clr/1984/1984_1_285.pdf

(1984)judgment. Counsel for the defendant ship did not oppose the application and lefi the matter to the Court. Held, that oncethejudgment hadto beenforced inthiscountry the conversion shouldtakeplace immediately before enforcement; that inthecircumstances of thepresentcases theappropriatedate 5 should be thedate when theplaintiffs judgment-creditors applied for the first time for the issue of writs of movables, without excluding the possibility inapropercase toconsider asthe appro­ priatedatethedate when theaffidavit to beannexed to Ilieappli­ cation for the issue of a writ of movable is sworn. ]0 Older Cases referred accordingly. to- Papavas.silioa and T\am>aiides ν t«.st Mediterranean Line and

(1974)I C.L.R.

1. Anoihei Miltangos v. George fiaitk (Textiles) at p. Lid [t975] 3 All E.R. 80I ]j 809: in le Railways of the riauuia and Re^la Wuielwuses Ltd. [I960] 2 All E.R.
2. .lugoslavenska Occanska Plovidhu i. Castle investment Co. Inc. [197.3] 3 All E.R. 498; 2r Barclays Bank v. Levin Bros [I976] 3 All E.R. 900; Jean Kraul A.G. Fideial v. Albany Fabrics [I977] 2 All E.R. 1I6; Commerce The Dcsphui ν Tradax Expoit [1977] 2 All E.R. 4 1 ; R. [1977] 3 All E.R. 874: The folia> [1978] 2 All E.R. 764 and on appeal [1979] I AM E.R.
3. 25 Oeoige Veflmgs Reden A/S ι. President of India [1979] I All E.R. 380: In re Dynamics Corporation of America [1976] 2 All E.R. 669; //; re Lines Bros. Ltd [1982] 2 All E.R. 183; Trade Development C.L.R. Bank i. The Ship "Ariadm 30 PA" [1981] I 653, Lamaignere v. Selene Shipping Agencies Limited

(1982)I C.L.R. 227 at p. 235. Application. 35 Application by applicants judgment-creditors for a direction regarding the date of the conversion into Cyprus pounds of the 286 1 CX.R. 5 Kouloumbis and Others v. Ship "Maria" Drachmas, inwhich thejudgment in their favour was expressed. P. Pavlou, for applicants judgment-creditors. M. Eliades with A. Skordis, for the defendant ship. E. Montanios with P. Panayi {Miss), for the intervener Williams & Giyn's Bank. L. Papaphiiippou, for the intervener Mosvold. Cur. adv. vuft. SAVVIDES J. lead the following judgment. Applicants are judgment-creditors of the defendant ship. The judgments in 10 their favour are expressed in Greek Drachmas or their equivalentinCyprus PoundsandtheircostsinCyprusPounds. The defendant ship was sold by writs of movables issued by the appellants-plaintiffs and the proceeds of the sale were deposited by the Marshal in Couit following directions to that 15 effect. The plaintiffs on the 27th October, 1983 applied that the judgments intheir favour bepaid out of thefund in Court which fund resulted from the execution of the writs issued by them. When such application came before the Court on the 8th No20 vember, 1983,a question atoseasto thedateof conversion of the Diachmas into Cyprus Pounds. Counsel appearing for the two interveners in these actions, alleged that the conversion should be effected on the date of payment, whereas counsel for plaintiffs contended that the conversion should be effected on 25 the date of judgment. Counsel for the defendant ship did not oppose the application and left the matter to the Court. Directionsweregivenforwrittenaddressestobefiled insupport of the contention of each party. Counsel for applicants in advancing his argument submitted that once the judgments 30 were given in Drachmas or their equivalent in Cyprus Pounds and no particular time was fixed for the conversion, the only reasonable infeience which can be drawn from such judgments is that the conversion should take place at the date on which such judgments were given, in support of his argument he 35 sought to rely on the case of Papavassiliou & Tsangarides and others v. East Mediterranean Line and another

