B e f o r e :
THE HONOURABLE MR JUSTICE LANGLEY
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Between:
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MICHAEL CHERNEY
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Claimant
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- and -
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OLEG DERIPASKA
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Defendant
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Mr J. Brisby QC and Mr A. Holliman (instructed by Stephenson Harwood) for the Claimant
Mr R. Stewart QC, Mr N. Cherryman and Mr G. Chapman (instructed by Bryan Cave LLP) for the Defendant
Hearing dates: 19 and 20 April 2007
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HTML VERSION OF JUDGMENT
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Crown Copyright ©
The Hon. Mr Justice Langley :
The Claim
- The Claimant (Mr Cherney) is an Uzbek by birth who spent a great deal of his working life in Russia. He now resides in Israel. The Defendant (Mr Deripaska) is Russian. He has vast business interests including (subject to this dispute) the beneficial ownership of a Russian company, Rusky Alyuminiy ("RusAl").
- Mr Cherney claims that by an oral agreement, made on 10 March 2001, Mr Deripaska agreed to hold 20% of the shares in RusAl on trust for him. It is alleged that this agreement was expressly made subject to English law and that it is evidenced by a written contract agreed and drafted in England. The written contract does not include an English law clause.
- On 24 November 2006 the Claim Form, with Particulars of Claim, was issued in these proceedings. The claim seeks a Declaration that Mr Deripaska holds 20% of the shares in RusAl on trust for Mr Cherney together with related relief.
- The only prior notification of the claim was a short letter dated 14 May 2006 from Mr Cherney's lawyers in Israel addressed to Mr Deripaska at an address of one of his companies in Moscow. That letter simply requested Mr Deripaska to begin the "repayment" of the 20% interest in RusAl. It did not threaten legal proceedings nor did it seek an address or representation for service of proceedings.
26 November 2006
- Mr Deripaska beneficially owns a house at 5, Belgrave Square, London, SW1X 5PH. On 26 November 2005, Mr Deripaska arrived at this property by car and went inside. Mr Hoskinson (a process server instructed on behalf of Mr Cherney) had been waiting outside the property. He handed the Claim Form in an envelope to a Mr Lawrence, who was standing outside the property, and asked Mr Lawrence to pass it on to Mr Deripaska, which Mr Lawrence agreed to do and did, having told Mr Hoskinson that Mr Deripaska was too busy to see him.
Acknowledgment of Service
- On 11 December an Acknowledgement of Service was filed on behalf of Mr Deripaska stating an intention to dispute jurisdiction.
The Applications
- Mr Deripaska's applications, dated 30 January 2007, seek to determine whether or not the Claim Form has been duly served upon him. He seeks an order that they have not. The applications also raise issues of jurisdiction. Mr Cherney's application, dated 7 February 2007, should he need it, seeks an order under CPR 6.9 dispensing with service of the Claim Form.
- On 9 February, Tomlinson J gave directions the effect of which was that issues of service and "domicile" were to be dealt with at the present hearing. Those are the issues the subject of this judgment. Issues arising from Mr Deripaska's application that the court decline jurisdiction on the grounds of forum non conveniens or upon any application by Mr Cherney for permission to serve proceedings out of the jurisdiction are, if they are still live following this judgment, to be determined at a further hearing on 21 and 22 June.
- This apparent complexity needs some explanation. Mr Cherney's case on the present issues has a number of bases with varying consequences. There are four possible outcomes:
i) Mr Cherney's primary case, and the one which gives him the "best" outcome, is that Mr Deripaska is domiciled in England, within the meaning of Article 59 of Council Regulation (EC) No 44/2201 ("the Jurisdiction Regulation"), and was served with the Claim Form on 26 November 2006, or service is to be dispensed with under CPR 6.9. If this case is right, this court will have jurisdiction to try the claim under Article 2 of the Jurisdiction Regulation. Questions of forum non conveniens are then irrelevant: Owusu v Jackson [2005] QB 801; Foote Cone & Belding Reklam Hizmetleri v Theron [2006] EWHC (Ch) 1585. The second hearing will not be required. The claim will proceed in this jurisdiction.
ii) If the court decides that Mr Deripaska is not domiciled in England, but that he was served with the Claim Form on 26 November 2006, the jurisdiction of this court will be established by service within this jurisdiction under CPR 6.2, 6.4 and 6.5. But it will be open to Mr Deripaska to contend that this country is not the appropriate forum to resolve Mr Cherney's claim the burden being upon him to make out that contention. The second hearing would be required to resolve that.
