England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
MR JUSTICE EADY

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 28th March 2001

MR JUSTICE BLACKBURNE:

Introduction

1. This is an appeal, brought with leave, against an order of Eady J made on 28 July 2000 dismissing an appeal by the second and fifth defendants from the decision of Master Leslie made on 11 May 2000 dismissing applications by them to set aside (1) an order giving permission to serve these proceedings out of the jurisdiction and (2) any service effected on them pursuant to that permission. The order giving permission to serve out was made by Master Ungley on 11 October 1999. The witness statement of Mr Kamal Bhatia filed in support of the application for permission relied on paragraphs (c) and (d) of Order 11 rule 1(1) of the Rules of Supreme Court contained in Schedule 1 to the Civil Procedure Rules. Order 11 has since been replaced by rule 6.20 of the Civil Procedure Rules.
2. So far as relevant rule 1(1) of Order 11, as contained in Schedule 1, provided as follows:

"…a claim form may be served out of the jurisdiction with the permission of the court if -

…

(c) the claim is brought against a person duly served within or out of the jurisdiction and a person out of the jurisdiction is a necessary or proper party thereto;

(d) the claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which -

(i) was made within the jurisdiction or

(ii) was made by or through an agent trading or residing within the jurisdiction on behalf of a principal trading or residing out of the jurisdiction, or

(iii) is by its terms, or by implication, governed by English law, or

(iv) contains a term to the effect that the High Court shall have jurisdiction to hear and determine any claim in respect of the contract; …

…

4(1) An application for the grant of permission under rule 1(1) must be supported by written evidence stating -

(a) the grounds on which the application is made;

(b) that in the belief of the witness the claimant has a good cause of action;

(c) in what place or country the defendant is, or may be found; and

(d) where the application is made under rule 1(1)(c), the grounds for the belief of the witness that there is between the claimant and the person on whom a claim form has been served a real issue which the claimant may reasonably ask the court to try.

(2) No such permission shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of the jurisdiction under this Order."

3. Those provisions have since been replaced by provisions to be found in rules 6.20 and 6.21 of the Civil Procedure Rules which, so far as material, provide as follows:

"6.20 … a claim form may be served out of the jurisdiction with the permission of the court if -

General Grounds

…

(3) a claim is made against someone on whom the claim form has been or will be served and -

(a) there is between the claimant and that person a real issue which it is reasonable for the court to try; and

(b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.

…

Claims in relation to contracts

(5) a claim is made in respect of a contract where the contract -

(a) was made within the jurisdiction;

(b) was made by or through an agent trading or residing within the jurisdiction;

(c) is governed by English law; or

(d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract.

…

6.21(1) An application for permission under rule 6.20 must be supported by written evidence stating -

(a) the ground on which the application is made and the paragraph or paragraphs of rule 6.20 relied on;

(b) that the claimant believes that his claim has a reasonable prospect of success; …

(2) Where the application is made in respect of a claim referred to in rule 6.20(3), the written evidence must also state the grounds on which the witness believes that there is between the claimant and the person on whom the claim form has been, or will be served, a real issue which it is reasonable for the court to try.

(2A) The court will not give permission unless satisfied that England and Wales is the proper place in which to bring the claim."

4. The proceedings, which were issued on 27 May 1999, are brought by two companies. The first, United Film Distribution Limited, which I shall call UFD, is an English company. The second, United Pictures (India) Exports Private Limited, which I shall call UPIE, is an Indian company. There are six defendants. The first, third and fourth defendants have been served and the proceedings will continue against them in any event. The sixth defendant is a Panamanian company. Leave to serve the proceedings out of the jurisdiction on that defendant was granted by Master Ungley at the same time as he gave leave to serve on the second and fifth defendants.
5. The second defendant is the first defendant's father. To avoid confusion, I shall refer to the second defendant as the father and the first defendant as the son. At the material time, the son was based in this country. He controls the third and fourth defendants which are companies incorporated in this country. The claimants contend, but the father denies, that these two companies and the sixth defendant are all owned or controlled or managed by father and son. The father lives in Bombay. The fifth defendant, which I shall call Fairdeal, is a company controlled by the father. Like UPIE, Fairdeal is an Indian company. It too is based in Bombay.

