Dubai Financial Group Llc v National Private Air Transport Services Company (National Air Services) Ltd

This is an appeal from Flaux J’s refusal to set aside a default judgment entered by HHJ Mackie QC in favour of the claimant and respondent Dubai Financial Group LLC (“DFG”) and arises from a contract of 30^th April 2008 between the parties for the sale and purchase of a 50% share interest in a Gulfstream aircraft (“the Aircraft”). The appellant seller was National Private Air Transport Services Company Limited (“NAS”) and the respondent purchaser was DFG.

Clause 10.1(d) of the Purchase Agreement provided an option for DFG at any time after 36 months to require NAS to repurchase the share for a fair market value provided that no material default by DFG had occurred or was continuing under what were called the “Operative Documents”. Clause 10.3 dealt with the determination of fair market value. On the same date, the parties entered into interconnected agreements (called “the Operative Documents”) which included, inter alia, an agreement requiring NAS to manage the use of the Aircraft (“the Management Agreement”). Clause 12.4 of the Purchase Agreement provided that it was governed by English law and contained an agreement that the English courts were to have jurisdiction to determine any disputes.

By a notice dated 23^rd January 2011, DFG sought to exercise the Clause 10.1(d) option requiring NAS to repurchase DFG’s share on 30^th April 2011. There then followed negotiation between the parties in order to determine the fair market value of the share. During the course of the negotiation NAS sought to set off, against the repurchase price, management fees of about a million dollars which had accrued under the Management Agreement and to agree that, therefore, NAS should pay about US$ 9 million rather than US$ 10 million. This was disputed by DFG, who alleged that there had been a waiver of entitlement to the management fees since 2010. The effect of this dispute was that the parties could not agree a repurchase price for the Aircraft. There was at that time no suggestion made by NAS that the option had not been validly exercised in the first place on the grounds that there had been a “material default” under any of the Operative Documents.

DFG’s solicitors then wrote a series of letters to NAS none of which was answered; on 15^th December 2011 DFG issued proceedings, seeking damages of US$10,356,041.92 plus interest, being the alleged fair market value due under the agreement for the repurchase of the share. On 22^nd December 2011, Field J granted permission to serve the claim form and particulars of claim on NAS outside the jurisdiction in Saudi Arabia. Attempts to serve through diplomatic channels via the Foreign Process Office of the Royal Courts of Justice were unsuccessful and various extensions of time for the validity of the claim form were granted until June 2013.

On 12^th December 2012, DFG, by one of their lawyers, purported to serve NAS at its premises in Saudi Arabia by serving the claim form and particulars of claim on a representative at those premises, who signed for those documents on the basis that he was a legal adviser of NAS. The justification for this service was that such service was not prohibited by Saudi law and accordingly complied with CPR 6.40(3)(c). No response pack was served with the claim form.

No acknowledgement of service was received from NAS; on 9^th July 2013 DFG filed an application notice for judgment to be entered in default. There was a hearing before HHJ Mackie QC on 31^st July 2013; he declared that service of the claim form and the particulars of claim had been effected on 12^th December 2012 and further declared that service by DFG had been properly effected pursuant to CPR 6.40(3)(c) and CPR 6.37(5)(b)(i) and CPR 6.15(1) and (2). He then (in paragraph 4) ordered that judgment in default be entered, pursuant to CPR Part 12.3 in the sum of US$10,356,041.92. DFG did not inform NAS that they had obtained this default judgment until, as the judge found, sometime in July 2014.

On 22^nd October 2014, the Aircraft landed at Luton Airport, where it was the subject of an arrest order, in execution of the judgment. In due course Master Eyre authorised the seizure and sale of the Aircraft.

On 29^th October 2014, NAS filed an application to set aside the default judgment pursuant to CPR 13.2 and/or 13.3, “because the claim form has not been validly served”. NAS further applied for a stay of any underlying enforcement orders, which was granted by Master Eastman on 31^st October 2014. The application to set aside the default judgment came before Flaux J on 5^th December 2014 who, relying on Abela v Baadarani [2013] UKSC 44; [2013] 1 WLR 2034, held

The relevant provisions of the CPR 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 acknowledgement of service; (ii) filing an admission; or (iii) filing a defence.

