TMT Asia Ltd & Ors v BHP Billiton Marketing AG

This is what may be the last act, apart from further steps of execution, in the long-running saga between the series of companies controlled by Mr Su (at any rate of which he is a director) who are the present Claimants in this case, TMT Asia Ltd ("TMTA"), TMT Taipei, F-Elephant Corporation, Favour Marine and Baron Shipping, and BHP Billiton Marketing AG ("BMAG"). In today's application, Nigel Cooper QC has appeared, as he has on many previous occasions, for BMAG and what I might call the Su companies are represented by Mr Adam Gersch of counsel who appears in this saga for the first time.

On 7 June 2008, there was a Settlement Agreement and, 18 days later, a Supplemental Settlement Agreement, which resolved disputes between TMT Asia, F-Elephant, Favour and Baron on the basis of a very substantial payment by the latter to BMAG with security provided by the ship owning companies of something over $200 million. On 30 June 2008, there was a separate document called a Deed of Termination between TMT Taipei, which was not party to either of the two settlement agreements, and BMAG relating to closing out the position between TMT Taipei and BMAG.

Very substantial sums were unpaid by the Su companies to BMAG and proceedings were issued as a result of which Gloster J gave summary judgment in favour of BMAG against TMTA and the F-Elephant Corporation which has been, in part, executed by very many steps of execution, both execution against securities and the obtaining of money judgments and garnishee and other kinds of orders. Suffice it to say that, as against TMTA, some $127 million remains outstanding and against the F-Elephant Corporation some $70 million. The execution steps have included proceedings all around the world, including Singapore and the Marshall Islands.

At no stage was it suggested that the Deed of Termination had any relevance to a defence by the Su companies to the BMAG claims which were straightforward, pursuant to the Settlement Agreements. Gloster J in her judgment analyses the position in full and includes the fact that there was what she called a thirteenth hour defence raised by the Su companies based on alleged anti-competitive conduct, which she dismissed. So she was satisfied that, including the last minute defence, there was not even an arguable defence by any of the Su companies to the claims against them, as a result of which she gave summary judgment.

On 5 June 2014, which was a day before what would otherwise have been the expiry of the limitation period resulting from the Settlement Agreement of 7 June 2008, the claim form in this action was issued, it appears after instruction of solicitors MFB, a few days before, in late May 2014 on the evidence. It is apparent from a witness statement from a Mr Hughes of MFB, which was put in, in support of a successful application by MFB to come off the record on 27 November 2014, nearly six months later, that the Claimants were told over and over again how important it was for them to give instructions for the service of the writ, which was issued not for service out of the jurisdiction on 5 June, before its expiry on 5 December 2014.

The witness statement for Mr Hughes exhibited a good deal of correspondence between the parties. There is an email of 24 November 2014 which commences with the words (and I substitute a word which is plainly an accidental error in the sentence):

"You may recall we issued the Claim Form on 5^th June 2014 as a matter of some urgency in view of the impending time bar. On 5^th June we advised you that the Claim Form had to be [served] on or before 4^th December 2014. We gave advice on the manner of service on 6^th June 2014."

He then sets out a long series of examples of chasers by him asking for instructions and relatively small amounts of sums by way of fees. He says in his conclusion:

"In the circumstances, we have at all times made it clear that the time for serving the Claim Form overseas was limited and that we needed time to effect service on the Defendants overseas, but no instructions have been forthcoming regarding service."

The service that was needed was of the Defendant company in Switzerland. So they came off the record on 27 November 2014, with the permission of the Court.

