Vladislav Zabelin v SPI Spirits (UK) Limited & Anor

The Part 71 order contained the following preamble:

“AND UPON Master Dagnall on 16 April 2025 directing the judgment creditor to say why the High Court has or should have jurisdiction and why the judgment creditor should not have to proceed in the County Court”

And at Paragraph 1 of the Order:

“Pursuant to section 40 of the County Courts Act 1984 (“the Act”), and without determining whether the application was appropriately issued in the High Court, the application is transferred to the County Court at Central London and, immediately upon transfer, and pursuant to section 41 of the act, is transferred back to the High Court, King's Bench Division.”

The Claimant’s case was that the High Court did have jurisdiction, for the following reasons. First, it was submitted in both written and oral submissions that on 1 April 2025 the Claimant applied to transfer the Tribunal Proceedings to the High Court for enforcement. The only document of that date provided to the court is Form N322B (Application for an order to allow enforcement of a decision or an ACAS settlement). I note that the Claimant in its chronology for the court describes the Form N322B as “C applies to transfer the Tribunal proceedings to the High Court for enforcement against D1 and D2 and for an order under CPR 71.2 compelling D2 to attend Court for examination”, presumably on the basis that the Claimant had inserted the High Court on the form in the space for “the name of the court”.

In my view the description of Form N322B as an application to transfer the Tribunal proceedings to the High Court is obviously wrong, both in terms of the description of the form on its face, which states that it is “Application to allow enforcement of a decision or ACAS settlement …that does not require permission to proceed”, and its inconsistency with the procedure in s.15(1) of the Employment Tribunals Act 1996 and CPR 71.2.The only transfer to the High Court was by means of Paragraph 1 of Master Dagnall’s order for examination, as set out above. But at the date of that transfer, 28 April 2025, the Tribunal judgment was not subject to the jurisdiction of the High Court, but only of the County Court, and no application under CPR 71.2 has ever been issued in the County Court. CPR 71.2 is in mandatory terms and in my judgment the Claimant was not entitled to circumvent it by making a direct application to the High Court, as there had not been a transfer of the proceedings to the High Court.

Secondly, the Claimant submitted that the High Court proceedings are not new proceedings but a continuation of the Tribunal proceedings. In my view that argument is irrelevant to the issue, as the High Court proceedings were never properly constituted to enable it to have jurisdiction by an appropriate transfer of the Tribunal decision by the County Court to the High Court until Master Dagnall’s Order, which was after the Part 71 application to the High Court had been made, on 1 April 2025.

Thirdly the Claimant also submitted that Master Dagnall’s Order of 28 April 2025 which transferred the proceedings to the County Court under section 40 of the County Courts Act 1984 and then transferred the proceedings to the High Court under section 41 of the County Courts Act 1984 had the effect of rectifying the error of procedure. I do not consider that this can be the case, first because Master Dagnall expressly stated that he was not determining whether the application was appropriately issued in the High Court, and secondly the Master could not, and did not purport to, permit a party to ignore the mandatory requirements of a rule of procedure.

I accept that there are now extant proceedings in the High Court, by virtue of Master Dagnall’s order, but there were no such extant proceedings at the time the Claimant’s application under CPR 71.2 was issued on 1 April 2025.

Finally, the Claimant submitted that the term “court” in CPR 71.2 was not confined to the County Court, but connotes all courts, including the High Court, relying on a decision of Deputy ICC Judge Baister in Schefenacker v. Horvat [2020] EWHC 506 (Ch)at [20]. However Deputy Judge Baister’s comment was made in the context of an interpretation of “courts” in the Judgments Regulation and has no relevance to these proceedings. CPR 71.2 is quite clear, and the High Court was not “the court which made the judgment or order which it is sought to enforce”, nor had “the proceedings since been transferred to a different court or hearing centre” i.e. the High Court, at the time the application under Part 71 was made.