iii) If the court decides that Mr Deripaska is not domiciled in England, and was not served with the Claim Form but nonetheless was prepared to dispense with service under CPR 6.9, the position would be the same as in (ii).
iv) If Mr Cherney were to fail on all his submissions and the claim is to be pursued in this jurisdiction, he would have to seek permission to serve the Claim Form on Mr Deripaska out of the jurisdiction and establish, the burden being upon him, that England was the appropriate forum for the determination of the claim. That would then be the subject of the second hearing.
The Jurisdiction Regulation
- Article 1.1 of Chapter 1 provides that (with irrelevant exceptions) the Regulation "shall apply in civil and commercial matters". Article 2.1 of Section 1 of Chapter II provides that:
"Subject to this regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State"
- Article 59.1 of Chapter V provides that:
"In order to determine whether a party is domiciled in the Member State whose courts are seized of a matter, the court shall apply its internal law."
- Article 60.1 of Chapter V provides that:
"For the purposes of this Regulation, a company or other legal person
is domiciled at the place where it has its:
(a) statutory seat, or
(b) central administration, or
(c) principal place of business."
- The "domicile" of individuals is provided for by the Civil Jurisdiction and Judgments Order 2001, SI 2001 No. 3929, ("the Judgments Order"). So far as material, paragraphs 9(2) and 9(6) of Schedule 1 to the Judgments Order provide:
"(2) An individual is domiciled in the United Kingdom if and only if-
(a) he is resident in the United Kingdom; and
(b) the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom.
(6) In the case of an individual who-
(a) is resident in the United Kingdom
, and
(b) has been so resident for the last three months or more,
the requirements of sub-paragraph 2(b)
shall be presumed to be fulfilled unless the contrary is proved."
- In Owusu v Jackson the Court of Justice of the European Communities held that Article 2 of the Brussels Convention (in materially the same terms as Article 2 of the Judgments Order) was mandatory and so not subject to any exception derived from the principles of forum non conveniens. The court emphasised that "respect for the principle of legal certainty" and "the predictability of the rules of jurisdiction" underlay and supported such a result, as well as the legal protection of defendants who would generally be better placed to conduct their defence before the courts of their "domicile" as defined.
- It is also established law that the relevant date for consideration of the domicle of Mr Deripaska is the date (24 November 2006) on which the Claim Form was issued: Dicey, Morris & Collins: The Conflict of Laws, 14th Ed., 11-271; Canada Trust Co v Stolzenberg (No 2) [2002] 1 AC 1 (decided on the materially identical provisions of the Lugano Convention); Petrotrade Inc v Smith [1998] 2 All ER 346 (decided on the Brussels Convention).
- Thus, it is Mr Cherney's case that as at 24 November 2006, Mr Deripaska was domiciled in the United Kingdom within the meaning of paragraphs 9(2) and 9(6) of the Judgments Order. The place of residence relied upon is 5, Belgrave Square. It is to be noted, however, that paragraph 9(2) uses the language of "he is resident in" not "he has a residence in" England.
- The parties are agreed, in accordance with Dicey, Morris & Collins at 6-117, that the meaning of "resident" may differ within different branches of the law or legal contexts. They are also agreed that in the present context a person will be resident in England if it is for him a settled or usual place of abode and that such a place of abode connotes some degree of permanence or continuity which will of course depend on the particular circumstances of each case: see Bank of Dubai Limited v Abbas [1997] 1 L Pr. 308 in particular per Saville LJ at pages 311-312.
- It is also rightly agreed that for the purposes of the Judgments Order a person may be "resident" at more than one place on the same date: Foote Cone at paragraph 23.
- There is, I think, some risk of over analysis. The words are ordinary English words. The question is whether or not, on the evidence, Mr Deripaska "is resident" in England. The benefits of certainty and predictability in the interests of defendants (paragraph 14) need to be kept in mind in addressing the question.