(1974)1 C.L.R. 183,whereA.Loizou,J.,expressed thsopinionthattheclaim and judgment must be in terms of Cyprus Pounds. He invited the Court to distinguish the present case from Miliangos v.George 287 Savvides ,1. Koutoumbis and Others %. Ship "Maria"

(1984)Frank(Textiles) Ltd. [1975]3AHE.R. 801,as in that cax, there wi.re directions in the judgment as to the date when the conversion was to take place, whereas in the present case, no such directions were made and in consequence the date of the judgment is the proper day for conversion. 5 Counsel for intervener Williams and Glyn's submitted that the words "or their equivalent in Cyprus Pounds" was only inserted in the judgment for the purpose of aid in execution, should such aid be required, and contended that the conversion should take place on the date of payment following in this res- l*) pect Mitiangos and all other Engliih cases which followed that case since 1975and also certain decisions of this Court in which the principles laid down in Miliangos case were adopted. Counsel for intervener Mosvold also submitted that tho words "or theii equivalent in Cyprus Pounds" arc added in the judg- 15 mints inorder to aid execution wherethereisnofund in Court at alt or where the fund in Court is in local currency. Relying on the Miliangos case he submitted that the date of conversion of a judgment debt is the date of payment of the judgment or, alternatively, the date of enforcement that is the date of the 20 affidavit leading to execution. In England the question as to whether a judgment could be given in foreign currency appeared as finally settled by the decision in Re UnitedRailways of theHavana andRegla Warehouses Ltd. [1960] 2 All E.R. 332, in which the House of Lords 25 affirmed theproposition inrule 177atpage914ofthe7th Edition of DICEY'S CONFLICT OF LAWS, that an English Court cannot givejudgment for the payment of an amount in foreign currency and that a debt expressed in foreign currency must be converted into sterling. As Lord Denning said in that case at 30 page 356; " if there is one thing clear in our law. is that the claim must be made in sterling and the judgment given in sterling." It was also held in that case that: "As to the rate of exchange for conversion of the foreign currency in which the unfulfilled obligations of the railway 35 company under the lease(which created debts duein foreign currency) were payable was that prevailing as and when each sum fell due and became unpaid." 288 1 C.I..R. Koutotimbis and Others r. Ship "Maria" Savtides J. Viscount Simonds at page 343 had this to add: 5 "In this country, the rule is settled so as to bind all courts that, wherethe claim is in damages for breach of contract or for a tortious act, the date of conversion is the date of that breach or that act." The origin of the rule as understood by Lord Denning "lies inthefact that, for longyears, sterlingwasregarded asa stable currency 'of whose true-fixed and resting quality there is no fellow in thefirmament'. Sterlingistheconstant unit of value 10 bywhich, in the eyeof the law, everything else is measured. So long as sterling isregarded as stablewhilst other currencies goupanddown,itwouldseemthatjusticeisbestdonebytaking the rate of exchange at the date of the breach." The situation, however, as regards currency stability since 15 1960has changed substantially. As Lord Wilberforce observed in the caseof Miliangos v. George Frank (Textiles) Ltd. (supra) at p. 809:- 20 25 "Instead ofthemainworldcurrenciesbeingfixedand fairly stable in value, subject to the risk of periodic re-or devaluations, many of them are now 'floating', i.e. they have no fixed exchange value even from day to day. This is true of sterling. This means that, instead of a situation. in which changes of relative value occurred between the· 'breach-date' and the date of judgment or payment being theexception, so that a rulewhich did.not providefor this case could be generally fair, this situation isnow the rule. So thesearch for a formula to dealwithit becomesurgent in the interest of justice". This state of facts became recognised in.those commercial 30 circleswhichwerecloselyconcernedwithinternationalcontracts, and this appears particularly in thefield,of arbitration where in 1965, two of the most experienced.Artibrators in the City of London madetheir awardsexpressed in terms of USdollars. The validity of such awards came to be tested in the Courts 35 in thecaseofJugoslavenska Oceatiska Plovidba v. Castle Investment Co.Inc. [1973] 3 All E.R. 498. But the radical,change in the old practice was brought about by Miliangos v. George Frank (Textiles) Ltd.(supra)whichdidnot follow and departed 289 Savvides J. Kouloumbis and Others v. Ship "Maria"

