By Oliver Browne and Hanna Roos

The English High Court has refused to recognise a Spanish default judgment because the judgment debtors had not been served with the documents which instituted the Spanish proceedings, as required under Regulation 44/2001 (the Original Brussels Regulation).

Background

In Corcoz & Anor v Molina (9 July 2015, unreported), Corcoz and [Anor] (the Defendants) and Molina (the Claimant) were personal guarantors of a Spanish company’s liability to a bank for monies advanced. The Claimant issued proceedings against the Defendants in the Spanish court and purported to serve originating documents at their address. The Defendants appeared to have moved from Spain to the UK and were no longer at their Spanish address and did not file a response to the claim. The Claimant therefore secured a “deemed service” order and the Spanish court entered judgment against them. The Spanish court considered that the Defendants had elected not to take part in the proceedings.

English court’s refusal to recognise the Spanish judgment

Molina successfully applied to register the Spanish judgment in England and Wales under Part 74 “Enforcement of Judgments in Different Jurisdictions” of the Civil Procure Rules (the CPR). The Defendants appealed and Molina did not resist the appeal. The issue was whether the registration order should be set aside.

The High Court allowed the appeal and set aside the registration order on the basis that the judgment could not be recognised. The Spanish judgment made it clear that service had been deemed under Spanish law. However, at the time of the decision, the relevant provisions in force (CPR 74.1) referred to the Original Brussels Regulation which provides that a default judgment shall not be recognised

if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so.” (Article 34(2)).

The High Court held that although the Claimant had secured “deemed service”, actual or sufficient service had not occurred to enable the Defendants to arrange their defence (applying Reeve v Plummer [2014] EWHC 4695 where the High Court found that registration of a Belgian default judgment had been appropriate under the Original Brussels Regulation). It followed that the prerequisites for recognising the judgment were not present and the only proper course was to allow the appeal and set aside the registration order.