JUDGMENT
Abela and others (Appellants) v Baadarani
(Respondent)
before
Lord Neuberger, President
Lord Clarke
Lord Sumption
Lord Reed
Lord Carnwath
JUDGMENT GIVEN ON
26 June 2013
Heard on 10 and 11 April 2013
Appellant Respondent
Clive Freedman QC Andrew Onslow QC
Tim Penny Paul Greatorex
(Instructed by PCB (Instructed by M&S
Litigation LLP) Solicitors Ltd)
LORD CLARKE (with whom Lord Neuberger, Lord Reed and Lord
Carnwath agree)
Introduction
1. The question for decision in this appeal is whether there has been good
service of the claim form in this action on the respondent.
2. This is an appeal against an order of the Court of Appeal (Arden, Longmore
and McFarlane LJJ) made on 15 December 2011 in which they set aside the orders
of a number of judges and, in particular, an order of Sir Edward Evans-Lombe
(“the judge”) made on 28 January 2011 in which he declared, pursuant to CPR
6.37(5)(b) and/or 6.15(2), that the steps taken on 22 October 2009 to bring the
claim form to the attention of the respondent amounted to good service of the
claim form. The Court of Appeal held that the judge should not have made that
declaration, that various extensions of the validity of the claim form for service
should not have been granted, that the respondent had not been properly served
with the claim form and that it followed that the claim must be dismissed. The
principal issue in this appeal is whether the Court of Appeal was correct to hold
that the judge should not have declared that the events of 22 October 2009
amounted to good service of the claim form.
The claims
3. As stated in the agreed statement of facts and issues, the underlying claim is
for damages for fraud in connection with a contract for the purchase of shares in an
Italian company called Gama SpA (“Gama”), made in March 2002, between the
third appellant, as purchaser, and the respondent and Cicines Holdings Ltd
(“Cicines”), as vendors, for a total consideration of US$14m. The contract
expressly provided that it was governed by English law and contained a nonexclusive English jurisdiction clause. The appellants claim that the shares were
worthless or worth far less than the amount paid for them. The claim alleges that
the fraud involved corruption on the part of a Mr Haan, a lawyer for the appellants,
who acted for them in connection with the sale and is said also to have acted
secretly for the respondent without the appellants’ knowledge.
4. The claim form in this action was issued on 30 April 2009, following the
settlement of an action (“the Haan action”) by the appellants against Mr Haan and
a firm of solicitors (“Hammonds”) who were said to be vicariously liable for the
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torts of Mr Haan, in order to recover such part of the moneys paid under the
contract as were not recovered in that action. The background facts are set out in
some detail by the judge at paras 2 to 12 of his judgment of 28 January 2011,
[2011] EWHC 116 (Ch). It is not necessary to set them out here, save to note that
the action against Mr Haan and Hammonds came to trial on 11 March 2009 and
was settled after eight days by a payment by the defendants in that action to the
appellants of a sum which included costs. The claims in this action mirror those in
the Haan action, although, if this action were to succeed, credit would presumably
have to be given for sums recovered in the Haan action.
5. The causes of action pleaded in this action are fraudulent misrepresentation
and/or conspiracy and/or dishonest assistance and/or unconscionable bargain
and/or undue influence, arising out of the alleged bribery and corruption of Mr
Haan in order to bring about the contract for the purchase of shares in Gama in
March 2002. They are summarised by the judge at para 19 of his judgment. The
claims were brought against both the respondent and Cicines, but Cicines is not a
party to this appeal.
Permission to serve the proceedings out of the jurisdiction and the claimants’
attempts to serve them
6. It follows from the fact that the claim form was issued on 30 April 2009
that its validity for service out of the jurisdiction would expire after six months, on
29 October 2009. The appellants took no steps for some three and a half months
until they instructed counsel to settle the particulars of claim in mid-August 2009.
The particulars of claim were signed on 9 September 2009 and on 14 September
2009 an application for permission to serve the proceedings on the respondent
outside the jurisdiction was made to Morgan J, without notice to the respondent.
Both the particulars of claim and a detailed skeleton argument were put before the
court. Morgan J was satisfied that there was a good arguable case for service out
of the jurisdiction and for the extension of the validity of the claim form. By an
order made on 14 September 2009, he gave permission under CPR 6.36 and 6.37
to serve the claim form and all other documents upon the respondent at an address
at Farid Trad Street in Beirut in Lebanon (“the Farid Trad Street address”). He
extended the time for serving the claim form from 29 October 2009 until 31
December 2009 and, to the extent required, gave permission to serve the claim
form and documents by alternative means, namely by personal service of an
untranslated copy of all the documents at the Farid Trad Street address.