(1984)from the previous decision of the House of Lords in the Havana Railways" c a ^ and approved the Jugoslavenska case. It was held in the Miliangoscase (Lord Simon of Glaisdalc dissenting): "Where a plaintiff brought an action for a sum of money due under a contract he was entitled to claim and obtain 5 judgment for the amount of the debt expressed in the currency of a foreign countiy if the proper law of the contract was the law of that countiy and the money of account and payment was that of the same countiy. If it was necessary to enforce the judgment that amount was 10 to bo converted into sterling at the date when leave was given to enforce thejudgment. Itfollowed that the plaintiff was entitled to aH order that the defendants should pay him the sum due in Swiss francs or the sterling equivalent at the time when leave was given to enforce thejudgment". 15 The Miliangos case has been followed ever since by the English Courts and applied in the cases of Barclays Bank v. Levin Bros. [1976] 3 All E.R. 900, Jean Kraut A.G. v. AlbanyFabrics [1977] 2 All E.R. 116, Federal Commerce v. Tradax Export [197η 2 All E.R. 41, The DespinaR [1977] 3 All E.R. 874 and 20 on appeal [1979] 1 All E.R. 421, The Folios [1978] 2 All E.R. 764 and on appeal [1979] 1 All E.R. 421 and GeorgeVeflings Rederi A/S v. President oj India [1979] 1 All E.R. 380 (in which Lord Denning, M.R., described the effect of Miliangos case on the law on this subject as having been revolutionised). 25 As to the date of conversion Lord Wilberforce had this to say in Miliangos case at pp. 813-814:"As regards the conversion date to be inserted in the claim or in thejudgment of theCourt,thechoice,as pointed out in the Havana Railways case, is betwe:n (i) the date of 30 action brought, (ii) the date of judgment (iti) the date of payment. Each has its advantages, and it is to be noticed that the Court of Appeal in Schorsch Meier and in the present case chose the date of payment, meaning, asI understand it, the date when the Court authorises enforce- 35• ment of the judgment in terms of sterling. The date of payment is taken in the convention annexed to the Carriage of Goods by Road Act 1965 (Schedule, art 27

(2)). This date gets nearest to securing to the creditor exactly what 290 1 C.L.R. 5 10 15 20 Koutoumbis and Others v. Ship "Maria" Savvides J. he bargained for. The date of action brought, though favoured by Lord Reid and Lord Radcliffe in the Havana Railwayscase, t-cemsto mctoplacethecreditortoo severely at the mercy of the debtor's obstructive defences (of this case) or the law's delay. It may have been based on an understanding of thejudgment of Holmes J in theDeutsche Bank now seen to be probably mistaken: see Mann on The Legal Aspect of Money and cases cited. The date of judgment is shown to be a workable date in practice b> its inclusion in the Carriage by Air Act 1961, which gave effect to the Hague Convention 1956 varying, on this verypoint, theWarsaw Convention 1929, but, in some cases, particularly where there is an appeal, may again impose on the creditoi a considerable currency risk. So Γ would favour the payment date, in the sense I have mentioned. In the case of a company in liquidation, the corresponding date for conversion would bs the date when the creditor's claim in terms of sterling is admitted by the liquidator. In the case of arbitration, there may be a minor discrepancy, if the practice which apparently adopted (see the Jugoslavenskacase) remains as it is, but Ican sec no reason why, if desired, that practice should not be adjusted so as to enable conversion to be made as at the date when leave to enforce in sterling is given". 25 and Lord Cross at p. 838: 30 35 "I would go no fuither on this occasion than to say that theCourthaspower togivejudgment for payment of money in a foreign currency and that one case in which such a judgment should be given is where the action is brought to enforce a foreign money obligation. In that case if the defendant fails to deliver the foreign currency the date for its conversion into sterling should be the date when the plaintiff is given leave to levy execution for a sum expiesscd in sterling. I say nothing oneway or theother as tothedatefor conversion intosterling of sums ascertained in foreign currency for damages for breach of contract or tort". Also Lord Edmund-Davies had this to say at p. 841 :- 40 "But for thatfact, themostjust ratewould be that prevailing when the award was being enforced, for the plaintiff had 291 Savvidcs J. Kouloumbis and Others v. Ship "Maria!'

