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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Mobile Telecommunications Co KSCP v HRH Prince Hussam Bin Saud Bin Abdulaziz Al Saud [2023] EWHC 312 (Ch) (31 January 2023) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2023/312.html Cite as: [2023] EWHC 312 (Ch) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Fetter Lane, London, WC2A 2LL |
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B e f o r e :
____________________
| MOBILE TELECOMMUNICATIONS CO KSCP |
Petitioner |
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- and - |
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| HRH PRINCE HUSSAM BIN SAUD BIN ABDULAZIZ AL SAUD |
Debtor |
____________________
2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.
Telephone No: 020 7067 2900. DX 410 LDE
Email: [email protected]
Web: www.martenwalshcherer.com
JOHN WARDELL KC and ANDREW SHAW (instructed by Millbank Solicitors) for the Debtor
____________________
Crown Copyright ©
DEPUTY ICC JUDGE CURL KC:
"Creditors petition: debtors against whom the court may make a bankruptcy order.
(1) A bankruptcy petition may be presented to the court under section 264(1)(a) only if-
(a) the centre of the debtor's main interests is in England and Wales, or
(ab) the centre of the debtor's main interests is in a member State (other than Denmark) and the debtor has an establishment in England and Wales, or
(b) the test in subsection (2) is met.
(2) The test is that-
(a) the debtor is domiciled in England and Wales, or
(b) at any time in the period of three years ending with the day on which the petition is presented, the debtor-
(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or
(ii) has carried on business in England and Wales."
Directions Sought
Background
"We deal first with 24 York House as that property has been held for the longest time. The sole legal and beneficial ownership of 24 York House is with the defendant's mother, Princess Noorah. 24 York House has been her London home for more than 40 years and continues to be so. The lease was originally purchased by her with her own money. The same applies to the lease extension and the premium paid for it.
Until the other London properties were purchased, 24 York House was the only property in London owned by the family and, therefore, Princess Noorah has allowed various family members, including the defendant, to reside and stay there from time to time. That does not, of course, create a beneficial interest in it. It is quite natural for a mother to let her son live in a property which she owns. The fact that loans may have been taken out by the defendant and secured against 24 York House also does not mean that he has a beneficial interest. In any event, they have all been discharged. The AP1 that you exhibit was completed by solicitors acting for the lender and was incorrect. Paying the council tax does not mean that a person has beneficial interest. There can be many reasons why it is expedient for a person to assume responsibility. In this case, it was so that the defendant had an address in London." (emphases added)
"24 York House is a substantial apartment and has room for family members to stay and reside there with me. This is what has happened over the years. This has included the defendant, his wife and my grandchildren. It has also enabled them to use 24 York House as an address in the UK for various purposes such as visas, including student visas when grandchildren were studying in London, opening back accounts, etc. For this reason, family members, including the defendant, have been registered as liable to pay the council tax from time to time. That does not mean that they have had a beneficial interest in 24 York House at any time. They have not. I am the only person who has had the beneficial interest in 24 York House." (emphases added)
Test For Service Out
"10. In these circumstances, the parties agree that the approach which the court must apply in determining whether the grounds of jurisdiction for service out are satisfied is that which applies under CPR Part 6, albeit that the grounds for a bankruptcy petition are those set out in section 265 and not in Practice Direction 6B to the CPR.
11. It is well established that the standard of proof which has to be satisfied to show that the claim falls within one of the heads of jurisdiction is not the balance of probabilities but the lower standard of 'a good arguable case'. This standard applies both where the issue going to jurisdiction will also be an issue at trial and where it will not be."
In this case, the issue going to jurisdiction (i.e., the ground in section 265(2)(b)(i)) will also be an issue at the final hearing of the Second Petition.
"Some of the jurisdictional gateways in Practice Direction 6B merely require that the claim should be of a particular character. For example, it is a claim for an injunction regulating conduct within the jurisdiction. Others, including gateways 6(a) and 9(a) on which Lady Brownlie relies, depend on the court being satisfied of some jurisdictional fact. A relevant contract must, for example, have been made or breached in England, or relevant damage sustained there. There are two closely related problems about this. The first is a legal one, namely that none of the law's established evidential standards satisfactorily meets the case. The second is a practical one, namely that some jurisdictional facts, for example the existence of the contract said to have been made or breached in England, may be in issue at trial if the case is allowed to proceed, when they will in all probability be determined on fuller material than is likely to be available at the interlocutory stage. The same is true of the more general requirement that if it proceeds the claimant should have a reasonable prospect of success."