The Claimant also argued that it was “a false premise” that an application under Part 71.2 has to be issued in the County Court, because of the wording of Section 15(1) of the Employment Tribunals Act 1996. It was submitted that the wording of the section does not mean that an Employment Tribunal award can only be enforced in the County Court and that it is trite that County Court orders can be enforced in the High Court where (as here) the sum in issue is more than £600. Such an argument is, in my view, entirely inconsistent with the wording of CPR 71.2 (2) , namely that an application under CPR 71.2 (1) “must be issued in the court or County Court hearing centre which made the judgement or order which it is sought to enforce, except that - if the proceedings have since been transferred to a different court or hearing centre, it must be issued in that court”. At the time the application under CPR 71.2 (1) was made the proceedings had not been transferred to the High Court. As for the fact that the judgment is over £600, that would obviously support an application to the County Court that the proceedings should be transferred to the High Court, but such an application was never made by the Claimant. It is not a factor which affects jurisdiction.

Accordingly for the reasons set out above I consider that the Part 71 Order must be set aside.

Whether the Part 71 order should be set aside because the Judgment Debtor was out of the jurisdiction at the time the Order was made

Mr Shefler’s alternative ground for his application to set aside the Order under CPR 71 was that at the time of the application Mr Shefler was outside the jurisdiction, relying on the judgment in CIMC Raffles Offshore (Singapore) Pte Holdings SA v Schahin Holdings SA [2014] EWHC 1742 (Comm) where Field J, setting aside orders made under Part 71 against Brazilian citizens living in Brazil, said:

“In my judgment it is clear that the House of Lords held in Masri that the court has no power to entertain an application or to make an order in respect of an individual who was outside the jurisdiction. In my view that means that if the individual is not within the jurisdiction at the time the application was made and at the time the order is made there is no power in the court to make an order against him.”

However, the Claimant correctly points out that Mr Shefler was already subject to the jurisdiction of the English Courts by reason of his being a party to the Tribunal proceedings, and because he had been served with the Part 71 Order further to Master Dagnall’s order granting permission to serve Mr Shefler out of the jurisdiction and to serve the same by alternative means dated 5 June 2025. The Part 71 Order was served on Mr Shefler on the same date; see also the decision of ChiefMaster Marsh in Key Homes Bradford Ltd & Ors v Rakil Patel [2014] EWHC B1 (Ch) at [26]). Accordingly, I do not consider that this argument succeeds as a ground for setting aside the Order of 28 April 2025, but because of my decision in respect of Mr Shefler’s primary argument based on lack of jurisdiction, there is no need for reliance on this argument.

The Claimant’s oral application under CPR 3.10 to correct a procedural error

The Claimant asks the court to exercise its discretion under its powers to correct procedural errors under CPR 3.10. I gave brief reasons for my decision not to exercise my discretion at the hearing but for completeness I will enlarge on these.

The Claimant relies, in summary, on the following factors in favour of granting relief:

I accept all of those criticisms of Mr Shefler, and no attempt was made by his Counsel to defend that conduct, although it has been stated by Mr Shefler’s solicitors in correspondence and through his Counsel in court that he will now comply with orders of this court. I note also that the power under CPR 3.10 must be exercised in accordance with the overriding objective of dealing with cases justly and at proportionate cost under CPR 1.1(1). Although there was indeed an error of procedure, it was an error affecting the court’s jurisdiction. The process for obtaining enforcement of a Tribunal award and for an order under CPR 71 are straightforward and clear. The Claimant is professionally advised and there has been no explanation as to how the error occurred. There has also been an attempt to suggest that the application in Form N322B was itself an application to transfer, which was clearly wrong. It is important, in my judgment, that parties are not permitted simply to circumvent mandatory rules of court, particularly those affecting jurisdiction. I recognise that there will be further delay and costs incurred in the Claimant having to make a further application, but that is the likely consequence of not adhering to the court rules, clearly set out.