Levers J
IN THE GRAND COURT OF THE CAYMAN ISLANDS
HOLDEN AT GEORGE TOWN, GRAND CAYMAN
CAUSE NO. 339/96
BETWEEN: JUAN COLERIO
AND: MARTA ADA GRAZIELLA DE LUCA
PLAINTIFF
DEFENDANT
Appearances:
Martin Jones of Campbells for the Plaintiff
Kenneth John Farrow of Quin & Hampson for the Defendant
Before: The Hon. Justice Levers
Heard: August 2, 2004
JUDGMENT
Levers, J.
The Plaintiff Juan Pedro Colerio comes by way of summons to this court for:
(1) Summary Judgment in this action against the Defendant Marta Ada Graziella De Luca or alternatively that the monies held in a joint account with the Bank of Butterfield (International) Cayman Ltd. be paid into court in proceedings before the National Court of the First Instance in Civil Matters no. 71 Buenos Aires, Argentina, court file no. 5529/1999 between De Luca, Noemi De Luca, Marta Ada Graziella, and
(2) that the costs of this application be paid by the Defendant to be taxed if not agreed and
(3) for such other directions as the court might think fit.
The summons is supported by two affidavits of the Plaintiff sworn on June 7, 2004 and July 19, 2004.
The Facts
The action concerns the beneficial ownership of certain funds now approximately U.S. $242,000.00 which was formerly held in an account in the joint names of the Defendant De Luca and her parents Ruggero De Luca and Anastasia Ladislao De Luca. It was held at the Banco De Galicia (Cayman) Ltd.
On a date unknown to the Plaintiff but before the September 10, 1995, Mr. and Mrs. De Luca, the parents of the Defendant set up an account with Banco De Galicia (Cayman) Ltd. The account number was 3806. Mr. and Mrs. De Luca were residents of Argentina.
Marta De Luca, daughter of Mr. and Mrs. De Luca and the Defendant herein, was also named as an account holder and given authority to sign in relation to the account. It is alleged by the Plaintiff that Martha De Luca was added for convenience only. Between the opening of the account and September 10, 1995 when Mrs. De Luca died, substantial
funds were deposited into the account. Proceedings to determine the succession to her estate were commenced in Argentina on September 28, 1995. On December 24, 1995, Mr. De Luca died. Proceedings to determine the succession to his estate were commenced in Argentina on February 20, 1996. On September 29, 1999, Noemi De Luca, the Defendant’s sister was appointed by the order of the Argentine court as the official prosecutor of the estate of both Mr. and Mrs. De Luca. On July 1, 1998, Noemi was replaced as the official prosecutor of the estate of her parents by Dr. Juan Colerio, the Plaintiff herein. Proceedings were commenced in Argentina on behalf of the parent’s estate against the Defendant Marta, claiming the monies in several accounts including the account belonging to her parents in Banco De Galicia. The Defendant Marta defended these claims on the basis that the monies deposited in the accounts were hers and that she had earned these amounts working as an escort and building up an escort agency. On July 13, 2000, the National Court of First Instance in Argentina ruled that the money in the account belonged to the estate of Mr. and Mrs. De Luca and further ordered that the money should be transferred to the Banco De la Nacion Argentina, Tribunales Branch to the order of the court pending the resolution of issues concerning the distribution of their estates. On March 24, 2004, as a result of Marta appealing this decision, the Court of Appeal decision was issued. That Court upheld the decision of the National Court of First Instance and declared that the monies being held at this time in the name of Campbells and Quin & Hampson be held as part of the estate of Mr. and Mrs. De Luca. The issue of the ownership of the money in the Cayman account was dealt with on its merits by both the Court of First Instance and the Court of Appeal. The Bank commenced Inter-pleader proceedings in the Cayman Islands on June 26, 1996 pertaining
to these monies. Noemi claimed that the account formed part of the estate and accordingly fell to be distributed to her, in accordance with the laws of Argentina. She sought an order for payment to her of these funds as official prosecutor. Marta, the Defendant, filed a defence on June 1, 1998 claiming that the account was never funded by Mr. and Mrs. De Luca. That she was the sole surviving account holder in the account and that she was the sole and true beneficial account holder and that the monies in the account never formed part of the estate.