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);

(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.

…

Form for defence etc. must be served with particulars of claim

7.8(1) When particulars of claim are served on a defendant whether they are contained in the claim form, served with it, or served subsequently, they must be accompanied by –

(a)

a form for defending the claim;

(b)

a form for admitting the claim; and

(c)

a form for acknowledging service.

…

Default Judgment … Conditions to be satisfied

12.3(1)

The claimant may obtain judgment in default of an acknowledgement of service only if –

(a)

the defendant has not filed an acknowledgement of service or a defence to the claim (or any part of the claim); and

(b)

the relevant time for doing so has expired.

…

Cases where the court must set aside judgment entered under part 12

13.2

The court must set aside a judgment entered under Part 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 rule 12.3(1) and 12.3(3) was not satisfied;

(b)

in the case of a judgment in default of a defence, any of the conditions in rule 12.3(2) and 12.3(3) was not satisfied; or

(c)

the whole of the claim was satisfied before judgment was entered.

Cases where the court may set aside or vary judgment entered under Part 12

13.3(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if

(a)

the defendant has a real prospect of successfully defending the claim; or

(b)

it appears to the court that there is some other good reason why –

(i)

the judgment should be set aside or varied; or

(ii)

the defendant should be allowed to defend the claim.

(2)

In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.”

Mr Michael McLaren QC for NAS now submits

In circumstances broadly comparable to those in the present case but where service had to be effected on a Lebanese defendant, Lewison J made a without notice order for alternative service on the defendant’s English solicitors on the basis that the defendant was already aware of the claim against him because an untranslated copy of the claim form with other relevant documents had been previously delivered to the defendant’s Lebanese lawyer’s offices in Beirut (paras 8 and 13) and because the defendant’s English solicitors had at least had sight of the claim form and the other relevant documents. Although the application to him was an application made without notice, Lewison J gave a judgment which was relied on by both Evans-Lombe J at the inter partes hearing and by the Supreme Court (para 38):-

“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.”

It was no doubt the Supreme Court’s approval of these observations of Lewison J that encouraged Flaux J to decline to set aside the default judgment in this case.

Mr McLaren submits that the default judgment entered by HHJ Mackie was an irregular judgment because the order which he made for alternative service did not specify a period within which NAS was to serve an acknowledgement of service. By “irregular” Mr McLaren meant a judgment which a defendant is entitled to have set aside as of right. This technical argument was never made to Flaux J and was only heralded in a supplementary skeleton argument before us. I have no doubt Flaux J would have rejected it and so would I.

It is true that CPR 6.15(4) uses the word “must” but the rule does not direct any specific sanction if the requirement is not complied with. I would not read into the rule a provision that any judgment obtained after an order for alternative service without provision being made for a period within which the defendant is to acknowledge service can be set aside as of right. That is an unnecessarily draconian consequence which cannot have been the intention of the draftsman of the Rules. Moreover CPR 13.2 expressly specifies the circumstances in which a default judgment must be set aside. Other circumstances cannot be implied. The highest that a defendant could put this argument, therefore, is that the absence of a period within which to acknowledge service might be a good ground for a court to exercise its discretion under CPR 13.3 (1)(b). But no such argument could be made in the present case, since Field J had already made an order for service out of the jurisdiction in a dispute which was well-known to the defendant. Once NAS’s lawyers had received the documents, they had the relevant time to acknowledge service if NAS was ever going to do so. NAS did not need a fresh period within which to do so.

CPR 6.15(2) was not originally part of 6.15 when the new rules were first made in 2000. Retrospective validation of alternative service was provided for in 2008 as a result of the decision of this court in Elmes v Hygrade Food Products Plc [2001] EWCA Civ 121 that there was no power retrospectively to validate alternative service. Prospective alternative service may well occur on a defendant whose first intimation it will be that an action will be brought against him. In such cases it is obviously of great importance that a defendant should be given proper time to acknowledge service. In cases in which a defendant has already been “served” and therefore knows full well that he has a dispute on his hands (let alone a defendant who has been negotiating and arguing his corner for months before being “served”), a period for acknowledgement of service is rather less important since he must have given some thought to whether he is going to submit to the jurisdiction of the English court and, even, what defence he may have to the claim.