(1984)been kept out of his money until then, and I see no reason why this,latter rate should not be the one adopted when judgments expressed in a foreign currency are being enforced". Lord Fiaser expressed the following opinion at p. 841,842:- 5 "The question is what the convulsion date should be. Theoretically, it should, in myopinion, be the date of actual payment of the debt. That would give exactly the cost in sterling of buying the foreign currency. But theoiy must yield to practical necessity to this extent that, if the It) judgment has to be unfoiced in this country, it must be converted before enfoicemcnt. Accordingly I agree with my noble and learned friend that conversion should be at the date when the Court authorises enforcement of the judgment in sterling. 1would add that 1 am not entirely satisfied that.difficulty, and even injustice, may not occur if the rule continues to be that damages are converted at the breach-date while foreign debts arc converted at the date of payment, hi the instant case, if the appellant's counterclaim had' been 20 successfully maintained, this question might have had to be-decided. As things are, it does not arise, and I would agree that it is not necessary or appropriate to consider cases other than foreign debts". As to the power of the Court to depart from an'established. 25 rule and the reason for having so to do Lord Wirbcrforcc said at p. 814: "I would say that, difficult as this'whole matter undoubtedly is, if once a clear conclusion is reached as to what the law ought now to be, declaration of it by this House 30 is appropriate. The law on this topic is judge made; it has been built up over the years from case to case. It is entirely within this House's duty in the course of administering justice, to give the law a new direction in a'particular case where, on principle and in icason, it appears 35 tight to do so. Icannot accept the suggestion that because a tule is long established only legislation can change it— thai may be so wh/n the rule is so deeply entrenched that 292- 15 1 C.L.R. Kouloumbis and Others t. Ship "Maria" Savrides J. it has infected the whole legal system, or the choice of a new rule involves more far-reaching research than Courts can carry out". 5 in some of the cases which followed Miliangos case the judgments wcic expressed in foreign cunency "or the equivalent in sterling at thedate of payment or enforcement" and in others in foreign currency "or for the sterling equivalent at the time when leave given to enforce judgment" or "at ths rate of ex­ change ruling at the date of payment". 10 The dicta of Lord Wilberforce and Lord Cross in Miliangos case that the date of conversion in the case of a company in liquidation would be thedate when the creditor's claim in terms of sterling is admitted by the liquidator have not been followed in Re Dynamics Corporationof America [1976] 2 All E.R. 669 15 and Re Lines Bros Ltd. [1982] 2 All E.R. 183 in which it was held that the conversion date should be the date of the com­ mencement of the winding-up, since that date was the date which existing liabilities wsre to be valued and the date beyond which no further liabilities could accrue. ;20 Prior to 1974, our Courts following the rule laid down in the Havana Railways case were reluctant to give judgment; in foreign currency. As a result, judgments were given in Cyprus currency. Thus, in Papavassiliou ά Tsangarides & Others (supra), A. Loizou, J., at p. 188 had this to say:- 25 "It seems to me that the principle of law applicable to a case wheT2 there is a claim for damages for breach of con­ tract or for tort in terms of foreign currency (the claim) must be converted intoCyprus Poundsat the rate prevailing at the date of breach or toitious act. Furthermore,when a plaintiff sues in the Courts of Cyprus, the claim and judgment must be in terms of Cypms Pounds". 30 After, however, such iule ceased to be followed as a result of the decision in Miliangos case our Courts adopted the new rule that judgments may be given in foreign currency. Thus, 35 in Trade DevelopmentBank v. TheShip "ARIADN/ PA"