As a result of actions taken by the present Plaintiff, Dr. Colerio, an order was made that the bank be dismissed from the proceedings after giving discovery and that the balance of the funds be paid into an escrow account. Dr. Colerio was substituted for Noemi in the Cayman proceedings and filed an Amended Statement of Claim. A Notice of Intention to Proceed was filed on October 14, 2003. It would appear that all parties progressed no further in this matter and were awaiting the decision of the Court of Appeal, in Argentina.
The Plaintiff’s Case
The Plaintiff alleges that Marta the Defendant participated in court proceeding in Argentina that specifically dealt with and resolved the question of the ownership of the monies in the account. It specifically ordered that the monies be transferred to Argentina to be collated as part of the estate of Mr. and Mrs. De Luca and distributed in accordance with Argentina law. The Plaintiff has exhibited both judgments including one that clearly indicated that Marta was participating in the Argentine court proceedings and was
represented by a lawyer. In these circumstances, the Plaintiff submits that it is no longer open for Marta to continue to fund these proceedings and seek to re-argue the same points before the Grand Court in the Cayman Islands. The Plaintiff submits that the principles of issue estoppel applies based on the decision of the Argentine Court of Appeal and further submits that it would be an abuse of process for Marta to seek to raise any arguments in these proceedings which could and should have been raised in the Argentine proceedings.
The Defendant’s Case
The Defendant submits that issue estoppel would only arise in certain circumstances and this case is not one in which it arises because he submits that the identity of the parties is not clear. The claimant in Argentina was the first Defendant’s sister Noemi and Dr. Colerio replaced her. The Defendant submits that there is no privity of interest between Noemi and Dr. Colerio such that the latter can get the benefit of the Argentine decision. He relies on the case of Carl Zeiss-Stiftung v. Rayner and Keeler Limited and others No. 2 All E.R. 1966 at page 536. In particular he refers the court to page 550 the speech of Lord Reid. (I will refer to that when I come to addressing the law in this judgment).
He submits that as Megarry V-C said in Gleason v. J. Whipple and Company Ltd. 1977 1 WLR (510) Division 1977 at page 510 that this is “difficult territory”. He therefore submits that this is not a fit case to be disposed of on an application for summary judgment.
The second point Mr. Farrow makes is that the identity of the subject matter is questionable. He accepts that decision of the Argentine court of appeal is to determine if the funds in question were provided by the Defendant’s mother rather than the Defendant herself. He submits that the application of Argentine law has not been pleaded and that it is far from clear that it does apply. Although the mother may at the time of the transfer into joint names have been domiciled in Argentina, the Defendant was not, and at all material times the situs of the funds in question has been outside Argentina. Finally he says that there is a procedural defect in that the affidavits ignore the matters which are pleaded and raise a matter which is not. Res judicata he says must be pleaded and relies on the case of Voght v. Winch (1814 to 1823) All E.R. at page 270.
The Law
A Foreign Judgment which is final and conclusive on the merits and not impeachable under any of the Rules 42-45 is conclusive on any matter thereby adjudicated upon and cannot be impeached by any error either of fact or of law. (See Dicey and Morris The Conflict Of Laws, that is Rule 41). This Rule holds good whether the judgment is relied upon by the Claimant or by the Defendant. It applies whether the judgment is in personum or in rem. This Rule in effect applies to foreign judgments, the principles well known in English domestic law under the name of Issue Estoppel. In Carl Zeiss-Stiftung v. Rayner and Keeler (see supra), a majority of the House of Lord’s held that Issue Estoppel can be based on a Foreign Judgment. This decision was applied by a unanimous house in The Senar No. 2 (1985 1 WLR p. 490).
Three conditions must be fulfilled before the doctrine can be applied:
(1) The Judgment of the foreign court must be a court of competent jurisdiction and must be final and conclusive on the merits in the sense of Rule 35;
(2) There must be identity of parties;
(3) There must be identity of subject matter, that is to say the issue must be the same.
The meaning of the word conclusive in Rule 41 according to Dicey and Morris is to a rule of English Law whereby a Foreign Judgment given by a court of competent jurisdiction and not impeachable on a number of strictly limited grounds is conclusive and not merely prima facie evidence of the matter therein.