For these reasons I reject Mr McLaren’s first argument.

This is an argument which Mr McLaren did make to the judge and, although it may be more formidable, the judge still rejected it. Again, I agree with the judge. There cannot be an absolute rule that any default judgment, entered at the same time as a retrospective order for alternative service is made, is automatically irregular. It must all depend on the circumstances.

As I have already said, a defendant who has been arguing the case with a claimant and has been “served” with court documents in a manner which is subsequently validated by the court can hardly complain of a default judgment if he in fact has no defence. It would be bordering on the absurd if a defendant was entitled to set aside such simultaneous default judgment as of right. Of course if he has an arguable defence, the default judgment should not stand; but that is a different matter. The most that can legitimately be said on behalf of a defendant in such circumstances is that, in a case where alternative service has been retrospectively validated, the court will be anxious to ensure that any simultaneous judgment should only stand if there is in truth no defence.

It would, in any event, be odd if simultaneity could be a decisive factor. It could hardly be the law that a defendant was entitled to have a simultaneous judgment set aside as of right but not a judgment entered a day after the order for alternative service.

Mr McLaren sought to rely on the decision of Colman J in Shiblaq v Sadi Koglu [2004] EWHC 1890 (Comm.) but that was a decision made before it was possible for the court to make an order retroactively validating service which had already occurred.

Moreover it seems to be the law that an order for retrospective validation of service validates all proceedings to date. In Kaki v National Private Air Transport [2015] EWCA Civ 731 an order had been made retrospectively validating service after a claimant had obtained summary judgment. It was held by this court that all the proceedings prior to the validation of service had to be treated as valid so that there was no right to set aside the summary judgment; an arguable defence had to be shown. If that is right (and we, of course, are bound to say that it is), it would be an impossible state of the law to hold that a judgment entered simultaneously with a retrospective order validating earlier alternate service was an irregular judgment but that a judgment entered a day before (or a day after) was not an irregular judgment.

I would therefore reject Mr McLaren’s second argument and decide that once it is held that proper service took place on 12^th December 2012, the subsequent default judgment was a regular judgment.

The judge did not deal with this point in terms because he had formed the impression that Mr McLaren did not make this a free standing point in favour of the judgment being set aside as opposed to an element in the exercise of discretion. Mr McLaren said that this was a misunderstanding and that the point was a free-standing one, although he did accept that its absence would not automatically require a default judgment to be set aside. He relied on Gulf International Bank BSC v Ekttitab Holding Company KSCC (unreported) where Simon J set aside a default judgment on the application of a defendant who was not represented by English solicitors and might not have understood English procedural law. He also relied on Henrikson v Pires [2011] EWCA Civ 1726 in which the nominated person to receive service of proceedings had no legal qualifications. Had it not been for separate and subsequent events Hickinbottom J would have set the default judgment aside.

In slight contrast to these authorities is Rajval Construction Ltd v Bestville Properties Ltd [2010] EWCA Civ 1621which made clear that the absence of a response pack did not make a default judgment an irregular judgment which had to be set aside pursuant to CPR 13.2(a) but it was a circumstance which might be very relevant when it came to discretion. In that case the claim form had been served on a personal defendant who took 8 days to send it to his solicitors on 23^rd December 2009. As soon as the Christmas holidays were over the defendant’s solicitors asked for an extension of time for serving a defence but judgment had already been entered. This court thought that the judgment should be set aside pursuant to CPR 13.3 (1)(b) largely because the individual defendant did not know (and had no reason to know) that an acknowledgement of service had to be returned within 14 days of service of the claim form. If a response pack had been served he might have had reason to have that knowledge and forwarded the documents to his solicitor earlier than he did. That is all a very long way from this case in which the defendant knew of the claim and was already in contact with his legal advisers. In these circumstances it is not surprising that Flaux J held (para 9) not only that HHJ Mackie was entitled to make the order retrospectively validating the alternative service but also that the default judgment was a regular judgment. I would hold therefore that the absence of the response pack required by CPR 7.8(1) is not, on the facts of this case, a good reason for exercising the court’s discretion under CPR 13.3 (1)(b).

