to the Cyprus Company of any amount to which it may be found entitled upon the final determination of Action No. 3508/81 not exceeding, however, the amount which the English Company will recover by enforcing their present judgment against the Cyprus Company. In case no such security is furnished,[*339]the money shall remain deposited in Court until further order.

Order accordingly.

[1] Order 40, r.ll reads:- "Any party against whom judgment has been given on an order made may apply to the Court or a Judge for a stay of execution or other relief against such judgment upon the ground of facts which have arisen too late to be pleaded; and the Court or Judge may give such relief and upon such terms as may be just."