The claims

6. The background to the claims, which I take from the 40 page particulars of claim and its various schedules, is an oral joint venture agreement between Mr Bhatia, a Mr Thakrar, who is a business associate of Mr Bhatia, and the son. The joint venture, which is said to have been agreed at a meeting of those persons in this country on 26 September 1997, related to the distribution of Indian films in the United Kingdom and Europe. The intended vehicle for the venture was to be a company owned directly or indirectly by the three co-venturers with Mr Bhatia having the largest share. Other matters said to have been agreed at the meeting on 26 September concerned the funding of the joint venture company and the film rights to be acquired for the purposes of the venture. They were to comprise film rights already acquired by a company called Stars, which Mr Bhatia controlled. The films to which these rights relate are referred to in the particulars of claim as the "Stars films". Other film rights to be acquired for the venture consisted of rights then owned by the third defendant or any other company or entity owned or controlled by or associated with the son. These films are referred to in the particulars of claim as the "Spark films". The nature of the rights depended upon whether the film in question had been released. If it had not, the distribution rights to it were to be transferred to UFD. If it had, UFD was to receive a commission on the gross receipts of the film. The agreement also provided that neither Stars nor Spark would trade on its own account outside the joint venture, except that Spark could continue a music and video business. The three co-venturers (Mr Bhatia, Mr Thakrar and the son) were to be appointed directors of the joint venture company with the son serving as managing director at a salary of £24,000 per annum.
7. UFD was incorporated on 8 October 1997 as the joint venture company. Two thirds of its shares are held by a Guernsey company associated with Mr Bhatia and the remaining third by another Guernsey company associated with the son and/or the father. The father denies any connection with that Guernsey company.
8. The particulars of claim allege that the agreement of 26 September was subsequently varied later that year in discussions between Mr Bhatia, Mr Thakrar and the son and his father. In paragraph 9 of his witness statement Mr Bhatia said that the conversations and meetings at which this occurred took place in this country. The pleading alleges that these further discussions resulted in agreement to alter the area of film distribution to anywhere in the world outside India and its related territories and also in the father participating in the joint venture on the basis that Mr Bhatia would have a 45% share in UFD, Mr Thakrar a 22% share and that father and son would between them have a 33% share with the co-venturers contributing loan capital to UFD in proportion to their respective shareholdings. Also agreed, it is said, were that the father and Fairdeal would act on behalf of UFD in two principal respects: first, in the purchase of worldwide film distribution rights from Indian film producers, monitoring the progress of film production and making instalment payments of the purchase price in the local currency; and, secondly, in the exploitation of such distribution rights throughout the world outside India and its related territories except that in the United Kingdom, Europe and North America the exploitation would be undertaken direct by UFD. It is alleged that it was agreed that the father and Fairdeal would perform these agency services for no remuneration but would be reimbursed their reasonable out-of-pocket expenses and that an associated company, bearing UPIE's name, would be established in India, to be managed, again for no remuneration, by the father on behalf of the joint venture parties and UFD and funded as to 67% by Mr Bhatia and Mr Thakrar and as to 33% by father and son.
9. Yet further amendments to the joint venture agreement are alleged to have been made in early 1998. These are said to have resulted in agreements that Mr Thakrar should cease to be a shareholder and director of UFD (leaving Mr Bhatia and his associated company holding a 67% share in UFD and the father and son or their associated company holding a 33% share in UFD) and that the as yet unacquired UPIE would become a subsidiary of UFD but with its shares held by the father and another of his sons as agents and nominees of UFD.
10. It is alleged that, although draft shareholders' agreements were prepared, none was executed and that the parties to the joint venture acted in accordance with its agreed terms. The particulars of claim then go on to set out the incorporation in early October 1997 of UFD, the appointments that were made to its board of directors and how it was funded. They also allege the incorporation in India of UPIE in May 1998 and how until early January 1999 its affairs were managed by the father and his other son from their offices in Bombay. In January 1999 Mr Bhatia and his son are said to have been appointed directors of UPIE in place of the father and the father's other son.
11. Paragraphs 27 to 30 of the particulars of claim set out at some length how, from late 1997 onwards, UFD exploited and released various Stars and Spark films (and, in the case of the latter, despite the son's failure to procure the transfer of the relevant film rights to UFD). Paragraph 31 alleges how, starting in October 1997, UFD and, later, UPIE purchased from named producers the United Kingdom and, in some cases, overseas distribution rights to various films which were thereafter shown in the United Kingdom.
