Kaki v National Private Air Transport Company & Anor

This is an appeal from the order dated 4 February 2014 of Mr Christopher Butcher QC sitting as a Deputy Judge of the High Court (Commercial Court), whereby he declared that steps taken by the claimant, the respondent to this appeal, to bring the claim form to the attention of the defendant (the appellant), in September 2012 amount to, “Good service pursuant to CPR Part 6.15(2). Permission to appeal was granted by Briggs LJ after an oral hearing on 11 December 2014.

In this judgment I will refer to the claimant who is the respondent to this appeal as, “The Sheik” and to the appellant as “NAS”.

The Sheik’s claim arises out of an agreement dated 28 March 2008 for the purchase of a 2.5 per cent interest in a Gulf Stream 450 aircraft (“the Aircraft”) for US$4,398,750 (“the Agreement”). The claimant alleges that NAS failed to deliver the interest in the aircraft and to satisfy certain conditions precedent and that, accordingly, the Sheik is entitled to return of the US$4,398,750 or to an equivalent amount of damages.

The chronology relating to the service of the claim form as found by the judge is not in dispute. A summary is very helpfully set out in the skeleton argument of Mr Milner, counsel for the Sheikh, at paragraph 4(1) to 4(22) and I will incorporate them in this judgment:

There are a number of important points to note about this chronology. First, the time for serving the claim form had been extended to 14 August 2013 by Andrew Smith J’s order of 31 January 2013. Secondly, the order of Mr Knowles QC of 20 May 2013 provided that service of the claim form by an alternative method would be achieved only by delivery of the claim form at the identified address in Saudi Arabia of NAS and also by delivery of the claim form to Field Fisher Waterhouse. As the judge explained in paragraph 11 of his judgment, the evidence before him was that Clydes intended to coordinate “Service” from Saudi Arabia and on Field Fisher Waterhouse so that they would be done at the same time. That is why Field Fisher Waterhouse were not served with the documents earlier than they were.

Secondly, in the event, the service of the claim form at the right PO Box address in Jeddah was not actually effected until 18 August 2013. That is four days after the latest date for service under the order of Andrew Smith J of 31 January 2013. Field Fisher Waterhouse had received the documents on 15 August 2013, which is one day after the latest date for service.

Thirdly, as the judge records at paragraph 12 of his judgment, Field Fisher Waterhouse responded to Clyde & Co on 15 August 2013 indicating that they no longer acted for NAS and that they had sent the letter and attachments to Bird & Bird Solicitors, who it was said now acted for NAS. There is no evidence of whether Bird & Bird were in any way involved in acting for NAS at that time, or between August 2013 and when they first officially came on the scene on 29 April 2014. On that date Bird & Bird acknowledged the order of the court granting summary judgment to the Sheik. However, as the judge remarked, Bird & Bird’s letter was the first written response from the defendants’ side since that of Mr Sohanpal in February 2012.

The Deputy High Court Judge heard argument on the applications made on behalf of the Sheik on 23 May 2014. He gave an extemporary judgment which is a model of conciseness. At the hearing, it had become common ground that (1) CPR Part 6.16 could not assist the Sheik if he could not succeed under Part 6.15; and (2) CPR 3.10 could not be to cure late service of a claim form. (See Vinos v Marks & Spencer Plc [2001] 3 ALL ER 784) Therefore, the parties’ submissions and the judgment focussed on the applications made by the Sheik under Part 7.6(3) and Part 6.15.

The judge dealt first with the application for an extension of time for service under Part 7.6(3). He dismissed this application because he held that neither of the two necessary criteria had been fulfilled. First, in the judge’s view, the claimant had not taken, “All reasonable steps” to effect service in time. The judge found that there had been no attempt to serve Field Fisher Waterhouse in time; that the claimants’ London solicitors had delayed in instructing Saudi lawyers to effect service and that they had failed to make those Saudi lawyers aware of the need to serve by 12 August 2013. He also found that there were delays on the part of the Saudi lawyers once they had been instructed.

Secondly, the judge held that the claimants had not made the application under Part 7.6(3) promptly. The late service occurred in August 2013 but the application was not made until May 2014.

