England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		7 Rolls Building Fetter Lane London EC4A 1NL
		9 May 2014

MR JUSTICE FIELD:

1. This is an application for judgment in default, the defendants not having filed acknowledgments of service or defences. The claim arises out of a loan to the defendants. The only question for decision as to whether there is an entitlement to judgment in default goes to the question of service.
2. The loan agreement contained a service of process provision at clause 38.2 as follows:

"Service of process. Without prejudice to any other mode of service allowed under any relevant laws, each Borrower -

38.2.1 irrevocably appoints Johnson Stevens Agencies Ltd, presently of Johnson Stevens House, 2 Abbey Road, Barking, Essex IG11 7AX as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

38.2.2 agrees that failure by a process agent to notify any Borrower of the process will not invalid proceedings concerned.

The borrower expressly agrees and consents to the provisions of this clause 38."

3. Service of the necessary documents, the claim form and the like, was made in the usual way by post and also by delivery by courier. At this time, the nominated service agent was in creditors' voluntary liquidation and this was known to the claimants. What was not known was that the liquidators had ceased to be involved in performing their functions as such. However, the company had not been struck off the register. This did not occur until the subsequent February.
4. It is submitted by Mr Cutress on behalf of the claimant that the fact that the nominated agent was in creditors' voluntary liquidation and the fact that the liquidators were no longer functioning as such, is no reason why there has not been good service as required before judgment in default can be obtained. I agree with that submission.
5. Clause 38 constitutes an irrevocable holding out as to the authority of the nominated agents to accept service. The fact that actual authority may have lapsed due to the creditors' voluntary liquidation, does not take the case outside clause 38. The appointment under that clause is irrevocable and unqualified. Accordingly, whilst it may -- and I emphasise "may" -- be the case that the liquidation process could terminate actual authority conferred on the company in liquidation, that does not mean that under this clause, service could not be effected in the manner adopted in this case. I agree with the submission that if the termination of actual authority could prevent the operation of clause 38, that would wholly undermine the purpose and object of the clause, which was to allow for a straightforward means of service in reliance on the wording of clause 38 without requiring enquiries as to the up-to-date relationship between the debtors and the agent at the time that service is contemplated.
6. Accordingly, I am of the clear view that there was good service under CPR Part 6.11 in this case, with the result that, since no acknowledgments of service have been returned nor defences, the claimant is entitled to default judgment. I shall hear now argument on the terms of the judgment sought.