C-166/80

KARL MICHEL

on the interpretation of Articles 27 and 52 of the Convention,

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

The facts of the case, the course of On 29 April 1976 the period for lodging the procedure and the observations an objection [Einspruch] to the submitted under Article 20 of the enforcement order expired, thereby Protocol on the Statute of the Court of rendering the enforcement order final Justice of the EEC may be summarized and conclusive as between the parties. as follows: On 1 September 1976 Mr Klomps raised an objection before the Amtsgericht Krefeld against the enforcement order, I — Facts and p r o c e d u r e maintaining that, when the above- mentioned documents were served, his 1. On 25 March 1976 Mr Michel, the habitual residence was in the respondent in an appeal in cassation to Netherlands and not in the Federal the Hoge Raad der Nederlanden Republic. [Supreme Court of the Netherlands] On 19 April 1977 after the Amtsgericht applied, in the context of a procedure found, after thorough examination, that, known as "Mahnverfahren" [summary according to the provisions of German p roceedings for the recovery of a debt or iquidated demand], to the Amtsgericht national law, Mr Klomps was also ha- bitually resident in the Federal Republic, [Local Court] Krefeld, in the Federal it overruled his objection on the ground Republic of Germany, for an order that it was raised out of time. against Mr Klomps, the appellant in On 12 July 1977 the decision of the cassation, for payment of the sum of Amtsgericht, against which no D M 63 270. According to the claim that proceedings were instituted, became amount represented commission for his binding. agency fees in connection with the purchase of land in Ratingen in the By judgment of 27 June 1978 the Federal Republic. President of the Arrondissements- rechtbank [District Court], Roermond, On 29 March 1976 the order for The Netherlands, delivered a judgment payment [Zahlungsbefehl] was auth- in which it ruled, inter alia, that the orized by a responsible officer order for payment and the enforcement [Rechtspfleger] of the Amtsgericht. order were enforceable in the Netherlands under the provisions of the On 3 April 1976 the order was served, in Brussels Convention of 27 September the absence of Mr Klomps, by depositing 1968. Mr Klomps's objections relating to it at the post office and by leaving a note those two heads of the judgment were at an address in Willich (in the Federal dismissed as unfounded by the Republic of Germany) which had been Arrondissementsrechtbank in its indicated by Mr Michel. judgment of 20 September 1979. On 9 April 1976, since Mr Klomps failed Mr Klomps then lodged an appeal in to submit an objection [Widerspruch] to cassation against that judgment to the the order for payment, an enforcement Hoge Raad der Nederlanden on the order [Vollstreckungsbefehl] was issued ground that at the time of service of and served on Mr Klomps on 22 April in the document which instituted the the same way as the order for payment. proceedings which, according to him,

was the order for payment, he had his spruch' [objection] to the 'Voll- habitual residence, or at least was living, streckungsbefehl' ? in the Netherlands. Consequently service was not duly effected or effected in good (3) Are the opening words and point 2 time. H e further claimed that, even of Article 27 applicable if the although the Arrondissementsrechtbank defendant in the State of the court considered whether service was duly the recognition or enforcement of effected, it failed to consider whether he whose decision is sought (the court had had sufficient time within which to first seised), has objected to the arrange for his defence, that is, to decision given in default and the submit, within the period of three days court first seised rules that the referred to in the order for payment, an objection is inadmissible because it objection [Widerspruch] to that order. was not lodged within the period laid down for that purpose? The Hoge Raad decided to stay the proceedings and to request the Court of (4) If the court first seised has ruled Justice to deliver a preliminary ruling on that at the time of service of the the five following questions concerning document which instituted the the interpretation of the Convention: proceedings the defendant had his habitual residence in the State of "(1) Must a 'Zahlungsbefehl' [order for that court, with the result that in payment], or a 'Vollstreckungs- that respect service was duly befehl' [enforcement order], issued effected, do the provisions of the under German law as it was in opening words and point 2 of 1976, be regarded as 'the document Article 27 require that a separate which instituted the proceedings' examination be carried out into the within the meaning of the opening question whether the document was words and point 2 of Article 27 of served in sufficient time to enable the EEC Convention on the defendant to arrange for his Jurisdiction and the Enforcement of defence? If so, is that examination Judgments in Civil and Commercial then confined to the question Matters? whether the document reached the defendant's habitual residence in (2) If it must be assumed that in a case good time or must, for example, such as the present one the the question also be examined 'Zahlungsbefehl' is the document whether service at that residence which instituted the proceedings was sufficient to ensure that the within the meaning of the opening document would reach the words and point 2 of Article 27 is it defendant personally in good time? necessary, with regard to the question whether that document (5) In connection with the questions set was served on the defendant in out under (4), is the position sufficient time to enable him to altered, having regard to Article 52, arrange for his defence, to take by the question whether the court account only of the period for of the State in which recognition or submitting a 'Widerspruch' [ob- enforcement is sought rules that jection] to the 'Zahlungsbefehl', under the law of that State at the or must account also be taken of time of service of the document the fact that after the expiry of which instituted the proceedings that period the defendant still the defendant had his habitual has a period for lodging an 'Ein- residence in that State?"

