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Admissibility of a reference for a preliminary ruling regarding the issue of a certificate under Article 53 of Regulation No 1215/2012: On the legal nature of the judgment delivered
Case C-579/17
BUAK Bauarbeiter-Urlaubs- u. Abfertigungskasse v GRADBENIŠTVO KORANA
The CJEU published last week a judgment on a request for a preliminary ruling by the Vienna Labour and Social Security Court. The facts of the case are presented under recitals 21-31. The Austrian court referred the following question to the Court:
‘Is Article 1 of Regulation … No 1215/2012 … to be interpreted as meaning that proceedings involving the assertion of claims by [BUAK] for wage supplements against employers as a result of the posting to Austria of workers without a habitual place of work in Austria for the purposes of performing work or in connection with the hiring-out of workers, or against employers established outside Austria as a result of the employment of workers with a habitual place of work in Austria, constitute “civil and commercial matters” to which the aforementioned regulation applies, even where such claims by BUAK for wage supplements concern employment relationships governed by private law and serve to cover workers’ claims to annual leave and payment in respect of annual leave, governed by private law and arising from employment relationships with employers, but nevertheless
– both the amount of the workers’ claims against BUAK for annual leave pay and that of BUAK’s claims against employers for wage supplements are determined not by contract or collective bargaining agreement but, instead, by decree of a Federal Minister,
– the wage supplements owed by employers to BUAK serve to cover not only the expenses for the payment in respect of annual leave payable to workers but also BUAK’s expenses for administrative costs, and
– in connection with the pursuit and enforcement of its claims for such wage supplements, BUAK has more extensive powers by law than a private person, in that
– employers are required to submit reports to BUAK on specific occasions as well as at monthly intervals, using communication channels set up by BUAK, to take part in and allow BUAK’s inspection measures, grant BUAK access to wage and business records and other documents, and provide information to BUAK, failing which a fine may be imposed, and
– in the event that an employer breaches its obligations to provide information, BUAK is entitled to calculate the wage supplements owed by the employer on the basis of BUAK’s own investigations, whereby, in that case, BUAK has a claim for wage supplements in the amount calculated by BUAK, irrespective of the actual circumstances of the posting or employment?’
1. The admissibility of the request
Prior to answering the question referred, the Court examined the admissibility of the request. The novelty of the matter lies on the existence or non-existence of a judicial character for the issue of a certificate under Article 53 of Brussels I bis Regulation. In other words, the question was raised after the termination of the proceedings and the publication of the judgment. It came to the surface due to the reservations of the competent Austrian body to issue the above certificate, thus labelling the case with a civil or commercial nature. The answer was given in recital 41:
Consequently, the procedure for the issue of a certificate under Article 53 of Regulation No 1215/2012, in circumstances such as those at issue in the main proceedings, is judicial in character, with the result that a national court ruling in the context of such a procedure is entitled to refer questions to the Court for a preliminary ruling.
2. On the civil or commercial nature of the dispute
Following the affirmative answer to the admissibility issue, the Court proceeded to the examination of the legal nature of the case at hand. Its analysis extends to recitals 46-64, wherefrom the following could be highlighted:
- The exercise of public powers by one of the parties excludes a case from civil and commercial matters within the meaning of Article 1(1) of Regulation No 1215/2012 [Recital 49].
- The CJEU held that the Austrian court’s powers were limited to a simple examination of the conditions for the application of Paragraph 33h (2b) of the BUAG, with the result that, if those conditions are satisfied, the court cannot carry out a detailed examination of the accuracy of the claim relied on by BUAK [Recital 57].
- In so far as Paragraph 33h (2b) of the BUAG places BUAK in a legal position which derogates from the rules of general law regulating the exercise of an action for payment, by attributing a constitutive effect to the determination by it of the claim and by excluding, according to the referring court, the possibility for the court hearing such an action to control the validity of the information on which that determination is based, it must be concluded that that body acted, in that case, under a public law prerogative of its own conferred by law [Recital 60].
- In such a case, BUAK should be considered to be acting in the exercise of State authority in the context of a dispute such as that which led to the judgment delivered on 28 April 2017, which would have a major influence over the modalities for the exercise of that procedure, and therefore over its very nature, such that that dispute does not come within the concept of ‘civil and commercial matters’ or, therefore, within the scope of application of Regulation No 1215/2012 [Recital 61].