- On an interlocutory application of the present kind this question has to be answered on the basis of whether or not Mr Cherney has established a good arguable case that the answer to it is "Yes". That is a lower test than "on the balance of probabilities" but because the outcome is effectively determinative of the issue of jurisdiction "a good arguable case" requires Mr Cherney to have "a much better argument on the material available": Canada Trust [1998] 1 WLR 547 at 555G (CA per Waller LJ) approved at [2002] 1 AC 13 (HL); Royal & Sun Alliance Insurance v MK Digital FZE [2006] EWCA Civ 629; Bols Distilleries BV v Superior Yacht Services Ltd [2007] 1 WLR 12 at 22 (PC).
CPR 6/Service
- Rule 6.2(1) provides that:
"A document to be served may be served by any of the following methods:
(a) personal service in accordance with rule 6.4;
(b) first class post
;
(c) leaving the document at a place specified in rule 6.5;
(d) through a document exchange
;
(e) by fax or other means of electronic communication
"
- Rule 6.4, so far as relevant, provides:
"(1) A document to be served may be served personally
.
(2)
.
(3) A document is served personally on an individual by leaving it with that individual."
- Rule 6.5, so far as material, provides:
"(1) Except as provided by Section III of this Part (service out of the jurisdiction) a document must be served within the jurisdiction.
.
(6) Where
(a) no solicitor is acting for the party to be served; and
(b) the party has not given an address for service,
the document must be sent or transmitted to or left at the place shown in the following table."
- The table includes service on an individual at "usual or last known residence".
- Mr Cherney relies on personal service said to have been in accordance with Rule 6.4 and service said to have been in accordance with Rule 6.5(6) by leaving the Claim Form at Mr Deripaska's "usual" residence at 5, Belgrave Square.
CPR 6.9: Dispensing with service
- Rule 6.9 provides :
"(1) The courts may dispense with service of a document.
(2) An application for an order to dispense with service may be made without notice."
- I would make the following introductory comments on these provisions of the CPR. Personal service, at least in cases where it founds jurisdiction, remains something of an anomaly dependent as it is on no more than the presence in England of the person to be served regardless of whether or not that person has any significant connection with this country. The CPR now provide for many methods of and grounds for service, within and outside the jurisdiction, and, if service is validly effected in accordance with Rules 6.2 to 6.5 it is not required that the person served be within the jurisdiction at the time: Behzad Kamali v Country Properties Ltd, [2006] EWCA Civ 1879 at paragraphs 14, 15 and 23. I agree with Mr Stewart QC's submission for Mr Deripaska, that in those circumstances there is no justification for seeking to enlarge the meaning or scope of these provisions of the CPR beyond their plain and natural meaning.
The Evidence
- There are a number of witness statements. No oral evidence was adduced. On behalf of Mr Deripaska witness statements were served made by Shelton Norman Lawrence dated 29 January and 2 April 2005, by Paul Hauser dated 30 January, 12 April and 17 April, and made by Maria Grebenschikova dated 30 January and 17 April.
- Mr Lawrence described himself as "employed by First Security as a security guard, operating at 5, Belgrave Square". His statements deal with events at 5, Belgrave Square on 26 November 2006. Mr Hauser is the Partner in the solicitors firm instructed by Mr Deripaska and has the care and conduct of this matter on his behalf. His statements address Mr Deripaska's connections with England and other countries. Ms Grebenschikova is the Head of Administration of the Supervisory Board of "Basic Element Company" based in Moscow. She is responsible for the administration of Mr Deripaska's private office. Her evidence largely relates to the nature and extent of Mr Deripaska's visits to England in the years 2001 to 2005 and for the year 2006 to 13 November 2006.
- On behalf of Mr Cherney, witness statements were served made by David Hoskinson dated 27 February 2007, by John Fordham dated 5 March and 18 April 2007, and by Russell Binch dated 5 and 26 March 2007. Mr Hoskinson works "on occasions" as a process server and his statement relates to the events at 5, Belgrave Square on 26 November. Mr Fordham is the partner in Mr Cherney's solicitors having the care and conduct of this matter on his behalf. He addressed the evidence relating to Mr Deripaska's connections with England. Mr Binch is an associate solicitor in the firm who has analysed the movements of the private aircraft (two Gulfstreams and a Sikorsky helicopter) owned by Mr Deripaska and sought to respond to the evidence of Ms Grebenschikova.
- There are various conflicts in this evidence, but in general I think they are capable of resolution or are sufficiently insignificant so as not to affect the outcome of the applications.