7. The evidence before Morgan J comprised the first and second witness
statements of Mr Mascarenhas of the appellants’ solicitors and the first witness
statement of the appellants’ Lebanese lawyer, Mr Houssami. The evidence in
support of the application included the following. The address in the claim form
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was in fact that of the respondent’s lawyer in Beirut. The respondent’s home
address was believed to be the Farid Trad Street address, which was the
appropriate address for service if he was to be served personally. That belief was
based on what Mr Houssami had been told by individuals not identified in his
witness statement and, more importantly, on the fact that he had previously
effected service of legal proceedings there in late 2006 or early 2007 by leaving
the documents with the respondent’s wife. Lebanon was not a party to any bilateral
convention on service of judicial documents and, in particular, the Hague
Convention on the Service Abroad of Judicial and Extrajudicial Documents in
Civil or Commercial Matters (1965) (Cmnd 3986) (the “Hague Service
Convention”) did not apply. Service of originating process through the judicial
authorities or the British Consulate would be likely to take several months.
8. The appellants’ evidence is that Mr Houssami used a notary to seek to serve
the respondent by causing a service agent or clerk to attend at the Farid Trad Street
address over a period of four consecutive days between 7 am and 4 pm, which
were official working hours. The respondent could not be located at that address.
The respondent denies that he lived there. However, on 22 October 2009, an
untranslated copy of the claim form, which was in English, together with other
relevant documents were delivered to the offices of Mr Azoury, who was the
respondent’s Lebanese lawyer in Beirut. This was not the method of service
authorised by the order of Morgan J, although on the respondent’s application to
set aside the various orders of the court, including the order of Morgan J, which
came before the judge, the appellants contended that it amounted to good service
on the respondent under Lebanese law. However, the Court of Appeal resolved
this issue against the appellants, and there is no appeal against that decision.
9. The appellants continued to try to effect service through diplomatic
channels at the Farid Trad Street address. They also obtained Arabic translations
of the documents for service and a request for service out was delivered to the
Foreign Process Section of the High Court on 19 November 2009 together with
certified translations. There were some delays and, shortly before a hearing before
Sales J on 16 December 2009, the appellants’ solicitors were told by the Foreign
and Commonwealth Office that service through diplomatic channels in Lebanon
might take a further three months from receipt of the documents.
10. On 16 December Sales J heard a further without notice application and
granted a four-month extension of the validity of the claim form from 31
December 2009 until 30 April 2010 so as to enable service to take place at the
Farid Trad Street address through diplomatic channels. The use of diplomatic
channels caused further delays. Under cover of a letter dated 11 February 2010,
Mr Azoury communicated with the appellants’ solicitors and returned the
documents received by him on 22 October 2009. In the letter he noted that the
address for service in the order of 14 September 2009, namely the Farid Trad
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Street address, was not that of the respondent, who had not to his knowledge ever
lived there or had any connection with it. He further said that he had never had
instructions to accept service of documents other than in connection with the
Lebanese proceedings (referred to in para 15 below) and that the respondent had
confirmed that that was the case. He gave no indication where the respondent
could be served.
11. On 17 February 2010, the appellants’ solicitors, PCB Litigation (“PCB”),
replied to the letter dated 11 February asserting that Mr Azoury held a general
power of attorney to act on behalf of the respondent in any legal proceedings, that
the respondent had expressly elected Mr Azoury’s office as a domicile in the
power of attorney and that the proceedings were validly served under Lebanese
law. If that was not accepted, they asked Mr Azoury to provide them with the
respondent’s usual address and to agree a date and time for service on the
respondent. Mr Azoury replied that the general power of attorney could only be
used to authorise him to represent the respondent when expressly instructed to do
so. He did however add that the respondent would instruct English solicitors,
which he did in the form of M&S Solicitors (“M&S”). Correspondence ensued
between PCB and M&S during which M&S made it clear that it was the
respondent’s case that he had no obligation to accept service of the proceedings, to
make himself available for service or to provide an address for service. No
agreement was reached.
12. By an application notice dated 22 March 2010, the appellants applied
without notice under CPR 6.15 and/or 6.37(5)(b) for an order (1) that the steps
already taken to serve the claim form amounted to good service; and/or (2) that the
appellants be permitted to serve the claim form and other documents by alternative
means, namely upon the respondent’s English or Lebanese solicitors; and (3) that
the time for service of the claim form be extended. Correspondence between the
parties ensued and the application was adjourned by David Richards J. The
adjourned application came on for hearing before Lewison J on 14 April 2010 on
notice to M&S, who wrote a detailed letter dated 25 March which was put before
the court at their request.
13. Lewison J made a number of orders on 14 April 2010. They included, by
paragraph 1, (without prejudice to paragraph 2) a further extension of the time for
serving the claim form to 30 June 2010 and, by paragraph 2 (without prejudice to
paragraph 1) an order permitting the appellants to serve the claim form by
alternative means, that is by service on the respondent’s English or Lebanese
solicitors. The order extending time for service was made in case the alternative
service order was set aside. In addition the judge adjourned the appellants’
application for an order that the steps already taken on 22 October 2009 to bring
the claim form to the attention of the respondent amounted to good service. He
adjourned that application generally but gave the appellants permission to restore
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it. Lewison J gave a short judgment, to which I will refer below, which is of some
importance because it was subsequently incorporated in extenso into the judgment
of the judge on the subsequent hearing inter partes. In the event, service was duly
effected by alternative means on the respondent’s English solicitors in accordance
with the order of 14 April 2010 and the respondent acknowledged service on 1
May 2010.
