JUDGMENT OF 16. 6. 1981 — CASE 166/80 KLOMPS v MICHEL
In Case 166/80 REFERENCE to the Court under the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters by the Hoge Raad der Nederlanden for a preliminary ruling in the proceedings in cassation pending before that court between
THE COURT composed of: J. Mertens de Wilmars, President, P. Pescatore and Lord Mackenzie Stuart (Presidents of Chambers), A. O'Keeffe, G. Bosco, A. Touffait, O. Due, U. Everling and A. Chloros, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts
I — Facts and procedure
II — Written observations
1. First question
2. Second question
3. Third question
4. Fourth question
5. Fifth question
III — Oral procedure
Decision
The first two questions
Third question
Fourth question
Fifth question
Costs
I —. Facts and procedure
1. On 25 March 1976 Mr Michel, the respondent in an appeal in cassation to the Hoge Raad der Nederlanden [Supreme Court of the Netherlands] applied, in the context of a procedure known as Mahnverfahren [summary proceedings for the recovery of a debt or iquidated demand], to the Amtsgericht [Local Court] Krefeld, in the Federal Republic of Germany, for an order against Mr Klomps, the appellant in cassation, for payment of the sum of DM 63270. According to the claim that amount represented commission for his agency fees in connection with the purchase of land in Ratingen in the Federal Republic.
2. The articles cited in those questions are worded as follows:
3. The judgment making the reference to the Court was recorded at the Court Registry on 15 July 1980.
II —. Written observations
1. First question
2. Second question
3. Third question
4. Fourth question
5. Fifth question
III —. Oral procedure
1. By judgment of 8 July 1980, which was received at the Court on 15 July 1980, the Hoge Raad der Nederlanden [Supreme Court of the Netherlands] referred to the Court for a preliminary ruling pursuant to the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, five questions, the first four of which concern the interpretation of Article 27, point 2, of that Convention whilst the fifth refers to Article 52.
2. These questions were submitted to the Court in the context of an appeal in cassation against a judgment of the Arrondissementsrechtbank [District Court], Roermond, of 20 September 1979 overruling the objection submitted against an order of 27 June 1978 whereby the president of that court declared enforceable in the Netherlands, by virtue of the provisions of the Convention, an order for payment and the order for its enforcement issued by German courts in the context of summary proceedings for the recovery of debts or liquidated demands, known as Mahnverfahren.
3. Personal service of the order for payment [Zahlungsbefehl] was not effected but in the absence of the defendant the order was lodged at the post office and written notification of the order was left at the address in the Federal Republic of Germany provided by the creditor, which, according to German law, constituted service at that address. Under the legislation in force at the time the defendant was allowed a period of not less than three days in order to submit an objection [Widerspruch] to the order for payment but that period was extended until such time as the court issued an order for its enforcement [Vollstreckungsbefehl]. In the present case that period was six days. After service of the enforcement order, which was effected by the same method, the defendant had a second period of one week within which to lodge an objection [Einspruch] to the enforcement order. However, the defendant allowed four months to pass before submitting such an objection and claimed that at the time of the summary proceedings his habitual residence was in the Netherlands. The objection was dismissed as being out of time following adversary proceedings in which the German court considered the question of habitual residence in order to establish whether service was duly effected and held that, according to German law, Mr Klomps was habitually resident at the address where service was effected.
4. It is clear from the file that under German law the objection to the order for payment might be made quite informally, without stating reasons, and even by a representative who was not required to prove that he was duly authorized for the purpose. Both the properly-introduced objection against an enforcement order and the objection to the order for payment had the effect of transforming the summary proceedings for obtaining that order into adversary proceedings but the enforcement order remained provisionally enforceable despite the objection and it was thus equivalent to a judgment in default.
5. In the course of the various proceedings before the Netherlands courts the defendant, who is the appellant in cassation, claimed that the recognition, and accordingly the enforcement, in the Netherlands, of the orders made against him by the German courts were contrary to Article 27, point 2, of the Convention which provides :
6. In these circumstances the Hoge Raad decided to stay the proceedings and to request the Court of Justice to answer the following questions:
7. Before a reply is given to those questions it must be recalled that Title II of the Brussels Convention contains provisions regulating directly and in detail the jurisdiction of the courts of the State in which judgment was given, and also provisions concerning the verification of that jurisdiction and of admissibility. These provisions, which are binding on the court in which judgment was given, are of such a nature as to protect the interests of defendants. This has made it possible, at the stage of recognition and enforcement which is governed by Title III of the Convention, to facilitate the free movement of judgments within the Community by simplifying the procedure for recognition and by reducing the number of grounds which may operate to prevent the recognition and enforcement of judgments. Amongst these grounds are that contained in Article 27, point 2, which, for the sole purpose of safeguarding the rights of the defendant, provides for refusal of recognition and, read together with Article 34, for refusal of enforcement, in exceptional cases where the guarantees contained in the law of the State in which the judgment was given and in the Convention itself are insufficient to ensure that the defendant has an opportunity of arranging for his defence before the court in which judgment was given. It is in the light of these considerations that the provision relied upon by the appellant in cassation in the main proceedings must be interpreted.