Here, I regret to say that I do part company with the judge who held that it was too late to take the point that there was a material breach of the Operative Documents. The judge (para 13) described the point as “a totally spurious and hopeless point” because the option to re-purchase the share in the aircraft had been clearly exercised in April 2011 while the first suggestion that there had been any material default was made in October 2014 in support of the application to set aside the default judgment. It was therefore “far too late for the defendant to raise the point now” because “the defendant clearly waived any reliance on that in relation to clause 10 or is estopped from raising the point now”. The judge may well be right but it is difficult to say that the point is unarguable. It is by no means obvious that any waiver was supported by consideration; the passage of time (even 3 years) may not be enough on its own. It is not clear whether the estoppel which the judge had in mind was a promissory estoppel or an estoppel by convention; if it was the former, both a representation by the defendant and a consequent reliance by the claimant would have to be shown; if the latter, it would be necessary to specify both the unstated assumption under which the parties were operating and the unconscionability of the defendant in seeking to reverse that assumption.

Late reliance on a doubtful new point does not make it unarguable of itself. It is just the sort of situation which, in the comparable case of a claimant seeking summary judgment, would persuade a judge that permission to defend should only be given if the sum in issue is brought into court. That is the right approach here also when one is deciding whether to set aside a default judgment under CPR 13.3 (a). We were informed that since Flaux J gave judgment on 5^th December 2014 NAS has paid to DFG the sum for which judgment was given. I would therefore order that that sum should be paid into court or (more sensibly) should be held in an account in the name of both parties’ solicitors pending resolution of DFG’s claim. To that extent only I would allow this appeal and, in the light of the majority judgments, would order that NAS have seven days from hand-down to acknowledge service.

I have seen the judgments of Longmore and McCombe LJJ in draft and agree with Longmore and McCombe LJJ that this appeal should be allowed. In common with them I consider that for the reasons given by Longmore LJ at paragraphs 24 and 25 of his judgment, the respondent had an arguable defence. In those circumstances I would set aside judgment pursuant to CPR 13.3(1)(a) on the terms indicated by Longmore LJ at paragraph 25.

In relation to the difference of opinion between Longmore and McCombe LJJ arising from CPR 6.15, and in particular the issue as to whether when a court has ordered that steps already taken to bring a claim form to the attention of a defendant by an alternative method constitutes good service, a claimant is entitled to enter a default judgment on the spot, I prefer the analysis of McCombe LJ.

Firstly, it seems to me that CPR 6.15(4)(c) does not contemplate the immediate entry of a default judgment if a form of service has been retrospectively validated by the court under CPR 6.15(2). On the contrary it contemplates a period of time in which a defendant may respond to the order as to service. It is to be observed that CPR 6.15(1) which deals with prospective authorisation of service and CPR 6.15(2) each govern the situation in 6.15(4) which provides “An order under this rule must specify…” Whilst clearly an order for prospective service would be expected to deal with arrangements for filing an acknowledgment of service, the rule makers clearly intended the same provision to apply to retrospective orders for service.

There seem to me to be considerable force in Mr McLaren’s submission that the CPR imposes no obligation on a defendant to take any steps in response to invalid or unauthorised service. Thus, until the point in time at which a CPR 6.15(2) order is made retrospectively validating service in a form not authorised by the rules or the court, a defendant in receipt of such documents would be under no obligation to acknowledge service.

In those circumstances where, ex hypothesi, a defendant cannot know that he has been validly served, to deprive him thereafter of any period during which he can acknowledge service in the usual way seems to me to be unfair and unjust. In effect it denies a defendant part of the due process involving the ability to contest a claim once the claimant has established, through a CPR 6.15(2) order, that the mechanism requiring him to respond if he is to contest the claim has been triggered.

