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England and Wales High Court (Commercial Court) Decisions
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F & M Bunkering Services Ltd v Bulgarian River Shipping & Ors [2012] EWHC B26 (Comm) (23 November 2012)
URL: http://www.bailii.org/ew/cases/EWHC/Comm/2012/B26.html
Cite as:
[2012] EWHC B26 (Comm)
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BAILII Citation Number: [2012] EWHC B26 (Comm) |
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Case No. 2011-1417/231716 |
IN THE HIGH COURT
IN LONDON
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The Commercial Court, Royal Courts of Justice, Strand, LONDON. |
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23 November 2012 |
B e f o r e :
THE HONOURABLE MR. JUSTICE BURTON
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Between:
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F & M BUNKERING SERVICES LTD |
Claimant |
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and |
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BULGARIAN RIVER SHIPPING & ORS |
Defendant |
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Transcript prepared from the official record by
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HTML VERSION OF JUDGMENT
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Crown Copyright ©
MR. JUSTICE BURTON:
- This has been an application by the Defendant, Nordik Navigation & Co LLP for whom Mr. Watthey of Counsel has appeared, to set aside a judgment entered in favour of F & M Bunkering Ltd, the Claimant, for whom Mr. Harakis has appeared. Both advocates have argued the matter very forcefully before me today.
- There are two aspects to the claim. The first is whether there is anything procedurally which can be relied upon by the Defendant so as to establish an entitlement to set aside the judgment as a right. The second, assuming that that is not so, is whether the Defendant can satisfy me that, as a matter of discretion, either by reference to the procedural matters or, more significantly, by reference to perceived merit in the claim, that I should exercise a discretion to set aside judgment. If I do exercise that discretion it is accepted that I am entitled to reach a view that the defences are so slim that were this, for example, summary judgment, I could very nearly be giving judgment against the Defendant, and consequently in the reverse scenario I should only set aside a judgment and give the opportunity for a day in court to the Defendant if, as it is very often colloquially put, the Defendant puts its money where its mouth is.
- I deal briefly with the case only by virtue of the time, which is approaching the adjournment and there are other cases this afternoon, but without any disrespect to the arguments that have been put before me. First of all, so far as the question as to whether the Defendant was ever served is concerned, they did not receive, on their evidence, the proceedings. It is never, of course, necessary for the Claimant to show that the documents are received: that is not the issue before me. The issue is as to whether they were sent by post such that they were, in fact, duly served, even if there be some oversight or error, such that they were not taken on board by a representative of the Defendant.
- The Claimant asserts that the papers were indeed so served. Their case is that the greater probability is that the documents, if they were received, as they assert, by the Defendants, were in some way lost by the Defendants, because they have subsequently instructed another representative of the Claimant's solicitors to serve a document which went missing in a similar way, in the sense of apparent inability of the relevant officers of the Defendants to assimilate the letter. Of course, that is only an analogy, and there is no burden on the Claimant or the Defendant in that regard. But the Claimant asserts that that or something similar is what occurred here, rather than that I should not be satisfied that they did originally serve the proceedings.
- As to that, perfectly understandably, Miss Northover challenged the Claimant from the beginning to show that the proceedings were posted. If there had been a post-book I have no doubt that the Claimant would have produced it. I infer from the considerable evidence produced by the Claimants that they do not operate a system of a post-book, or if they do that it is not available. If that were produced it would be more likely that the Defendant would have accepted that the proceedings were posted. In fact, instead of the production of the post-book, there has been a considerable array of evidence from various representatives of the Claimant's solicitors explaining what happened and asserting and affirming that the proceedings were posted or left in the post-room to be posted in the usual way.
- I am satisfied on the evidence before me that the proceedings here were posted and consequently that there was service.
- There were two errors by the Claimant's solicitors which were not very dissimilar to what happened in the decision in the case before Simon J, unreported, of Gulf International Bank v. Equity Tab Holding Co. KSCC (15 November 2010), which has been put before me by Mr. Watthey. The first is that the certificate which is required by Rule 6.17 of the CPR to be filed was not filed within 21 days, in accordance with the Rule. Secondly, the pack which is intended to accompany the proceedings, in particular including an acknowledgment of service form was, Mr. Watthey suggests, not served in this case. I will return to that.
- So far as the first argument is concerned the word "must" is certainly used in Rule 6.17(2)(a):
"The Claimant must file a certificate of service within 21 days of service."
What happened here is that the certificate of service was, in fact, filed in five weeks rather than three, which is an error and an oversight by the Claimant's solicitors. The Rule goes on, in Rule 6.17(2)(b), to say that the Claimant may not obtain judgment in default under Part 12, unless a certificate of service has been filed. The certificate has, as I have indicated, been filed, albeit two weeks late.