Inter partes hearing
14. On 21 May 2010 the respondent issued an application to set aside the
various orders that had been made in the action. The application came before the
judge, who heard it over four days from 7 December 2010. He gave judgment on
28 January 2011. He set out the background facts in detail between paras 1 and
19. He considered first the respondent’s application to set aside the order of
Morgan J giving permission to serve out of the jurisdiction. He first rejected the
respondent’s submission that there was no real issue between the parties which it is
reasonable for the court to try under CPR 6.37(2). The respondent relied on two
grounds, first that the effect of the settlement of the Haan action was to settle the
appellants’ claims against the respondent and, second, that the claims were timebarred. The judge held at paras 28 and 29 that the settlement agreement did not
have that effect. As to limitation he held that, although the cause of action accrued
on 26 March 2002 and would thus be time-barred as being more than six years
before the issue of the claim form on 30 April 2009, the appellants had a good
arguable case that they did not discover the fraud until 26 June 2003 or,
alternatively May 2003, and that they could not have discovered it with reasonable
diligence before 1 May 2003. It followed that the judge held that the appellants
had a good arguable case that the claims were not time barred when the claim form
was issued on 30 April 2009. The judge discussed this point in detail between
paras 30 and 37 of his judgment.
15. The judge further rejected the respondent’s case that England was not the
forum conveniens and that permission to serve out should be refused under CPR
6.37(3). The judge discussed this point, again in detail, at paras 38 to 56. He
concluded the point in favour of the appellants. He noted at para 54 that the
appellants had given an undertaking to Morgan J not to pursue the claims in these
proceedings in an action in Lebanon, which was both criminal and civil and (as
explained by the judge at para 11) included the claims advanced in this action.
None of these issues is relevant to this appeal.
16. The judge thus did not reach the service issues until para 57 of his
judgment. The respondent applied for orders setting aside the various orders
extending time for service of the claim form, by Morgan J from 29 October to 31
December 2009, by Sales J from 31 December 2009 to 30 April 2010 and by
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Lewison J from 30 April 2010 to 30 June 2010. He also applied for an order
setting aside Lewison J’s order permitting service by alternative means on the
respondent’s Lebanese and English lawyers. The appellants cross-applied for a
declaration that in the events which had happened there had been good service of
the claim form on the respondent and for an order further extending the time to
enable the claim form to be served through British Consular channels should the
previous extensions of time stand but the order for alternative service made by
Lewison J be set aside.
17. The judge considered first the appellants’ cross-application for a
declaration. This was in effect the restoration of the appellants’ application for a
declaration that the steps already taken amounted to good service which Lewison J
had adjourned. The judge granted the application and, as stated above, made a
declaration, pursuant to CPR 6.37(5)(b) and/or 6.15(2), that the steps taken on 22
October 2009 to bring the claim form to the attention of the respondent amounted
to good service of the claim form.
The CPR
18. The provisions of the CPR that are relevant for present purposes are these:
“Service of the claim form by an alternative method or at an
alternative place
6.15
(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
acknowledgment of service; (ii) filing an admission; or (iii) filing a
defence.
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Power of the court to dispense with service of the claim form
6.16
(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
6.37
…
(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
6.40
(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);
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(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.
…
Service of a claim form
…
7.5(2) Where the claim form is to be served out of the jurisdiction,
the claim form must be served in accordance with Section IV of Part
6 within 6 months of the date of issue.
Extension of time for serving a claim form
7.6
(1) The claimant may apply for an order extending the period for
compliance with rule 7.5.
(2) The general rule is that an application to extend the time for
compliance with rule 7.5 must be made
(a) within the period specified by rule 7.5; or (b) where an order has
been made under this rule, within the period for service specified by
that order.
(3) If the claimant applies for an order to extend the time for
compliance after the end of the period specified by rule 7.5 or by an
order made under this rule, the court may make such an order only if
(a) the court has failed to serve the claim form; or (b) the claimant
has taken all reasonable steps to comply with rule 7.5 but has been
unable to do so; and (c) in either case, the claimant has acted
promptly in making the application.
(4) An application for an order extending the time for compliance
with rule 7.5 – (a) must be supported by evidence; and (b) may be
made without notice.”
19. As the judge noted at para 66, before him the question was raised whether
rule 6.15(2) could be used, as it is used in respect of issues as to service in
proceedings where the parties are within the jurisdiction, retrospectively to accept
the parties’ actions as constituting good service where the defendant is outside the
jurisdiction. It was conceded before this court that rule 6.15(2) can be so used.
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20. For my part, I would accept that that concession was correctly made. The
judge was to my mind correct to hold in para 71 that, just as the power under rule
6.15(1) prospectively to permit alternative service in a service out case is to be
found in rule 6.37(5)(b)(i) or is to be implied generally into the rules governing
service abroad (because that must have been the intention of the drafter of the 2008
amendments to CPR rule 6), so rule 6.37(5)(b)(i) is to be construed as conferring
the power, via rule 6.15(2), retrospectively to validate alternative service in such a
case, or such a power is to be implied generally into the rules governing service
abroad. In any event, the contrary was not contended before this court.