12. Paragraph 32 alleges, so far as material, that in or about late November or early December 1997 the father was authorised by Mr Bhatia on behalf of UFD to negotiate the acquisition of worldwide distribution rights to a named film. The statement of case goes on to allege that the father, alternatively Fairdeal, successfully negotiated and purchased the rights to that film on behalf of UFD and that, subsequently, UFD (acting either by the son or by Mr Bhatia) authorised the father alternatively Fairdeal to acquire worldwide distribution rights in a further eight films. Together with the first film, those other eight are listed in schedule C to the statement of case. Various particulars are then provided of each of the nine schedule C films. Paragraph 32A alleges that between December 1997 and June 1998 UFD paid Fairdeal £316,000 towards the purchase of the schedule C film rights and a further $10,000 for the purchase of certain other film rights.
13. Paragraph 33 alleges that on various occasions between 1 May 1998 and January 1999 the father, acting as a director and manager of UPIE, alternatively Fairdeal as UPIE's agent, purchased the worldwide distribution rights in six films listed in schedule D. Various particulars are then provided of each of the six schedule D films.
14. Paragraphs 34 to 36 set out various licence agreements between UFD and various third parties for the exploitation of the rights in certain of the schedule C and D films in various countries of the world.
15. Paragraph 38 alleges that meetings took place in London in June 1998 attended by Mr Bhatia, Mr Thakrar and the father and son. According to paragraph 37 the meetings had been prompted by Mr Bhatia's concern (1) that UFD had made payments to Fairdeal for the purchase of film rights but had received no proper account from the father or Fairdeal of how they had spent the money, (2) that the son, as the person responsible for the day to day management of UFD, had supplied incomplete and confusing accounting and other information concerning UFD's affairs and (3) that there was a need to reconcile the position of the joint venture parties over the provision of UFD funding.
16. It is alleged that on 12 June 1998 a further agreement (the so-called June 1998 agreement) was reached by the parties to the joint venture. The details, which are set out at some length in paragraphs 39 and 40, do not presently matter. They relate for the most part to payments by way of reconciliation of dealings between UFD and Fairdeal and to the future funding of UFD and UPIE. They include a term that, having been fully reimbursed various sums, the father would procure Fairdeal to transfer or assign to UFD certain distribution rights in the schedule C films. Paragraph 41 then alleges that, in partial performance of the June 1998 agreement, various payments were made, particulars of which are then set out.
17. Paragraphs 48 to 65 set out the breaches of obligation upon which the claimants rely. Before Eady J and again before this court, Mr Page for the father and Fairdeal relied upon an analysis made by him of the claims against his clients which he grouped into four main categories: first, claims by UFD and UPIE against the father for breach of the joint venture agreement and the June 1998 agreement; second, a claim by UPIE against the father for breach of his duties as a director or employee of UPIE to ensure that rights in the schedule D films were transferred to that company; third, a claim by UPIE against the father for wrongfully procuring UPIE to pay Fairdeal 3 million Indian Rupees in respect of one of the schedule C films; fourth, claims against Fairdeal by (a) UFD and (b) UPIE for breach of its alleged agency agreements in respect of the schedule C and schedule D films.
18. Just as there are claims by UFD and UPIE against the father for breach of the joint venture and June 1998 agreements, so also are there claims against the son for breach of those agreements. Likewise there are claims against the son for breaches of his duty as a director or employee of UFD and claims by UFD and UPIE against the son and his companies (the third, fourth and sixth defendants) for failing to account to UFD for its share of the commission from the exploitation of the Spark films or for failing to transfer to UFD the distribution rights in certain of those films. In addition there is a claim against the son for exploiting or causing or permitting Fairdeal and the third, fourth and sixth defendants to exploit for their own account and benefit the distribution rights in, among others, the schedule C and D films.
19. The particulars of claim then go on to allege that the claimants have suffered loss and damage as a result of these various breaches and that they are entitled to transfers of distribution rights, the delivery of various documents, and a full account of the proceeds and expenses of the exploitation of the various film rights together with payment and interest.
20. The father, while accepting that he and his son are both involved in the business of acquiring and sub-licensing rights to Indian films, denies that he was ever a party to the joint venture or June 1998 agreements or that he had anything to do with the son's business or companies or, conversely, that the son had anything to do with his business or Fairdeal. He claims that from its incorporation in May 1998 until January 1999, UPIE was, like Fairdeal, his own company and had nothing to do with Mr Bhatia or the joint venture. Although admitting that Fairdeal had dealt with UFD and, after January 1999, with UPIE, the father maintains that such dealings have always been as principal to principal and never as agent. He therefore denies any agency between Fairdeal (or himself) on the one hand and UFD or UPIE on the other.