High Tech International AG v Deripaska
- Eady J held in this case, reported at [2006] EWHC (QB) 3276, that at April 2006 Mr Deripaska was not domiciled in England for the purposes of the Judgments Regulation and so was entitled to a declaration that the court had no jurisdiction over him in respect of a claim by High Tech and others. The evidence before Eady J (see paragraphs 16 to 32) was, unsurprisingly, similar to the evidence before this court. Mr Brisby QC, for Mr Cherney, rightly questioned the accuracy of some of the figures referred to by Eady J. He also questioned the reasoning and, of course, the conclusion. The decision is not binding upon me.
26 November at 5, Belgrave Square
- Mr Lawrence says, and it is not in issue, that Mr Deripaska arrived by car at about 10.40pm and went into the house. Mr Hoskinson (to whom Mr Lawrence referred as a "courier") was watching. Mr Lawrence says in his first statement that he stood in front of Mr Hoskinson as he approached the door adding:
"I do not remember the courier's precise words. However, I believe they were something to the effect that he had an important document for Mr Deripaska that needed to be delivered to him personally. I took the package from the courier and he mounted his motorcycle and drove away. I then entered the house with the package in my hand. This exchange between the courier and me is captured on the footage shown at "SNL-1", file named "FRONT_DO". The door to the house was closed although not latched. I gave the envelope directly to Mr Deripaska.
The standing instructions for the house are that the guards are not authorised to accept packages for the Defendant. I failed to act in accordance with these standing instructions because the incident took place so quickly that I did not have time to think."
- The reference to "footage" is a reference to the fact that there is film from a CCTV camera of the event.
- Mr Hoskinson's account is that:
"I began to walk up the steps of the Property. At this stage, a gentleman wearing a suit and white shirt and dark tie whom I had observed standing in front of the Property prior to Mr Deripaska's arrival met me at the top of the steps. I now know this man was Mr Lawrence.
I said, "Good evening, are you the butler?" He replied in a well spoken English accent, "Yes, I am, Sir, can I help you?" Having seen Mr Lawrence's witness statement, I am now surprised to learn that this man was in fact a security guard.
I said, "Yes, you can, I am trying to be as diplomatic as possible without alerting all your security. Can I speak with Mr Deripaska?" The "butler" replied, "No, Sir, he's [pause] busy".
I said, "OK, well I have important Court papers for Mr Deripaska. Please can you give them to him as a matter of urgency?" I handed the papers to the "butler" who accepted them without hesitation, saying "Yes, Sir. No problem at all".
I walked back down the steps of the Property to the pavement. As I was doing so, the "butler" said, "Goodnight, Sir. Thank you".
I handed the Court papers to the "butler" whilst standing on the steps. I did not go back down to the pavement until after the conversation. Mr Lawrence's recollection on this point must be mistaken.
I crossed the road to a motorcycle parked in a parking bay across from the Property and drove off."
- In his second statement, Mr Lawrence said:
"
I remember Mr Hoskinson stating words to the effect that he wanted to be discrete and that he had documents that needed to be given to Mr Deripaska personally. I cannot recall my words precisely, but I recall saying that Mr Deripaska was busy. In my saying this I was in contravention of standing instructions for the House which are that due to security issues, guards are not to say anything about Mr Deripaska, including anything which admits to his presence in the House. I only accepted the envelope to attempt to ensure that Mr Hoskinson left as soon as possible without any fuss. There having been no previous arrangements made for the documents Mr Hoskinson was apparently carrying to be delivered to the House, as I mentioned in my First Witness Statement, I had no authority to accept the envelope containing the documents and should not have done so.
I do not remember Mr Hoskinson using the word "court" to describe the documents he was apparently carrying in the envelope he had with him, although I did get the impression from what he said that they were important. I do clearly recollect that I had no idea at the time that the envelope contained any type of "court" documents. Having been handed the envelope by Mr Hoskinson I recall telling him that I would give the envelope to Mr Deripaska. This exchange between Mr Hoskinson and me is captured on the footage (see SNL-2, "FRONT_DO" and pages 10-11)."
- There are therefore differences of recollection about whether or not Mr Lawrence accepted he was the butler and whether or not Mr Hoskinson referred to "court" documents or just "important" documents which needed to be handed to Mr Deripaska personally. What is not in issue is that Mr Hoskinson left the documents, which were in an A4 envelope, with Mr Lawrence, not Mr Deripaska, and he made no reference to "serving" the documents as legal process or the documents requiring to be "served" on Mr Deripaska. I have little doubt that had Mr Lawrence been or been made aware that the objective was to serve legal process upon Mr Deripaska he would have reacted differently.