8. By the first question the Hoge Raad asks whether, under a system like that which was in force in the Federal Republic of Germany in 1976 in accordance with which service on the defendant of an order for payment enables the plaintiff, where the defendant does not submit an objection to the order within the prescribed period, to obtain a decision which remains provisionally enforceable even after the submission of the objection against the enforcement order, but under which both that objection and the objection to the order for payment transform the procedure into adversary proceedings, the words the document which instituted the proceedings refers to the order for payment [Zahlungsbefehl] or the enforcement order [Vollstreckungsbefehl].
9. As has been indicated above, Article 27, point 2, is intended to ensure that a judgment is not recognized or enforced under the Convention if the defendant has not had an opportunity of defending himself before the court first seised. It follows that a measure, such as the order for payment [Zahlungsbefehl] in German law, service of which on the defendant enables the plaintiff, where no objection to the order is made, to obtain a decision which is enforceable under the Convention, must be duly served on the defendant in sufficient time to enable him to arrange for his defence and accordingly that such a measure must be understood as being covered by the words the document which instituted the proceedings in Article 27, point 2. On the other hand a decision, such as the enforcement order [Vollstreckungsbefehl] in German law, which is issued following service of an order for payment and which is in itself enforceable under the Convention, is not covered by those words even although the lodging of an objection against the enforcement order, like the objection to the order for payment, transforms the procedure into adversary proceedings.
10. With regard to the second question the same considerations show that for the purpose of examining whether the defendant has been able to arrange for his defence within the meaning of Article 27, point 2, the court in which enforcement is sought must take account only of the time, such as that allowed under German law for submitting an objection to the order for payment, available to the defendant for the purposes of preventing the issue of a judgment in default which is enforceable under the Convention.
11. The reply to those two questions must accordingly be that Article 27, point 2, must be interpreted as follows:
12. This question refers in substance to the jurisdiction of the courts of the State in which the judgment was given and the courts of another Contracting State before which proceedings have been brought for the recognition or enforcement of a judgment given in the former State. In this connection it should be emphasized that Article 27, point 2, is not addressed to the courts of the State in which the judgment was given, but only to the court before which proceedings have been brought for recognition or enforcement of the judgment in another Contracting State. In the case with which the question is concerned the defendant did not submit a defence as to the substance of the case before the court first seised. The dismissal of the objection to the enforcement order as inadmissible means that the decision given in default remains intact. For that reason the objective of Article 27, point 2, requires that in the case with which this question is concerned the court in the State in which enforcement is sought should carry out the examination prescribed by that provision.
13. The reply to the third question should therefore be that Article 27, point 2, remains applicable where the defendant has lodged an objection against the decision given in default and a court of the State in which the judgment was given has held the objection to be inadmissible on the ground that the time for lodging an objection has expired.
14. By this question the Hoge Raad asks first whether, where a court of the State in which the judgment was given has already found that service has been duly effected, the court seised in the other Contracting State is still required to consider whether service was effected in sufficient time to enable the defendant to arrange for his defence.
15. For the purposes of the reply to the first part of the question it should first of all be pointed out that Article 27, point 2, lays down two conditions, the first of which, that service should be duly effected, entails a decision based on the legislation of the State in which judgment was given and on the conventions binding on that State in regard to service whilst the second, concerning the time necessary to enable the defendant to arrange for his defence, implies appraisals of a factual nature. A decision concerning the first of those conditions made in the State in which the judgment was given accordingly does not release the court in the State in which enforcement is sought from its duty to examine the second condition, even if that decision was made in the context of separate adversary proceedings.
16. The reply to this part of the question must accordingly be that, even if the court in which the judgment was given has held, in separate adversary proceedings, that service was duly effected, Article 27, point 2, still requires the court in which enforcement is sought to examine whether service was effected in sufficient time to enable the defendant to arrange for his defence.
17. In the event of an affirmative reply to first part of the fourth question, the Hoge Raad asks further whether the examination in question must be limited to the finding that the document reached the habitual residence of the defendant in sufficient time or whether it is a further requirement, for example, that the service in question should provide a sufficient guarantee that the document would reach the defendant personally in good time.
18. The second condition contained in Article 27, point 2, is intended to ensure that the defendant has sufficient time to prepare his defence or to take the steps necessary to prevent judgment's being given in default. The question submitted to the Court is not concerned with how long this time is but rather with the point from which it begins to run. The Hoge Raad is in fact asking whether the court in which enforcement is sought must proceed on the assumption that a defendant is able to prepare his defence as soon as the document which instituted the proceedings reaches his habitual residence.
