Conflict of laws — Action for breach of contract — Foreign judgment pleaded in defence — Natural justice — Expert appointed by foreign court to examine and report — Failure to carry out duties — Biased report — Report not binding on foreign court — No defect in procedure — Estoppel.

 

In an action by buyers against foreign sellers for breach of contract alleging failure to deliver goods in the quantity and of the quality agreed to be sold, the defence was set up that the matter had been litigated in the French Court, which had given judgment for the defendants and that this judgment was a bar to the action. The plaintiffs replied that the judgment was obtained by proceedings contrary to natural justice.

 

The action in France was brought by the sellers against the buyers for cancellation of the contract, and for damages, and the court made an order appointing an expert to go to London to examine the goods, compare them with the samples delivered, hear and take down in writing all evidence, and make a full report in writing to the French court. It was proved in the English action that the expert appointed made a hurried and incomplete examination of the goods, refused to look at certain documents or to hear the evidence of the plaintiff and his witnesses, and ultimately, as found by Roche, J., made a biased and erroneous report to the court.

 

Held, that there being evidence that according to French law the court was not bound by the expert's report, but could reject it, and that the English plaintiff's case had been properly argued before the French court, and his evidence heard, there was no defect in the proceeding, and there being no fraud proved, the judgment in the French action was valid and could not be impeached, and therefore was a complete defence to the English action.

 

Pemberton v. Hughes (80 L. T. Rep. 869; (1899) 1 Ch. 781) and Abouloff v. Oppenheimer (47 L. T. Rep. 325; (10 Q. B. Div. 295) applied.

 

Decision of Roche, J affirmed.

 

Appeal from a decision of Roche, J., holding that the action was not maintainable owing to the defendants' having obtained a judgment against the plaintiffs in a French court. The facts are stated shortly in the above headnote, and fully in the judgment of the Master of the Rolls. [*387]

 

J. B. Matthews, K.C. and Turner-Samuels for the appellant (the plaintiff). — The French judgment was obtained in circumstances and by methods entirely contrary to natural justice. According to the practice of the French courts, either party may apply for an expert to be appointed to examine goods, hear evidence, and make an impartial report. Upon the plaintiff's application the court appointed M. Varenne, also a silk manufacturer of Lyons. It has been discovered since the case was heard in France that Varenne was a partner in another business with the defendant Frachon's brother-in-law. He arrived in London late made a hurried examination of some of the pieces delivered, refused to hear the evidence of the plaintiff or of his witnesses, and made what the learned judge found to be a prejudiced and erroneous report. The court acted upon this report. There has therefore been a suppression of evidence in favour of the plaintiff and the procedure of the Lyons Court has been tainted and made defective in such a way that the decision is not only wrong, but contrary to elementary notions of natural justice. Varenne was not merely an expert witness, but in the position of an arbitrator. The defendant Frachon was guilty of fraud; he knew that the goods were not up to the samples submitted. [They referred to Pemberton v. Hughes (80 L. T. Rep. 369; (1899) 1 Ch. 781), Abouloff v. Oppenheimer (47 L. T. Rep. 825; 10 Q. B. Div. 295), and Robinson v. Penner (106 L. T. Rep. 542, 722; (1913) 3 K. B. 835).]

 

Jowitt, K.C. and B. B. Stenham for the respondents. — On the facts as found, the court cannot say that the decision of the French tribunal was arrived at by methods contrary to natural justice. The expert's opinion may have been mistaken, but it was honest. The court was not bound by it in any way, but it decided after hearing evidence by and on behalf of the plaintiff to contradict the report (Jeannot v. Fuerst, 100 L. T. Rep. 816). The plaintiff voluntarily appeared in the French action, and is bound by the judgment: (Guiard v. De Clermont and Donner, 111 L. T. Rep. 293; (1914) 3 K. B. 145).

 

Turner-Samuels replied.

 