- I am entirely satisfied that the requirement that the certificate of service must be served within 21 days is salutary, because it disciplines the solicitors in order to make sure that acknowledgment of service is filed as soon as possible. But the consequence of not doing so is not that they can never obtain judgment in default, it is simply that they cannot obtain judgment in default unless and until they have filed the certificate. Insofar as it is necessary for there to be an extension, there is power in the court to give almost any extension pursuant to Rule 3.10. Simon J concluded that, where there had been no filing of the certificate of acknowledgment, that gave him the discretion to set aside the judgment in default. He does not appear to me, on my viewing of his judgment, to have concluded that it was a jurisdictional bar. Certainly it would be a jurisdictional bar if they did not so file at all. But if they did not file within 21 days, but by some later date, he did not, in my judgment, and rightly, regard that as a jurisdictional bar and nor do I. He considered that it was a matter he would take into account as part of his discretion.
- What was significant in that case was that the Defendant was a foreign Defendant and did not have the acknowledgment of service which should have formed part of the pack. I have to decide, first of all, in this case whether there was a breach of the requirement under Rule 7.8(1) that the Particulars of Claim must be served accompanied by:
"(c) A form for acknowledgment of service."
Mr. Watthey relied upon the certificate of service which was filed, since, perfectly understandably, he is in no position to assert positively that there was no pack containing a form for acknowledgment of service served in this case -of course, it is speculation so far as his clients are concerned, because they never received anything. There is equally no case here, such as was adumbrated by Simon J, that there would have been difficulty for a foreign defendant to understand what to do given that no acknowledgment of service was included. In this case, of course, the proceedings were not received or at any rate dealt with at all, and no such case is put forward by the Defendant of receiving proceedings but not knowing what to do with them.
- The inference drawn by Mr. Watthey that there was no acknowledgment of service pack provided is drawn from the Claimant's answer to the question in the certificate of service which was filed with the court in standard form:
"What documents did you serve?"
To which the answer is "The Claim Form and Particulars of Claim".
- In fact, it is plain to me, and I find, that the Claimant did serve the acknowledgment of service together with the Claim Form and the Particulars of Claim. This is clear from the covering letter, a copy of which I have been shown, which said so, and which was served together with the proceedings which I have found to have been served. It is therefore unfortunate that this question was incompletely answered. What should have been referred to were the Claim Form and Particulars of Claim and the acknowledgment of service required by Rule 7.8(1)(c), and for that matter the other forms there referred to in Rule 7.8 (1).
- It seems to me that it may be a matter for the Rules Committee to consider whether this is not an inappropriate or unnecessary question. It does seem to me that, since nothing else is required than a certificate as to the service of the Claim Form, that ought to be all that is dealt with by the certificate of service that is filed. On the face of it, if other documents are served at the same time, even apart from the pack, the question:
"What documents did you serve?"
which is coupled with the words:
"Please attach copies of the documents you have not already filed with the court"
could encourage, or even require, a whole host of other documents to be attached if they happened to be served at the same time, such as, for example, orders and witness statements, which is not what is intended, in my judgment, by the certificate of service.
- It is clear to me that this was an inadequate answer, not to record that the acknowledgment of service form was also served, but it is not one that , in fact, in the circumstances of this case, caused any prejudice, and one which in my judgment, was an incorrect answer, because I am satisfied that the acknowledgment of service was served.
- Neither of these two technical matters therefore in my judgment assists the Claimant either on the question of jurisdiction or on the question of discretion. However, there was, despite the assertion of Mr. Harakis, no material delay in this case before the Defendant did set about setting aside the judgment, and if he is entitled not as a right but because he has shown a good arguable or even a sufficiency of defence then he should be entitled to defend.
- In this regard I have reached the conclusion in the course of, and indeed towards the end of, Mr. Harakis' powerful submissions, and notwithstanding what Mr. Watthey has submitted in response, that this is a case which is very close to the border and where it is only appropriate for me to give leave to set aside the judgment on terms.
- Because I am proposing for the matter to go forward on those terms I shall say little by way of scepticism or criticism of the defence, not least because there will now be a chance for the Defendant to expand upon and perhaps even succeed in respect of its defence. All I can say is that on the evidence before me now the Claimant's claim is a powerful one. There was an exchange of emails between the Claimant and an entity called F & M Agency, which the Defendant relies upon as constituting a contract with that Agency, and not with the Claimant. It was an exchange of emails on the 12 August 2011 which ended from F & M Agency Ltd with the words:
"If you agree we will revert with bunker confirmation during today."
- The defence case is that that is the end of it. There was thus a rather informal contract with F & M Agency Ltd. The bunkers were received, and there was confirmation of receipt on a document which had F & M Agency Ltd's address at the top, and subsequently they paid F & M Agency Ltd, as they assert (although the Claimant does not accept that) and that is the end of the case; they had a contracting party with whom they have contracted, and who delivered the bunkers and whom they paid. That is the simple case which Mr. Watthey put forward and wishes to pursue.
