Practice—Service out of the jurisdiction—Method of service

Queen’s Bench Division
Mackay J
8 December 2006

CPR 3.10 cannot be used to correct an error in service where proceedings have been purportedly served out of the jurisdiction, but in a method which is not valid in the relevant jurisdiction.

Jasbhir Dhillon (instructed by Eversheds LLP) for the defendant.
Hugh Mercer (instructed by Spring Law Ltd) for the claimant.

The defendant was an Icelandic resident. The claimant was an Icelandic businessman, who wished to bring a claim concerning allegedly defamatory material on the defendant’s website. Proceedings were issued in London in August 2004.

In September 2004, on the instructions of the Foreign and Commonwealth Office, the deputy head of mission at the British embassy in Iceland identified the defendant, who was already known to him, and gave him a copy of the claim form and other court documents including the response pack.

Beyond receiving the envelope, the defendant took no steps. There being no acknowledgement of service, and the court being satisfied that the documents had been served, judgment was entered in default in favour of the claimant in December 2004. The defendant applied to set aside the judgment, and the claimant in turn applied for relief under CPR 3.10 in relation to the fact that there had been no written receipt of service obtained.
The master held that there had been an error regarding service in the absence of written receipt. He went on, however, to exercise his discretion under CPR 3.10 to correct that error, and therefore dismissed the application to set aside. The defendant appealed.

MACKAY J:

CPR 3.10 provided:

“Where there has been an error of procedure such as a failure to comply with a rule or practice direction—(a) the error does not invalidate any step taken in the proceedings unless the court so orders; and (b) the court may make an order to remedy the error.”

CPR 6.24 provided:

“(1): Where a claim form is to be served out of the jurisdiction, it may be served by any method—(a) Permitted by the law of the country in which it is to be served...(2) Nothing in this rule or in any court order shall authorise or require any person to do anything in the country where the claim form is to be served which is against the law of that country.”

CPR 13.2 provided:

“the court must set aside a judgment entered under Pt 12 if judgment was wrongly entered because—(a) In the case of a judgment in default of an acknowledgement of service, any of the conditions in r 12.3(1) and 12.3(3) was not satisfied...”

The defendant placed heavy reliance on Mr Justice Colman in the case of Shiblaq v Sadikoglu (No 2) [2004] EWHC 1890 (Comm), [2004] 2 All ER (Comm) 596. He argued that simple personal service, no matter by whom it was effected, was not a permitted method of service in Iceland. He stressed the importance of strict observance of service rules imposed by the state in which the person served was found. The terms of CPR 13.2 were such that it was mandatory in those circumstances that the court had to set aside the default judgment.

His Lordship considered the Shiblaq case and also the decision of the Court of Appeal in Phillips v Nussberger [2006] EWCA Civ 654, [2006] 2 All ER (Comm) 305. The latter case was handed down the day before the master heard the instant application and it was not drawn to his attention.

The issue before the Court of Appeal in Phillips was whether the English court or the Swiss court, in which proceedings had also been issued by the opposing party, had first become “seised of the matter” under Art 21 of the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988. The claimant sought to apply CPR 6.9 to obtain an order dispensing with service of the English proceedings and thus making the English court the court first seised. The decision of the Court of Appeal was that that was not an order that the English court could make.
Strictly CPR 3.10 was not in issue in that appeal, since it was not relied on by the appellant, but the Court of Appeal went on to consider whether, if it had been, it could have saved the appellant’s position. The court noted that in domestic cases it was not possible to invoke CPR 3.10 on its own to extend time for service of the claim form, or to override the failure to serve the claim form, not least because there were other specific rules dealing with extension of time and dispensing with service. The court cited Elmes and Vinos v Marks and Spencer plc [2001] 3 All ER 784 and approved Colman J’s decision in Shiblaq No 2.

The defendant claimed that that dictum was binding on the issue in this case. His Lordship held that he had put his case too high. It was however highly persuasive and powerful support for the views of Colman J.
The claimant relied on Habib Bank Ltd v Central Bank of Sudan [2006] EWHC 1767 (Comm), [2006] All ER (D) 251 (Jul). At para 30 Mr Justice Field challenged the assertion in a White Book note that CPR 6.24 had the effect of preventing service by a method which the law of the place of service did not permit in the relevant circumstances.

The defendant’s response was that Field J was considering a significantly different question, namely one where a prospective application for alternative service had been made before judgment being entered. His Lordship held that that was indeed a valid distinction and undermined, from the
respondents’ point of view, the utility of Habib Bank as an authority in this case.

His Lordship held that pre-CPR decisions were of lesser value. Had the master had the benefit of the Phillips case, he would and should have regarded the balance as being swung in favour of the defendant’s arguments about whether CPR 3.10 could be used at all in the circumstances. In his Lordship’s view it could not, and the appeal would therefore be allowed.