II — W r i t t e n o b s e r v a t i o n s 2. . . . if the defendant was not duly served with the document which 1. First question instituted the proceedings in sufficient time to enable him to arrange for his Mr Michel explains first of all that he defence." interprets this question as meaning that, in determining which is the document Article 52 which instituted the proceedings there is a choice between the order for payment "In order to determine whether a party and the enforcement order. H e remarks is domiciled in the Contracting State that, whilst service of the order for whose courts are seised of a matter, the payment starts the proceedings and court shall apply its internal law. indeed has retroactive effect, the case does not become a pending suit until the If a party is not domiciled in the State German court, after receiving an whose courts are seised of the matter objection to the order, fixes the date for then, in order to determine whether the the hearing. In his view the order itself is party is domiciled in another Contracting of no legal significance where it is not State, the court shall apply the law of followed by an enforcement order and that State." 1 likewise, according to him, it does not constitute an enforceable decision or judgment. Since the Convention must be 3. The judgment making the reference intepreted in isolation, on the basis of to the Court was recorded at the Court the objective and scope of its articles, it Registry on 15 July 1980. is necessary to consider the national provisions in the light of the guarantees offered by Article 27, point 2, and above Pursuant to Article 5 of the Protocol of all to take account of the fact that, 3 June 1971 and in accordance with according to German law, the debtor has Article 20 of the Protocol on the Statute two periods of time within which to of the Court of Justice of the EEC, defend himself in the summary written observations were lodged by the proceedings, namely the time within respondent in cassation, Mr Michel, represented by J. Wuisman, of the Bar which he must submit an objection to the of The Hague, by the German order for payment and the time within Government, represented by W. which he must lodge an objection to the Holtgrave, Director at the Federal enforcement order, and it is only after the expiry of the latter period that the enforcement order becomes final and 1 — Translator's note: The relevant provisions of the binding. The document which instituted English version of the Convention published in Official Journal L 304 employ the word "domicile", which is the proceedings is thus the order auth- accordingly used in direct quotations. Elsewhere the orizing enforcement of the order for term "habitual residence" is used throughout this judgment to denote the concept in question. payment.

The German Government states that 2. Second question Article 27, point 2, constitutes a provision for the protection of the Mr Michel considers that, even if the defendant in that it guarantees his right order for payment is considered as to defend himself in adversary the document which instituted the proceedings properly so-called. As proceedings, the court of the State in service of the order for payment permits which enforcement is sought may in any the defendant to submit observations case take account both of the time for by way of the objection, thereby objecting to the order for payment and transforming the summary proceedings of the time for objecting to the into normal adversary proceedings, the enforcement order for the purpose of order for payment must be considered as deciding whether service took place in the document which instituted the sufficient time since, even after the issue proceedings, in place of an originating of the enforcement order, the defendant application. may submit a comprehensive defence. The Commission concurs in that view, at On the other hand the enforcement the same time emphasizing that, whilst order amounts to a judgment in default the objection to the order for payment which is declared to be provisionally may be made informally, the objection to enforceable, that is, it is equivalent to a the enforcement order must comply with judgment in adversary proceedings. certain formal requirements.