21. In para 72 the judge, in my opinion correctly, added that the power
retrospectively to validate alternative service in a service out case involves
consideration of whether events in the foreign country in question were capable of
constituting proper service of the proceedings “in the sense that the court can be
satisfied that the proceedings have been properly brought to the attention of the
defendant”. As I will explain, that is an important point in the context of this
appeal.
22. The appellants’ argument is that the court had power under rule 6.15(2) to
make an order that steps already taken to bring the claim form to the attention of
the respondent by an alternative method constituted good service. The steps taken
were the delivery of the claim form and other documents, including the particulars
of claim, at Mr Azoury’s office in Beirut on 22 October 2009, which was within
the initial six months’ validity of the claim form.
23. Orders under rule 6.15(1) and, by implication, also rule 6.15(2) can be made
only if there is a “good reason” to do so. The question, therefore, is whether there
was a good reason to order that the steps taken on 22 October 2009 in Beirut to
bring the claim form to the attention of the respondent constituted good service of
the claim form upon him. The judge held that there was. In doing so, he was not
exercising a discretion but was reaching a value judgment based on the evaluation
of a number of different factors. In such a case, the readiness of an appellate court
to interfere with the evaluation of the judge will depend upon all the circumstances
of the case. The greater the number of factors to be taken into account, the more
reluctant an appellate court should be to interfere with the decision of the judge.
As I see it, in such circumstances an appellate court should only interfere with that
decision if satisfied that the judge erred in principle or was wrong in reaching the
conclusion which he did.
24. It is important to note that rule 6.15 applies to authorise service “by a
method or at a place not otherwise permitted” by CPR Part 6. The starting point is
thus that the defendant has not been served by a method or at such a place
otherwise so permitted. It therefore applies in cases (and only in cases) where
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none of the methods provided in rule 6.40(3), including “any other method
permitted by the law of the country in which it is to be served” (see rule
6.40(3)(c)), has been successfully adopted. The only bar to the exercise of the
discretion under rule 6.15(1) or (2), if otherwise appropriate, is that, by rule
6.40(4), nothing in a court order must authorise any person to do anything which is
contrary to the law of the country where the claim form is to be served. So an
order could not be made under rule 6.15(2) in this case if its effect would be
contrary to the law of Lebanon. Although it was held that delivery of the claim
form was not permitted service under Lebanese law, it was not suggested or held
that delivery of the documents was contrary to Lebanese law or that an order of an
English court that such delivery was good service under English law was itself
contrary to Lebanese law.
The judgment at first instance
25. As stated above, the judge set out Lewison J’s judgment in extenso. At para
59 the judge identified the parts of the evidence which had been before Lewison J
and he then quoted paras 2 to 4 of the judgment as follows:
“2. The underlying claim raises serious allegations of fraud
against the Defendant, Mr Baadarani; who is a Lebanese national.
Attempts have been made to serve via the Consular authorities in the
Lebanon in accordance with CPR Part 6, rule 42. Those attempts
have proved very difficult, not least, because there is considerable
uncertainty about the method by which service should be effected
which, according to the evidence, goes back to a Treaty of the 1920s
between the Lebanon and France. Nonetheless, the claim form and
its accompanying documents were, to use a neutral word, delivered
to Mr Baadarani’s Lebanese lawyer, who holds a power of attorney,
which enables him to conduct proceedings, including proceedings in
this jurisdiction. on Mr Baadarani’s behalf. That lawyer signed for
the papers and retained them for some four months before returning
them. According to the claimant’s Lebanese expert, that amounts to
good service under Lebanese law. Nonetheless, Mr Baadarani
appears to be denying that he has been properly served and has
declined to provide an address for service.
3. In addition to delivery of those papers to the Lebanese lawyer,
Mr Baadarani has instructed a firm of English solicitors called M &
S Solicitors Ltd, who have taken up the cudgels on his behalf and so
far as the evidence goes, have themselves at least had sight of the
claim form and the other relevant documents. They have written a
long letter of 25 March 2010, which has been placed before me and
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to which Mr Penny, who appears on behalf of the claimant, has quite
properly referred. The points made in that letter have been addressed
in the fifth witness statement of Mr Mascarenhas, which I have read.
4. 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.
The provisions of CPR rule 6.37(5) say that the court may, in giving
permission to serve out of the jurisdiction:
‘Give directions about the method of service.’
That is a quite general provision and, as it seems to me, would
ordinarily mean that the court would make directions, which did not
involve one of the prescribed methods of service dealt with by rule
6.40 and following. In other words, it is inherent in rule 6.37(5)(b)(i)
that the court may make directions about alternative methods of
service. Where the court is dealing with service of proceedings
within the jurisdiction the court also has the power to declare that
steps already taken to bring the proceedings to the notice of a
defendant should count as good service. Mr Penny did at one stage
submit that the same power applied to service out of the jurisdiction,
but in the light of an interchange between him and me he is not
pressing that submission and I am not ruling for or against it. I will
adjourn that part of the application notice in case it becomes a live
issue at a later date.”
