knowledge 30 November 2020 |

European Enforcement Order: Plaintiff Argues no Contest but Court Doesn’t Agree

Background

The European Enforcement Order (“EEO”) was put in place by Regulation (EC) 805/2004 (“the Regulation”).¹  It is a simplified procedure that can be used for “uncontested” cross-border claims allowing a judgment in an uncontested claim delivered in one EU Member State to be easily recognised and enforced in another Member State. 

Under the Regulation, a claim may be “uncontested” where the debtor has expressly admitted or has never objected to the claim but also under Article 3(1)(c) where:

• “…the debtor has not appeared or been represented at a court hearing regarding that claim after having initially objected to the claim in the course of the court proceedings, provided that such conduct amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the Member State of origin…”

In Ireland, under Order 42B Rules of the Superior Courts, where the High Court has given judgment in an uncontested claim, an application can be made to the court to certify the judgment as an EEO.

Case before the court

In Monteriro Da Silva v Rosas Construtores,² the plaintiffs were Portuguese nationals who came to Ireland as construction workers.  The defendants were their employers.  The plaintiffs’ claim centred on issues such as the underpayment of wages.  In the High Court, the defendants did not fully engage with the proceedings.  The plaintiffs obtained a judgment for damages against them and then sought an EEO on the basis that the claim was uncontested.  This order was refused and the plaintiffs appealed.

What is an “uncontested” claim under Article 3(1)(c)?

Leaving aside the issue of whether the plaintiffs’ claims came within the scope of the Regulation,³ the main issue for determination by the Court of Appeal was whether the defendants’ lack of engagement in the High Court meant that the proceedings were uncontested for the purposes of Article 3(1)(c) of the Regulation?  The court heard that:

• The defendants entered appearances and delivered full defences;

• Prior to the hearing the defendants had instructed three firms of solicitors, each of whom came off record, citing a failure to provide instructions as a basis for so doing;

• The defendants were unrepresented on the first two days of the trial;

• On the afternoon of the third day, solicitors came on record and counsel appeared for five days of the trial;

• However, no defence case was put to the plaintiffs.  Their evidence was not challenged.  The defendants called no evidence on their own behalf;

• Prior to the conclusion of the trial, the new solicitors came off record as they could not obtain instructions;

• The trial concluded with no appearance in court on behalf of the defendants.

The plaintiffs argued that the court should carry out a qualitative assessment of the role played by the defendants in the trial and determine whether it amounted to contesting the claim.  They said that the defendants’ conduct was an abuse of the court process and that their participation in the trial could not be interpreted as bona fide contesting the claim.  They argued that the delivery of a defence was not sufficient to contest a claim as often pleas in defences were not maintained at trial.  What was crucial was the case advanced at trial.  Here, no case was advanced and so no court could endorse what occurred as contesting a claim within the meaning of the Regulation.

The court rejected this argument.  While Costello J expressed sympathy with the plaintiffs and would “deprecate entirely” the defendants’ conduct, she could not agree that the court ought, or even could, engage in the qualitative assessment of the defendants’ participation in the trial in order to determine whether the plaintiffs were entitled to an EEO under Article 3(1)(c).

She said that the Regulation introduced a simplified mechanism to enforce uncontested claims throughout the EU.  Central to the Regulation was the fact that the EEO would not be reviewed in the recipient Member State.  Therefore, the safeguards for defendants should be strictly construed to ensure that the claim was in fact an uncontested claim. 

Two conditions must be satisfied for Article 3(1)(c) to apply:

• The defendant must not have appeared or have been represented at a hearing of the case.  If that was not true, then Article 3(1)(c) could not apply (“threshold test”);

• If the threshold test was met, then a second test should be satisfied: could the non-appearance or non-representation amount to a “tacit admission” of the claim?

Costello J said that this test did not permit a qualitative assessment of the role played once the defendant appeared or was represented at a hearing.  Participation in a trial, however slight it might be or for whatever unmeritorious motives, could not verify the absence of a dispute.  Instead, the qualitative assessment occurred when the court considered whether the fact of the non-appearance or the non-representation of the defendant at a hearing amounted to a tacit admission of either the claim or the facts of the claim.

She said that if she was wrong on her reading of the Regulation, and the attendance of counsel and solicitor during part of the trial was not an appearance by the defendants, she was still satisfied that there was no tacit admission of the plaintiffs’ claim.  Whatever one thought of the defendants’ conduct, it was inconsistent with such a finding. In fact, the High Court judge had referred to the defendants’ “stymying” of the plaintiffs’ claims.  The fact that the defendants did not equip their lawyers with instructions or witnesses to enable their legal representatives to fight the case in the normal way did not amount to a tacit admission of the claim.

Comment

While the EEO mechanism provides an efficient mechanism for the enforcement of uncontested cross-border disputes across the EU, this case illustrates the difficulties that can arise for certain plaintiffs.  However, it should be borne in mind that since the advent of Brussels I recast, the enforcement of civil and commercial judgments more generally across the EU has been simplified so plaintiffs do have other avenues open to them when faced with difficult defendants.