Lord Hanworth, M.R. — This is an appeal from the decision of Roche, J., who gave judgment enforcing the judgment of the French Commercial Court, held at Lyons. Messrs. Isidore Jacobson and Co., in the year 1924, made two contracts with Mr. Charles Frachon, trading as Frachon Ressicaud and Co., at Lyons; the two contracts were one in Aug. and one in Sept. 1924. The first contract in Aug. 1924, was for the delivery to Messrs. Jacobson and Co. of a number of pieces of crepe de chine, and the colours were to be assorted; the second contract of the 6th Sept. was for a number of pieces of black crepe de chine. The defendant, Mr. Charles Frachon, did not comply, as Messrs. Jacobson contended, with the terms of the contract. Certain deliveries were made in the end of December and early in January, but they failed in respect of the- first contract to make deliveries in accordance with the contract either as to quality or as to time. The result was that Messrs. Jacobson made complaints against Messrs. Charles Frachon. With regard to the second contract, the contract of the 6th Sept., for a number of pieces of black crepe de chine, it seems on the uncontested facts that the contract was not complied with, the goods were, not delivered, and it would appear that upon that contract Messrs. Jacobson had a justifiable cause of complaint. A protest was made and correspondence took place, and there was an interview which took place on the 24th Feb. 1925, at which an effort was made to agree terms; apparently terms were offered by Messrs. Frachon, but they were not put into writing at once, and Messrs. Jacobson distrusted somewhat the delay which had taken place to meet them in accordance with what apparently had been agreed on this 24th Feb. On the 3rd March this latter came from Messrs. Frachon, "Further to my interview with your good self of the 24th ult. and to the verbal offer which I made you on behalf of Messrs. Frachon Ressicaud and Co., goods delivered against your order with our firm, of 1000 pieces of crepe de chine our quality 2080, offer which you wanted to be placed before you in writing. I am in a position to confirm you same as follows: 1. We shall replace at once all pieces delivered" Ð that is delivered in December Ð "and which you are complaining of. 2. We shall deliver at once, or when requested by you, the second and third portions of your order" Ð those were deliveries in January and in February Ð "3. The balance of your order is in work and will be delivered in due time. We are very anxious to settle in an amicable manner the difference which arose between your goodself and our firm over these goods, and we hope that our offer will meet the case to your satisfaction." That letter does not refer to further deliveries which were to be made in March and April. The reply on the 5th March is this, "Replying to yours of the 3rd inst., we are very sorry that in spite of all efforts, it was impossible for us to keep these orders open any longer, and same are now cancelled. We regret that we have no other course open than to hold you responsible for the loss we sustained owing to the nonfulfilment of contracts." That letter of the 3rd March refers to the assorted goods which were to be delivered under the first contract; it does not refer to deliveries which had taken place under the second contract of the 6th Sept., because the pieces which had been delivered in purported pursuance of the contract were rejected by Messrs. Jacobson, returned to and accepted by Messrs. Frachon.

Messrs. Jacobson, as their statement of claim alleged, and apparently it is accepted, indeed I should have thought it was plain, had made these contracts and required the goods for the [*388] purpose of re-selling she same at a profit to their sub-purchaser. The reason why Messrs. Jacobson on the 5th March reply refusing the offer which had been originally made on the 24th Feb. was this, that they were liable to their sub-purchasers. Hence, although the delay is a delay between the 14th Feb. and some date as it would be after the 3rd March, that delay coming on the top of other delays was too great for Messrs. Jacobson to support, and therefore they had to take the ordinary step to fulfil their contract with their sub-purchaser and thus reject the terms offered by that letter of the 3rd March It would seem plain upon those facts simply stated that, both as to the first and as to the second contract, there were breaches of contract on the part of Messrs. Frachon. No question can arise with regard to the second, because all the goods had been returned. With regard to the first contract, it is Plaint those terms, offered as they were on the 3rd March, indicate that Messrs. Frachon themselves recognised a breach of contract on their part.

Upon that the first step then was taken by the issue of the writ in the French courts at the suit of Messrs. Frachon. In that suit Messrs. Frachon claimed with regard to the two contracts made between them and Messrs. Jacobson that the goods should be returned so far as there had been delivery, and that in consequence of the cancellation of the contract some damages should be paid by Messrs. Jacobson to Messrs. Frachon. That was the claim, but before any-thing took place in respect of that French action, on the 6th May of this same year 1925, tire writ was issued in the present action. That writ claimed that by the two contracts to which I have referred, the defendant ought to have made delivery in accordance with the contracts, and in accordance with the sample of crepe de chine that had been supplied. It alleged that the defendants were well aware of the purpose of the contracts and that the plaintiffs were under contract to re-sell to their sub-purchasers. It claimed a sum of 12661. as damages and a declaration that the plaintiffs were entitled to be indemnified against any damages which might be recovered against the plaintiffs by their sub-purchasers. On the 8th May there was the first hearing of the proceedings in the French Court. That interim judgment remitted the case to the First Division to be heard on the 4th Sept. there was a hearing before the First Division, which took time to consider the matter, and ultimately the first effective step was taken in the action when on the 30th Oct. an expert was appointed. That expert was a Mr. Varenne. Under the terms of his appointment he was directed to come over and to inspect the goods which were then in the possession of. Messrs. Jacobson. I am reading on p. 112 The court then appoints Mr. Varenne "whose duty it will be to hear the statements and contentions of the parties, to inspect the contracts forming the subject-matter of this action, to obtain all information, hear all witnesses subject to his including in writing in his report all evidence given by them". In his report he is "to state who is to be held responsible for the cancellation. In short, to express his opinion concerning the various grievances of the parties and more particularly upon the claim for damages put forward by both parties." That appointment was made in consonance with what may be called chapter 14 of the Code Civile [sic] which enables experts to be appointed to make a report to the court. Mr. Varenne took his oath on the 29th Nov. and on the 26th Jan. 1926 he came over here, and there was a preliminary hearing before Mr. Varenne at Lyons.