(1981)I C.L.R. 653 it was held, following Miliangos caae and The DespinaR. that plaintiffs were entitled to obtain judgment pay­ able in U.S. dollars. 293 Sanides J. Kouloumbis and Others κ Ship "Maria"

(1984)Also, in Lamaignere v. Selene Shipping Agencies Limited

(1982)I C.L.R. 227, Pikis J. had this to say at page 235: "The development of English law along its present lines was dictatednot by any problems peculiar to English society but by the need to facilitate inteinational trade and keep 5 the avenues of commerce.open, considerations relevant to the policy of the law in eveiy countiy. The solution is ajust oneand intheabsence of any legislativs restrictions. it should be followed in Cyprus with equal benefit". Before concluding on the legal aspect of the case I wish to 10 add that there is nothingcither in the Court of Justice Law I960 or in our Admiralty Rules or.the R.S.C.in England prohibiting a judgment to be given in foreign currency. Undei the Rules of the Supreme Couit of Cyprus in its Admi­ ralty jurisdiction and the Civil Proctduie rules no leave is \5 required from the Coutt to issue a writ of movables for enforce­ ment of the judgment when no period for stay is mentioned in the judgment or the period fixed for payment has expired, A writ of execution is issued by the Registrar of the Court upon the filing of a formal application foi the issue of same supported 20 by an affidavit verifying the amount due and by an office copy of thejudgment sought to be executed. No discretion is given to the Registrar to refuse such application and no -leave is required from him for the issue of a writ of movables for exe­ cution of a judgment for the payment of a sum of money and 25 costs. Rule 168 of the Admiralty Rules provides as follows: "168. Where any party shall desire to obtain execution of a judgment or order by sale of movable property or by attachment of movable property, he shall make a written application for the same to the Registrar, and shall at the same time produce to the Registrar an office copy of the judgment or order sought to be executed. The application shall be signed by the judgment creditor or his advocate and shall be filed". Its corresponding rule under the Civil Procedure Rules(Order 40, IUIC 7) provides: ; *7. Eveiy person to whom any sum or money or any 294 30 35 1 C.I..R. Kouloumhis and Others Λ. Ship "Maria" Savvides .(. costs shall be payable under a judgment or order shall. so soon as the money or costs shall be payable, be entitled lo apply for the issue of writs to enforce payment thereof. subject nevertheless as follows:5 10 (

1. a)If thejudgment or 01der is for payment within a period therein mentioned, no writ shall be issued until after the expiration of such period; (
2. b)The Court or Judge may, at or after the time of giving judgment or making an order, stay execution until such time as they or he shall think fit". Having dealt with the principles as emanating fiom the above authorities 1am now coming to consider, in the circumstances of the present cases which is the appropriate date for conversion of the amounts awarded in drachmas into their equivalent in 15 Cypius pounds. I am inclined to the view that once the judg­ ment had to be enforced in this countiy the conversion should take place immediately before enforcement, in the circum­ stances of the present cases I find that the appropriate date should be the datewhen theplaintiffs judgment-creditors applied 20 for the first time for the is>ue of writs of movables, without excluding the possibility m a proper case to consider as the appropriate date the date when theaffidavit tobeannexed to the application for the issue of a writ of movable is sworn. Having examined the records of the cases I find that the dates 25 when the plaintiffs filed their applications for the issue of writs of movables in the first instance ar^ as follows: In actions Nos. 73-85 such date was the 23rd September, 1982 and in actions Nos. 124-133/83 the 28th September, 1983. 30 35 In the result I direct that the date for conversion of drachmas into Cyprus Pounds in actions Nos. 73-85 should be the 23rd September, 1982, and in actions Nos. 124-133/82 the 28th September, 1983. In the circumstances 1 make no order for costs in this appli­ cation. Orderaccordingly. 295