26. In para 60 the judge noted a number of points derived from Lewison J’s
judgment which he observed were based, not on the appellants’ evidence, but on
the evidence of Mr Azoury and on the respondent’s solicitors’ letter of 25 March
2010. In particular Lewison J found, not only that Mr Azoury retained the
documents delivered on 22 October 2009, but that they or a copy of them had been
in the hands of the respondents’ English lawyers prior to writing their long letter of
25 March 2010. Lewison J found that the respondent must have been fully aware
of the contents of the claim form. The judge concluded that such a finding of fact
seemed to him inevitably to follow from Lewison J’s other findings, which,
because of their source, were in his judgment unchallengeable.
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27. For present purposes, the critical part of the reasoning of the judge is in
paras 73 and 74 of his judgment. They are in these terms:
“73. In my judgment, the declaration sought by the claimants in
this case should be made. The evidence before Lewison J and before
me is sufficient to demonstrate that this is an appropriate case for the
use of the power. The principal reasons for doing so are that the
method of service through diplomatic channels in Lebanon has
proved impractical and any attempt to pursue it further will lead to
unacceptable delay and expense. B has demonstrated that he is
unwilling to co-operate with service of the proceedings by disclosing
his address in the Lebanon, but, and most importantly, it is clear that
B, through his advisers, is fully apprised of the nature of the claim
being brought.
74. The delivery of the claim form and supporting documents to
B’s Lebanese lawyer on 22 October 2009, which I have found is to
be treated as good service of the proceedings, took place during the
initial six-month period of validity of the claim form. Accordingly,
my conclusion means that the three orders for extension of the
validity of the claim form were unnecessary and I need not deal with
the question of whether those orders are to be set aside as the first
defendant contends. Nor need I deal with the claimants’ application
for a yet further extension of that validity.”
28. The judge thus determined the issue of service on the basis that there was
good reason for making the declaration sought under CPR rule 6.15(2). In short he
held that there was a good reason to order that the steps taken to deliver the
documents to Mr Azoury’s offices in Beirut on 22 October 2009 and thus to bring
the documents to the respondent’s attention amounted to good service on him.
The Court of Appeal – discussion
29. The respondent appealed to the Court of Appeal against the making of that
declaration. It appears to me that the central question on that appeal ought to have
been whether the judge was entitled to make the declaration and that the appeal
should have turned on the question whether, having afforded the decision of the
judge appropriate respect, the Court of Appeal concluded that he erred in principle
or was wrong in reaching the conclusion which he did.
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30. However, that does not seem to have been the focus of the argument in the
Court of Appeal. In the Court of Appeal Longmore LJ, with whom McFarlane and
Arden LJJ agreed, first considered and, at paras 5 to 8, rejected the first ground of
appeal, which again asserted that England was not the appropriate forum for these
proceedings. The respondent has not sought to argue that point in this court.
31. As to service, Longmore LJ referred to some of the evidence in detail at
paras 11 to 16. He then referred to the judgment and, in particular, to the
declaration at para 17. At para 18 he said this:
“It would be unusual (to say the least) for a judge to validate a form
of service which was not valid by local law. It must follow that,
although he does not spell it out, the judge must by implication be
taken to have decided that the service which took place was valid by
Lebanese law because he also decided that he would and should
retrospectively validate the service that had taken place.”
It was submitted by Mr Freedman QC on behalf of the appellants that the judge did
not hold, either expressly or by implication, that the delivery of the documents on
22 October 2009 was good service under Lebanese law.
32. I would accept Mr Freedman’s submission. The judge did not hold in paras
73 and 74 that there was good service under Lebanese law. If he had so held, there
would have been no need for the declaration granted by the judge because the
service would have been good service as service “by any other method permitted
by the law of the country in which it is to be served” (see rule 6.40.(3)(c)), which
in this case was of course Lebanon. As already explained, an order under rule
6.15(2) may only be made where there is a good reason to authorise service by a
method or at a place not otherwise permitted by Part 6. The judge could, therefore,
not have made the declaration if he had taken the view that the delivery of the
documents on 22 October was good service under Lebanese law. Moreover, it is
in my opinion clear from the first sentence of para 74 that the judge was not
holding that the delivery was good service under Lebanese law but that it was “to
be treated as good service” under English law pursuant to CPR 6.15(2).
33. The question is whether the judge was entitled to hold that there was a good
reason to order that the delivery of the documents to Mr Azoury on 22 October
2009 was to be treated as good service. Whether there was good reason is
essentially a matter of fact. I do not think that it is appropriate to add a gloss to the
test by saying that there will only be a good reason in exceptional circumstances.
Under CPR 6.16, the court can only dispense with service of the claim form “in
exceptional circumstances”. CPR 6.15(1) and, by implication, also 6.15(2) require
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only a “good reason”. It seems to me that in the future, under rule 6.15(2), in a
case not involving the Hague Service Convention or a bilateral service treaty, the
court should simply ask whether, in all the circumstances, there is good reason to
order that steps taken to bring the claim form to the attention of the defendant is
good service.
