Cypriot court sets aside foreign judgment registration because debtor resides abroad and has no local property.

[*463] 1965 May 18

(HADJITSANGARIS, P.D.C. AND HADJIHAMBIS, D.J.)

IN THE DISTRICT COURT OF LIMASSOL

In the matter of the Foreign Judgments

(Reciprocal Enforcement) Law, Cap.10,

and

In the matter of a Judgment Obtained in the High Court of Justice, Queens Bench Division, Commercial Court, in Action No. 1983-C-No.764 Between Colonial Bank (a Body Corporate), Plaintiffs, and Nicolas Yiannis, Defendant, and dated the 30th day of March, 1984.

(Application No. 76/84).

Foreign Judgments - The Foreign Judgments (Reciprocal Enforcement) Law, Cap. 10, sections 2, 4(1) and 6

- Setting aside registration of - Judgment debtor residing in Greece, but having property within the jurisdiction of the District Court of Limassol – The Judgment is for a sum of money and, therefore, does not “relate” (vide definition of “District Court” in section 2(1)) to such property - Registration set aside as having been effected in contravention of the provisions of the Law.

E. Montanios for M. Montanios, for the Applicant.

G. Christodoulou, for St. McBride, for the Respondents.

RULING

The following ruling was delivered by:-

HADJIHAMBIS, D.J.:- On 30th March, 1984, the Colonial Bank obtained a judgment against Nicolas Yiannis in the Commercial Court of the Queen’s Bench Division of the High Court of Justice in England in Action 1983-C-No.764 for US$1 ,382,953.36 with interest and costs. A sealed [*464] photocopy of this judgment is attached to the ex parte application filed by the Bank dated 5th July, 1984, for the registration of the said judgment in this Court which was granted on 9th July, 1984. On 17th September, 1984, Nicolas Yannis took out this summons applying that the registration of the judgment be set aside.

Mr. Montanios, appearing for the applicant, effectively argued the application on the substantive legal ground that the judgment is not a judgment which could have been registered in the first place and was consequently registered in contravention of the relevant legal provisions, and did not, rightly, we believe, insist on another line of argument to the effect that the notice of registration given to his client was irregular in that it was neither sealed nor served personally on him. Indeed, we note that the application only prays for the setting aside of the registration and, as Mr. Montanios agreed, does not include any reference to irregularity of the notice of registration (irregularity of this kind not being, in any case, one of the grounds upon which the registration of the judgment may be set aside); further, the purpose of notice of registration under Rules 8 and 9 of the Foreign Judgments (Reciprocal Enforcement) Rules (hereinafter referred to as “the Rules”) being, apparently, to enable the judgment-debtor to apply to have the registration set aside and halt execution until [*465] then, any irregularity in the notice of registration of the kind in question seems to be waived or of no further consequence once the judgment debtor actually applies, as he has done in this case, to have the registration set aside before execution has issued.

Turning to Mr. Montanios’ basic point, his application is based on s. 6 (1) (a) (i) of the Foreign Judgments (Reciprocal Enforcement) Law, Cap. 10 of the Laws of Cyprus (hereinafter referred to as “the Law”), which provides:

“6(1) - On an application in that behalf duly made by any party against whom a registered judgment may be enforced, the registration of the judgment -

(a) shall be set aside if the registering Court is satisfied -

(i) that the judgment is not a judgment to which this Part of this Law applies or was registered in contravention of the foregoing provisions of this Law;”.

We note, in the first instance, as Mr. Montanios has pointed out, that the ex parte application for registration, though based on the Rules, was not based on s.4(1) of the Law, which provides: [*466]

“4.(1) - A person, being a judgment creditor under a judgment to which this Part of this Law applies, may apply to the District Court at any time within six years after the date of the judgment, or, where there have been proceedings by way of appeal against the judgment, after the date of the last judgment given in those proceedings, to have the judgment registered in the District Court, and on any such application the Court shall, subject to proof of the prescribed matters and to the other provisions of this Law, order the judgment to be registered ...”.

Furthermore, s. 2(1) of the Law provides:

“‘District Court’ means the District Court in the district in which the judgment-debtor or any of the judgment-debtors resides or in which any property to which a judgment relates is situate”.

On this basis, Mr. Montanios argued, the judgment could not be registered in the District Court of Limassol as the District Court of Limassol did not come within the definition of “District Court” in s .6(1) given by s .2(1), neither of the alternative conditions of s .2(1) (residence of the debtor or situation of property to which the judgment relates within the Court’s jurisdiction) being fulfilled. As to residence, he submitted that it is clear from the Applicant’s affidavit as much as from the [*467] affidavits filed in support of the application for registration and the notice of intention to oppose the present application, that the applicant does not reside in Limassol or even in Cyprus but resides in Greece. As to the other condition, he submitted that it is clear from the judgment that the same is for a sum of money and does not relate to any property situate within the jurisdiction of this District Court. Thus, even if, according to the affidavits filed in support of the application for registration and the notice of intention to oppose the present application, the applicant is the holder of shares in a company having its registered office in Limassol, these shares,, though they may be deemed to be situate within the jurisdiction of this Court, do not constitute property to which the judgment relates, this being affirmed in the applicant’s affidavit.