Then on the 5th Feb. he made an examination over here. Exception is taken to Mr. Varenne's report. It is said that in the course of something like one and a half h-ours be examined, I think, as many as over 100 pieces or rolls of this crepe de chine. It is said that he did not allow Messrs. Jacobson to present their case to him, that h-e said he would be guided by his own expert examination of the pieces, that he did not want Lo and would not hear the witnesses; in short, he set aside the instructions to obtain all information, to hear all witnesses, and the like, and to express his opinion upon various grievances, and so on. He really confined himself to an expert examination of some pf the pieces, and an examination which was all too short and too perfunctory was really effected. What he purported to do was what no man could do in the limit of time he gave himself, namely, form a just opinion as to whether these pieces were really good or not, and he looked cursorily at the nearest portion of the rolls without undoing the rolls fully in order to conic to a sound and just judgment as to their quality. On the 15th March he made his report in favour of the view presented by Messrs. Frachon. He said in terms, as recorded in the judgment, that even if there had been delay, and even if the goods were not in accordance with the contract, yet that delay and that want of quality were not of such a character as to justify the attitude of Messrs. Jacobson. The result was bethought that Messrs. Jacobson were wrong and Messrs. Frachon were right. That report was served upon the parties. I ought to have said that when the proceedings were commenced in the French court Messrs. Jacobson appeared. That is a vital point to be considered. Mr. Jacobson is an Englishman, he did not either by residence or otherwise owe allegiance to the court, but he did in fact appear, and throughout the proceedings that have taken place in the French court, he has been represented by an avocat in court. When the report had been presented objection was taken to it. It appears from the Code Civile that the judges are not bound to follow the report of an expert, and more than that, by art. 822, if the judges do not find the report [*389] sufficiently clear, they can appoint a further expert to report to them. It appears from the judgment which was ultimately delivered on the 10th June, that the objections which were taken to the attitude of Mr. Varenne were all put before the court when, on the 17th May, an application was made to the court to appoint another expert, and we have a recital to that effect in the judgment of the 10th June. [His Lordship read the recital, and proceeded:] Although that is all recited, it is also recited that the court came to a conclusion to reject this claim for the appointment of a further expert, and they did not do so. When the case came on for actual hearing on the 10th June, the matter was argued upon materials which were presented to the court by counsel on behalf of Messrs. Jacobson, but the court decided to follow the report of Mr. Varenne, and said: "Whereas for all these reasons it is proper to approve so far as may be necessary the expert's report and pronounce the cancellation of the agreements," and so on. Then the judgment says: "Giving such consideration as is required by law to the report of the expert Varenne. Declaration that there is no occasion to have recourse to the additional investigations petitioned for by Jacobsen and Co." So it was on this 10th June the judgment was given in favour of the French firm of Messrs. Frachon against Messrs. Jacobson, and Messrs. Jacobson were ordered to pay a sum of, 2001. in damages to Messrs. Frachon and to pay the costs, it is plain from the judgment of the judge and from the evidence called, and from the criticism to which Mr. Varenne's conduct rightly had been subjected, that there is serious ground for thinking that Mr. Varenne did not exercise his functions in the manner that we should expect in this country an expert so charged to exercise them. He did not hear any evidence. It is said that he had to take into account the letter which I have read of the 3rd March and the letter of the 5th March, and that although on their face that appeared to show that there was an admission by Messrs. Frachon that they had not fulfilled their contract, that could be dealt with and explained in some measure. All those suggestions indicate the great importance of Mr. Varenne having to hear the evidence. I sympathise with the attitude which has been adopted by Mr. Matthews and by Mr. Samuels in the ease, that, considering the way in which this examination was conducted, there is grave reason for saying that the case of Messrs. Jacobson was not adequately and properly considered.