"'Good arguable case' reflects . . . that one side has a much better argument on the material available. It is the concept which the phrase reflects on which it is important to concentrate, i.e., of the court being satisfied, or as satisfied as it can be having regard to the limitations which an interlocutory process imposes, that factors exist which allow the court to take jurisdiction."
"When the case [that is the Canada Trust case] reached the House of Lords, Waller LJ's analysis was approved in general terms by Lord Steyn, with whom Lord Cooke of Thorndon and Lord Hope of Craighead agreed, but without full argument [2002] 1 AC 1, 13. The passage quoted has, however, been specifically approved twice by the Judicial Committee of the Privy Council: Bols Distilleries BV (trading as Bols Royal Distilleries) v Superior Yacht Services Ltd [2007] 1 WLR 12, paragraph 28, and Altimo Holdings. In my opinion, it is a serviceable test, provided that it is correctly understood. The reference to 'a much better argument on the material available' is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice. What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word 'much', which suggests a superior standard of conviction that is both uncertain and unwarranted in this context."
"It is in my view clear that, at least in part, the Supreme Court confirmed the relative test in Canada Trust. This is plain from the express endorsement of that test in Brownlie, and nothing in Goldman Sachs detracts from that analysis, but on the contrary operates upon the basis that Brownlie was correct. The reference to 'a plausible evidential basis' in limb (i) is hence a reference to an evidential basis showing that the claimant has the better argument. It is perhaps relevant that in the Court of Appeal in Brownlie, Arden LJ expressly linked the formulation of Waller LJ in Canada Trust with a concept of relative plausibility: at paragraph 23. The use of 'plausibility' as a guiding relative principle in Brownlie and in Goldman Sachs was not therefore a novelty plucked from a jurisprudential void."
"In expressing a view on jurisdiction, the court must be astute not to express any view on the ultimate merits of the case, even if there is a close overlap between the issues going to jurisdiction and the ultimate substantive merits: see for example per Waller LJ in Canada Trust at page 555F, Teare J in Antonio Gramsci Shipping Corporation v Recoletos Ltd at paragraph 39, and Aikens LJ in JSC Aeroflot Russian Airlines v Berezovsky at paragraph 14."
"Next, the adjunct 'much' in the Canada Trust formulation must be laid to rest. This was the view expressed by a variety of judges prior to Brownlie and the word was, rightly in my view, deemed superfluous in Brownlie by Lord Sumption. There is no discernible logic for saying that jurisdiction arises if the claimant, having established that it has the better case (relatively), then has to proceed upwards and onwards and show that it has 'much' the better case. A plausible case is not one where the claimant has to show it has 'much' the better argument."
"Limb (ii) is an instruction to the court to seek to overcome evidential difficulties and arrive at a conclusion if it 'reliably' can. It recognises that jurisdiction challenges are invariably interim and will be characterised by gaps in the evidence. The court is not compelled to perform the impossible but, as any judge will know, not every evidential lacuna or dispute is material or cannot be overcome. Limb (ii) is an instruction to use judicial common sense and pragmatism, not least because the exercise is intended to be one conducted with 'due dispatch and without hearing oral evidence': see per Lord Steyn in the House of Lords in Canada Trust at paragraph13, and per Lord Rodger of Earlsferry in Bols at paragraphs 27 and 28."
" The relative test has been endorsed 'in part' because limb (iii) is intended to address an issue which has arisen in a series of earlier cases and which has to be grappled with but which as a matter of logic cannot satisfactorily be addressed by reference to a relative test: see for example Antonio Gramsci [2012] 2 Lloyd's Rep 365, paragraphs 39 and 44-48, per Teare J citing WPP Holdings Italy Srl v Benatti [2007] 1 WLR 2316, paragraph 44 ('WPP') per Toulson LJ. This arises where the court finds itself simply unable to form a decided conclusion on the evidence before it and is therefore unable to say who has the better argument.
What does the judge then do? Given that the burden of persuasion lies with the claimant, it could be argued that the claim to jurisdiction should fail since the test has not been met. But this would seem to be unfair because, on fuller analysis, it might turn out that the claimant did have the better of the argument and that the court should have asserted jurisdiction. And, moreover, it would not be right to adjourn the jurisdiction dispute to the full trial on the merits since this would defeat the purpose of jurisdiction being determined early and definitively to create legal certainty and to avoid the risk that the parties devote time and cost to preparing and fighting the merits, only to be told that the court lacked jurisdiction. In Antonio Gramsci and in WPP, the court recognised that a solution had to be found. In WPP, at paragraph 44, Toulson LJ stated that the court could still assume jurisdiction if there were 'factors would exist which would allow the court to take jurisdiction', and in Antonio Gramsci, at paragraph 48, Teare J asked whether the claimant's case had 'sufficient strength' to allow the court to take jurisdiction. The solution encapsulated in limb (iii) addresses this situation. To an extent, it moves away from a relative test and, in its place, introduces a test combining good arguable case and plausibility of evidence. Whilst no doubt there is room for debate as to what this implies for the standard of proof, it can be stated that this is a more flexible test which is not necessarily conditional upon relative merits."