The applications to set aside

21. In dismissing the applications to set aside, Master Leslie took the view that the claimants established a reasonable prospect of demonstrating that they were parties to the pleaded joint venture agreement. For this purpose he distinguished between what he described as "the narrow shareholders' agreement" and what he referred to as "the wider joint venture agreement". The latter, he said "embraces the whole of the picture as to what actually happened and as is described and contended for in the particulars of claim". He also took the view that the claimants had a reasonable prospect of succeeding in establishing that Fairdeal was appointed their agent in the acquisition of film distribution rights, that the father was a party to the so-called wider joint venture agreement and that the joint venture was what he described as "an English contract" to which English law was applicable.
22. Eady J, while dismissing the appeal from Master Leslie, approached the matter somewhat differently. Accepting that the claimants could not be said to be parties to the joint venture agreement (wider or narrower) referred to by the Master, he concluded that the material established a good arguable case for the existence of an agency relationship between the claimants and the father and Fairdeal. Alternatively, he said, if the case were arguable against Fairdeal, only on the basis of agency, then the claim should be allowed to proceed against the father on the basis that he would be a necessary and proper party to the claims against Fairdeal. He also took into account the fact that, as he put it, "the claimants, especially UFD, were arguably parties to the joint 1998 agreement" (meaning, I assume, the June 1998 agreement described in paragraphs 39 and 40 of the particulars of claim). In the result, he said that he found himself in agreement with the Master as to the substance of the latter's judgment.

The order appealed

23. Paragraph 1 of the order drawn up to reflect Eady J's judgment dismissed the appeal from the Master "save as provided in [paragraph] 2". Paragraph 2 provided that "the precise effect of the Judgment delivered on 27^th July 2000 on the Particulars of Claim is to be resolved if possible by agreement between the parties or, in default of such agreement, by restoration of the appeal before Mr Justice Eady". Implicit in paragraph 2 is that, having regard to the judge's reasoning and conclusions, some of the claims against the father and Fairdeal may no longer be maintainable in the sense that there may be no proper grounds for permitting service out of the jurisdiction in respect of such claims.

Permission to appeal

24. Permission to bring this appeal, which is a second tier appeal, was granted by Mantell LJ who took the view that, as contended for in Mr Page's skeleton argument lodged in support of the application, a point of principle, worthy of consideration by the full court, was involved. That point was whether a claim for breach of fiduciary duty as an agent under agency arrangements which are themselves not English contracts or governed by English law can count as a claim under a contract made in England to which the claimants are not parties. This issue apparently arose out of a suggestion that, although the claimants are not parties to the joint venture agreement, nevertheless, the father and son owed them fiduciary duties to act in their best interests and not to make any secret profits at their expense.
25. Before us, neither party addressed any argument based upon the fiduciary duties of agents. Speaking for myself, I do not consider that the existence of any fiduciary duties which the father might have owed the claimants can have any bearing on the issues arising on this appeal.

