In the recent English decision of Shovlin v Careless and Ors, concerned the enforcement in the English High Court of a default judgment granted against defendant companies by a Superior Court of the State of California.
In 2013, the claimant brought proceedings against the defendants in California relating to alleged fraud and defamation. After a request by the claimant for judgment to be entered in default of filing a defence, in 2019, at a hearing to assess damages, the defendants' lawyer made a special appearance and raised the issue that the case should be dismissed due to failure to prosecute within five years (Californian law requires a civil action to be brought to trial within five years after the action is commenced). The claimant argued because of the defendants' lawyer's special appearance, it would be inappropriate for him to make submissions on this issue.
The Californian Court eventually made an order granting default judgment in favour of the claimant for US$10,066,353. In October 2021, the claimant issued a claim in the English Court to enforce the judgment.
Both sides accepted that the default judgment met the common law requirements of being (a) for a definite sum of money; and (b) final and conclusive. The dispute was over whether the claimant met the additional requirement that the Californian Court had jurisdiction over the defendants, as determined by the English conflict of law rules of international jurisdiction. The critical issue was whether the defendants voluntarily submitted to the Californian Court's jurisdiction by making a special appearance at the hearing. Expert evidence presented to the English Court agreed that a general appearance operated as a submission to the personal jurisdiction of the Californian Court. In contrast, a special appearance is typically entered to preserve a jurisdictional defence. The experts accepted that the issue discussed at the hearing on failure to comply with the five-year rule was a non-jurisdictional issue, and they differed in opinion on whether raising a non-jurisdictional issue when in default amounted to submission under Californian law.
Applying English law, the English Court concluded submission required unambiguously waiving objection to jurisdiction. Here, the lawyer stated he made a special appearance, raised the dismissal issue but did not make a formal or informal motion on it, and did not oppose the assessment. Therefore, the defendants' attendance at the hearing did not unequivocally represent submission to jurisdiction. The English Court consequently dismissed the claim.
This is a valuable reminder of the jurisdictional issues clients and practitioners face when seeking to recognise and enforce foreign judgments and awards through the common law route. Harneys does not advise on the law of England and Wales, but this judgment will be persuasive in common law jurisdictions such as the BVI, Cayman and Bermuda.
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