The judge then dealt with the Part 6.15 application. He referred to the leading case on the scope and construction of Part 6.15 which is the decision of the Supreme Court in Abela v Ahmad Baadarani [2013] 1 WLR 2043. That case is fundamental to this appeal and so I will refer to it in some detail now.

The claimants in that case had obtained permission to serve proceedings on the first defendant, an individual at a specific address in Beirut, Lebanon and to the extent required, to do so by an alternative method. Attempts to locate the defendant at the identified address were unsuccessful, but the claimant delivered a set of untranslated documents to a Lebanese attorney who had acted for the first defendant in other proceedings in Lebanon, which had been started by the claimants. The attorney returned the documents. Attempts to serve the proceedings through diplomatic channels failed. The claimants sought an order from the English court that delivery of the document to the Lebanese attorney amounted to good service. The judge, Lewison J (as he then was) accepted the concession of counsel that Part 6.15 permitted the court to authorise service by a method or at a place not otherwise permitted by Part 6, even in a case where service would be out of the jurisdiction. The judge also held that, as the first defendant had been fully appraised of the nature of the proceedings through the Lebanese attorney, he would make an order for service by delivery of the documents to the attorney constituted the service.

The Court of Appeal set aside the judge’s order, but it was restored in the Supreme Court. Lord Clarke of Stone-cum-Ebony JSC gave the leading judgment. Lord Sumption agreed with it and made some supplementary remarks. Lord Clarke focussed on the question of the meaning of the words: “... that there is a good reason” in Part 6.15(1). It is to be noted that the indefinite article precedes the words, “good reason” in that sub-paragraph.

At paragraph 33 of his judgment Lord Clarke states:

“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 r 6.16, the court can only dispense with service of the claim form ‘in exceptional circumstances’. CPR r 6.15(1) and, by implication, also 6.15(2) require 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.”

That is the guiding principle and we must beware any attempts to add any gloss on the wording of Part 6.15(1) and (2). Insofar as Mr John Baldwin QC may have inadvertently done so in his decision (sitting as a Deputy High Court Judge) in Dunbar Assets Plc v PCP Premier Limited [2015] EWHC 10(Ch), I respectfully suggest his approach should not be followed. The Supreme Court did not state, in Abela, that there is a two-stage test in which the court asks first is there a good reason to authorise alternative service and secondly, should the court exercise its discretion to do so. Thus, it may well be that the comment at paragraph 6.15.3 of the current edition of The White Book (p.249) based on the statements of Lightman J in Albon (t/a N A Carriage Co) v Naza Motor Trading SDN BHD [2007] EWHC 327 (Ch) may need some reconsideration. In the Dunbar Assets case, Mr Baldwin also referred to a number of possible factors that might be considered in deciding whether there is, “A good reason”. These are no more than possible factors, they are not a checklist.

I return to the judgment in the present case. The judge held that there was a good reason to order that the steps taken to bring the claim to the attention of NAS, specifically, by sending the letter enclosing the claim form on 13 September 2012, should amount to good service and so he authorised it as such.

The judge accepted that the point was a difficult one to decide. He gave four main reasons for his conclusion. First, the claim form had come to the attention of the defendant such that the defendant was aware of its existence and the nature of the proceedings by virtue of letters and emails sent to Dr Juwayer in February and September 2012. The letters and emails of 13 September 2012 had been sent at a time after the Sheik had been given permission to serve out of the jurisdiction and within the validity of the claim form: see paragraph 33 of the judge’s judgment. Secondly, service through diplomatic channels failed: see paragraph 34. Thirdly, although the claimant had not taken, “all reasonable steps” to serve the claim form in time, overall the claimant had made significant efforts over a prolonged period to bring the claim and the claim form to the attention of the defendant and had succeeded in doing so: see paragraph 35. Lastly, the claim was not time barred and there might be further difficulties and delays if the claimant were required to serve a new claim out of the jurisdiction: see paragraph 36.

There are two main broad grounds on which Mr Alexander Milner for the appellant, NAS, attacks the judgment of the judge. First, he submits, the judge failed to take any account of the fact that the application under Part 6.15(1) and (2) had been made long after the time for serving the claim form had expired. This is in marked distinction to the situation in the Abela case so that that case can be distinguished. Mr Milner submits that where the application is made after the time for service that the claim form has expired, the court must adopt a much more rigorous approach to the question of whether there is, “a good reason” to authorise service by a method other than the ones authorised by the CPR. Otherwise, he submits, the strict time limits that apply to service of the claim form can be too easily and inappropriately circumvented, thus subverting the court’s rules and its overriding objective.