I have finished with the French proceedings so far, but the proceedings in the English court were going on while the French proceedings were continued. On the 12th Dec. 1925 the defence was put in, but that was amended and re-delivered on the 20th Oct. 1929, in order that the defendants, Messrs. Frachon, should plead that the same issue had been heard and determined by the French court on the 12th June, and by that judgment the contracts were dissolved, that Messrs. Jacobson had been ordered to return the pieces and to be mulcted in 200l. damages and costs. That plea was put upon the record on the 20th Oct. 1926. Then there was a reply, amended, re-amended, and again amended, and it was ultimately completed on the 14th Feb. of this year. That made a protest against the action of Mr. Varenne and alleged that it "was contrary to and offended against the English view of natural and substantial justice and that substantial injustice to the plaintiff was according to English views there committed by reason whereof the said decision and (or) judgment or judgments entered therein cannot and (or) should not be enforced or admitted in England." That took exception in particular to the fact that Mr. Varenne did not examine the witnesses, did not consider the letters and documents which were available to be put before him, and that in effect it was impossible for Mr. Varenne to reach a conclusion in accordance with the court's order at ah unless he heard the plaintiff's witnesses or received or read the documentary evidence which he refused to hear or receive, and that by his arbitrary method as aforesaid and so on, he misled and misrepresented the true facts to the court. That raises of course the question as to whether or not the judgment, which was pleaded in answer to the claim and which said that the plaintiffs were estopped from further procedure in their action, is one which can be enforced by this court, or whether on the ground upon which it is attacked this court ought to say that they will net give effect to the judgment of the French court. I need not deal with the question of the two trials before Roche. J., those are not germane to the point that we have to decide at the present time. Roche, J. in giving his judgment came to conclusions which we accept and adopt. Those conclusions are very severe upon the conduct of Mr. Varenne. It was argued before him that the report of Mr. Varenne was perverse, dishonest, untrue, and deliberately false. It was said on the other hand by Mr. Jowitt, on behalf of Messrs. Frachon, that the report although it was irregular and unfortunate was still intended to be fair. I merely recount those contentions in order to show that Roche, J. had before him the whole gamut of criticism which could be levelled against the report of Mr. Varenne, but the view that he takes is mid-way between the extreme contentions. He comes to the conclusion that the report was one which was erroneous and un-candid, the uncandid production of a biased and prejudiced mind. The learned judge says, "I am satisfied that Mr. Varenne's result that he obtained was erroneous. I ant quite satisfied that these goods were not in accordance with sample and that they were not in accordance with the contract."

That being so we have to consider, and to consider very carefully, whether this is a judgment that ought to be given effect to in these present proceedings, but the courts in this country, as the courts in foreign countries, have established a basis of comity between them [*390] under which effect is given to the judgments of foreign courts. Perhaps the passage which is now quoted most often and accepted as the greatest authority is the passage in Pemberton v. Hughes (80 L. T. Rep. 369; (1899) 1 Ch. 791, at p. 790), in which Lindley, M.R. states what is the actual practice of the court. I will not read the whole of the passage, but I will read a portion of it: "If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice." There are a number of cases in which it has been laid down that a final judgment reached by a foreign court, where it has jurisdiction cannot be impeached on the merits. You cannot refuse to accept a judgment reached by a foreign court because the judgment of a court in this country might have been different. You cannot impeach it for a mistake of foreign law or English law; you assume and ought to assume that the procedure of the foreign court has been properly followed, that the court dealing with a case of which it is rightly seised, has followed its own I procedure and rightly carried out the system which it is the duty of the foreign court to follow. With those principles before it, perhaps I might add that it is difficult to set aside a foreign judgment even although one may come to the conclusion, to which Roche, J. has come, that in fact the report of Mr. Varenne was wrong and uncandid. It is then said that you can set aside a judgment if it is contrary to natural justice, and that a judgment based upon a report, of which the true view is that stated by Roche, J. is contrary to natural justice. It cannot be consonant with the justice that respect in this country that parties should be compelled to pay damages when their case has not been heard as it was not heard by Mr. Varenne. The judgment of Channel, J. in Robinson v. Penner (108 L. T. Rep. 542; (1913) 3 K. B. 835), has been referred to, but I am inclined to agree with the view that he presents there, that the question of natural justice is almost, if not entirely, comprised in considering whether there has been an opportunity of having had a hearing, and whether the procedure of the court has been in accordance with the instincts of justice whereby both parties are to be given a full opportunity of being heard.

With regard to the question of Mr. Varenne's report it is plain from the article of the Code Civile which has been referred to, that the court is not bound to follow it; it may ask for another report. It is not bound to follow it, and it has been established in evidence which is uncontradicted that the effect of the report is as evidence. Mr. Monsarrat, in his affidavit, says this: "Such a report to the court by an expert so appointed is evidence only as to the matters set out therein and the French court is not in the least bound to accept and act on such a report." Then, "The party who has requested the court to appoint an expert is not in the least prevented thereby from attacking his report and adducing such further evidence as the court admits." I doubt if that is quite the true view inasmuch as Mr. Varenne was appointed to form his opinion by an expert examination, and also to hear evidence and, if possible, to bring the parties together, it appears to me that he held a position which was of greater responsibility than of merely giving evidence to the court, but even so, his report seems to be rather like evidence taken on commission by a person responsible to the court whose decision is not to be the decision of the court and whose views can be reconsidered entirely by the court. In this case it appears from its own procedure with which we cannot interfere, that the court did consider the objections to Mr. Varenne's report, the question whether there should be another report, and the question of his not having taken the examination of the witnesses, and after consideration of those three points carne to the conclusion that they would not set aside Mr. Varenne's deport and would not ask for a further report. The court was just, acting within its jurisdiction, between the parties, both of whom appeared before it. It appears to me; therefore, impossible to say that this court can ay that the French courts were wrong in the way they treated Mr. Varenne's report, for indeed they say the effect they have given to it is giving such consideration as is required by law to the report of Mr. Varenne and no more. It seems to me, therefore, impossible to impeach the judgment or to refuse to carry it out merely on the ground of irregularity in the procedure of Mr. Varenne or on the ground that he reached a conclusion which, owing to his irregularities, ought not to have been reached, for both those matters were determined in favour of the report and against Messrs. Jacobson and by a court which had full cognisance of this matter.