19. In this connection it must be stated first of all that Article 27, point 2, does not require proof that the document which instituted the proceedings was actually brought to the knowledge of the defendant. Having regard to the exceptional nature of the grounds for refusing enforcement and to the fact that the laws of the Contracting States on the service of court documents, like the international conventions on this subject, have as their objective the safeguarding of the interests of defendants, the court in which enforcement is sought is ordinarily justified in considering that, following due service, the defendant is able to take steps to defend his interests as soon as the document has been served on him at his habitual residence or elsewhere. As a general rule the court in which enforcement is sought may accordingly confine its examination to ascertaining whether the period reckoned from the date on which service was duly effected allowed the defendant sufficient time to arrange for his defence. Nevertheless the court must consider whether, in a particular case, there are exceptional circumstances which warrant the conclusion that, although service was duly effected, it was, however, inadequate for the purposes of enabling the defendant to take steps to arrange for his defence and, accordingly, could not cause the time stipulated by Article 27, point 2, to begin to run.
20. In considering whether it is confronted with such a case the court in which enforcement is sought may take account of all the circumstances of the case in point, including the means employed for effecting service, the relations between the plaintiff and the defendant or the nature of the steps which had to be taken in order to prevent judgment from being given in default. If, for example, the dispute concerns commercial relations and if the document which instituted the proceedings was served at an address at which the defendant carries on his business activities the mere fact that the defendant was absent at the time of service should not normally prevent him from arranging his defence, above all if the action necessary to avoid a judgment in default may be taken informally and even by a representative.
21. The reply to that part of the fourth question should therefore be that the court in which enforcement is sought may as a general rule confine itself to examining whether the period reckoned from the date on which service was duly effected allowed the defendant sufficient time for his defence. However the court is also required to consider whether, in a particular case, there are exceptional circumstances such as the fact that, although service was duly effected, it was nevertheless inadequate for the purpose of causing that time to begin to run.
22. This question concerns Article 52 of the Convention, the relevant provisions of which read as follows:
23. That article states which law is applicable where, according to the other provisions of the Convention, in particular those concerning jurisdiction, it is necessary to determine the habitual residence (or one of the habitual residences) of a party. In the context of Article 27, point 2, the habitual residence of the defendant may be a decisive factor for the purpose of considering whether service has been duly effected but that question must in any case be resolved by applying the internal law of the State in which the judgment was given and of the relevant conventions. The question whether service was effected in sufficient time involves, as has been indicated above, assessments of fact to which the concept of habitual residence is irrelevant.
24. The reply to the fifth question should therefore be that Article 52 of the Convention and the fact that the court of the State in which enforcement is sought concluded that under the law of that State the defendant was habitually resident within its territory at the date of service of the document which instituted the proceedings do not affect the replies given above.
25. The costs incurred by the Government of the Federal Republic of Germany and the Commission of the European Communities, which submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds, THE COURT in answer to the questions referred to it by the Hoge Raad der Nederlanden by judgment of 8 July 1980, hereby rules: Article 27, point 2, of the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters must be interpreted as follows:
1 The words the document which instituted the proceedings cover any document, such as the order for payment [Zahlungsbefehl] in German law, service of which enables the plaintiff, under the law of the State of the court in which the judgment was given to obtain, in default of appropriate action taken by the defendant, a decision capable of being recognized and enforced under the provisions of the Convention.
2 A decision such as the enforcement order [Vollstreckungsbefehl] in German law, which is issued after service of the order for payment has been effected and which is enforceable under the Convention, is not covered by the words the document which instituted the proceedings.
3 In order to determine whether the defendant has been enabled to arrange for his defence as required by Article 27, point 2, the court in which enforcement is sought must take account only of the time, such as that allowed under German law for submitting an objection [Widerspruch] to the order for payment, available to the defendant for the purposes of preventing the issue of a judgment in default which is enforceable under the Convention.
4 Article 27, point 2, remains applicable where the defendant has lodged an objection against the decision given in default and a court of the State in which the judgment was given has held the objection to be inadmissible on the ground that the time for lodging an objection has expired.
5 Even if a court of the State in which the judgment was given has held, in separate adversary proceedings, that service was duly effected Article 27, point 2, still requires the court in which enforcement is sought to examine whether service was effected in sufficient time to enable the defendant to arrange for his defence.
6 The court in which enforcement is sought may as a general rule confine itself to examining whether the period, reckoned from the date on which service was duly effected, allowed the defendant sufficient time for his defence. It must, however, consider whether, in a particular case, there are exceptional circumstances such as the fact that, although service was duly effected, it was inadequate for the purposes of causing that time to begin to run.
7 Article 52 of the Convention and the fact that the court of the State in which enforcement is sought concluded that under the law of that State the defendant was habitually resident within its territory at the date of service of the document which instituted the proceedings do not affect the replies given above.
1 Translator's note: The relevant provisions of the English version of the Convention published in Official Journal L 304 employ the word domicile, which is accordingly used in direct quotations. Elsewhere the term habitual residence is used throughout this judgment to denote the concept in question.