Canada Trust Company v. Stolzenberg and Gambazzi

The House interpreted the words "be sued" in Articles 2 and 6 of the Lugano Convention (in identical terms to the Brussels Convention) as referring to the initiation of proceedings rather than the moment of service. Applied to English procedure, that means the date of issue of the writ (or claim form) is the critical date for testing domicile under Articles 2 and 6. The court held that the appropriate standard on an Order 12, rule 8 challenge to jurisdiction is whether the claimant has a good arguable case that the defendant was domiciled in the forum at the critical date. Article 6 does not require prior service on an anchor defendant before other defendants may be sued in the forum. Practical objectives of the Convention (certainty and avoidance of evasion of service) informed the interpretation.

The claimants (trustees of Canadian pension funds and Daimler-Chrysler Canada) issued a writ in England alleging a large-scale fraud by Mr Stolzenberg and others inducing investments in a group of companies. The writ was issued on 1 August 1996 but many defendants were only served on 11 March 1997; Mr Stolzenberg removed himself from England in the interim and his domiciliary status at the time of service was therefore uncertain. Six defendants challenged the English court's jurisdiction under R.S.C., Ord. 12, r. 8, arguing that, for the purposes of Articles 2 and 6 of the Lugano Convention, a person is "sued" only when proceedings are served and not when they are issued, and that Article 6 required prior service on an anchor defendant domiciled in the forum.

The procedural history was: a first instance ruling by Rattee J. that "sued" meant issue of the writ; a majority decision in the Court of Appeal (Nourse and Waller L.JJ., with Pill L.J. dissenting) ([1998] 1 WLR 547) upholding that view; and the present appeal to the House of Lords. The House considered textual and contextual treaty interpretation (Vienna Convention principles), the Convention's purpose (certainty and uniformity), and the relation between autonomous Convention concepts and national procedural rules. It concluded that the concepts "sued", "to bring proceedings" and "instituting proceedings" in Articles 2 and 6 are best read as referring to the initiation of proceedings and that, under English procedure, the issue date of the writ is the operative date. The House also held that Article 6 does not require an anchor defendant to have been previously served and that the correct standard on an Order 12, rule 8 challenge is whether there is a good arguable case on domicile rather than the balance of probabilities.

Issues framed by the court: (i) whether "sued" means issue or service when applied to English proceedings; (ii) whether Article 6 requires prior service on an anchor defendant; (iii) standard of proof on jurisdictional fact (domicile) on an Order 12, rule 8 application; and (iv) consequences for non-Convention defendants served by leave under Order 11. The House rejected the appellants' arguments and dismissed the appeal, while recognising that multi-party cases may present practical difficulties under the chosen rule which were not resolved on the appeal.

Appeal dismissed. The House held that for Articles 2 and 6 of the Lugano/Brussels Convention the concept of being "sued" is to be interpreted as the initiation of proceedings; in English law that corresponds to the issue of the writ (claim form). Accordingly the relevant date for determining domicile is the date of issue. Article 6 does not require prior service on the anchor defendant. The proper standard on an Order 12, r. 8 jurisdictional challenge is whether the claimant has a good arguable case that the defendant was domiciled in the forum at the critical date.

First instance: Rattee J. (unreported) held that 'sued' meant issue of the writ and refused the jurisdictional challenge. Court of Appeal (majority Nourse and Waller L.JJ.; Pill L.J. dissenting) affirmed that the relevant date was the date of issue and applied the 'good arguable case' standard: Canada Trust Co. v. Stolzenberg (No. 2) [1998] 1 WLR 547. The House of Lords dismissed the appeal on 12 October 2000 ([2000] UKHL 51).