ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE FLAUX
Strand, London, WC2A 2LL
B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE TREACY
THE RIGHT HONOURABLE LORD JUSTICE MCCOMBE
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Mr Khawar Qureshi QC (instructed by Wragge Lawrence Graham & Co) for the Respondent
Hearing dates: 2nd December 2015
Crown Copyright ©
Lord Justice Longmore:
i) that there had been valid service pursuant to the provisions for alternative service in CPR 6.15;
ii) that the default judgment was not, therefore, an irregular judgment;
iii) that there was no arguable defence that the option had not been validly exercised; and
iv) that there was an arguable defence that management fees had accrued.
He therefore refused to set aside the default judgment but reduced its amount to US$ 9,616,418.92.
"Service of the claim form by an alternative method or at an alternative place
(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place.
(2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.
(3) An application for an order under this rule –
(a) must be supported by evidence; and (b) may be made without notice.
(4) An order under this rule must specify –
(a) the method or place of service; (b) the date on which the claim form is deemed served; and (c) the period for – (i) filing an acknowledgement of service; (ii) filing an admission; or (iii) filing a defence.
Power of the court to dispense with service of the claim form
(1) The court may dispense with service of a claim form in exceptional circumstances.
Application for permission to serve the claim form out of the jurisdiction
(5) Where the court gives permission to serve a claim form out of the jurisdiction –
(b) it may –
(i) give directions about the method of service; and
(ii) give permission for other documents in the proceedings to be served out of the jurisdiction.
Methods of service – general provisions
(1) This rule contains general provisions about the method of service of a claim form or other document on a party out of the jurisdiction.
Where service is to be effected on a party out of the United Kingdom
(3) Where a party wishes to serve a claim form or other document on a party out of the United Kingdom; it may be served –
(a) by any method provided for by –
(i) rule 6.41 (service in accordance with the Service Regulation);
(ii) rule 6.42 (service through foreign governments, judicial authorities and British Consular authorities); or
(iii) rule 6.44 (service of claim form or other document on a State);
(b) by any method permitted by a Civil Procedure Convention or Treaty; or
(c) by any other method permitted by the law of the country in which it is to be served.
(4) Nothing in paragraph (3) or in any court order authorises or requires any person to do anything which is contrary to the law of the country where the claim form or other document is to be served.
Form for defence etc. must be served with particulars of claim
7.8(1) When particulars of claim are served on a defendant whether they are contained in the claim form, served with it, or served subsequently, they must be accompanied by –
(a) a form for defending the claim;
(b) a form for admitting the claim; and
(c) a form for acknowledging service.
Default Judgment … Conditions to be satisfied
The claimant may obtain judgment in default of an acknowledgement of service only if –
(a) the defendant has not filed an acknowledgement of service or a defence to the claim (or any part of the claim); and
(b) the relevant time for doing so has expired.
Cases where the court must set aside judgment entered under part 12
The court must set aside a judgment entered under Part 12 if judgment was wrongly entered because –
(a) in the case of a judgment in default of an acknowledgement of service, any of the conditions in rule 12.3(1) and 12.3(3) was not satisfied;
(b) in the case of a judgment in default of a defence, any of the conditions in rule 12.3(2) and 12.3(3) was not satisfied; or
(c) the whole of the claim was satisfied before judgment was entered.
Cases where the court may set aside or vary judgment entered under Part 12
13.3(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why –
(i) the judgment should be set aside or varied; or
(ii) the defendant should be allowed to defend the claim.
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."
i) that HHJ Mackie QC was wrong to have entered judgment in default of acknowledgement of service at the same time as declaring that service was properly effected pursuant to (inter alia) CPR 6.15, becausea) CPR 6.15(4)(c) required the court to specify, when making the order, a period within which an acknowledgement of service has to be filed;b) it was only fair that a defendant who is held retrospectively to have been validly served by a method of alternative service should, in any event, be given a period of time within which to acknowledge service; the court should therefore never retroactively authorise alternative service and, at the same time, enter a default judgment;c) no response pack was served with the service of the claim form as requested by CPR 7.8.Flaux J should therefore have set aside Judge Mackie's order. Abela v Baadarani had not concerned a default judgment and was thus distinguishable.
ii) that, even if all that was wrong, there was an arguable defence that the option had never been validly exercised and the default judgment should be set aside on that ground also.
Abela v Baadarani
"The purpose of service of proceedings, quite obviously, is to bring proceedings to the notice of a defendant. It is not about playing technical games. There is no doubt on the evidence that the defendant is fully aware of the proceedings which are sought to be brought against him, of the nature of the claims made against him and of the seriousness of the allegations."
It was no doubt the Supreme Court's approval of these observations of Lewison J that encouraged Flaux J to decline to set aside the default judgment in this case.
Non-compliance with CPR 6.15(4)(c)
Simultaneous entry of default judgment
Absence of a response pack
Arguable defence that option not validly exercised?
Lord Justice Treacy:
Lord Justice McCombe:
"…a validation order made under Part 6.15(2) must have retroactive effect not just for the purposes of identifying the date on which the claim form was deemed served but for all subsequent events… ".
However, that case did not consider the effect of CPR 6.15(4) or the consequences of making an order under sub-rule (2) for the purposes of the requirements for acknowledgement of service and whether it is permissible for judgment to be entered in default of such acknowledgement, even if a defendant has never been in default at all.