Then comes another point which was discovered at or about Easter of this year, that Mr. Varenne and a partner in some business, I do not stop to inquire what-a partner of a man named Mr. Emery, a partner of Mr. Frachon had married sisters, and some time about May a private detective was put on to examine or to find out what he could about the matter. His name was Norbert and he says that he was directed to begin the examination about a fortnight after Easter Ð I put it, say, the 1st May. What he discovered was this, that Mr. Varenne and Mr. Emery had married sisters. There is no evidence which connects Mr. Frachon with any sinister charge that could be made against Mr. Varenne, and the inference that is suggested is this, that Mr. Varenne adopted a biased attitude because, owing to the relationship between him and Mr. Emery, if relationship it be, or kinship of marriage, he was concerned to do service to the partner in some business Ð not this business Ð in which this Mr. Emery, associated as he was by the marriages, was associated also with Mr. Frachon. It goes so far, but it does not go any further, [*391] and in the evidence which he gives to which I must refer, he says this. He made a report on the matter of the 23rd June 1927 after having been employed as from the 1st May. Certain steps were taken in the French proceedings. On the 27th May 1927 the French Appellate Court to which Mr. Jacobson had taken his appeal, were asked to postpone the case until the hearing of the English proceedings. That was refused, but it is noticeable that at that time the inquiries had
been set in motion for some weeks, which ended in the evidence which was given by the detective, and no application appears to have been made to the French court to reconsider their attitude as to Mr. Varenne or to stay their hand in respect of him. Although it is true that the report was not actually received until June, still the nature of the charge that was to be made, or the bias that was suggested against Mr. Varenne had come to the knowledge of those who were acting on behalf of Messrs. Jacobson.

At any rate Messrs. Jacobson abandoned the appeal on the 30th May in the French case and the matter was brought before Roche, J. No alteration of that pleading took place, although I associate myself with what Atkin, L.J. has said about the necessity, if these matters are to be introduced and pleadings are taken to be altered, of there being a written delivery of the alteration which is to be relied upon; but the matter was considered by Roche, J., because he held this under the twenty-third paragraph of the Reply, "The plaintiff will contend that the circumstances and the business relationship between the said G. Varenne and the defendants made it contrary to and offended against the English view of natural and substantial justice in appointing the said G. Varenne with the powers and for the purposes hereinbefore set forth." As I have said no charge is made of fraud on the part of Mr. Frachon. It is merely this as put at the very highest by Roche, J. that the appointment of Mr. Varenne was one which ought not to have been made. Roche, J. says, "It was to my mind offensive to every rule of propriety and justice and seemliness that Mr. Varenne should act or be allowed to act." Taking that sentence at its full it does not appear to throw the responsibility for Mr. Varenne's appointment, or continuance in acting, upon the connivance of Mr. Frachon. It is not a fraud; what is it? It is a suggestion that it would have been better that Mr. Varenne should not have acted. In that sense it may be that Mr. Varenne is now known to have a motive which may have biased him. At any rate it amounts to this, that the
court in acting upon evidence which is not attributed to the illicit or sinister action of Mr. Frachon, may have been misguided, but it is not attributable to Mr. Frachon and if the judgment stands, it still remains the judgment of the court which this court in England is bound to respect.

Perhaps the best statement of the law as to how far fraud will invalidate the judgment is to be found in the case to which Mr. Samuels called our attention. As Lord Coleridge says in Abouloff v. Oppenheimer (47 L. T. Rep. 325; 10 Q. B. Div. 295) quoting from De Grey, C.J., in the Duchess of Kingston's case, 2 Sm. L. C., 11th edit., 731 "Like all other acts of the highest judicial authority it is impeachable from without; although it is not permitted to show that the court was mistaken, it may be shown that they were misled." But he was dealing in that case with a case of fraud. In Professor Dicey's book on Conflict of Laws he puts it in this way (4th edit., rule 105, p. 437): "A foreign judgment is invalid which is obtained by fraud. Such fraud may be either (1) fraud on the part of the party in whose favour the judgment is given; or (2) fraud on the part of the court pronouncing the judgment." Now it is not suggested here that there was any fraud on the part of the court pronouncing the judgment, nor indeed is it suggested that there was fraud on the part of the party in whose favour the judgment was given, but merely that the court acted upon evidence which unfortunately was made available to it. I think perhaps. a better statement of the rather narrow view, or the limits within which fraud can be considered, is to be found stated by Brett, L.J., as he then was, at p. 307 of Abouloff v. Oppenheirner to which fortunately our attention was called. "It is immaterial to consider whether it was erroneous by reason of a wrong appreciation of the evidence or of the law, or by reason of frauds perpetrated on the courts by witnesses other than the plaintiff and her husband; the only manner in which that foreign judgment can be rendered ineffective upon the ground of fraud, is by proving that it was obtained by the fraud of the plaintiff, who now relies upon it." When one applies that standard to the present case it is plain that however forcibly, however justifiably learned counsel on behalf of Messrs. Jacobson and Messrs. Jacobson themselves may present their case, however indignant they may feel that their case was not properly handled by Mr. Varenne and not fully considered nor tried, yet the evidence now before the court falls far short of what is necessary to enable us to set aside the judgment of a competent court that had jurisdiction in this matter over Messrs. Jacobson. It is for these reasons that I think Roche, J. was right in the view that he took on the main point in holding that the judgment must be given effect to in this action.