34. This is not a case in which the Hague Service Convention applies or in
which there is any bilateral service convention or treaty between the United
Kingdom and Lebanon. In the courts below, the case was argued throughout on
that basis and, although there was a hint in the argument before this court that that
might not be the case, it was accepted that the appeal should be determined on that
basis. It follows that an alternative service order does not run the risk of
subverting the provisions of any such convention or treaty: cf the reasoning of the
Court of Appeal in Knauf UK GmbH v British Gypsum Ltd [2002] 1 WLR 907,
paras 46 to 59 and Cecil v Bayat [2011] EWCA Civ 135, [2011] 1 WLR 3086,
paras 65 to 68 and 113. In particular, Rix LJ suggested at para 113 of the latter
case that it may be that orders permitting alternative service are not unusual in the
case of countries with which there are no bilateral treaties for service and where
service can take very long periods of up to a year. I agree. I say nothing about the
position where there is a relevant convention or treaty.
35. As stated above, in a case of this kind the court should simply ask itself
whether, in all the circumstances of the particular case, there is a good reason to
make the order sought. It should not be necessary for the court to spend undue
time analysing decisions of judges in previous cases which have depended upon
their own facts.
36. The mere fact that the defendant learned of the existence and content of the
claim form cannot, without more, constitute a good reason to make an order under
rule 6.15(2). On the other hand, the wording of the rule shows that it is a critical
factor. As the editors of the 2013 edition of the White Book note (vol 1, para
6.15.5), rule 6.15(2) was designed to remedy what were thought to be defects as
matters stood before 1 October 2008. The Court of Appeal had held in Elmes v
Hygrade Food Products plc [2001] EWCA Civ 121 that the court had no
jurisdiction to order retrospectively that an erroneous method of service already
adopted should be allowed to stand as service by an alternative method permitted
by the court. The editors of the White Book add that the particular significance of
rule 6.15(2) is that it may enable a claimant to escape the serious consequences
that would normally ensue where there has been mis-service and, not only has the
period for service of the claim form fixed by CPR 7.5 run, but also the relevant
limitation period has expired.
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37. Service has a number of purposes but the most important is to my mind to
ensure that the contents of the document served, here the claim form, is
communicated to the defendant. In Olafsson v Gissurarson (No 2) [2008] EWCA
Civ 152, [2008] 1 WLR 2016, para 55 I said, in a not dissimilar context, that
“… the whole purpose of service is to inform the defendant of the
contents of the claim form and the nature of the claimant’s case: see
eg Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506, 509
per Lord Brightman, and the definition of ‘service’ in the glossary to
the CPR, which describes it as ‘steps required to bring documents
used in court proceedings to a person’s attention…’”
I adhere to that view.
38. It is plain from paragraph 73 of his judgment quoted above that the judge
took account of a series of factors. He said that, most importantly, it was clear that
the respondent, through his advisers was fully apprised of the nature of the claim
being brought. That was because, as the judge had made clear at para 60, the
respondent must have been fully aware of the contents of the claim form as a result
of it and the other documents having been delivered to his lawyers on 22 October
in Beirut and communicated to his London solicitors and to him. As Lewison J
said at para 4 of his judgment (quoted above):
“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.”
I agree.
39. In addition the judge had regard to the fact that service through diplomatic
channels in Lebanon had proved impractical and that any attempt to pursue it
further would lead to unacceptable delay and expense. Furthermore, the judge
noted that the respondent was unwilling to co-operate with service of the
proceedings by disclosing his address in the Lebanon. While I accept the
submission made on behalf of the respondent that he was not under a duty to
disclose his address, his refusal to co-operate does seem to me to be a highly
relevant factor in deciding whether there was a good reason for treating as good
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service the delivery of the documents in Beirut within the six months’ validity of
the claim form in circumstances in which the documents came to his knowledge.
40. It was submitted that the judge did not have regard either to the three and a
half month delay between the time the appellants issued the claim form and the
time they instructed counsel to settle particulars of claim or to the fact that the
claim was time-barred. I would not accept those submissions. It is true that he did
not expressly refer to either point in the part of his judgment dealing with service
but I do not think that he can have been unaware of either point. As to the time
bar, the judge was plainly well aware of it. Indeed, he discussed the limitation
defence in detail between paras 30 and 33. The significance of the time bar
defence was in the minds of the parties and the judge throughout. The judge
thought that there was good reason for making an order under rule 6.15(2)
notwithstanding that defence and was, in my view, entitled to take that view. As to
the three and a half months delay, the judge must have been aware of it. It seems
to me to be likely that he took the view that, given the difficulties which faced the
appellants in serving the claim form, the delay made no difference. He was
entitled to do so. The critical points were that the documents were delivered within
the six months’ validity of the claim form and brought to the respondent’s
attention and that service via diplomatic channels had proved impracticable.
41. In these circumstances I do not think that the judge made an error of
principle. He correctly directed himself that the question was whether there was a
good reason to order under rule 6.15(2) that the steps already taken to bring the
claim form to the attention of the respondent constituted good service. He
answered that question in the affirmative and was entitled to reach that conclusion.