Resident/Residence
- The picture which emerges from the evidence is, I think, sufficiently clear. Mr Deripaska is an immensely wealthy man. He is also a very busy one. He travels all over the world in pursuit of his business interests. He has a large number of "residences" in several countries. Although Mr Cherney has sought to challenge the analysis of his travels prepared by Ms Grebenschikova I am quite satisfied that the challenge is misplaced for the reasons she gives. Mr Cherney complains that the documentary material upon which Mr Hauser and Ms Grebenschikova rely has not been disclosed despite requests to do so. But I see no reason to doubt that their evidence (verified by statements of truth) has been properly and carefully prepared from this material and I think it understandable where the information is both voluminous and confidential (such as passports, diaries, and flight plans) that the view was taken that disclosure would not be proportionate: see in particular paragraph 16 of Ms Grebenschikova's second witness statement.
- I think the evidence shows that:
i) Mr Deripaska is the beneficial owner of 5, Belgrave Square and has been since April 2003. He uses the house whenever he is in England. The house is kept staffed with both security and domestic staff and ready for use throughout the year.
ii) Mr Deripaska is indirectly responsible for payment of the outgoings of the house, including Council Tax.
iii) Mr Deripaska's wife and children also use the house when they are in London. Mrs Deripaska spent 36 nights at the house in 2005 (including a stay of 18 nights just prior to Christmas) and 33 nights in 2006 to 13 November (including 23 nights in April/May).
iv) In 2005 (when the available evidence is less detailed than for 2006) Mr Deripaska spent between a minimum of 20 and a maximum of 27 nights at the house, which is 5 to 7% of the number of nights in the year. In 2006 to 13 November he spent 19 nights which is 6% of the nights in the year to that date. His longest continuous stay was 6 nights.
v) Mr Deripaska was in the house when his wife was also there only for 5 nights in 2005 and 7 in 2006. The 7 nights were in October and November and even that occasion was interrupted by a visit to Kiev.
vi) In 2005 Mr Deripaska spent 210 nights in Moscow (57%) and in 2006 to 13 November 179 nights (also 57%). He also spent 23 (2005) and 18 (2006) nights elsewhere in Russia where he has a number of properties.
vii) Mr Deripaska has houses in several countries including 3 "houses" in France.
viii) There is no pattern to his visits to England save that the majority are for one night stays and involve a constant flow of business meetings, including over dinner.
ix) Mr Deripaska has significant business interests in England but they form a minimal part of his total interests which are largely Russian. It is not right on the evidence to say, as Mr Brisby sought to do, that Mr Deripaska's global business interests are managed from England. The probability is that in a real sense they are managed at the highest level by Mr Deripaska wherever he happens to be, and that is by far and away mostly in Russia.
Domicile
- Mr Brisby referred to a number of tax cases in which, in that context, the relevant legislation used the word "resident" as the criterion for a charge to tax. In Cooper v Cadwalader (1904) 5 TC 101, an American, ordinarily resident in New York, who rented a house and shooting rights in Scotland where he spent about two months continuously every year, was held to be a person "residing in the United Kingdom" and so liable to income tax on his income received in or monies remitted to the U.K. In Levene v Commissioners of Inland Revenue [1928] AC 217 a British subject who lived abroad but returned to the United Kingdom every year for about five months, staying in hotels for the purpose of obtaining medical advice, visiting his relatives, taking part in certain Jewish religious observations and dealing with his tax affairs, was held by the House of Lords (upholding the Commissioners) not to be entitled to relief from tax on the ground that he was neither "resident" nor "ordinarily resident" in the United Kingdom. Although the decision itself was founded on the decision of the Commissioners being findings of fact which could not be disturbed, in the course of his speech Viscount Cave L.C. at page 222 said:
"My Lords, the word "reside" is a familiar English word and is defined in the Oxford English Dictionary as meaning "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place." No doubt this definition must for present purposes be taken subject to any modification which may result from the terms of the Income Tax and Schedules; but, subject to that observation, it may be accepted as an accurate indication of the meaning of the word "reside". In most cases there is no difficulty in determining where a man has his settled or usual abode, and if that is ascertained he is not the less resident there because from time to time he leaves it for the purpose of business or pleasure. Thus, a master mariner who had his home in Glasgow where his wife and family lived, and to which he returned during the intervals between his sea voyages, was held to reside there, although he actually spent the greater part of the year at sea: In re Young; Rogers v Inland Revenue. Similarly a person who has his home abroad and visits the United Kingdom from time to time for temporary purposes without setting up an establishment in this country is not considered to be resident here