On his part, Mr. McBride, conceding that the residence requirement was not satisfied, argued, as to the alternative requirement of situation of property, that the reference in s. 2(1) to “any property to which a judgment relates is situate” was not meant to law down a requirement that the judgment, to be registrable, must relate to property situate within the jurisdiction of the District Court in question, but to specify the District Court within Cyprus in which the judgment is to be registered. On this basis, Mr. McBride concluded, it would be [*468] sufficient for the purposes of s.2(1) to show that the judgment-debtor has any property within the jurisdiction of the District Court in which registration is sought, and here it is common ground that he does have such property even though the judgment does not relate to it. Mr. McBride pointed out that registration under the Law is based on reciprocity and that the equivalent English statute, the Foreign Judgments (Reciprocal Enforcement) Act 1933, to which our own Law otherwise corresponds, contains no equivalent limitation, judgments being subject to registration in the High Court. Consequently, he argued, to read our Law as allowing registration only in cases in which the judgment relates to property situate within the jurisdiction of the District Court, would violate the principle of reciprocity, which our Law aims to further, and thereby defeat its purpose.

In considering the question thus raised, we would, in the first instance, refer to the decision of the Supreme Court, cited by Mr. Montanios, in Zygmunt Sieczko v. F. Hoffmann-La Roche & Co. A.G. (1978) 1 C.L.R. 57, dealing on appeal with the definition of “District Court” in this context. It had there been argued that, as to residence, it was not a prerequisite for registration that the judgment-debtor was resident within the jurisdiction of the District Court where registration is sought or even in Cyprus, and that, as to situation of property, the existence of any property was sufficient [*469] without the need that the judgment should relate to it. Neither of these arguments found favour with the Court. Rejecting counsel’s argument that no residence requirement is to be found in the English statute, on which, in the context of reciprocity, our law was based, Triantafyllides, P., giving the judgment of the Court, said, at p. 63, that:

“It should be observed, on the other hand, that there is not to be found in the said English Act a definition section, such as section 2(1) of our Cap. 10, which contains the definition of ‘District Court’ ”.

Pointing out the principle of statutory interpretation, particularly in relation to a definition section, consistently with the provisions of s.4 of the Interpretation Law, Cap. 1 of the Laws of Cyprus, that in ascertaining the intention of the legislature the Court should primarily proceed on the language used, the President proceeded to refer to Power v. Beha, 23 C.L.R. 116, where a similar issue arose, and, at p. 64, quoted from the judgment of Zekia, J. (as he then was), at p. 138 to the effect that:

“The fact that the requirement of the ordinary residence of the child is included in the definition of the word ‘Court’ and not in the words ‘illegitimate child’ supports the view that the primary object of the definition of ‘Court’ [*470] is to determine the territorial jurisdiction of a particular District Court in relation to the other Courts of the Island. This need not be however the sole object of the definition in question. This requirement might have to be considered not only in relation to other Courts but also independently as a prerequisite before the assistance of any Court is invoked in an application for legitimation or for an affiliation order”:

And the President concluded that, as put it at pp. 64-65:

“Likewise, in the present case, bearing in mind all the foregoing, and reading together the relevant provisions of Cap. 10 as an integral whole, we have to hold that the definition of ‘District Court’ in section 2(1) of Cap. 10, though primarily intended to determine the territorial jurisdiction as between District Courts in Cyprus, introduces, also, a residence requirement of a judgment-debtor for the purposes of the application of the provisions of section 4(1) of Cap. 10 as regards the registration of a foreign judgment in Cyprus; therefore, the submission to the contrary of counsel for the respondents cannot be upheld as correct”. [*471]

The Court proceeded to reject also counsel’s second argument, effectively the same as that which Mr. McBride has advanced in this case. As the President put it, at p. 65:

“... we cannot agree with him that ‘any property’ means any property of the judgment-debtor against which execution of the foreign judgment to be registered may be levied. From the express terms of the provision under consideration it is abundantly clear that it must be property to which the foreign judgment to be registered relates and this is not so in the instant case”.

