This is an extract of our Desert Sun V. Hill document, which we sell as part of our Conflict of Laws BCL Notes collection written by the top tier of Oxford students.
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DESERT SUN V. HILL FACTS The defendant and others formed a partnership to acquire and develop a piece of real estate in Arizona. The plaintiff made an advance to the partnership, secured by a promissory note, for that purpose. The partnership defaulted and became liable for the deficiency amount, which was the sum due less the value of the land. The plaintiff obtained judgments in Arizona against the partnership and certain of the partners personally, including the defendant, as guarantors, for the amount due under the promissory note. US attorneys acting for the partnership accepted service of the proceedings on behalf of the defendant as well as the partnership and the other guarantors. The defendant claimed that he did not authorise them to do this. The defendant's application to the Arizona Court to set aside the judgment on the ground that he had not authorised the US attorney to accept service failed and an appeal was dismissed. The plaintiff then applied to the UK court to enforce the judgment against the defendant, who was resident in the UK. The defendant claimed that he had authorised the US attorneys to accept service only on behalf of the partnership, not against him personally as guarantor. Since he had not voluntarily submitted to the proceedings of the foreign court, the English court had no jurisdiction to enforce the judgment. The plaintiffs relied on issue estoppel, seeking summary judgment to enforce the Arizona court's ruling which barred the defendant from raising the same issue in English courts. The question was whether the Arizona Court's finding that service on the US attorneys was sufficient to bind the defendant is binding on UK Courts. In particular, the question is whether a preliminary finding on a procedural issue can satisfy the requirements for creating issue estoppel. HOLDING Issue Estoppel - General In the international context, the principle is based on recognition of the validity of a foreign judgment in respect of the same claim or cause of action as between the same parties. The principle is that an issue of fact or law which necessarily was concluded in favour of one party in the foreign proceedings cannot be re-opened in further proceedings between the same parties here.
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