. But a man may reside in more than one place. Just as a man may have two homes one in London and the other in the country so he may have a home abroad and a home in the United Kingdom, and in that case he is held to reside in both places and to be chargeable with tax in this country. Thus, in Cooper v Cadwalader (2), an American resident in New York who had taken a house in Scotland which was at any time available for his occupation, was held to be resident there, although in fact he had only occupied the house for two months during the year; and to the same effect is the case of Loewenstein v de Salis. The above cases are comparatively simple, but more difficult questions arise when the person sought to be charged has no home or establishment in any country but lives his life in hotels or at the houses of his friends. If such a man spends the whole of the year in hotels in the United Kingdom, then he is held to reside in this country; for it is not necessary for that purpose that he should continue to live in one place in this country but only that he should reside in the United Kingdom. But probably the most difficult case is that of a wanderer who, having no home in any country, spends a part only of his time in hotels in the United Kingdom and the remaining and greater part of his time in hotels abroad. In such cases the question is one of fact and degree, and must be determined on all the circumstances of the case
."
- In Lowenstein v de Salis 10 TC 424 the taxpayer was a Belgian with a residence in Brussels who came to the United Kingdom each year to occupy what was described as a "hunting box" belonging to a company of which he was a Director and 90% shareholder. The "hunting box" was available for his use at any time and "certain of his servants, indoor and outdoor, were on the premises throughout the year." The "hunting box" appears to have been furnished and to include gardens, stables, garage, tennis court, seven houses and about 342 acres of land. The taxpayer appears to have spent up to 4½ months a year there. Perhaps unsurprisingly, Rowlatt J held that he was a person residing in the United Kingdom and so chargeable to income tax. The argument seems to have been that as he did not have a legal interest in the hunting box but it was made available by the Company he was not resident there. Rowlatt J considered that did not address "the substance of the matter".
- The decision in the House of Lords in Commissioners of Revenue v Lysaght [1928] AC 234 followed immediately after Levene's case. Viscount Cave dissented. But I think the headnote accurately reflects the decision that the findings of the Commissioners could not be disturbed and the question whether a person was "resident" in the United Kingdom was essentially a question of fact for them.
- Whilst these cases have often been cited in the present context, and were relied upon by Mr Brisby, I do not derive much assistance from them beyond the agreed propositions to which I have already referred in paragraphs 17 to 19 above and which are supported by Viscount Cave's words in Levene which I have quoted. The decision of the Court of Appeal in Bank of Dubai was applied by Patten J in Foote Cone. In that case the facts that the defendant's wife was permanently resident in England, in a house in Kingston, his passport showed him as permanently resident there, and he occupied the Kingston house on regular monthly visits of at least a week or so, were, I think, the major factors in the decision that he was "domiciled" in England.
- The major factor on which Mr Brisby relies is the permanence of the establishment kept by Mr Deripaska at 5, Belgrave Square. There is no dispute that Mr Deripaska is resident in Moscow (or Russia) but this factor and the visits to England of himself and his wife are, Mr Brisby submitted, sufficient for him to be resident in England also.
- In agreement with Eady J, I do not accept this submission. It is not a numbers game, although the numbers hardly support Mr Cherney's case. The "quality" of the use of the house is, I think, equally important. In many ways its use by Mr Deripaska resembles that of a private hotel. It is infrequent, intermittent, and generally fleeting. The house has the character of continuity and permanence; its use does not. It cannot, I think, in any normal sense of those words, be described as a "settled or usual place of abode" of Mr Deripaska. In my judgment, as at 26 November 2006, Mr Cherney has failed to show a good arguable case that Mr Deripaska was resident at 5, Belgrave Square and so domiciled there for the purposes of the Jurisdiction Regulation and Judgment Order. It is therefore unnecessary to consider the second limb of paragraph 9(2) of the Judgment Order (paragraph 13) but it requires the nature and circumstances of the "residence" to indicate a substantial connection with this country and so on my findings cannot be fulfilled. The same applies to paragraph 9(6).