With regard to what he has done about the costs he has, within a matter in his discretion, given effect to his views to which I have already referred, views with which I have more than once said that this court agrees. For these reasons it appears to me that the appeal must be dismissed with costs, yet it is a case in which I have endeavoured to deal with the matter fully out of respect to the views presented, and rightly presented to us against a judgment which undoubtedly, as Roche, J. thought, was a judgment which had, if not as its sole basis, [*392] at least an important part of its foundation, a report which was uncandid and inaccurate.

 

Atkin, L.J., having stated the facts, proceeded, Ð The question is whether or not the French judgment affords a defence to Mr. Jacobson's action in this case. Prima facie a foreign judgment would be a defence to an action brought in respect of the same subject-matter. It is not that the debt is merged in the judgment; that is not the rule, but in fact it constitutes a debt due from the one party to the other, and the parties are estopped from litigating again the subject-matter which has given rise to the debt by reason of the decision of a court of competent jurisdiction. The reply that is raised here is that that foreign judgment, when the proceedings are examined, was given in a manner which shows that the proceedings were contrary to natural justice, or to accept the phrase which is used by Lord Lindley in Pemberton v. Hughes (sup.): "If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice." By that it is quite plain from the context that Lindley, M.R. is dealing with proceedings offending against English views of substantial justice. He is not dealing with the merits of the case or the actual decision, because he goes on to say in the same case at p. 792, "A judgment of a foreign court having jurisdiction over the parties and subject-matter Ð i.e., having jurisdiction to summon the defendants before it and to decide such matters as it has decided cannot be impeached in this country on its merits." It is plain that the Master of the Rolls is dealing only with the proceeding, because it is obvious if a court gives judgment on the merits for the plaintiff, when it is plain it ought to have given judgment for the defendant, or vice versa, that is a judgment which offends against the English views of substantial justice. Nevertheless as the Master of the Rolls says, it cannot be impeached upon that ground, but it can be impeached if the proceedings, the method by which the court comes to a final decision, are contrary to English views of substantial justice. The Master of the Rolls seems to prefer, and I can quite understand the use of the expression, "contrary to the principles of natural justice"; the principles it is not always easy to define or to invite everybody to agree about, whereas with our own principles of justice we are familiar. Those principles seem to me to involve this, first of all that the court being a court of competent jurisdiction, has given notice to the litigant that they are about to proceed to determine the rights between him and the other litigant; the other is that having given him that notice, it does afford him an opportunity of substantially presenting his case before the court.

Both those considerations appear to be essential if they are to be in accordance with natural justice. I think the expression opinion of the late Professor Dicey in his great book on the Conflict of Laws, dealing with this subject-matter is a little narrowly expressed. He says in rule 107 (4th edit., p. 444): "A foreign judgment may sometimes be invalid on account of the proceedings in which the judgment was obtained being opposed to natural justice." Then he says that is owing to want of due notice. "But, in such a case, the court is generally not a court of competent jurisdiction." It may be that the court is generally not a court of competent jurisdiction, but that seems to me by no means the whole of the rule. A court of competent jurisdiction, as I have said, may very well, either in accordance with its rules or in violence of them, refuse a substantial hearing to the party, and, if so, it appears to me that the judgment would be invalidated on the ground that it was contrary to natural justice for the reasons I have already to give. That gives quite free play for a variation between different countries and different jurisprudences of the method in which they shall hear the parties and the nature of the evidence to be given in the court. The case here depends upon whether or not the procedure of this foreign court did offence against our principles of substantial justice.