Witness Statement Direction
"Elements of Res Judicata Estoppel
1.02 A party setting up a res judicata as an estoppel against his opponent's claim or defence, or as the foundation of his own, must establish its constituent elements, namely that:
(i) the decision, whether domestic or foreign, was judicial in the relevant sense;
(ii) it was in fact pronounced;
(iii) the tribunal had jurisdiction over the parties and the subject matter;
(iv) the decision was:
(a) final;
(b) on the merits;
(v) it determined a question raised in the later litigation; and
(vi) the parties are the same or their privies, or the earlier decision was in rem."
"The determinations which will found an issue estoppel may be of law, fact, or mixed fact and law."
"Issue estoppel-English law.
Issue estoppel has a long history, in England as well as other common law countries (see Spencer Bower and Turner: The Doctrine of Res Judicata (2nd edition 1969) page 150), but it is usually thought only to have achieved authoritative recognition in English law by the House of Lords decision in Carl-Zeiss-Stiftung v Rayner & Keeler Ltd (No. 2) [1966] 2 All ER 536. It is an off-shoot of what has been called 'cause-of-action estoppel' (see Thoday v Thoday [1964] 1 All ER 341 at 352).
The principle is that an issue of fact or law which necessarily was concluded in favour of one party in the foreign proceedings cannot be reopened in further proceedings between the same parties here. Dicey and Morris page 467 states as follows:
'For there to be such an issue estoppel, three requirements must be satisfied: first, the judgment of the foreign court must be (a) of a court of competent jurisdiction, (b) final and conclusive, and (c) on the merits; secondly, the parties to the English litigation must be the same parties (or their privies) as in the foreign litigation; and, thirdly, the issues raised must be identical. A decision on the issue must have been necessary for the decision of the foreign court and not merely collateral.'"
"The third reason for caution, however, does raise a difficult problem with which I must now deal. It is clear that there can be no estoppel of this character unless the former judgment was a final judgment on the merits. But what does that mean in connection with issue estoppel? When we are dealing with cause of action estoppel, it means that the merits of the cause of action must be finally disposed of so that the matter cannot be raised again in the foreign country. In this connection, the case of Nouvion v Freeman ((1889) 15 App Cas 1) is important. There had been in Spain a final judgment in a summary form of procedure; but that was not necessarily the end of the matter because it was possible to reopen the whole question by commencing a different kind of action, so the summary judgment was not res judicata in Spain. I do not find it surprise that the House unanimously refused to give effect in England to that summary judgment."
Evans LJ then continued at 854H:
"The natural meaning of 'final and on the merits' is that there has been a final, as opposed to provisional, determination of the parties' substantive rights."
"On balance, and regarding the question entirely as one of principle, I would be prepared to hold that an issue estoppel could arise from an interlocutory judgment of a foreign court on a procedural, i.e., non-substantive, issue, where the following conditions were fulfilled: (1) there was express submission of the procedural or jurisdictional issue to the foreign court; (2) the specific issue of fact was raised before and decided by the court; and (3) the need for 'caution' recognised by Lord Reid in Carl-Zeiss is carefully borne in mind."
"It may be, therefore, that in practice the scope for a plea of issue estoppel arising out of a procedural decision and in relation to non-substantive issues will be very small."
"34. …The definitive finding by DICC Judge Schaffer was that the debtor had permission from his mother to stay at York House at any time (see paragraph 56). On appeal, Roth J considered that that binding assessment of the evidence the debtor had chosen to put forward gave rise to a good arguable case that the debtor did have a place of residence in England and Wales.
35. Further, as is readily apparent from the fact that the finding was that the debtor had permission from his mother to stay at York House at any time, the right to reside found by the court was a right that persisted throughout the First Relevant Period, including during the Overlap Period.
36. The debtor now seeks by the 2022 Set Aside Application [i.e., the Second Set Aside Application] to invite the court to revisit the issue of residence during the Overlap Period and conclude that during that period there is no good arguable case that the debtor had a residence in England and Wales in circumstances where the court has already addressed this on several occasions and made a definitive finding to the opposite effect. As noted above, the 2022 Set Aside Application must fail if the debtor cannot succeed in relation to the Overlap Period.