Mr Milner drew our attention, by way of analogy, to the requirements under CPR Part 7.6(3) for a retrospective extension of time for service and those for obtaining an order to dispense with service of proceedings under Part 6.16. He submits that it would be illogical and unsatisfactory if CPR Part 6.15(1) and (2) imposed a less rigorous test in cases where the application to validate service by an alternative method was made after the time for service by the authorised method had passed.

Mr Milner emphasised the fact that the judge did not appear to place any weight at all on the fact that the application in this case had been made after the time authorised service of the proceedings had passed. If he had done so he would have been bound to conclude that no relief should have been given under Part 6.15(1) and (2). In support of this first ground, Mr Milner relied on statements of Andrew Smith J in Brown v Innovatorone plc[2009] EWHC 1376 at paragraph 40 in which he stated that a court should adopt, “A rigorous approach” to an application by a claimant for “indulgence” when made under CPR Part 6.15. Mr Milner submitted that the judge in this case singularly failed to take that approach.

Mr Milner’s second main argument is that the judge’s conclusion overall was wrong and that there was not, “a good reason” to authorise service of the method of sending the letter with the claim form and other documents on 13 September 2012 for the attention of NAS. He submits that the basic reason for the failure to serve documents in time in an authorised manner was the incompetence of the claimants’ legal representatives in England and Saudi Arabia. That could not be, “a good reason” to permit service by another unauthorised method. Moreover, Mr Milner submits that the judge’s four factors were not sufficient in themselves to amount to, “a good reason”, to permit an unauthorised method of service, especially after the time for proper service had expired.

Mr Milner submits that NAS had suffered considerable prejudice as a result of the judge’s order. The effect of the order is to validate service of the claim form as at the 17 September 2012. This meant that the summary judgment order granted by Mr Knowles QC sitting as a Deputy High Court Judge in March and April 2014 became entirely regular so that it could not be set aside as of right, but only if merits were shown. This, Mr Milner submits, gave an improper advantage to the claimant especially as the court was not told at the time of the summary judgment that there had not been proper service of the claim form by the terms of the order of 20 May 2013, as amended.

We did not require counsel for the Sheik, Mr Robert Levy QC, to make any oral submissions to us this morning. He had provided a very helpful skeleton argument. In this he submitted, in relation to the first of Mr Milner’s grounds, that the wording of Part 6.15 drew no distinction between an application made before the expiry of time to effect service by an authorised method and one which is made after. He noted that the Supreme Court in Abela had not drawn any distinction between the two situations. Furthermore, he informed us that in Norcross v Georgallides [2014] EWHC 4530. Mr Jonathan Hirst QC, sitting as a Deputy High Court judge, had granted relief under Part 6.15(2) when the validity of the claim form had expired. It is, however, right to point out at this juncture that this particular point does not seem to have been taken in that case.

Mr Levy’s written submission was that there was no warrant in principle for drawing any distinction between a case where an application is made before the expiry of the time for service of the claim form and one where the application was made afterwards. Moreover, he submitted that no useful analogies could be drawn with Part 7.6(3) or Part 6.16 because the wording of those provisions were different on the wording of Part 6.15.

Secondly, Mr Levy emphasised the statement of Lord Clarke in Abela at [41] that when the Judge at first instance makes his decision under Part 6.15 on whether or not to exercise the power to authorise service by a method not authorised by the rules, he is reaching a “value judgment”, based on the evaluation of a number of different factors. Whilst acceptance that the readiness of an Appellate Court to interfere with the decision of the judge would depend upon the circumstances of an individual case, Lord Clarke indicated that an Appellate Court should only interfere with the decision if satisfied the judge had erred in principle or was wrong in reaching the conclusion which he did.

Thirdly, Mr Levy submitted that the judge had neither erred in principle nor was he wrong in his overall conclusion, therefore, this court must not interfere with it.