We have quoted at length from the above judgment in view of the direct bearing that the Court’s reasoning seems to have in the instant case. Mr. McBride invited us to hold that the President’s dictum on the question of situation of property was obiter and that it was a wrong obiter at that, not accurately representing the law. We find ourselves unable to subscribe to such view. It is clear from the judgment that the two questions of residence and situation of property were considered alternative prerequisites, and the Court only proceeded to examine the question of residence after deciding that the question of situation of property could be of no avail. Indeed, the point was specifically raised and discussed and specifically dealt with by the Court. In any case, we do not feel that the President’s view of the matter is one which we would, in [*472] interpreting the particular issue to which it refers, be entitled or prepared to disregard. Further, the Court’s views as to the interpretation of the residence requirement, which was the main issue before it, seems to us to apply equally to the situation of property requirement. Thus, though the primary object of the definition of “District Court” in terms of the situation of property or in terms of residence, may be to determine the jurisdiction of the District Courts as between themselves, nevertheless, this is not the sole object of the definition which, by its clear words, introduces, in addition, as much a residence requirement as an alternative requirement that the judgment must relate to property situate within the District Court in which registration is sought. Indeed, to hold otherwise would amount to a deliberate and unwarranted disregard of the express words of the Law by giving them a meaning which by no legitimate stretch of the technique of interpretation they could attract. Such is not an exercise which this Court favours or in which it deems itself entitled, by either function or disposition, to engage, thereby effectively usurping the role of the legislature.

Nor do we believe that the position is affected by Mr. McBride’s strong appeal to reciprocity. It is true that the purpose of our Law is proclaimed to proceed on the basis of reciprocity, but we do not believe that the general purpose of a law can override its express words. On the contrary, the [*473] general purpose of a law can only be carried into effect by being expressed and conditioned in terms of the specific operative provisions of the law. Consequently, neither the fact that our Law is modelled on the English statute nor the fact that the two Laws are based on the principle of reciprocity suffices to carry the matter to resolution. Indeed, we note that our Law itself, which in s.3 provides for its application in relation to any particular country, conditions such application not in terms of exact equivalence but in terms of “substantial reciprocity of treatment”. This is, in fact, as far as reciprocity could go, for, failing universal regulation by international convention, it must be left to the legislator of each country to adapt the principle of substantial reciprocity to the circumstances there prevailing. Thus, as long as substantial reciprocity of treatment is accorded sufficient to extend the operation of our Law to another country, exact equivalence or maximum approximation cannot be either a requirement or a necessary yardstick for interpretation.

Furthermore, the argument as to reciprocity is unconvincing even on its own premises. If reciprocity were to be carried to its natural conclusion and serve as a criterion for the interpretation of s. 2(1), we would be deleting s. 2(1) altogether from our Law. For nowhere in the English statute is to be found any requirement as to either situation [*474] of property or residence in England. Now, if we were to interpret our Law in terms of the reciprocity advocated by Mr. McBride, we would be stopping short of true reciprocity by holding that a requirement, i.e. residence or situation of property in the limited sense in which he suggests, is still necessary under our Law when it is not necessary under English law. Mr. McBride suggested that in England residence or situation of property, though not expressly required, are taken into consideration in the exercise of the Court’s discretion whether to allow registration. To this, however, we must point out that under the English statute (as much as under our Law) the Court has no discretion whether to allow registration but, as s. 2 (1) provides, “... the Court shall, subject to proof of the prescribed matters and to the other provisions of this Act, order a judgment to be registered”. The fact is that our legislature, mindful of the realities of effective execution, has chosen to condition registration in terms of certain criteria which appeared to it necessary at the time. If, today, in the light of international and national modern conditions of life and business, those criteria appear too limited or lacking (e.g. they do not cover the instant case of a non-resident carrying on business here), the answer is not to be found in the effective abolition of those express and clear statutory criteria by the courts “under the thin guise of interpretation” but in the resort [*475] to statutory amendment by the legislature which alone is ordained and qualified to judge the terms in which laws should be expressed.

Having taken this view of the matter, we consider it unnecessary to rule on the other question raised by Mr. Montanios that the ex parte application for registration, though based on the Rules, was not based on s.4 of the Law under which alone registration can be obtained. Certainly, we are mindful of the obligation of a party moving the Court to include in his application the provisions of the law or rules on which he relies and of the fact that, quite apart from the ordinary consequence of failure to do so being that his application may be refused or any order made upon it may be set aside (see Kouppas v. Vassiliades (1981) 1 J.S.C. 120, Pikis, P.D.C. (as he then was), s. 6(1) of the Law expressly provides that registration of a judgment shall be set aside if it was registered in contravention of the provisions of the Law (which it would be in so far as the application was not based on s.4). Nevertheless, seeing particularly that the matter was not sufficiently argued before us but rather referred to leading to the main argument, and that we have already decided that the registration of the judgment should be set aside on that main argument, we do not propose to say anything more on this question. [*476]

In the result, we order that the registration in this Court of the judgment of the Commercial Court of the Queen’s Bench Division of the High Court of Justice in England in Action 1983-C-764 for US$1,382,953.36 obtained on 30th March, 1984 by the Colonial Bank against Nicolas Yannis, which was ordered by this Court on 9th July, 1984, be set aside.

In view of the outcome of this application, we have decided that the costs should be against the Respondents. Costs to be assessed by the Registrar.

Judgment of High Court of Justice in England set aside.

Costs against the Respondents.