- I am satisfied that the evidence which I have now seen renders that extremely difficult to support, although, as I have indicated, I do not shut him out completely. The significant matters to me are that the response after the 12 August 2011 from F & M Agency, when they said they would revert with bunker confirmation during that day, is that that on the very same day they did send, or there was then sent, from the financial department, on behalf of and as per instructions of F & M Agency Ltd, the promised bunker conformation which came from, on the face of it, the F & M Agency's principals, F & M Bunkering Ltd, the Claimant. No response came back from the Defendant querying the fact that the enclosed confirmation came from the Claimant and not from the Agents. That was followed on the 26 August with an invoice from F & M Bunkering Ltd, the Claimant, which was the only invoice at that stage.
- Subsequently the Defendant was informed of some kind of transaction or arrangement between the Claimant and Agency which was constituted by a document that they were sent. This document is heavily attacked by the Claimant as being a fabrication, but for the purposes of this application I cannot possibly, and do not begin to, suggest or conclude that the Defendant had any knowledge of the alleged falsity of this document. Indeed, they relied on it they say, to pay, that is two months later, the monies which the Claimant asserts were owed to them and which were due under the bunkering contract to which I have referred, to F & M Agency.
- The difficulty, it seems to me, for the Defendant is that the session contract which purports to ask the Defendant to pay the F & M Agency Ltd records that the contracts which are purportedly thereby assigned or novated to the F & M Agency Ltd are contracts, (the invoice numbers given being the same) which were the bunkering contracts made between the Defendants and the Claimant. Therefore, the Agency's own documents assert that, at any rate until the purported session contract, the contract was between the Claimant and the Defendant as the Claimant asserts. The Claimant submits that there is no substance in the session contract, but the session contract for the purposes of today appears to me to support the Claimant's case as to the Defendant's understanding that, at any rate prior to the session contract, the obligation as buyer and seller was as between the Claimant and Defendant.
- The Defendant was firmly told by the Claimant in subsequent letters to take no notice of the session contract and to continue to pay them. But the Defendant asserts that it paid the F & M Agency. Of course, if the position is that it was paying the original contracting party, notwithstanding attempts by some third party - the Claimant - to interfere, then the Defendant was entirely correct to do what it did, albeit that in doing so it was putting itself at risk. But the Claimant's case is that the Defendant was always the contracting party, without even an overlay of evidence, which it cannot possibly invite me to resolve today, that the session contract itself was fabricated and that the Defendant must have had knowledge of that.
- As to whether the Defendant did, in fact, pay the monies subsequently to F & M Agency, so that they can assert that they are now paying twice, there too there is considerable dispute, which I cannot possibly resolve.
(i) The Claimant doubts the evidence of the Defendant that there were monies paid in cash;
(ii) The Claimant asserts that the purported receipts from F & M Agency Ltd are fabricated or forged;
(iii) The timing of the payments by the Defendants to F & M Agency, being in November, sometime after the alleged session contract, in fact post-dated the making of a freezing order by the Claimant against F & M Agency, and, of course, I cannot possibly resolve at this stage whether the Defendant had any knowledge of that order.
I make no finding at all, and could not do so in relation to any of those matters. I conclude that, for the purposes of today, the strength of the Claimant's case is simply based upon it being the original contracting party, and, if that be right then even if the Defendant has made a payment to F & M Agency honestly, that could be no defence to the Claimant's claim and the Defendant must simply recover the monies double paid, if they were, from F & M Agency.
- In those circumstances I refer to my conclusion that this is a case where at any rate on the evidence as it is before me the Defendants will have a very uphill task.
- The Claimants obtained, in the interim, a freezing order or an attachment in respect of one of the Defendant's vessels, which was only later released with the assistance, which is another matter the Claimant considers suspicious, of F & M Agency's lawyer. The vessel was released upon terms of monies being lodged with Messrs Brechers & Co. in London, in order to obtain such release, the amount of money being the full amount of the principal in this action.
- I am satisfied that the condition which I should impose, as a condition of permitting the judgment to be set aside, which I now order, is that a sum which is a round figure sum to cover the claim and something in respect of the 2% per month interest which would be due if the contract was between the Claimant and Defendant, and something in respect of costs both to date and continuing, of £85,000 should be either left with or further lodged with Messrs Brechers & Co, the amounts to make up that sum to be lodged within 21 days of today. If that sum is so lodged then there will be leave to defend and transfer of this action to the Mercantile Court.
MR. WATTHEY: I am taking instructions on how long we can actually, you have said 21 days, it may be that we need a little longer than that.
MR. JUSTICE BURTON: Well you tell me, we are talking about the difference between the sum that is presently there, it is about £25,000 probably.
MR. WATTHEY: My Lord, although Miss Northover doesn't have express instructions on it, we just know from having dealt with it that I know 21 days won't be enough, if we could have 28 that would be much more helpful.
MR. HARAKIS: My Lord, I have no problem with 28.
MR. JUSTICE BURTON: Thank you. Yes, costs?
Submissions by both counsel as to costs
MR. JUSTICE BURTON: The order that I am proposing to make is that today's costs be the Defendant's costs in the case. Mr. Harakis, you understand what that means, i.e., the Defendants never have to pay today's costs, but they only get them if they win the trial. Very good, thank you both.
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