On 2 December 2014, the Claimants instructed a new firm, W Legal. W Legal the next day issued an application notice seeking an extension of time for the service of the Claim Form and for the filing of Particulars of Claim, which had not at that stage been finalised. The application was supported by a witness statement from Miss Tierney of that firm dated 3 December 2014. There was also before the Court Mr Hughes' witness statement, to which she made reference in her own witness statement. When the witness statement was signed and the matter put before the Court, it was one day before the date of expiry of the Claim Form on 4 December 2014. It was thus the second time that the Claimants had come right up against the last minute before doing anything about their alleged claim. The alleged claim being that, as a result of the Termination Agreement, the Settlement Agreements should be disregarded (if I can use non-legal phraseology) and indeed to such extent that the Claimants would be entitled to payment of the full amount said to be due under the Settlement Agreement, $210 million, which of course would include the $96 million-odd received prior to Gloster J’s Judgment and any sums recovered by virtue of the various steps of execution which BMAG has taken.

In support of this two-page claim form so asserting, Miss Tierney put in her witness statement saying, in paragraph 7:

"The claim seeks multi-million pound damages, injunctive and declaratory relief and an order for account."

There is specific reference, of course, not only to the Termination Agreement but to the Settlement Agreements, including and in particular the main Settlement Agreement dated 7 June 2008. She said as follows:

"8.

The Claim Form has not been served for a number of reasons which cumulatively constitute good reasons, for the Court to grant the order sought. In summary:

i)

The Claimants were in dispute with their previous solicitors, in particular as a result of the solicitors being out of funds;

ii)

W Legal has only just been instructed;

iii)

The Claimants are situated overseas, which has rendered co-ordination with their legal team more cumbersome; and

iv)

Effecting valid service in Switzerland is a lengthy process."

That was really the nub of her witness statement. She said that since being instructed they had obtained translations of all documents into German and that she had that day lodged the relevant form, together with the necessary documents to be served on the Defendant, with the Foreign Process Service of the High Court. She had been informed it took around two months to effect service.

Then there was the caveat in paragraph 20, headed "Limitation":

"The Court should be aware that the limitation period for elements of the Claim may well have expired in June 2014 if the proceedings had not been issued. It is therefore likely that if the Court does not grant the extension today the Claimants will not be in a position to re-issue the Claim Form."

That perhaps puts it a little low. Plainly the claim had expired in June 2014, but the thrust of what she was saying was clear, namely that if she did not get the extension, the claim would be statute-barred and that would be the end of it.

Teare J, in the usual method, in the Commercial Court at any rate, of dealing with the matter on paper, amongst, no doubt, a pile of other similar paper applications for service out of the jurisdiction, and of course in this case extension of the period of the writ, made an Order, and the Order that he made was for service on BMAG in Switzerland, with a specific direction that BMAG be served by post at what was described as the Defendant's registered office, Jochlerweg 2, CH-6340 Baar, Switzerland.

It turned out that that was a correct registered office but the letter which was sent by W Legal Ltd, purporting to serve the Order and the witness statement, was addressed to CH-6349 Baar, and it is quite clear, and I am satisfied, that, if that letter was posted, and there is no proof of posting (although Miss Tierney says she remembers taking it to the Post Office) it never reached the Defendant because, I am satisfied, it was incorrectly addressed, and that, as I see from the evidence, in those circumstances, it would not have been delivered by the Swiss post. I pause to say that the same wrong address was used for the Order to which I shall be referring in a moment, and that too never reached BMAG.

At any rate, that gave a breathing space for the Claimants on the face of it, and they should have got on with serving the writ, for which an extension of six months had now been given. There is no evidence that anything happened, apart from the posting of that letter, and on 20 May 2015, W Legal ceased to act for the Claimants, and a notice was lodged that the Claimants would be acting in person. Despite that, on the following day, W Legal through Miss Tierney who was, it seems, doing her best to help the Claimants, notwithstanding the fact that her firm was off the record, wrote to the solicitors for BMAG, Clyde & Co, asking if Clyde & Co had instructions to accept service relating to claims "arising out of the Deed of Termination", and seeking a declaration that the Settlement Agreements be cancelled. The letter did say that W Legal were not willing to be on the record in relation to the claim.

On 26 May, Clyde & Co wrote to W Legal stating that they did not have instructions to accept service. This, of course, is not an unusual situation and cannot be held in any way against the foreign Defendants, BMAG, who are entitled to insist upon service through the proper mechanisms and knew nothing whatever, of course, about the Order of Teare J or the purported service on them.