The scope of the appeal

26. In considering whether Eady J was correct in coming to the conclusion he did, it is important to bear in mind the grounds relied on, and in respect of which claims, in the claimants' application to Master Ungley for permission to serve out and the limited extent to which Eady J found, when dismissing the appeal from Master Leslie, that those grounds were made out. In this connection, it is clear that, as rule 4(1) of Order 11 required (and as rule 6.21(1) of the Civil Procedure Rules now requires), an application for permission to serve out must indicate the paragraphs of the rule under which it is made. Having secured permission to serve out on one ground, the applicant cannot use that permission as a peg on which to hang other claims not covered by the application.
27. The grounds relied on by the claimants were set out in paragraphs 21 and 23 of Mr Bhatia's first witness statement. In those paragraphs Mr Bhatia said this:

"21 The claims of the first claimant, UFD, against Mr M. Chhabria and Fairdeal for breach of their duties as its agents are claims made in respect of a contract of agency made within the jurisdiction and in pursuance of the amended JVA which was also made within the jurisdiction. These agreements are by implication governed by English law. The claims of UFD against Mr M. Chhabria and Fairdeal for breaches of the June 1998 agreement (referred to in paragraphs 39 and 40 of the particulars of claim) are also claims in respect of a contract made within the jurisdiction. Accordingly these claims fall within case (d) of Order 11 Rule 1(1) of the Rules of the Supreme Court as contained in Schedule 1 to the Civil Procedure Rules.

…

23 In respect of the other claims of both claimants against Mr M Chhabria, Fairdeal and Mathilda [the sixth defendant] these are claims which are also brought against the other defendants, Mr Anil Chhabria, Spark Entertainment Limited and Spark Media Limited, all of whom are within the jurisdiction and have been served with these proceedings already. Given the close associations of all the defendants and the inter-connections of all of the claims and given that the subject matter which gives rise to all the claims is a joint venture formed between the parties within the jurisdiction, I respectfully submit that the second, fifth and sixth defendants, Mr M. Chhabria, Fairdeal and Mathilda, are necessary and proper parties within case (c) of Order 11 Rule 1(1)."

The agency claims

28. It will be noted that paragraph (d) of Order 11 rule 1(1) was relied on only by UFD and then only in relation to UFD's agency claims (ie, claims falling within category 4(a) of Mr Page's analysis) and claims by it for breach of the June 1998 agreement. Eady J concluded that a good arguable case existed for service out in relation to the agency claims. Although he said that the claimants, especially UFD, were arguably parties to the June 1998 agreement, this was clearly in the context of the agency claims. He expressed no view on whether the claims falling within categories 2 and 3 of Mr Page's analysis were covered by paragraphs (c) or (d) of Order 11 rule 1(1). He was of the view that the claimants' claims for breach of the joint venture agreement - ie the claims falling within category 1 of Mr Page's analysis - were not covered. This was not because the joint venture agreement was not governed by English law or made within the jurisdiction but simply because, accepting what he referred to as the "impeccable logic" of Mr Page's arguments, the claimants were not parties to and could not therefore enforce the joint venture agreement, whatever the contractual duties that may have arisen under it. His reasoning applied no less to claims by UFD for breach of the June 1998 agreement to which neither of the claimants was alleged to be a party.
29. Subject to one matter, I consider that, on the material before him, Eady J was entirely correct in this conclusion. Paragraph 14 of the particulars of claim asserts in terms that, at the meetings between Mr Bhatia, Mr Thakrar and the father and son in November and December 1997, it was agreed that the father and Fairdeal would act on behalf of UFD in the purchase of worldwide film distribution rights from Indian film producers and in the exploitation of such rights throughout the world outside India and its related territories, UK, Europe and North America. It is clear from paragraph 9 of Mr Bhatia's first witness statement that the matters referred to in paragraph 14 of the particulars of claim were agreed in conversations and meetings with the father and son in this country. In paragraph 21 of the witness statement Mr Bhatia asserted in terms that the contract of agency between UFD and the father and Fairdeal was made within the jurisdiction. In my judgment, therefore, there were ample grounds for the judge's conclusion in this respect.
30. Mr Page's attempt to suggest that the judge was in error in reaching his conclusion was based not so much on evidence contradicting Mr Bhatia's assertions (on the contrary, in his witness statements the father accepted that he met Mr Bhatia in London in November 1997 and might have been present at the meeting in London on 12 June 1998) as on what he submitted was an absence of any assertion or evidence to indicate that the agency contracts relied on were made in this country. In so submitting, however, he appeared to overlook the contents of paragraph 14 of the particulars of claim and paragraphs 9 and 21 of Mr Bhatia's first witness statement.
31. The one qualification to this is that it was not open to UPIE to rely before Eady J on paragraph (d) in relation to its agency claims. The application to Master Ungley was not made on that basis. In any event, as the agency relationship is pleaded to have been established at meetings in London in late 1997 and as UPIE was not incorporated until May 1998 (which was several months later), it cannot be asserted that an agency relationship between UPIE and the father and Fairdeal was established at that time.