I do not consider that the decision of this court in Kaki v National Private Air Transport Company[2015] EWCA 731 requires us to take a different approach. The issue for this court in relation to the effect of CPR 6.15(4)(c) was not before the court in Kaki which in any event was dealing with an application relating to summary judgment in relation to which different procedural provisions to those relating to default judgment apply. In the context of this case, I would regard Aikens LJ’s observations at paragraph 43 of Kakias being inapplicable.

Moreover, I do not consider that the CPR presents an obstacle in the circumstances of this case to setting aside judgment. CPR 13.2 provides that the court must set aside a default judgment where any of the conditions in rule 12.3(1) and 12.3(3) was not satisfied. The latter provision does not apply, but the former is relevant. CPR 12.3(1) states that a claimant may obtain judgment in default of an acknowledgment of service only if (a) the defendant has not filed an acknowledgment of service or a defence and (b) the relevant time for doing so has expired (my italics). I accept Mr McLaren’s argument that, when an order for retrospective validation of an alternative method of service has been made pursuant to CPR 6.15(2) the relevant time for filing an acknowledgment of service is the period which the court must specify under CPR 6.15(4)(c). Where, as in this case, the court did not specify any such time there can be no relevant time which has expired for the purposes of CPR 12.3(1). If this analysis is correct the requirements of CPR 12.3(1)(b) have not been satisfied and so the court is obliged to set aside the default judgment pursuant to CPR 13.2(a).

For these reasons I differ from the conclusion of Longmore LJ on this point.

These observations, of course, do not affect the outcome of this appeal which, as already indicated, I would allow.

I am most grateful to Longmore LJ for setting out so carefully and succinctly the background facts of this case and the material provisions of the Civil Procedure Rules. I too agree that this appeal should be allowed but for reasons more extensive than those appearing in paragraphs 24 and 25 of his judgment. In essence, unlike Longmore LJ, I accept the argument of Mr McLaren QC as to the effect of the material provisions of the CPR in this case for the following reasons.

Under CPR 13.2 “the court must set aside a judgment entered under Part 12 if judgment was wrongly entered because - (a) in the case of a judgment in default of acknowledgement of service, any of the conditions in rule 12.3(1) and 12.3(2) was not satisfied…”. At no time prior to the order of 31st July 2013 had NAS failed to comply with any rule or order of the court requiring it to acknowledge service by a known time. NAS had simply not been served in accordance with the law and time for acknowledgment of service had not begun to run against it at all.

The application before Judge Mackie QC invited the court to order, pursuant to CPR 6.15(2) 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”. The judge made such an order, specifying the date of deemed service. However, as Longmore LJ has set out, CPR 6.15(4) requires that such an order must specify “the period for (i) filing an acknowledgement of service; (ii) filing an admission; or (iii) filing a defence”. This order did not do that. There is nothing in the rules to indicate that a statement in the documents served, as to the time for acknowledgment of service, on the occasion treated as good service, without more, should constitute the relevant time for the purposes of CPR 6.15(4)(c)(i). Of course, here no response pack was served anyway on the relevant occasion on 12 December 2012 and there was nothing in the claim form itself would have indicated to the recipient a date by which it was required to acknowledge service.

It seems to me, therefore, that it behoved Judge Mackie in making the order under CPR 6.15(2) to specify a date for acknowledgement of service. Thus, even assuming that the judge was right to make that order under sub-rule (2), still no time for acknowledgment of service had begun to run against NAS. Therefore, at the moment and when a few seconds later the judge entered the default judgment “the relevant time for [acknowledging service]” had not expired (CPR 12.3(1)(b)) because none had become applicable, either on 12 December 2012 or by virtue of the order. Thus, one of the conditions in CPR 12.3(1) had not been satisfied within the meaning of rule 13.2(a).

I respectfully disagree with the conclusion of Longmore LJ (in paragraph 13) that somehow the word “must” in CPR 6.15(4) is watered down in its mandatory character because it does not direct any specific sanction if not complied with. There is no obligation imposed upon a claimant in seeking an order under rule 1.65(2) to identify the time for acknowledgment of service. Therefore, no sanction on any party is required and it is not clear to me upon whom such a sanction could be imposed. The rule simply sets out what the court must do in permitting steps previously taken to be treated as good service.

