In Andrew Marcus Henderson v Novo Banco SA,(1) the European Court of Justice (ECJ) repeated and adopted its earlier decision in Alpha Bank Cyprus(2) that the EU Service Regulation (1393/2007) must be interpreted and applied to ensure a fair balance between the interests of the party that serves the documents and those of the addressee by reconciling the objectives of efficiency and speed of service of procedural documents with the need to ensure that the addressee's right to defence against the documents is adequately protected through the guarantee of their receipt.
Henderson arose from a dispute in the Portuguese courts relating to lease contracts for shop premises in Portugal concluded between a Portuguese bank, Novo Banco SA, as lessor and an Irish-resident individual called Andrew Henderson as lessee. Due to the lessee's failure to pay the rent, the lessor gave him notice to make the payments due, failing which the leases would be terminated. The leases were eventually terminated, but the lessee refused to surrender possession of the properties. The lessor applied to the local district court in Portugal for an interim measure seeking the return of the leased property. The application was served on Henderson by registered letter with acknowledgement of receipt addressed to him in Ireland. When the acknowledgement of receipt was not returned, the district court requested information from the Portuguese postal service, which replied that, according to the computerised registers of the postal operator in Ireland, the EU member state of destination, the letter in question had been delivered to the addressee on a specific date. Concluding that Henderson had not responded by appearing and contesting the measure sought in the application, the Portuguese court granted the lessor's application.
Henderson appealed the decision, but the appeal court dismissed the appeal and upheld the judgment delivered at first instance. Henderson requested a review of the decision, claiming that it was contrary to EU law and the requirements of the EU Service Regulation.
The appeal court referred the case to the ECJ for a ruling on whether:
- the service of the document instituting proceedings was valid despite the fact that the acknowledgment of receipt of the registered letter was not returned to the sender and it appears that the letter was received by a third party and not the addressee; and
- the EU Services Regulation precludes national legislation, in this case Portuguese legislation, which requires that any defence that a judicial document served on a defendant residing in another EU member state is invalid (because it is not accompanied by a translation into a language that the defendant understands or an official language of the member state where service is to be effected, or due to the omission of the standard form set out in Annex II to the EU Service Regulation) be invoked by the defendant within a specified period or at the beginning of the proceedings and before any defence on the merits.
The ECJ found as follows:
- Article 8(1) of the EU Service Regulation expressly provides that the addressee of the document to be served may refuse to accept it on the ground that the document in question is not drafted or accompanied by a translation in a language which he or she is deemed to understand.
- The right to refuse to accept the document to be served constitutes a right of the addressee of that document.
- The right to refuse to accept the service of a document stems from the need to protect the rights of defence of the addressee of that document, in accordance with the requirements of a fair hearing.(3) These rights should not undermine the objectives of the EU Service Regulation – namely, to improve the efficiency and speed of judicial procedures and ensure the proper administration of justice.(4)
- It must be ensured that not only has the addressee of a document received it, but also that he or she can understand effectively and completely the meaning and scope of the action brought against him or her in order to effectively prepare a defence and assert his or her rights in the EU member state of transmission.
- The right of refusal set out in Article 8(1) of the EU Service Regulation has effect once the addressee of the document is duly informed, in advance and in writing, of the existence of that right via the standard form set out in Annex II to the regulation.
In Henderson, the ECJ concluded that the non-return of the acknowledgment of receipt did not impair the postal transmission procedure, as that formality could have been replaced by a document which provides equivalent guarantees. The ECJ further concluded that it is for the court hearing the matter in the EU member state of transmission to satisfy itself that the addressee received the document in question in such a way as to ensure that his or her rights of defence have been respected.
As regards the fact that the registered letter containing the document to be served was received in the requested member state by a third party rather than the addressee, the ECJ noted that Article 14 of the regulation contained no express indication in that regard. While it can be deduced from Article 19(1)(b) of the regulation that the document to be served can be delivered not only to the addressee in person, but also, in his or her absence, to a person present at his or her place of residence, the ECJ once again stressed the need to ensure that all guarantees necessary for the effective protection of the addressee's rights of defence are respected. Thus, where appropriate, it is for the addressee to establish, by all admissible forms of evidence before the court hearing the matter in the member state of transmission, that he or she:
- could not have known that judicial proceedings were being brought against him or her in another EU member state;
- could not identify the subject matter and grounds of the claim; or
- had insufficient time to prepare a defence.
The ECJ's conclusions indicate its preference for a purposive approach that:
- looks at fundamental issues and principles, rather than an over-rigid focus on procedural deficiencies which can be validly redressed by taking simple steps; and
- respects the fundamental rights of the party that advances the service and the party to whom service is addressed.
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(3) See second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union and Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms.
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