Necessary or proper party

32. In respect of UFD's other claims and all of UPIE's claims against the father and Fairdeal, the application to Master Ungley was put on the basis that "given the close associations of all the defendants and the inter-connection of all the claims and given that the subject matter which gives rise to all the claims is a joint venture formed between the parties within the jurisdiction" the father and Fairdeal were necessary and proper parties within paragraph (c) of Order 11 rule 1(1). Although, by dismissing the appeal from Master Leslie's order, Eady J was impliedly accepting that UPIE had established a sufficiently arguable case for service out of the jurisdiction on the father and Fairdeal under paragraph (c), the judge did not spell out how or why he reached this conclusion.
33. Mr Auld QC for the claimants submitted that the father and Fairdeal are necessary or proper parties to claims being brought by both claimants against persons on whom the proceeding had been duly served. Put shortly, he submitted that the claims against the father and Fairdeal arise out of the same facts transactions and arrangements as do the claimants' claims against the other defendants.
34. Mr Page initially submitted that paragraph (c) only applies where the party to be served is a necessary or proper party to the very cause of action against a person who has been duly served. He later accepted that this was too narrow but submitted that it was not sufficient merely that there was a close connection between the claims against the person already duly served and the claims against the person to be served if the claims - ie the facts giving rise to the claims - were not the same. He submitted that the claims by UPIE against the father and Fairdeal failed to meet this requirement.
35. I consider that Mr Page stated the position too narrowly.
36. The meaning of the expression "proper party" in the phrase "necessary or proper party" appearing in paragraph (c) of Order 11 rule 1(1) was explained by Lord Esher MR in Massey v Heynes 1881 21 QBD 330 at 338:

"The question, whether a person out of the jurisdiction is a 'proper party' to an action against a person who has been served within the jurisdiction, must depend on this, - supposing both parties had been within the jurisdiction would they both have been proper parties to that action? If they would, and only one of them is in this country, then the rule says that the other may be served, just as if he had been within the jurisdiction."

In the same case Lindley LJ said (at 338):

"Where the liability of several persons depends upon one investigation, I think they are all 'proper parties' to the same action and, if one of them is a foreigner residing out of the jurisdiction, rule 1(g) of Order XI applies."

That was said in reference to rule 1(g) of Order XI which was the then equivalent of what later became paragraph (c) of Order 11 rule 1(1) and what is now rule 6.20(3) of the Civil Procedure Rules. I am not aware that any doubt has ever been cast on the accuracy of that approach to the meaning of "proper party" as used in Order 11 rule 1(1)(c).

37. In Barings plc (in administration) v Coopers & Lybrand (unreported) 2 August 1996, Chadwick J (as he then was) pointed out that whether a person is a "proper party" to an action in which he has been, or is to be, joined as co-defendant with another must depend on the relevant rules of procedure and the practice under such rules. Order 15 rule 4(1) permitted joinder of two or more persons as defendants with the leave of the court or where:

"(a) if separate actions were brought … against each of them … some common questions of law or fact would arise in all of the actions and

(b) all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions."