I do not see it as a draconian consequence that a judgment, obtained after deemed service has been effected without specifying a time for that service to be acknowledged, should be set aside as of right in such a case. I agree that CPR 13.2 specifies the circumstances in which a default judgment must be set aside and in my judgment one of those circumstances is when judgment is entered in default of an acknowledgment of service when “any of the conditions in rule 12.3(1)…was not satisfied”. Here one such condition was not satisfied, namely the time for acknowledgement of service had not expired, because none had ever become applicable.

This, to my mind, is not “playing technical games” (c.f. the passage from the Abela case, cited at paragraph 11 in the judgment of Longmore LJ). It is merely applying the principle that due process should be followed. If a defendant has never become under a valid obligation to acknowledge service, either as specified under the rules or by order of the court, I do not see how it can be that a judgment can be entered against him in default of such acknowledgment. He is simply not in default at all.

Our system of law has always taken pride in ensuring that even the apparently unmeritorious only have judgment entered against them once found to be liable by trial, by summary judgment or when they have failed to meet the express procedural requirements of a clearly defined obligation to take a procedural step which has been drawn to their attention. In my view, that approach on the part of our courts is likely to be the type of attraction that has drawn many foreign individuals and corporations to bring their disputes to the courts of England and Wales and subject them to our law, as these parties did by clause 12.4 of the Purchase Agreement.

I do not consider it is strictly necessary to decide a further issue which in my judgment arises on the facts of this case, namely whether Judge Mackie could reasonably have exercised such discretion, which he perceived he had, not to specify a further period for acknowledgment of service, after steps had been taken to bring his order under CPR 6.15(2) to NAS’s attention. In my judgment, quite apart from the view that I have taken as to the construction of CPR 6.15 and the related provisions, it seems to me to have been lacking in fairness to enter a judgment, after retrospective validation of service, without providing a further (no doubt, very short) period for acknowledgement. I would have been inclined to say that Flaux J should have set aside the default judgment entered on that basis also.

I would add that I was also disturbed to be told that Judge Mackie had not been informed at the hearing on 31st July 2013 (at which DFG was represented by different solicitors and counsel) that no response pack had been served on the occasion on which the respondent was inviting the court to say should be treated as good service. That too was a factor that went to the judge’s discretion and, in particular to the question whether a short time should have been provided within which NAS was to acknowledge service.

I do not consider that anything in the Abela case precludes the view of the CPR provisions that I have taken so far. As noted by Longmore LJ, that case did not involve a default judgment and the defendant had acknowledged service: see paragraph 13 in the judgment of Lord Clarke of Stone-cum-Ebony.

Nor do I consider that the decision of this court in Kaki v National Private Air Transport Company [2015] EWCA 731 compels a different view. It is true that, in that case, Aikens LJ said (at paragraph 43),

“…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… ”.

However, that case did not consider the effect of CPR 6.15(4) or the consequences of making an order under sub-rule (2) for the purposes of the requirements for acknowledgement of service and whether it is permissible for judgment to be entered in default of such acknowledgement, even if a defendant has never been in default at all.

Kaki’s case involved validation of a summary judgment. It is not clear from the transcript of the judgments, either in this court or in the High Court ([2014] EWHC 1947 (Comm)) in that case, how precisely the judgment came to be given, since normally an application for summary judgment cannot be made before acknowledgment of service, except where the court gives permission or a practice direction otherwise provides: CPR 24.4(1). For my part, I do not consider that Kaki’s case, dealing with rather different procedural circumstances, compels us to hold that a judgment entered in purported default of acknowledgment of service is regular when there has been no default at all.

For these reasons, in addition to those given by Longmore LJ in paragraphs 24 and 25 above with which I agree, I too would allow this appeal. I also agree with the proposal that the sum in question should be ordered to be paid into court or into a suitable joint account and that NAS should have seven days within which to acknowledge service.