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Considering Domicile: Stait v Cosmos Insurance Limited Cyprus

Introduction

On 1 November 2022, the Court of Appeal handed down judgment in the decision in Stait v Cosmos Insurance Limited Cyprus [2022] EWCA Civ 1429. This appeal is of historic interest only, as it concerns rights which the Claimant only had while the United Kingdom was a member of the European Union. It does, however, illustrate in relation to a fairly simple set of facts the principles to be applied when considering the issue of domicile.

Facts

The facts of the case were reasonably simple. The Claimant had suffered serious injuries in a cycling accident caused by collision with a car in the Republic of Cyprus. The Claimant was an RAF officer stationed with his family in the Sovereign Base Area at Akrotiri (a British Overseas Territory under the sovereignty of the United Kingdom, although not itself a part of the United Kingdom). He did, however, retain ownership of a house in England and maintained bank accounts and investments in the United Kingdom, as well as paying United Kingdom tax and National Insurance. Whether or not the Claimant could bring his claim in the court of England and Wales therefore depended on whether he could be said to be domiciled in England and Wales.

Background

On 9 December 2020, the Defendant (the Cyprus-domiciled insurer of the driver involved in the collision) issued an application for a declaration under CPR Part 11 that the courts of England and Wales had no jurisdiction to try the claim. On first hearing, it was held by DJ Griffith that this was correct – he held that the Claimant was not domiciled in England and Wales at the material time.

On appeal to the Court of Appeal, the key question was the correct interpretation of Articles 11.1, 13.2 and 62 of the Recast Regulation. Taken together, these provide that an insurer domiciled in a Member State may be sued in the courts of the Member State in which he is domiciled, in another Member State in the case of certain actions in the courts of the place where the claimant is domiciled, or in the courts of a Member State in which proceedings are being brought against a leading co-insurer.

The test of domicile is to be determined by the internal law of the court seized of the matter. In the United Kingdom, the definition of domicile for the purposes of the Recast Regulation is set out in paragraph 9 of Schedule 1 to the Civil Jurisdiction and Judgments Order 2001, which provides that an individual is domiciled in the United Kingdom if and only if he is resident in the United Kingdom and the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom. The issue to be determined on appeal was whether the Claimant satisfied this test.

Appeal

In the appeal, Lady Justice Whipple considered a number of authorities on the meaning of residence, beginning with the decision in Levene v Commissioners of Inland Revenue [1928] AC 217. In this decision, the definition of residence was considered to be a matter of ordinary English, meaning the place where a person has one’s settled or usual abode. In subsequent decisions, this has been held to require that a person’s stay in a place has a considerable degree of permanence, although it need not be their only residence (Fox v Stirk [1970] 2 QB 463) and sufficient continuity to be described as ‘settled’ (R v Barnet LBC ex p Shah [1983] 2 AC 309). Conversely, becoming a non-resident of the United Kingdom requires a person to create a distinct break in the pattern of their life in the United Kingdom, which demands a multifactorial inquiry into their social and family ties (R (Davies and another) v Revenue and Customs Commissioners [2011] UKSC 47.

Lady Justice Whipple held first that the Claimant was not entitled to special treatment by virtue of being a member of the armed forces – there was no legislative carve-out in either domestic law or in the Recast Regulation in respect of servicemen and women. Whether or not he was entitled to sue in the United Kingdom was therefore dependent on whether he was resident in the United Kingdom.

It was held that the Claimant was not resident in the United Kingdom for the purposes of the claim. The Claimant had been working full time in the Sovereign Base Area at the relevant period and had been doing so for four years, during which he rarely visited the United Kingdom. His immediate family lived with him in the Sovereign Base Area – it was held that ‘their pattern of life had moved there completely’. There were factors tying him to the United Kingdom (including his intention to return to the United Kingdom, his financial affairs, and his lack of community ties in Cyprus) but these did not outweigh the clear indications that the Claimant’s life was now settled in the Sovereign Base Area. It was held that he had changed the pattern of his life such as to create a distinct break with the United Kingdom and as such he was solely resident (and therefore domiciled) in the Sovereign Base Area.

The judgment can be found here.

Article by Annie Mackley



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