42. The Court of Appeal did not focus on the reasoning of the judge. The
essential reasoning of the Court of Appeal is set out in the judgment of Longmore
LJ at paras 22 to 32. He considered first (between paras 22 and 28) whether
service on Mr Azoury was good service under Lebanese law and concluded at para
29 that it was not. As I indicated above, the appellants do not challenge that
conclusion.
43. There are five respects in which I respectfully disagree with the conclusions
reached by the Court of Appeal. The first is that referred to in paras 31 and 32
above, namely that the judge did not decide that there had been valid service of the
claim form under Lebanese law.
44. The second is related to the first. In paras 22 and 23 Longmore LJ said this:
Page 17
“22. [CPR 6.37(5)(b)(i)] authorises the court therefore to make an
order for alternative service pursuant to CPR 6.15(1) and also
to make such an order with retrospective effect pursuant to
CPR 6.15(2). Nevertheless the exercise of this power is liable
to make what is already an exorbitant power still more
exorbitant and I am persuaded by Mr Greatorex that it must
indeed be exercised cautiously and, as Stanley Burnton LJ
said in Cecil v Bayat [2011] 1 WLR 3086, para 65, should be
regarded as exceptional. It would, therefore, usually be
inappropriate to validate retrospectively a form of service
which was not authorised by an order of an English judge
when it was effected and was not good service by local law.
CPR 6.40 permits three methods of service including service
through the British Consular authorities and any additional
method of service should usually not be necessary. The fact
that CPR 6.40(4) expressly states that nothing in any court
order can authorise or require any person to do anything
contrary to the law of the country in which the document is to
be served does not mean that it can be appropriate to validate
a form of service which, while not itself contrary to the local
law in the sense of being illegal, is nevertheless not valid by
that law.
23. It follows that a claimant who wishes retrospective validation
of a method of service in a foreign country must (save perhaps
where there are adequate safeguards which were not present
in this case) show that the method of service which is to be
retrospectively validated was good service by the local law.
Service on Mr Azoury would not be regarded as good service
on Mr Baadarani as a matter of English law merely because
Mr Azoury was clothed with a general power of attorney. Can
Mr Freedman show that the position is any different in
Lebanese law?”
45. I do not agree that for the court to make an order under rule 6.15(2) is “to
make what is already an exorbitant power still more exorbitant”. I recognise of
course that service out of the jurisdiction has traditionally been regarded as the
exercise of an exorbitant jurisdiction. That is a consideration which has been of
importance in determining whether permission to serve out of the jurisdiction
should be granted, although in this regard I agree with the approach set out by
Lord Sumption in his judgment. In any event, in this case, it is now accepted that
it was proper to serve the claim form out of the jurisdiction. The rules as to the
method of service set out above seem to me to have the legitimate sensibilities of
other states in mind. It is for that reason that CPR 6.40(4) provides that nothing in
CPR 6.40(3) or in any court order authorises or requires any person to do anything
Page 18
which is contrary to the law of the country of service. I have already expressed my
view that the order recognising the delivery of the claim form as alternative service
under English law is not contrary to Lebanese law. Moreover it was not in breach
of any convention or treaty but merely recognised that the claim form (and other
documents) had been brought to the attention of the respondent. I do not think,
therefore, that in a case not involving the Hague Service Convention or a bilateral
service treaty, an order under rule 6.15(2) must be regarded as “exceptional” or,
indeed as suggested in para 29 of Longmore LJ’s judgment, that there must be a
“very good reason” for it. As already stated, the CPR do not so provide. They
merely require good reason.
46. My third reason for disagreeing with the Court of Appeal concerns para 23
of Longmore LJ’s judgment, where he says that a claimant who wishes the court
retrospectively to validate alternative service abroad must “(save perhaps where
there are adequate safeguards which were not present in this case)” show that the
method used was good service under the local law. As noted above, that would
render rule 6.15(1) and (2) otiose. Without the words in brackets, the proposition
in para 23 would not be correct. It is not however clear to me what safeguards the
court had in mind. In any event, for the reasons already stated, Longmore LJ was
wrong in my view to suggest that a court needs a “very good reason” to make an
order under rule 6.15(2) where the steps taken did not constitute valid service
under local law.
47. The fourth reason arises out of the Court of Appeal’s reliance upon the fact
that the appellants did not issue the claim form until nearly the end of the
limitation period. At para 29 of his judgment, Longmore LJ stated:
“29. Since, therefore, Mr Azoury had no authority in fact to accept
service and since he did not, in any event, purport to do so, the
delivery of the claim form and associated documentation to him did
not, in my view, constitute good service in Lebanese law. I do not,
therefore, think that the judge should have retrospectively validated
that service as alternative service to that directed by Morgan J unless
there was very good reason to do so. The only reason to do so was to
avoid the claim becoming time-barred, which is not in itself a good
reason (let alone an exceptional reason) for preserving a stale claim.