Service: Rule 6.5
- It was submitted that a different conclusion was open in considering service in accordance with Rule 6.5(6) (paragraphs 23 and 24) at Mr Deripaska's "usual or last known residence". Whilst I agree that in theory that may be right, in the circumstances of this case it is not. I have held that Mr Deripaska was not resident at 5, Belgrave Square. It would be anomalous then to hold that it was his "usual residence". On the evidence, it was not. It was where he usually, indeed invariably "resided" when in England but it was not his usual residence.
- Mr Cherney has also failed to show a good arguable case that at 26 November 2006, 5, Belgrave Square was Mr Deripaska's "usual residence". It follows that service by leaving the Claim Form at that address was not good service.
Service: Rule 6.4
- The circumstances on which reliance is placed to show a good arguable case of personal service are set out in paragraphs 33 to 37. As I have said (paragraph 27), I see no basis for applying anything other than the express words of the Rule which are set out in paragraph 22.
- The Rule requires the Claim Form to be served by "leaving it with" Mr Deripaska. Mr Hoskinson did not leave the Claim Form with him. He left it with Mr Lawrence to deliver it to Mr Deripaska. Despite Mr Brisby's submission that this "amounted to" leaving it with Mr Deripaska, in my judgment it plainly did not: see Kenneth Allison Ltd v A.E. Limehouse & Co [1992] 2 AC 105.
- Mr Brisby had two further submissions. Both, in my judgment, are also plainly wrong. He submitted that either the evidence showed that Mr Hoskinson had "constituted" Mr Lawrence as his, and so Mr Cherney's, agent to serve Mr Deripaska or that Mr Lawrence had apparent authority from Mr Deripaska to accept personal service on his behalf.
- The Rule requires "personal" service, which it then defines or explains. Even in the case of service on a person's solicitor, the requirements to be met are prescribed. So, too, the rules for service on officers of companies and partnerships: CPR 6.4(4) and (5). On either version of what took place on or near the steps of 5, Belgrave Square, I do not think Mr Lawrence became an agent for service of Mr Cherney, anymore than a receptionist at an office or hotel would do so in similar circumstances. He was not asked to act as such an agent; nor did he consent so to do. Indeed it would be little short of astonishing if he had consented. The most he agreed to do was to hand the envelope to Mr Deripaska.
- The submission that Mr Lawrence had apparent authority to accept service for Mr Deripaska is, if anything, even more fanciful. Mr Deripaska made no relevant representation to Mr Hoskinson. At the highest he allowed Mr Lawrence to stand on the steps of 5, Belgrave Square and to enter the house. In my judgment that does not begin to establish any case of agency.
Rule 6.9: Dispense with service
- The rule is set out in paragraph 26. There are obvious objections to dispensing with service in circumstances where (as I have held in this case) a party has sought but failed to comply with the requirements of service in accordance with the rules. But where a claim has in fact (as here) come to the attention of the person to be served and that person is before the court, albeit contesting service, to require service in full compliance with the rules could be pointless and a waste of costs. However the exercise of the court's discretion to dispense with service is sought in circumstances in which otherwise the Claim Form could only be served out of the jurisdiction in accordance with Section III of CPR 6. That, in my judgment, should not be allowed. The effect would be to circumvent the provisions of Section III, as well as those on which Mr Cherney seeks to rely, and to implead a party outside the jurisdiction. Mr Deripaska should be entitled to contest the efficacy of Section III should Mr Cherney seek to achieve service upon him by that route. That, I think, is fully in accord with the decisions of Colman J in Shiblaq v Sadikoglu [2004] EWHC 1890 and of the Court of Appeal in Nussberger and Galerie Nefer A.G. v Phillips and Harland [2006] EWCA Civ 654.
- I, therefore, will not dispense with service of the Claim Form on Mr Deripaska.
CONCLUSION
- The Claim Form has not been duly served upon Mr Deripaska. Mr Cherney's application to dispense with service is refused. Mr Deripaska is not domiciled in England within the meaning of the Jurisdiction Regulation. The outcome is the one described in sub-paragraph (iv) of paragraph 9. I will hear the parties on the appropriate form of order and any ancillary matters to the extent they cannot be agreed when this judgment is handed down. That should also be an occasion on which any outstanding matters in relation to the further hearing can be addressed. This judgment was provided to the parties in draft form on 27 April 2007.