The Court dedicated only six recitals for the concept of social security and its exclusion pursuant to Article 1(2) (c) Brussels I bis Regulation [Recitals 65-70], concluding that, on the basis of facts delivered, the case does not come within the concept of social security for the purposes of the provision aforementioned.
3. Some thoughts on the ruling
The significance of the judgment is self-explanatory: Unlike its predecessor, the certificate under Art. 53 Brussels I bis is one of the core documents needed for direct enforcement in the country of destination. The previous exequatur stage is abolished; hence, the issue on the legal nature of the case is transferred to the court which would try the application for refusal. Therefore, the decision of the Austrian court to refer the matter to the CJEU should be endorsed; the same goes for the position of the latter in regards to the admissibility issue.
The case resembles a recent judgment of the Thessaloniki Court of 1st Instance, which refused to grant exequatur to a German Notice of the National Association of Statutory Health Insurance Physicians against a doctor of Greek origin, active in the region of Rhineland-Palatinate. As in the case of the Austrian BUAK, the notice was issued ex parte, but no court proceedings ensued in the country of origin. Moreover, the German authorities issued a certificate without questioning the legal nature of the matter at hand. Given that the case fell under the scope of Brussels I Regulation, the Greek judge denied exequatur, stating that the above notice was of an administrative nature, thus falling out of the Regulation’s ambit. The case is published in its original text in: Armenopoulos 2018, pp. 812 et seq. It is also reported in a case note I prepared for the German journal Praxis des Internationalen Privat- und Verfahrensrechts, see: Nichtanwendung der EuGVVO 2001 auf den Bescheid einer deutschen kassenärztlichen Vereinigung in Griechenland – LG Thessaloniki, 19.12.2017 – 19865/2017, IPRax (forthcoming).
What Does it Mean to Submit to a Foreign Forum?
The meaning of submission was the central question, though by no means the only one, in the Supreme Court of Canada’s decision in Barer v Knight Brothers LLC, 2019 SCC 13 (available here). Knight sought enforcement of a Utah default judgment against Barer in Quebec. The issue was governed by Quebec’s law on the recognition and enforcement of foreign judgments, which is set out in various provisions of the Civil Code of Quebec (so much statutory interpretation analysis ensued). Aspects of the decision may be of interest to those in other countries that have similar provisions in their own codes.
The court held that the Utah decision was enforceable in Quebec. Seven judges (Gascon J writing the majority decision) held that Barer had submitted to the Utah court’s jurisdiction. Two judges held that he had not. One of them (Brown J) held that the Utah court had jurisdiction on another basis, and so concurred in the result, while the other (Cote J) held it did not, and so dissented.
The majority held that in his efforts to challenge the Utah’s court’s jurisdiction, Barer had presented substantive arguments going to the merits of the dispute (para 6). It analysed various possible steps in a foreign proceeding that either would or would not constitute submission (paras 59-63). It was invited by Barer to consider the “save your skin” approach to submission, which would recognize that a defendant who both challenged jurisdiction and raised substantive arguments would not be taken to have submitted. It rejected that approach (para 68). Its core concern was to protect “the plaintiff’s legitimate interest in knowing at some point in the proceedings, whether or not the defendant has submitted to the jurisdiction” (para 62). It added that “plaintiffs who invest time and resources in judicial proceedings in a jurisdiction are entitled to some certainty regarding whether or not the defendants have submitted to the court’s jurisdiction” (para 67).
The majority acknowledged that in a case in which the process of the foreign forum required the raising of a substantive argument alongside a jurisdictional challenge, this could affect the determination of whether the defendant had submitted (para 75). But this was not such a case: the defendant had not established, as a factual matter, that this was such a feature of the Utah procedure (paras 75 and 78). Accordingly, the fact that Barer had raised a defence on the merits – that a pure economic loss rule barred the claim against him – amounted to submission (para 71).
In dissent, Justice Cote finds the majority’s test for submission to be “too strict” (para 212). She urged a “more flexible approach” which would allow a defendant to raise substantive arguments alongside a jurisdictional challenge (para 213). In her view, if “a broad range of arguments may convince a Utah court that it lacks jurisdiction over a matter … A defendant must be allowed to present those arguments” (para 219). While Gascon J put the onus of showing that the Utah process required raising substantive arguments at a particular time on the defendant, Cote J put that onus on the plaintiff, the party seeking to enforce the foreign judgment (para 223).