The facts relied on are these: The French Tribunal of Commerce faced with this question, which was a question whether goods were up to sample or not, decided to refer the matter to an expert nominated by the court who had specific directions given to him. Such a procedure is in accordance with the French code, and the person who is appointed as an expert has very large powers entrusted to him by the court. I am reading from an English translation of the French judgment. The court appointed Mr. Varenne of Lyons, "expert, whose duty it will be to hear the statements and contentions of the parties, to inspect the contracts forming the subject-matter of this action, to obtain ail information, hear all witnesses subject to his including in writing in his report all evidence given by them; it shall also be his duty to call for the samples which are alleged to have been shown when the contract was entered into and likewise the deliveries which were made or offered to identify the same and their origin, to state whether the alleged non-conformity exists, and to how much it amounts. To express his opinion as to the conformity or non-conformity of the material supplied, taking into account that the weight of this material contained an excessive percentage compared with the sample submitted. In particular, to ascertain whether the alteration in the material was not specially brought about by this excessive overweight, as by the length of time which has elapsed since delivery of the goods. To express his opinion in the delay which Jacobson and Co (the defendant in the French action, and the plaintiff in the present action) alleged to have taken place, and the importance thereof; to state whether Frachon Ressicaud and Cie [*393] (the plaintiffs in the French action, and the defendants in the present action) did in fact offer other quantities besides those which had been delivered, and if so which quantities and on what date. To state who is to be held responsible for the cancellation. In short, to express his opinion concerning the various grievances of the parties, and more particularly upon the claim for damages put forward by both parties," and he directed the expert, if possible, to put the parties into agreement, that is, he was to conciliate the parties if possible, and in default, to render his report.

Those, no doubt, are very responsible duties, and the case that was made before us as I understand it by the plaintiff, was this. It is said the court delegated to Mr. Varenne its duty of investigating the facts, hearing the I witnesses in order to report what the evidence was, and what the facts were, and that the finding of the expert, when expressed in his report, substantially was the finding of the court. Therefore, if the expert acing directed to hear the witnesses, in fact refused to hear j the witnesses, the proceedings of the court must be taken to be invalid. Now as to what Varenne did there can be no doubt, to my mind, if that was the true position, this judgment could not stand for a moment. Mr. Varenne came over here, he had some hearings of the parties; he came in a hurry he came to Mr. Jacobson's warehouse late in the afternoon of a February day, and he spent one and a quarter hours examining 125 pieces of crepe de chine. He examined them somewhat summarily, the evidence being that he only unfolded each piece to the extent of a yard or two, but being deputed to near the evidence, he absolutely refused to hear the evidence of Mr. Jacobson or the other people. They were there ready, witnesses not merely on the question of opinion as to whether the goods were equal or not to sample, which was material evidence, because he was invited to compare goods which were admitted to be equal to sample with the goods complained of; some of the goods, the twelve pieces to which I have referred, were lying on Mr. Jacobson's counter available for him to see. Fie was invited in addition to that to consider the evidence that was ready to be laid before him to the effect that the sellers' representatives had admitted over and over again that the goods were not equal to sample and the admissions of the representatives from the Lyons' firm itself, who had come over here, to the effect he had so said at Lyons before the goods had been delivered, were evidence which the plaintiff was entitled to put before the arbitrator, and it was vital for him to consider before he came to a decision upon the matter.

There was, further, the evidence of Mr. Jacobson as to the position of the subcontract, as to the fact chat his buyer had rejected and as to his reasons for refusing any further deliveries. Mr. Varenne refused to hear any of shut evidence at all. He went away and he delivered a report in which he found that substantially the goods conformed to the contract, that the delay was immaterial, that Mr. Jacobson was in default in respect of the non-performance of the contract, and he expressed no opinion as to damages. The learned judge has found that report the erroneous and uncandid production of a biased and prejudiced mind, and it appears to me that there is no reason whatever for differing from that finding or qualifying it in any respect. I should say, in addition to that, Mr. Varenne did not deal at all with any explanation of the circumstances of the second contract as to which there appears to have been no defence in respect of the claim for non-delivery, because the only delivery that had been made was not only said to be faulty but admitted and proved to be faulty by an opinion given by one of the defendant's servants.

The question is whether Mr. Varenne, having plainly, to my mind, refused to hear the evidence of one party, that must be taken to be the refusal by the court to hear the evidence of the party. It is in this respect, to my mind, that the plaintiffs' case fails. In the course of the proceedings, the course of which it is unnecessary to detail, there was an application made by the defendant in the English action to stay the action by reason of the proceedings in the French notion. In the course of those proceedings the plaintiff filed an affidavit by a distinguished French advocate familiar with the practice in France, and his evidence was to my mind of, great importance in this case. It is the affidavit of Mr. Monsarrat. Dealing with the report, he says in par. 4: Such a report to the court by an expert so appointed as evidence only as ho the matters set out therein, and the French court is not in the least bound to accept and act or- such a report. Quite often the court declines to accept such a report, as it is perfectly entitled to do under the provisions of art. 328 of the Code de Procedure Civile, and I have known in he course of my professional experience of many oases where the court has so declined. The party who has requested the court to appoint an expert is not in the least prevented thereby from attacking his report and adducing such further evidence as the court admits." Then he goes on to say: "I am informed by the said Isidore Jacobson, and believe that he has forwarded to the advocate representing him in the said French action (1) certain written certificates from persons experts in the silk trade to the effect that they have compared the bulk delivered under the contract first mentioned in the said exhibit DJC.1 with the sample, and that the bulk is inferior to the sample in the respects mentioned in such certificates, and (2) a statement in writing by one W. H. Wilcox, formerly in the employ of Messrs. Ley and Read, London agents for the above-mentioned Charles Frachon, relative to the condition of some of the goods delivered under the said first contract and to certain admissions made to him by one Gaillard, an agent of the said Charles Frachon, that the [*394] said goods were not in fact up to sample. The said certificates and statement constitute evidence admissible in the French action, and the court may accept and act thereon, rejecting the said report if satisfied thereby."