The two initial paragraphs of Part 6.15 go together. Paragraph (1) gives the court the power to make an order permitting service by a method other than those otherwise permitted by Part 6 where there is “a good reason” to do so. As I have already noted, the words, “good reason” are preceded by the indefinite article, which I regard as significant. One good reason only is sufficient. It is also significant that there is no other qualification in the wording. There is nothing that indicates that a different test is to be applied in various different circumstances, before the power of the court can be exercised. I do not accept that if a court has found that there is “a good reason” to authorise service by a method not otherwise permitted by Part 6 there is then a further discretion which could result in the court not doing so. The basic question, as is clear from the Abela decision of the Supreme Court, is whether there is a good reason for the authorisation or not.

Paragraph (2) deals with the power of the court when an application is made to permit service of the claim form by an alternative method or an alternative place. It is concerned with a specific situation, that is: authorising as, “good service” steps that have, “already been taken to bring the claim form to the attention of the defendants by an alternative method”. In other words, the court is looking back at what has been done and deciding whether, retrospectively, that is to be authorised as good service. An “alternative method” means a method not otherwise authorised by Part 6. It should be noted that there are no other qualifications in the wording of paragraph (2).

It is also important to note the terms of paragraph (3). It is clear from the wording that an application can be made at any time and even without notice, so long as it is supported by evidence. There is no qualification as to when the application has to be made.

The effect of the wording of these three paragraphs is, to my mind, that a claimant can apply either before or after the time during which a claim form is valid for service, within or without the jurisdiction, for an order permitting service by an alternative method. If the claimant seeks an order that steps already taken to bring the claim for to the attention of the defendant by an alternative method is to be, “good service”, then there must be, “a good reason” for ordering that the steps identified by the claimant as the ones that were made to bring the claim form to the attention of the defendant will constitute good service of the claim form on him. That is clear in terms of paragraph 23 of the judgment of Lord Clarke in Abela where he said:

“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 [in that case] constituted good service of the claim form on him.”

As Andrew Smith J pointed out at paragraph 39 of his judgment in Brown v Innovatorone [2010] 2 All ER (Com) 80, the wording of rule 6.15 is in contrast to that of rule 6.16 which specifically stipulates that service of a claim form will only be dispensed with in, “exceptional circumstances”. Andrew Smith J correctly stated that the court is not confined to exercising its powers under Part 6.15(1) and (2) in “exceptional circumstances”.

The judge who has to decide whether to make an order under Part 6.15 will, of course, have to consider all factors that are relevant to the circumstances of the particular case in front of him. It is not sensible to try and identify all those factors in case that list is treated by others as a gloss on the wordings of Part 6.15(1) and (2). However, I readily accept that, as Lord Clarke stated at [48] of Abela, there will inevitably be a focus on the reason why the claim form cannot or could not be served within the period of its validity. Therefore, the conduct of the claimant and his advisors in this regard and the timing of the application are likely to be relevant factors for the judge to consider. So, too, will the conduct of the defendant and his advisors. I would also accept that when the court is considering all the relevant circumstances of a particular case, it has to adopt a “rigorous approach”, because that is the court’s job. It has to examine all relevant factors carefully and reject irrelevant ones. To that extent it must be “rigorous”. Indeed, it is only if the approach is “rigorous” that the court will be able to conclude that there is a “good reason” to make an order under Part 6.15(1) or (2).

I cannot, however, accept that the approach has to be any more rigorous if the application is made after the time for permission to serve out has expired rather than before the expiry of that time limit. If the application is made after the time for service out has expired, then that is just another factor that the court will have to consider. It will examine all relevant factors rigorously.

Therefore, I would hold that the deputy judge did not err in principle as to whether or not to make an order under Part 6.15(2).

In considering this argument, I have to keep in the forefront of my mind the words of Lord Clarke at [23] of Abela. The judge had to make the valued judgment on whether there is, “a good reason” to regard what was done to bring the claim form to the attention of NAS as constituting, “good service”. At paragraph 28 of his judgment in this case, the judge identified the steps on which the Sheik relied. These are:

“(i)

The letter to PO Box 18118 Jeddah of 21^st February 2012; (ii) the email of Mr Sohanpal of 21^st February 2012 and the email to Dr Ayman Al Juwayer on 22^nd February 2012; (iii) the further letter to the same address on 13^th September 2012; and (iv) the further email to Dr Ayman Al Juwayer on 13^th September 2012.”