As Chadwick J observed, it would be beyond argument that any person who has or could have been joined as a party without leave under Order 15 rule 4(1) must be a "proper party" for the purposes of the rules and, in particular, that such a person must be a "proper party" for the proposes of Order 11 rule 1(1)(c). He did not find it necessary to decide whether any person whom the court itself could join under rule 6(2)(b)(ii) of Order 15 must be treated as a "proper party" for the purpose of Order 11 rule 1(1)(c) but saw no reason in principle why the court should not, in appropriate circumstances, give leave to serve out of the jurisdiction in circumstances in which it could order the person to be added as a party to existing proceedings.

38. Although the Rules of the Supreme Court have been replaced by the Civil Procedure Rules, it is not suggested that the power of the court to give permission for service out under rule 6.20(3) is narrower than under Order 11 rule 1(1)(c) or that the circumstances in which a person may properly be joined as a defendant to a claim are narrower under rule 19.2(2) of Civil Procedure Rules than under its relevant predecessors, namely Order 15 rules 4(1) and 6(2)(b) of the Rules of the Supreme Court. Rule 19.1(2) of the Civil Procedure Rules provides that the court may order a person to be added as a new party if (a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings or (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue. The court's power to add or substitute a party is wide. Although the expression "necessary or proper party" to the claim does not appear in that rule it can scarcely be supposed that the court would order a person to be added or substituted as a party on the ground that it is "desirable" to do so if that person were not either a necessary or a proper party to the claim in question. In my judgment the court's power to permit service out under what is now rule 6.20(3) (formerly Order 11 rule 1(1)(c)) is not less wide than the court's wide power to add or substitute a party under rule 19.1(2).
39. It is not suggested that the claims by the two claimants against the other defendants do not give rise to real issues which it is reasonable for the court to try. The sole question therefore is whether, in the sense explained above, the father and Fairdeal are "proper parties" to some or all of UPIE's claims (and UFD's other claims).
40. It is manifest, in my view, that UPIE's claims against the father and Fairdeal on the one hand and against the son and other defendants on the other give rise to common questions of fact. Notable among those are the terms of and circumstances in which the joint venture agreement, as varied from time to time, was made and whether, in particular, as the claimants assert, it was agreed that the father and Fairdeal should act as agents. If they were to act as agents of UFD, it is not less likely that they were also to act as agents of UPIE assuming that the claimants can make good their contention in paragraphs 14 and 15 of the particulars of claim that the parties to the joint venture agreed that UPIE would function effectively as a subsidiary of UFD.
41. Equally clearly, in my view, UPIE's claims against the father and Fairdeal arise out of the same series of transactions as are the subject of UPIE's (and UFD's) claims against the son and UFD's claims against the father and Fairdeal. The underlying substance of the various claims is that Mr Bhatia, Mr Thakrar and the father and son were together engaged in the acquisition and exploitation outside India of the distribution rights to a number of Indian films. Their vehicles for doing so were the claimants. As the courts below recognised, it would be quite unreal to suggest that UFD should be free to litigate its claims against the various defendants in this jurisdiction but that UPIE, although it functioned at all material times effectively as UFD's subsidiary and is able to pursue its claims against the son and his companies in this jurisdiction, should be compelled to pursue its claims against the father and Fairdeal in India.
42. In my judgment, therefore, with the evidence disclosing that there are serious questions to be tried and with the courts of this country as plainly the proper place in which to pursue all of these matters, permission to serve out was correctly given in respect of UPIE's claims falling within category 4(b) of Mr Page's analysis.
43. It follows, therefore, that the appeal fails. I would add, however, that, like Eady J, I agree that the claimants do not have claims against the father and Fairdeal (or against any of the other defendants for that matter) for breach of the joint venture agreement (or the June 1998 agreement) to which neither was a party. On the other hand, those claims would appear to arise out of exactly the same transactions as claims falling within category 4(b).

LORD JUSTICE LAWS:

44. I agree.

LORD JUSTICE ALDOUS:

45. I also agree.
ORDER: Appeal dismissed; the 2^nd and 5^th Defendant to pay the Claimant's costs, assessed summarily at £18,000. (Order does not form part of approved Judgment)