On 28 May a two page Particulars of Claim was issued by the Claimants, which added nothing to the sum of human knowledge, and did not in any way clarify the nature of the case. It simply recorded the assertion that the Deed of Termination, as I put it earlier, meant that the earlier Settlement Agreement should be disregarded.

The next day, 29 May 2015, an application notice was issued seeking a further extension of time for service of the Claim Form and filing of the Particulars of Claim. It seems to me that that must imply that at that stage they knew that there had been no prior service, because there was no attempt to enter judgment on the basis of the default by BMAG in complying with its obligations for entering acknowledgement of service pursuant to the earlier service. Once again, we are up against a deadline because the second period of six months for service of this writ expired, or would have expired, on 3 June and the application was issued four days earlier on 29 May.

By that time, W Legal having gone off the record, Mr Su was acting in person on behalf of the five Claimant companies or, put another way, the five Claimant companies were purporting to act in person through the medium of Mr Su. He appears to have kept in touch with Miss Tierney, and used Miss Tierney's witness statement (although there is no explanation given about this and it seems common ground that this is what happened) by way of what could be called colloquially a "cut and paste job", so as to use Miss Tierney's witness statement of 3 December 2014 to which I have referred, as the basis for a witness statement made by him in support of the second application for an extension.

His witness statement, signed on 29 May, is considerably shorter than her witness statement, but contains the same or similar nub. There is no reference to (and I assume no lodgment of) Mr Hughes' witness statement relating to the story of the first Order, and all that is lodged is this one witness statement, reciting that he, Mr Su, was director of each of the five Claimant companies, who were acting as litigants in person, and therefore plainly he is accepting that he had acted, did act and continued to act, on their behalf. Indeed, he features in the correspondence with both sets of previous solicitors as being the person who was giving the instructions, as one would expect in the circumstances.

He recites that, despite W Legal ceasing to act, they have agreed that the Claimants can use their London office address for service of any documents. He refers to Teare J's order, and notes that time would otherwise expire pursuant to it on 3 June 2015. He refers to Miss Tierney's earlier witness statement. Then he says as follows:

"6.

The Claim Form has not been served for a number of reasons which cumulatively constitute good reasons for the court to grant the order sought. In summary:

i)

The Claimants’ instructed solicitors, W Legal, have ceased to act on behalf of the Claimants;"

No explanation is given for that, no explanation is given as to what steps W Legal had sought to take since December 2014 prior to their ceasing to act, nor of the fact that, when they did cease to act, it was only three days before the expiry of the six month period, nor an indication of what, if any, dispute there was between them.

"ii)

The Claimants are situated overseas which has rendered co-ordination with their legal team more cumbersome."

That seems, as I commented to Mr Gersch in the course of argument, a very strange statement. He is the Claimants, and he has been coordinating with the legal team. He knows full well what the case is, if there is one, arising out of the Termination Agreement. He was the relevant person acting on behalf of the companies at the time of the Settlement Agreement and the Termination Agreement.

Quite apart from the fact that it would be no excuse to wait for the Particulars of Claim, and that the earlier witness statement of Miss Tierney in December had indicated that all was ready to go in December, six months earlier, there is no indication as to what information, whether from Hong Kong or otherwise, was awaited, or how it related to the very straightforward two page Particulars of Claim, to which I have referred.

"(iii)

The Claimants have now lodged all necessary documents and translations with the court so that service can be effected through the authority designated under the Hague Convention, but effecting valid service in Switzerland is a lengthy process."

No explanation is given as to why there is any change from the previous December. Then the same words, word for word, are used in paragraph (9) in respect of limitation as have been used in the earlier witness statement of Miss Tierney:

"It is therefore likely that if the Court does not grant the extension today the Claimants will not be in a position to re-issue the Claim Form."

Popplewell J made the same, or similar, Order on 4 June as that which had been made by Teare J, for service to be made by post at, among others, CH-6340 Baar, and the same inaccurate letter was sent on 11 June to CH-6349 Baar and, as I have indicated earlier in the Judgment, it is plain it was never received.