The judge gave four reasons why he valued those steps provided, “a good reason”, and why they should constitute good service. The judge considered the points that were made, doubtless forcefully, by Mr Milner.

In this court Mr Milner has concentrated on three particular matters which he submits the judge did not take account of either at all or sufficiently. The first, he submits, is that the judge did not focus on why the claim form was not served in accordance with the order of 20 May 2013 (as amended) within the period of validity, i.e. before 14 August 2013. Mr Milner submits that the sole reason for this failure was the incompetence of Clyde & Co and its agents in Saudi Arabia and he submits that this therefore cannot amount to “good reason” for making an order under Part 6.15(2).

The judge fully set out the chronology of the events for the time of 20 May 2013 order until the fulfilment of its terms by 19 August 2013, although he did so in the context of the application of the Sheikh to extend the period of time in which to serve the claim form under Part 7.6(3). The judge examined the arguments that were made by Mr Milner in respect of that aspect of the case, as is clear from paragraph 23 of his judgment. The judge concluded that, “Not all reasonable steps” had been taken: see paragraph 25.

In my view, the judge had all those factors in mind when he stated at paragraph 25 of his judgment that although, “not all reasonable steps” had been taken for Part 7.6(3) purposes, overall the claimant had made, “significant efforts” to bring the claim form to the attention of the defendants and had done so. That is a valued judgment on that factor and I, for my part, find nothing wrong with it.

Secondly, Mr Milner submits that the judge did not take account of the fact that the application was made after the validity of the claim form for service out of the jurisdiction had expired. I disagree. In my view, the judge had this point in mind in making the comments that he did at paragraph 37 of his judgment.

Thirdly, Mr Milner emphasises that the judge did not take into account the effect of his judgment on the summary judgment of March 2014. Mr Milner submits that the effect of the order was that it would retrospectively turn the summary judgment order into a regular one which could then only be set aside if merits were shown. Without the judge’s order, that summary judgment order would have been irregular and could have been set aside as of right. This is a point which Mr Milner fairly accepts had not been specifically pressed before the judge.

Whether or not that is the case, in my view, there is nothing in the point. If there is “a good reason” for the order of the judge that the steps taken to bring the claim form to the attention of the defendant constitute good service, then it must follow that the judge is entitled, indeed obliged, under Part 6.15(3) to specify a date when the claim form is deemed served. As Flaux J correctly pointed out in paragraph 9 of his judgment in Dubai Financial Group Plc v National Private Air  Transport Services Co (National Air Services Limited) [2014] EWHC 4482(Com) a case similar to the present one, (and, I believe, with the same defendant), it must follow from that order that proper service in this case took place on 17 September 2012. Therefore the summary judgment of March 2014 was a regular judgment. In other words, in my view, a validation order made under Part 6.15(2) must have retroactive effect not just for the purposes of identifying the date on which the claim form was deemed served but for all subsequent events. There is no qualification of the rule itself and there is no basis on which I can see that the order should have effect for one purpose but not another.

I accept that rule 6.15(3) gives the court the power to state the date on which the claim form is deemed to be served and that in an appropriate case, it might not be the same date as that when the claim form was brought to the attention of the defendant. No later date was however argued for by Mr Milne, at least not before us.

Looking at the matter overall, Mr Milner has not been able to convince me that there are other factors that the judge should have considered or that he considered factors that were not relevant. The precise weight that the judge gave to the factors considered is a matter for him because he is the judge at first instance. It is not a matter for this court to review, unless we were to conclude that the weight attached to a particular factor or the conclusion of the judge overall was just, “Wrong”.

In a different context, Lord Neuberger of Abbotsbury, President of the Supreme Court, has suggested that there could be seven shades of “rightness” or “wrongness” in a judge’s evaluative conclusion: see paragraphs 93 and 94 of his judgment in Re B (a Child) [2013] 1 WLR 1911. To my mind, the value judgment in conclusion of the judge in this case is not one that, on balance, I consider wrong; nor is it even one where I cannot say whether it is right or wrong. On the contrary, I think that the conclusion of the judge was right.

Accordingly, I would dismiss this appeal.

I agree.

I also agree.