37 "…In making the 2020 Set Aside Application, the debtor submitted to the court the issue of whether the debtor had a place of residence in England and Wales at any time during the First Relevant Period. The court held that, as a matter of fact, MTC had a good arguable case that the debtor did have such a place of residence during inter alia the Overlap Period. The evidence available for the court to reach that conclusion was that chosen by and submitted by the debtor."
"Looking at the facts in this case, ICC Judge Jones found that the director de facto has had a place of residence in the three years before February 2020, and I see nothing before me on the evidence to gainsay his findings and to set aside that decision. The debtor has had a right to stay in the family home by his mother in the relevant period. There is no evidence from his mother to the contrary. The fact he did not exercise that right is not sufficient to disengage the test, and the mother has offered no evidence that this right was at any time in the relevant period withdrawn. That is critical. The debtor did in fact stay at one of the family homes in February 2018, I assume, if it was required, with the consent of his mother. Indeed, I would also have noted that the debtor was registered for council tax up to December 2019 which could, without any further explanation, show some evidence of a place of residence." (emphasis in original)
"24 York House is described by the debtor's mother as 'a substantial apartment', and the debtor had permission from his mother to stay at 24 York House at any time. This was an express finding by the judge that, as Mr Wardell recognised, cannot now be challenged, as permission to appeal against the judge's appraisal of the evidence was refused. The debtor's mother says that the debtor, his wife and their children have stayed there 'over the years'. It follows, in my view, that the permission which the debtor had while a student continued after he had his own family, and it appears that this was his and his mother's expectation."
"…Applying the lower standard of proof which I have held here applies and taking all the above matters into account, I have no doubt that the creditor has shown a good arguable case that the debtor had a place of residence in the jurisdiction, or that it has 'the better of the argument' on the material available. At the hearing of the petition, the court will have to assess the matter on the balance of probabilities, and it will be open to the debtor to give evidence explaining matters more fully."
Cross-examination Direction
"English law does not generally permit, save by consent, depositions, in other words oral interrogation of an opposing party, except at a trial where that party has chosen to give evidence."
"It would amount to a deposition of the Al Khayyat brothers before it has even been determined whether the claim should be heard in this jurisdiction. This would be contrary to the general policy of English law that depositions are not permitted subject to exceptions not material here…"
and he then gives the reference to the passage from Stokoe to which I have just referred.
"The decision of the Court of Appeal in the Canada Trust case was appealed by the defendants to the House of Lords. Counsel for the defendants dealt with the appropriate standard of proof in their written case, but not in oral argument. So counsel for the plaintiffs was not called upon to address it. In these circumstances, only Lord Steyn referred to the matter. He gave his view briefly at page 13.
'In a purely internal English case, the test of a good arguable case had been laid down by the House of Lords as applicable also in respect of domicile as a ground of jurisdiction: Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438. The question is whether in the context of article 6 the more stringent test of a balance of probabilities should apply. The adoption of such a test would sometimes require the trial of an issue or at least cross-examination of deponents to affidavits. It would involve great expense and delay. While it is true that the jurisdictional issues under the Conventions are very important, they ought generally to be decided with due despatch without hearing oral evidence. In my view, Waller LJ's judgment at 553 to 559 correctly explained on sound principled and pragmatic grounds why the defendants' argument is misconceived.'"
"In practice, what amounts to a 'good arguable case' depends on what requires to be shown in any particular situation in order to establish jurisdiction. In the present case, as the case law of the Court of Justice emphasises, in order to establish that the usual rule in Article 2(1) is ousted by Article 23(1), the claimants must demonstrate 'clearly and precisely' that the clause conferring jurisdiction on the court was in fact the subject of consensus between the parties. So, applying the 'good arguable case' standard, the claimants must show that they have a much better argument than the defendants that, on the material available at present, the requirements of form in Article 23(1) are met and that it can be established, clearly and precisely, that the clause conferring jurisdiction on the court was the subject of consensus between the parties."
"…Given that I have decided that cross-examination on the underlying allegations would be inappropriate in an application of this kind, cross-examination would not be likely materially to assist the judge in determining the matters that fall to be considered on the stay application, even if it could be done without turning the hearing into a mini-trial."
"…Some jurisdictional facts, for example the existence of the contract said to have been made or breached in England, may be in issue at trial if the case is allowed to proceed, when they will in all probability be determined on fuller material than is likely to be available at the interlocutory stage."
"English law does not generally permit, save by consent, depositions, in other words oral interrogation of an opposing party, except at a trial where that party has chosen to give evidence."
Overall Conclusion