The question to address is whether this Judgment of the foreign court in Argentina (The First Instance and the Court of Appeal) is a final and conclusive Judgment on the merits in the sense of Rule 35. If a Judgment is given by a court of a foreign country with jurisdiction to give that Judgment in accordance with certain principles then that Judgment may be enforced by a claim or counter-claim for the amount due and if the Judgment is for a debt or definite sum of money be final and conclusive. Under Rule 35, the important section for purposes of this application is no. 3:
“No proceedings may be brought by a person on a cause of action in respect of a Judgment which has been given in his favour in proceedings between the same parties or their privies in a court, in another part of the United Kingdom or in a court in an overseas country unless that Judgment is not enforceable according to clause 1 or not entitled to recognition according to clause 2 of this rule.”
Clause 2 states that a final and conclusive Judgment on its merits if it is not impeachable is entitled to recognition in common law and may be relied on in proceedings in England.
Mr. Farrow raises the question of the Judgment being final and conclusive on its merits.
The Court of Appeal Judgment in Argentina states:
“should an amount remain unavailable until a final Judgment is entered in the collation proceedings or until the same is concluded by settlement or conciliation.”
He submits that those words make it not a final judgment. The proceedings in Cayman pertain to the ownership of the monies. The Court of Appeal held:
“considering that any matter in connection with the personal property forming the asset of the estate is ruled by Argentine law and pursuant to the event in a resolution of the probate proceedings filed in the country corresponding to the last domicile of the principals, a jurisdiction which is accepted by both co-heirs - the resolution issued on folio 120 is hereby extended in the sense that the amounts existing in Banco De Galicia (Cayman) Ltd. must be transferred to Banco de la Nacion Argentina, the Tribunales branch to the order of this Court and as belonging to the probate proceedings of Ladislao De Luca and Anastasia De Luca Ruggero.”
It is therefore abundantly clear that after a trial in which Marta took part, submitted to the jurisdiction of Argentina (a matter which has been emphasized by the court of appeal), the monies were adjudicated as belonging to the estate. That is the very same issue that is before this court. Secondly, counsel submitted, that there is no privity of interest between the parties, as Dr. Colerio did not take part in the Mexican proceedings. However, a
careful reading of the authorities leaves me unable to agree with Mr. Farrow on the submission. I quote from Carl Zeiss-Stiftung at page 550:
"It has always been said that there must be privity of blood, title or interest. Here it would have to be privity of interest. That can arise in many ways, but it seems to me to be essential that the person now to be estopped from defending himself must have had some kind of interest in the previous litigation or its subject matter."
The Defendant in this case had interest in the previous litigation in Argentina, had interest in the subject matter and was defended by counsel in those proceedings.
The question of whether the estoppel must be pleaded or was pleaded is also raised by Mr. Farrow. He submits that unless it is pleaded it cannot be relied upon by the Defendant. The pleadings in this matter have been amended and filed sometime ago. The Court of Appeal Judgment had just been delivered in Argentina. Mr. Farrow submits that now instead of asking for Summary Judgment what should be done is that a summons taken out to strike out the claim. I disagree. Once this court is satisfied that the Judgment abroad is final and conclusive on the merits of the matter and not clearly on a procedural point or a conditional point then it is my view that this court can recognize that Judgment as final and conclusive under Rule 41 and Issue Estoppel will arise, albeit that it has not been pleaded.
I agree with learned counsel for the Plaintiff that the Defendant should be estopped from re-litigating the issues raised in Argentina and that it would be an abuse of process for the Defendant to seek to raise any arguments in these proceedings which should and could have been litigated in the Argentine proceedings.
Summary Judgment awards should not be made if there is a probable defence. In this case, the defence as it is filed, purely attempts to religitate a matter which has already been litigated in Argentina and therefore I hold that the Plaintiff is entitled to Summary Judgment.
Counsel for the Defendant had indicated to me that he wished to address me on any consequential orders that could result from this decision. I have therefore not addressed the question of costs till I hear further submissions.
Dated this 17th day of August, 2004
Levers, J.
Judge of the Grand Court