At the same time, there was the lodging with the foreign process department of the Court and on this occasion, on 17 June, very shortly (considering what was said about the normal two month delay) after the Order of Popplewell J, the Claim Form etc were duly served under the 1965 Hague Convention on BMAG. Clyde & Co on 8 July acknowledged service on behalf of BMAG, confirming an intention to contest the jurisdiction of the English court.

This application was begun at a time when the Defendants had no idea, and were not informed, by Miss Tierney or otherwise, about the existence of Popplewell J's Order, and so the matter seemed entirely straightforward that the only Order in question was Teare J's and, on any basis, there had been no compliance with it, in terms of time, and service was way out of time. On 26 October 2015, the newly instructed counsel on Direct Access, Mr Gersch, supplied to Clyde & Co a copy of the Order of Popplewell J. The application was reconstituted and, after various adjournments, the matter has now come before me.

It is common ground as to what the authorities are which I have to consider. I have been supplied an agreed bundle containing the most relevant of them, put together by BMAG. The most significant ones to which both sides have referred are Hashtroodi v Hancock [2004] 1 WLR 3206, Euro-Asian Oil SA v Abilo (UK) Ltd [2013] EWHC 485, Lincolnshire County Council v Mouchell[2014] EWHC 352, Mitchell v Newsgroup Newspapers Ltd [2014] 1 WLR 795, which is more general in relation to compliance with time limits, and The Katarina [2010] 1 Lloyd's Rep 499.

To summarise, the obligation on a party seeking effectively to extend the limitation period by having an extension of time for service of a writ, and on this occasion an extension was sought twice, is to give a good reason for the delay, and that good reason would apply both to why the claim was left to be made until the limitation period had expired, or in this case had nearly expired, and in particular where the limitation period would otherwise by then have expired, and to the delay or otherwise in relation to an extension of time for a writ, once that writ was issued within the limitation period but had not been served.

The explanation that is given must be the better the more delay there is, and in particular where the limitation period either was about to expire, as it was in the case of the original writ, or had already expired, in relation to the two Orders obtained from Teare J and Popplewell J.

Mr Cooper QC has asserted that there was failure to be full and frank in relation to the two applications before Teare J and Popplewell J, because there was no adequate explanation of the central feature of this case, namely that the delay actually was constituted by long periods of time in which the Claimants were seeking to avoid execution of an unappealed judgment of Gloster J, during which period there had been no reliance on the alleged Termination Agreement defence, except that it was raised in the execution proceedings in Singapore and the Marshall Islands, and in both cases regarded as an irrelevance, because if and insofar as arguable at all, it was too late to argue the matter, which had not been raised in the English Courts before Gloster J.

I am not persuaded that that of itself amounts to a failure to be full and frank, but it does seem to me to be the reverse side of the coin of the duty of the Claimants to give a good reason. There was no explanation made as to why they had waited to the end of the limitation period, and the explanation that was given in relation to the first application to Teare J was, as I have indicated in my summary of it, very inadequate. Of course, as it happens, Mr Hughes' witness statement was put before the learned Judge, and that no doubt would have raised an eyebrow on the part of the Judge. But nevertheless, the explanations which were put forward were at least sufficient so far as Teare J was concerned to make the Order he did, always subject to its being challenged or set aside thereafter on an inter partes basis; which is no doubt what he had in mind when he saw that there was a limitation point which was flagged up. But on any analysis, particularly at the inter partes stage, the explanation was non-existent and there was no good reason, particularly in the absence of any explanation, even to the extent of "This defence has only occurred to us, on legal advice or otherwise, very recently and we only took the point in execution proceedings and we have now thought it ought to be given a run."

Whether saying that would have prevented Teare J making the Order does not matter. The fact is there was no explanation of the period prior to June 2014 and the explanation given in relation to the period when, on any basis, Mr Hughes was warning them to get their tackle together, was not a good explanation, certainly not good where the limitation period had by then expired.