Mr Freedman submits that both personal service and service through
diplomatic channels had become impossible, but that impossibility
(as to which there was very little evidence) has only arisen as a result
of the dilatory way in which the claimants have pursued the English
claim. They were asking for trouble by only issuing their claim form
shortly before the limitation expired. If the claim form had been
issued say four years earlier, and a diligent process server had been
instructed, Mr Baadarani might well have been served at one of the
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three address identified by Mr Houssami in his witness statement and
the order of Morgan J would have been complied with. Four years
might even have been long enough for diplomatic channels to be
effective but it is not suggested that Mr Baadarani could only be
served in that manner. If it really was proving impossible to effect
service over that long period, an application for alternative service
could still have been made well before the six year period had
expired and no retroactive gymnastics would have been necessary.”
48. As I read para 29, the delay prior to the issue of the claim form was a
significant part of the reasoning of the Court of Appeal, although, as I understand
it, it was not a point taken on behalf of the respondent. I would accept the
submission that (save perhaps in exceptional circumstances) events before the
issue of the claim form are not relevant. The focus of the inquiry on an issue of
this kind is not and (so far as I am aware) has never been on events before the issue
of the writ or claim form. The relevant focus is upon the reason why the claim
form cannot or could not be served within the period of its validity. The judge held
that there was an issue to be tried on the question whether the appellants’ claim
was time-barred. In resolving the issues of service, the court had therefore to treat
the claim form as issued in time.
49. This brings me to a consideration of the facts and to the fifth respect in
which I respectfully disagree with the Court of Appeal. In para 31 Longmore LJ
said this:
“31. In the present case both the evidence of the fact (if it be a fact)
that Mr Baadarani did in fact reside at the suggested address and the
evidence of the attempt to serve him there was very meagre. That
evidence does not, in my judgment, show that there was such an
ineffective attempt at service to constitute a good reason for not
serving him at that address in such a way as to justify even an
original order for alternative service pursuant to CPR 6.15(1) let
alone an order that a form of service unilaterally chosen by the
claimants should be deemed to be good service pursuant to CPR
6.15(2).”
50. It appears that the respondent did not in fact reside at the Farid Trad Street
address. However, there is no reason to think that the appellants did not genuinely
think that he did. Moreover there is no evidence that they could have found out
what his address was, especially in circumstances where he was refusing to tell
them where he lived. If he did not live at the Farid Trad Street address, further
attempts to serve him there would have proved fruitless.
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51. In these circumstances, the judge was entitled to reach the conclusions of
fact which he did. As the judge explained, there were difficulties in serving the
claim form, the appellants cannot be blamed for failing to ascertain his address,
especially in circumstances in which the respondent instructed his lawyers to
refuse to tell the appellants what it was. Moreover, the claim form was delivered
to Mr Azoury’s office within the period of its validity, with the result that it came
to the attention of the respondent. In all these circumstances he held that there was
a good reason to grant the declaration. In my opinion there is no legitimate basis
on which to interfere with that decision.
CONCLUSION
52. For these reasons I would allow the appeal and restore the declaration made
by the judge. In these circumstances the other issues argued on the appeal do not
arise.
LORD SUMPTION (with whom Lord Neuberger, Lord Reed and Lord
Carnwath agree)
53. In his judgment in the Court of Appeal, Longmore LJ described the service
of the English Court’s process out of the jurisdiction as an “exorbitant”
jurisdiction, which would be made even more exorbitant by retrospectively
authorising the mode of service adopted in this case. This characterisation of the
jurisdiction to allow service out is traditional, and was originally based on the
notion that the service of proceedings abroad was an assertion of sovereign power
over the Defendant and a corresponding interference with the sovereignty of the
state in which process was served. This is no longer a realistic view of the
situation. The adoption in English law of the doctrine of forum non conveniens and
the accession by the United Kingdom to a number of conventions regulating the
international jurisdiction of national courts, means that in the overwhelming
majority of cases where service out is authorised there will have been either a
contractual submission to the jurisdiction of the English court or else a substantial
connection between the dispute and this country. Moreover, there is now a far
greater measure of practical reciprocity than there once was. Litigation between
residents of different states is a routine incident of modern commercial life. A
jurisdiction similar to that exercised by the English court is now exercised by the
courts of many other countries. The basic principles on which the jurisdiction is
exercisable by the English courts are similar to those underlying a number of
international jurisdictional conventions, notably the Brussels Convention (and
corresponding regulation) and the Lugano Convention. The characterisation of the
service of process abroad as an assertion of sovereignty may have been
superficially plausible under the old form of writ (“We command you…”). But it
Page 21
is, and probably always was, in reality no more than notice of the commencement
of proceedings which was necessary to enable the Defendant to decide whether
and if so how to respond in his own interest. It should no longer be necessary to
resort to the kind of muscular presumptions against service out which are implicit
in adjectives like “exorbitant”. The decision is generally a pragmatic one in the
interests of the efficient conduct of litigation in an appropriate forum.
54. For these reasons I cannot share the starting point from which the Court of
Appeal approached the present case. I consider that the appeal should be allowed
for the reasons given in the judgment of Lord Clarke.
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