The Government of the Federal Republic the document which instituted the of Germany, on the other hand, states proceedings within the meaning of that only the objection to the order for Article 27, point 2, of the Convention of payment may be made informally and 27 September 1968 on Jurisdiction and prevent the issue of a provisionally the Enforcement of Judgments in Civil enforceable document, so that, in its and Commercial Matters.” view, regard should be had only to the time allowed for objecting to the order The Commission emphasizes that both for payment. It adds that, although the the order for payment, where an provisions of German law in force at the objection [Widerspruch] is submitted time as a general rule considered a against it, and the enforcement order, period of three days as being sufficient where an objection [Einspruch] is for a defendant habitually resident within lodged, are capable of initiating the district of the court seised of the adversary proceedings, since, under the matter, this was so precisely because it provisions of German national law, the was possible to raise an objection to the enforcement order takes effect from the order for payment by means of any date of service of the order for payment. written or oral statement to the Accordingly either of these two orders competent official of the registry, may constitute the document which indicating, even without reasons, that the institutes the proceedings. debtor contested the order for payment.

The German Government accordingly "In the procedure for recognizing or proposes that the reply to the second enforcing a judgment in default the question should be as follows: defendant is not precluded from relying upon defects in the procedure for the "In ascertaining whether an order for purposes of Article 27, point 2 of the payment for the purposes of Article 27, Convention if the proceedings instituted point 2, of the Convention was served in by him against the judgment in default sufficient time it is necessary to have were dismissed as inadmissible because regard only to the period available to the they were out of time." debtor, prior to the issue of the enforcement order, for stating that he is raising objections to the claim." The Commission concurs in the point of view of the German Government having regard to the second guarantee provided by Article 27, point 2, (".. not duly 3. Third question served . . . in sufficient time for him to arrange for his defence"). It emphasizes Mr Michel contends that where the court that the article is irrelevant for the court first seised has held the objection to the first seised which is not concerned with enforcement order to be out of time and the stage of recognition and enforcement accordingly inadmissible this implies that of its judgment. an examination of the formal conditions of service had been undertaken and that the court considered that, according to national law, service was duly effected 4. Fourth question and in good time. The fact that after that finding was made by the court first seised, the court in the State where the enforcement was sought carried out a Mr Michel considers that it is detailed examination of that point on the unnecessary for the court in the State in basis of Article 27, point 2, adversely which enforcement is sought to consider whether service was effected in sufficient affects "the free movement of time if the court first seised has already judgments", legal certainty and the considered that point, as occurred in this uniformity of enforcement of decisions case. Due service implies that the court which have become final and binding. first seised took into consideration, in accordance with its national law, the According to the Government of the time-limit in force which is intended to Federal Republic of Germany the allow the defendant time to prepare his judgment in default remains unaffected defence. if the court simply rules on the admissibility of proceedings instituted against that judgment and dismisses them Due service, that is to say, service which as being out of time. Any defects as to is effected at the habitual residence as procedure in the judgment in default ascertained by the court first seised and thus continue to exist and may be which also satisfies the other formal pleaded in the procedure for recognition requirements of national law must mean under Article 27, point 2, of the that service was also effected in sufficient Convention. time. In that case the court of the State in which enforcement is sought is The Government accordingly proposes not obliged to consider this matter the following answer: comprehensively and in depth on the

basis of Article 27, point 2, of the be necessary to take into account Convention. whether or not the defendant actually knew of the service. In this connection it proposes the following reply: In any case the requirement that service must be effected in sufficient time simply means that the defendant must be "The scope of . the examination in enabled to arrange for his defence after question must not be confined to ascer- due service and not that the document taining whether the document reached which instituted the proceedings has in the defendant's habitual residence in fact been brought to his knowledge in sufficient time. All the circumstances may good time. be considered — as the case may be, subject to certain restrictions — for example, the nature of the parties to The Government of the Federal Republic the action and their relationship; the of Germany concurs in the point of view requirement that the document must last expressed. The defendant must thus reach the defendant in person in himself ensure that he is able personally sufficient time may not be laid down as a to acquaint himself with the document general rule; that condition may only be served on him. Furthermore the German required if, in given circumstances, it Government concurs with the Com- would be unreasonable to expect the mission in saying that the Convention defendant to have made the necessary provides a double guarantee in that preparations to ensure that communi- service must be correctly effected and in cations addressed to him in his absence good time. Consequently, in determining actually reached him." whether or not service was effected in sufficient time, the court of the State in which enforcement is sought is not bound either by its own findings as to 5. Fifth question whether service was duly effected or by those of the court first seised. The German Government proposes the following reply: The Government of the Federal Republic of Germany considers that the rule laid down by Article 52 is not directly "Article 27, point 2, of the Convention relevant to ascertaining whether the also requires a separate examination of document which instituted the the point whether a document which proceedings was served in sufficient time. instituted the proceedings was served in That article is intended to overcome the sufficient time if the court in the State in difficulties inherent in the interpretation which the judgment was given found that of the concept of habitual residence and it was duly served. Whether a document the court of the State in which was served in sufficient time depends enforcement is sought is bound by the exclusively on the date on which due findings of the court first seised on the service, in accordance with the law of question of habitual residence. Similarly, the State in which the judgment was the mere fact that the debtor may be given, was effected on the defendant; habitually resident in two places is actual knowledge of the contents of the irrelevant in ascertaining whether service document is unnecessary." was effected in sufficient time.