But if that was an inappropriate Order, Popplewell J's Order was an even more inappropriate one, in the sense that this was now the second application for an extension, and there was still no explanation about the earlier periods, but no explanation whatever about the period between December 2014 and May 2015. I have effectively criticised the witness statement of Mr Su in the course of my recital of it, and I do not propose to repeat what I have said.

I have considered that this is a case in which no adequate, certainly no good explanation was given, either for the first Order or in particular for the second Order. Insofar as the merits arise, since the authorities do indicate that one is entitled to consider the merits, either on the original ex parte application or on the inter partes reconsideration, I am not persuaded that there is any merit in the case. I have not, of course, considered the strength of the actual defence that the Termination Agreement in some way replaced the Settlement Agreements, but what is utterly clear is that it did not occur to anyone on the Claimants’ side, and no explanation has been given as to how it did occur to them, until very late on in the execution procedures and, above all, of why it was not run, either at the 13th or even 14th hour before Gloster J when she gave judgment. On the principles of Henderson v Henderson (1843) 3 Hare 100, and Johnson v Gore-Wood (No.1) [2002] 2 AC 1, I see no likelihood that this will survive, never mind res judicata, the abuse test. I am not however concluding the absence of merits; I am simply indicating that if merits come to be considered, if there were a balancing to be done, merits would come firmly down on the side of the Defendants.

So although there is prejudice to the Claimants in not being able to pursue what, in my judgment, was in any event a very weak case, there would be much greater prejudice to the Defendants, if this case, which is statute-barred and for which no good reason has been given for the extension of any writ and thereby the loss of any limitation defence, were permitted to be brought. It is sometimes a factor if defendants did not know of the existence of a potential claim and, as Mr Gersch has pointed out on 21 May 2015 in the letter to which I referred, there was some very unparticularised indication given to the Defendants of such a claim, which might take it out of the ordinary run of an entirely ignorant defendant. That could in some cases be a factor, but in my judgment, it is not a factor here. What is important however is that the Defendants knew that there was no defence, could be no defence, when they got judgment, and then sought to enforce it at great length. It is now only belatedly, even if one takes it as at 21 May 2015, suggested that there is some arguable basis of challenge. But there is not. It is statute-barred.

There is a further basis on which this writ could have been struck out, namely that the proper fee was not paid. The position is that the only fee that was paid by the Claimants' solicitors, when the writ was issued just within the limitation period, was a fee of £480, which would be relevant to the declaratory relief that was sought. However because there was the damages claim in addition, and of course a very substantial damages claim of more than $200 million (albeit not specifically quantified in the writ), there should have been paid an additional £1,920 fee, making a total of £2,400. No such fee was paid.

It is, of course, a tough situation to be told that because a fee was not paid in full, or the right fee was not paid, the writ was not issued. That is, however, the consequence of a decision of the Court of Appeal in Page v Hewetts Solicitors[2012] EWCA Civ 805, and the subsequent first instance decision based upon that Court of Appeal judgment, by Hildyard J, [2013] EWHC 2845, this was itself a limitation case, and the issue was whether the action had been brought within the limitation period, and it was held not to have been brought within the limitation period because the relevant fee had not been paid which was a condition for a good issue of a writ.

It is plain that the conclusion of the Court would be that that error could be corrected by the subsequent payment of the correct fee, which would thereby render, but not retrospectively, the issue a good issue. But in that case, and in this one, that was no longer possible because the limitation period had expired. In any event, there has been no attempt to make retrospective payment of the additional fee in this case.

Plainly, this would not be needed as the determinative factor in this case because I have already decided very firmly that the service of the writ should be set aside and the proceedings dismissed on the other grounds. Whether it would have been possible to argue that the declaratory part of the writ should survive even if the damages claim was struck out for want of a fee, I need not decide, although it is plain that these proceedings would have been completely toothless if they had been limited to a declaratory claim. It seems to me most unlikely that that would have been the sensible outcome. But it is not one that I need to consider because, for all the reasons I have given, this application must be allowed.