Brown J’s concurring decision did not comment at any length on the test for submission. He held that “I agree with my colleague Cote J. that Mr. Barer has not submitted to the jurisdiction of the Utah court merely by presenting one argument pertaining to the merits of the action in his Motion to Dismiss” (para 146; emphasis in original). This is consistent with Cote J’s approach to the meaning of submission.
There is a further interesting dimension to the reasons. Cote J held, in the alternative, that even if Barer had submitted, the plaintiff also had to show a real and substantial connection between the dispute and Utah before the judgment could be enforced (para 234). This engaged her in a complex argument about the scheme and wording of the Civil Code. Having identified this additional legal requirement, she held this was a case in which the submission itself (if established) was not a sufficiently strong connection to Utah and so the decision should nonetheless not be enforced (para 268). In contrast, Brown J held that there was no separate requirement to show such a connection to Utah (paras 135 and 141-42). Showing the submission was all that was required. The majority refused to resolve this interpretive dispute (para 88), holding only that on the facts of this case Barer’s submission “clearly establishes a substantial connection between the dispute and the Utah court” (para 88).
The judges disagreed about several other aspects of the case. Put briefly and at the risk of oversimplification, Brown J relied primarily on the notion that all parties and aspects of the dispute should have been before the Utah court. Barer was sufficiently connected with various aspects of the dispute, over which Utah clearly did have jurisdiction, that its jurisdiction over him was proper (see paras 99, 154 and 161-62). Neither Cote J nor Gascon J agreed with that approach. There are also disputes about what types of evidence are proper for establishing the requirements for recognition and enforcement and what law applies to various aspects of the analysis.
In a small tangent, the majority decision criticized the “presumption of similarity” doctrine for cases in which the content of foreign law is not properly proven and it offered a more modern explanation of why forum law is applied in such cases (para 76).
Recognition of Surnames in Greece – Where do we go from here? –
The recognition of surnames determined abroad by virtue of a judgment or an administrative act has never attracted the attention of academics in Greece. The frequency of appearance concerning reported judgments is also scarce. In practice however, applications are filed regularly, mostly related with non EU-Member States. Until recently, recognition was granted by courts of law, save some minor exceptions, where the public order clause was invoked to deny recognition. A ruling of the Thessaloniki Court of Appeal from 2017 brings however an unexpected problem to surface.
I. The legal status in Greece
Name and surname issues are regulated by a decree published in 1957, as amended. For a person to change her/his name, there are certain requirements and an administrative procedure to be followed. The applicant has to prove the existence of a reason, such as psychological problems due to cacophonous sound of the surname, its pronunciation difficulty or hilarious meaning, its bad reputation or connotation, the lack of any contact with the applicant’s father, whose last name she/he uses, etc. In case of acceptance, the competent Mayor issues an act, granting the right of the petitioner to carry the new surname. If the application is dismissed, the applicant may file a recourse before the General Secretary of the territorially competent Decentralized Administration unit. The Council of State, i.e. the highest administrative court in Greece, serves as the last resort for the applicant.
II. The treatment of foreign judgments / administrative acts
The above decree does not regulate the situation where a person of double nationality (one of which is of course Greek) requests the registration of a foreign judgment or administrative act, whereupon a change of surname has been determined. Being confronted with relevant petitions, the Greek administration sought the assistance of the Legal Council of State, i.e. an advisory body at the service of state authorities. By virtue of a legal opinion issued in 1991, the Legal Council stated that registration may not take place prior to court recognition of the foreign judgment, pursuant to standard procedures provided for by the Greek Code of Civil Procedure [= GCCP]. In this fashion, the ball was sent to the courts.
III. The practice of the courts
Until recently, Greek courts reacted in a rather formal and simplistic way: Reference to the applicable provisions of the GCCP, presentation of facts, brief scrutiny on the merits and the documents produced, and recognition was granted. There are two exceptions to the rule. The first one is a reported case from 1996 [Athens 1st Instance Court Nr. 4817/1996, published in: Hellenic Justice 1997, p. 452], where a court order by the Supreme Court of Queensland was denied recognition, because it was based on the applicant’s wish to give up his surname and acquire a new one, without any examination by the Australian court. The Greek court invoked the public policy clause, stating that the issue goes beyond private autonomy, and is differently regulated in Greece. The same outcome appeared 32 years later in the course of an application for the recognition of an act issued by the Civil Registry of Suchoj Log, Sverdlovsk Oblast: In a ruling from last year, the Thessaloniki 1st Instance Court refused recognition on public policy grounds, because the procedure followed in Russia contravened mandatory rules of Greek law on the change of surnames [Thessaloniki 1st Instance Court Nr. 8636/2018, unreported].