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

KLOMPS v MICHEL

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.

6 In these circumstances the Hoge Raad decided to stay the proceedings and to request the Court of Justice to answer the following questions: “(1) Must a ‘Zahlungsbefehl’ [order for payment], or a ‘Vollstreckungs- befehľ [enforcement order], issued under German law as it was in 1976, be regarded as ‘the document which instituted the proceedings’ within the meaning of the opening words and point 2 of Article 27 of the EEC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters? (2) If it must be assumed that in a case such as the present one the ‘Zahlungsbefehl’ is the document which instituted the proceedings within the meaning of the opening words and point 2 of Article 27 is it necessary, with regard to the question whether that document was served on the defendant in sufficient time to enable him to arrange for his defence, to take account only of the period for submitting a ‘Widerspruch’ [objection] against the ‘Zahlungsbefehl’, or must account also be taken of the fact that after the expiry of that period the defendant still has a period for lodging an 'Einspruch' [objection] against the ‘Vollstreckungsbefehl’? (3) Are the opening words and point 2 of Article 27 applicable if the defendant in the State of the court the recognition or enforcement of whose decision is sought (the court first seised) has objected to the decision given in default and the court first seised rules that the objection is inadmissible because it was not lodged within the period laid down for that purpose? (4) If the court first seised has ruled that at the time of service of the document which instituted the proceedings the defendant had his habitual residence in the State of that court, with the result that in that respect service was duly effected, do the provisions of the opening words and point 2 of Article 27 require that a separate examination be carried out into the question whether the document was served in sufficient time to enable the defendant to arrange for his defence? If so, is that examination then confined to the question whether the document reached the defendant's habitual residence in good time or must, for example, the question also be examined whether service at that residence was sufficient to ensure that the document would reach the defendant personally in good time? (5) In connection with the questions set out under (4), is the position altered, having regard to Article 52, by the question whether the court of the State in which recognition or enforcement is sought rules that under the law of that State at the time of service of the document which instituted the proceedings the defendant had his habitual residence in that State?”

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

JUDGMENT OF 16. 6. 1981 — CASE 166/80

words "the document which instituted the proceedings" in Article 27, point 2. On the other hand a decision, such as the enforcement order [Voll- streckungsbefehl] 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.

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.

Fourth question

1 4 Bythis 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.

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.

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.

Fifth q u e s t i o n

22 This question concerns Article 52 of the Convention, the relevant provisions of which read as follows:

"In order to determine whether a party is domiciled in the Contracting State whose courts are seised of a matter, the court shall apply its internal law.

JUDGMENT OF 16. 6. 1981 — CASE 166/80

If a party is not domiciled in the State whose courts are seised of the matter, then, in order to determine whether the party is domiciled in another Contracting State, the court shall apply the law of that State."

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.

Touffait Due Everling Chloros

Delivered in open court in Luxembourg on 16 June 1981.

A. Van Houtte J. Mertens de Wilmars Registrar President

O P I N I O N O F MR ADVOCATE GENERAL REISCHL DELIVERED O N 25 MARCH 1981 1

Mr President, Matters (hereinafter referred to as "the Members of the Court, Convention on Jurisdiction"), which is worded as follows: The case on which I shall give my views "A judgment shall not be recognized: today concerns the interpretation of Article 27, point 2, of the Convention on Jurisdiction and the Enforcement of 2. where it was given in default of Judgments in Civil and Commercial appearance, if the defendant was not 1 — Translated from the German.