That being the state of things, it appears that Mr. Jacobson, after the report of the expert did in fact take proceedings to invite the court to reject the report of Mr. Varenne, and, if necessary, to appoint another expert or experts to consider the matter. The reasons he gave substantially were the complaints I have just mentioned, which, I think, were entirely well founded, that Mr. Varenne had not listened to the evidence, and that he had not made a sufficient examination and investigation, and so forth. I have no doubt that for that purpose, either, this evidence, which is referred to in the affidavit of Mr. Monsarrat, was put forward or that the court Ð accepted the view that such evidence would be or could be put forward, and dealt with it on the footing that it was before them; but the Tribunal of Commerce came to the conclusion that, notwithstanding those facts, they would accept the report of Mr. Varenne, and they did so accept it, and in those circumstances they treated the contract as having been broken by Mr. Jacobson and gave the moderate amount of damages, some 2001., to Messrs. Frachon, with what appears to us a very modest sum for costs. Therefore, I think, it is quite impossible for Mr. Jacobson to make out that the French court declined to hear his evidence or to hear his case. There was not delegated to Mr. Varenne the sole duty of hearing the evidence. It was his duty as an expert to hear his evidence, but the court itself reserved the fullest power to hear evidence, and did in fact hear evidence on behalf of Mr. Jacobson by way of contradicting or varying the report. In those circumstances I fail to find that there was any violation of the ordinary principles of justice in accordance with our rules.

It appears that it was unknown to the court Ð I assume that in justice to the tribunal Ð that the expert they had appointed was connected by marriage with a partner of the defendant. I have no doubt upon the facts elicited that created a likelihood of bias on the part of Mr. Varenne, and explains the bias which the learned judge found to have existed. It was important that that fact should be known, but it was not known at the time, and the question arises whether or not that fact in itself is sufficient to say that this decision has been arrived at contrary to the principles of natural justice. I am bound to say I do not think our rules do permit such a fact to invalidate a judgment. As it stands it is no more than this, I think, it is no stronger than the fact that the witness was, if he were, a perjured witness, that is a witness who had intentionally stated what he knew to be false. I am quite clear that it would not be a defence to a foreign judgment to prove that the court proceeded on the evidence of one of the parties and that the evidence could subsequently be shown to have been perjured evidence, that would be attacking the decision on its merits. In the same way it appears to me to show one of the witnesses was a biased witness, or was interested in the case, is only an attack on the merits of the decision and is not an attack upon the procedure. It would be different to my mind if it could be shown that the plaintiff had himself procured a witness whom he knew to be a biased witness, and who would be likely to mislead the court. That, to my mind, would be fraud on the part of the plaintiff. It matters not, I think, whether he procured a perjured witness or a biased witness. In both circumstances I am inclined to think the true answer would be: This is a judgment obtained by the fraud of one of the parties who cannot now set it up. There is no evidence of associating Mr. Frachon or any of the defendants in the action with Mr. Varenne's appointment in that sense. The only evidence we have before us is that the expert, in default of agreement by the parties, is appointed by the court, and the order of the court nominates Mr. Varenne as though he were in fact appointed by the court.

In those circumstances, seeing that there is no violation in my judgment, of the principles of substantial justice in regard to proceedings, and seeing that there is no allegation in the action of fraud by Mr. Frachon, and indeed no evidence which would entitle us to come to the conclusion that there was fraud, I think that the judgment is a valid foreign judgment, and if it is a valid foreign judgment it affords a defence to the claim. Therefore I think that the appeal must be dismissed.

There was a cross-appeal by the defendant with regard to the order of the learned judge refusing to allow the defendants costs and putting it precisely upon this position in respect of Mr. Varenne. With regard to that, all it is necessary to say is that that is a matter which is entirely within the discretion of the learned judge; it is plain he has exercised his discretion, acting upon materials which arose in the course of the hearing and out of the proceedings, and, therefore, in accordance with the recent judgment of the court, that was an exercise of judicial discretion and cannot be interfered with and cannot be reviewed by us. The result is that, in my judgment, the appeal must be dismissed with costs and the cross-appeal with costs with a proper set-off.

 

Lawrence, L.J. Ð I agree.

 

Solicitors for the appellant, C. Butcher and Simon Burns.

 

So1icitors for the respondent, Russell and Arnholz.