A different stance was however opted by the Piraeus Court of Appeal with respect to an act issued by the Mayor of Vienna: After quashing the first instance decision, which dismissed the application as legally unfounded, the appellate court stayed proceedings, requesting a legal opinion on the procedure followed for the change of surnames pursuant to Austrian law. Upon submission of the legal opinion, the court proceeded to a brief analysis, whose outcome was the recognition of the Austrian act. In particular, the court confirmed that the procedure followed was in accordance with Austrian law [Bundesgesetz vom 22. März 1988 über die Änderung von Familiennamen und Vornamen (Namensänderungsgesetz – NÄG)]. Hence, no public policy reservations were in place [Piraeus Court of Appeal Nr. 141/2017, unreported].
IV. The Game Changer
The complacency era though seems to be over: In a judgment of the Thessaloniki CoA issued end 2017, things are turning upside-down. The application for the recognition of a registration made by the Civil Registry of Predgorny, District of Stavropol, was denied recognition, this time not on public order grounds, but on lack of civil courts’ jurisdiction. The court stated that the recognition of a foreign administrative act may not be examined by a civil court, if the subject matter at stake (change of surname) is considered to be an administrative matter according to domestic law. Bearing in mind that the change of surname is a genuinely administrative procedure in Greece (see under I), civil courts have no jurisdiction to try such an application.
V. Repercussions and the way ahead
What would be the consequences of this ruling in regards to the overall landscape?
First of all, there could be a sheer confusion in practice: If the administration demands court recognition, and courts decline their jurisdiction, stagnation is at the gates. A ping pong game will start between them, and the ball will be the poor applicant, trapped in the middle. Needless to say, there is no other judicial path for recognition. The Code of Administrative Procedure does not contain any provisions on the matter.
Secondly, is it to be expected that the same stance will prevail with respect to judgments or administrative acts coming from EU Member States? A spillover effect is not to be excluded. Courts seem to be encapsulated in their national niche. It is remarkable that no reference is made to the case law of the CJEU, even in the case regarding the Austrian Mayor’s act.
Therefore, an intervention by the legislator is urgently needed, otherwise we’re heading for stormy weather.
News
The HCCH 2019 Judgments Convention: Cornerstones, Prospects, Outlook
Hart Studies in Private International Law officially released a book today titled: The HCCH 2019 Judgments Convention: Cornerstones, Prospects, Outlook. The book is edited by M Weller et al. The blurb reads as follows:
This book analyses, comments and further develops on the most important instrument of the Hague Conference on Private International Law (HCCH): the HCCH 2019 Judgments Convention. The HCCH Convention, the product of decades of work, will have a transformative effect on global judicial cooperation in civil matters. This book explores its ‘mechanics’, i.e. the legal cornerstones of the new Convention (Part I), its prospects in leading regions of the world (Part II), and offers an overview and comment on its outlook (Part III). Drawing on contributions from world-leading experts, this magisterial and ambitious work will become the reference work for law-makers, judges, lawyers and scholars in the field of private international law.
New Editors
We are happy to announce the following new members of the Editorial Board:
- Prof Marlene Wethmar-Lemmer (University of South Africa, South Africa)
- Prof Béligh Elbalti (University of Osaka, Japan)
- Prof David P Stewart (Georgetown University, USA)
- Prof Du Tao (East China University of Politics and Law, China)
- Prof Wenliang Zhang (Renmin University, China)
- Prof Samuel Fulli-Lemaire (University of Strasbourg, France)
- Prof Étienne Farnoux (University of Strasbourg, France)
9th Journal of Private International Law Conference: Registration is now open!
We are pleased to announce that registration is now open for the 9th Journal of Private International Law Conference. The conference will be held on 3 to 5 August 2023 at the Yong Pung How School of Law at the Singapore Management University. The keynote address will be delivered by The Honourable Justice Philip Jeyaretnam, President of the Singapore International Commercial Court.
The deadline for speakers to register is 30 May 2023. The deadline for other registrants is 15 July 2023.
Registration is complimentary for speakers, Journal of Private International Law editorial board members and SMU faculty, staff and students. Preferential rates apply for academics, government officials, SMU alumni and non-SMU students – register with your institutional e-mail to enjoy the preferential rate.
More information, including the draft programme and link to register, can be found here. We look forward to welcoming you to Singapore.