England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
SHEFFIELD DISTRICT REGISTRY
(Mrs Justice Hallett)

		Royal Courts of Justice Strand London WC2 Tuesday 27th February, 2001

1. LORD JUSTICE ALDOUS: The claimant, Camden Wines Ltd ("Camden"), traded as a wine merchant. They approached two companies, Matthew Clark Wholesale Bond Ltd and Matthew Clark Wholesale Ltd, wholesalers and importers of beers, wines and spirits, for credit. It appears from the papers that they agreed that they would provide credit, with Mr Nawaz giving a personal guarantee. According to the Matthew Clark companies, the debt built up to over £400,000.
2. On 26th August 1998 Matthew Clark issued a writ against Camden and Mr Nawaz for judgment for over £490,000-odd. The proceedings were not defended and judgment was obtained against both defendants by the end of October 1998. Judgment was also obtained in America against Mr Nawaz. Camden Wines Ltd then went into liquidation.
3. The liquidator on investigation found that Camden had lent monies to the defendant company, Medlink International Inc, which was evidenced by promissory notes held in the files. The liquidator took steps to recover the money.
4. On 26th July 2000 proceedings were started claiming over £300,000 and over US$690,000.
5. Medlink was a company registered in Nevada in the United States of America, but as required by the Companies Act it had registered details in the Companies registry which appear at page 182 of the bundle. They show that Mr Nawaz was a person authorised to represent the company for service, and it also gave the address for which service could be effected as Ivy Cottage in Datchet, Berkshire.
6. The proceedings seeking to recover the money were served on that address by Camden. It is contended, probably correctly, that Camden were aware that Ivy Cottage had been sold (I think by Mr Nawaz) and no business was being carried on from the premises. With that knowledge they also faxed copies of the proceedings to Medlink in the United States.
7. On 15th August an acknowledgement of service was received which stated that the proceedings would be defended and the jurisdiction would be contested. No defence was served, nor was there an application contesting the jurisdiction. Camden took steps to enter judgment in default which they obtained for a sum exceeding £900,000.
8. Subsequently, Medlink, the defendants, applied to set aside the judgment, strike out the claim and set aside a freezing order that had been made. Medlink's case was that the service was irregular, the money claimed had been repaid and the freezing order was made because of a failure of disclosure, and of course upon a wrong basis because the money had been repaid.
9. Those applications came before Hallett J. In her judgment, delivered on 4th October, she said this as to the assertion that service had not been proper:

"In any event, I am satisfied that the Claimants quite properly relied upon the documents that they received from Companies House indicating the proper address for the registered branch office was Ivy Cottage. They indicated to the court that there was a possibility that the cottage had been sold, but, as Mr Walford submitted, that does not mean that Ivy Cottage was no longer the registered branch office. I am satisfied therefore, as I say, that the service was properly done. In any event, the Defendants plainly had notice of the claim form and the Particulars of Claim by the fax dated 2nd August. Therefore, I reject Mr Nusrat's submissions that there was no UK branch office and the Claimant company required permission of the court to serve out of the jurisdiction and a longer period for service was required. The judgment was, therefore, regular."

10. Mr Nusrat has appeared before me today and has renewed those submissions. He drew to my attention passages from the Civil Procedure Rules relating to service out of the jurisdiction. Of course he is right, that if leave was needed then the service that was carried out by way of fax upon the defendants in the United States was not sufficient.
11. His submission in reply to the reasons of the judge was that there was no authorised place for service. The reason he put forward was the same as that put forward before the judge, namely that the claimants knew that Ivy Cottage was no longer the registered branch office. That submission must be rejected for the same reasons as the judge rejected it. The whole purpose of having details of a person authorised to accept service and a place for service on the register at Companies House is to enable service to be effected. In the present case it is clear from Rule 6.2 of the Civil Procedure Rules that service upon such an address is good service. In those circumstances his submission does not stand any chance of success in this court as the details remained on the form I have outlined.
12. I turn next to the merits of the case, which seen to me to be all important. The case advanced in the affidavits before the judge, and put forward by Mr Nusrat, is that the money had been repaid. In fact it was not owing. The judge said this:

"Should the judgment be set aside in any event, in the exercise of my discretion, considering the prospects that the Defendant company might have of successfully defending the claim? It is a rather curious position when the sole director of the Claimant company, employed by the Defendant company in the same year, if not at the same time, purports to acknowledge receipt of a substantial sum of money. There is no record of any such payment in the Claimant company files.

Mr Nusrat (on behalf of the Defendants) relies, as I have said, entirely upon the so-called Certificate of Discharge, and nothing has been put before me of any substance whatsoever to seek to contradict the movements of the money to the people and the accounts as set out in the affidavits of Mr Clarke.

I am satisfied, therefore, that there is nothing before me that would indicate the Defendant company has any reasonable prospect of defending this claim, and, therefore, the judgment will stand. I reject the Defendant company's application to set aside the judgment."

13. I have also looked at the documents in this case, and there is ample evidence upon which the judge could have come to the conclusion that there was no reasonable prospect of defending the claim.
14. Before me I have an application to adduce further evidence. The two letters that could possibly have a bearing on this matter are dated 22nd March 2000 and 2nd July 1998. Having read them, they do not appear to me to add anything to the evidence that was before Hallett J. In my view her judgment cannot be faulted and therefore there is no chance of maintaining a successful appeal on this point.
15. Next it is said that the freezing order that was made should never have been made and should be discharged. In my view if the if the applicants failed, as they have done, to strike out the claim and successfully challenge the order made, then the application to discharge the freezing order must in principle fail. Mr Nusrat's submission was not based upon the merits, but he raised technical arguments that his clients had not had sufficient time to the deal with the matter and the application did not satisfy the time limits laid down in the rules.
16. Such submissions would not stand a real prospect of success in this court. The money is owed, a valid judgment has been given for the money and therefore it was appropriate for the judge to continue the freezing order on the merits.
17. In my view, the matters raised before me in the full skeleton argument provided by Mr Nusrat do not provide any grounds upon which an appeal could succeed. In those circumstances, the application must fail. I have not dealt with all the submissions that he made as to what was the proper law of the contract. Those were not matters dealt with by the judge. In this case there can be no doubt; the loans were made in this country and the law inevitably is English law. Therefore the detailed and learned submissions do not get off the ground. This an application which has no merit and therefore is refused.
18. I should have mentioned, the application to introduce by way of fresh evidence the complaint of 27th September 2000, in relation to the United States' bankruptcy proceedings which are before the District of Colorado. Interesting as the complaint may be, I cannot see it has any bearing whatsoever upon the matters that are before this court. I therefore would refuse the application to adduce the fresh evidence upon the basis that the evidence could not have affected the outcome of the application.
19. The applications are refused.
ORDER: Applications for permission to appeal and for permission to rely on fresh evidence refused. (Order not part of approved judgment)
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