1) Albert John Martin Abela and Others (Respondents/Claimants) v Ahmad Baadarani
| Jurisdiction | England & Wales |
| Judge | Lord Clarke,Lord Sumption,Lord Neuberger,Lord Reed,Lord Carnwath |
| Judgment Date | 26 June 2013 |
| Neutral Citation | [2013] UKSC 44 |
| Date | 26 June 2013 |
| Court | Supreme Court |
[2013] UKSC 44
Lord Neuberger, President
Lord Clarke
Lord Sumption
Lord Reed
Lord Carnwath
Appellant
Clive Freedman QC
Tim Penny
(Instructed by PCB Litigation LLP)
Respondent
Andrew Onslow QC
Paul Greatorex
Instructed by M&S Solicitors Ltd)
Heard on 10 and 11 April 2013
Lord Clarke (with whom Lord Neuberger, Lord Reed and Lord Carnwath agree)
The question for decision in this appeal is whether there has been good service of the claim form in this action on the respondent.
This is an appeal against an order of the Court of Appeal (Arden, Longmore and McFarlane LJJ) made on 15 December 2011 in which they set aside the orders of a number of judges and, in particular, an order of Sir Edward Evans-Lombe ("the judge") made on 28 January 2011 in which he declared, pursuant to CPR 6.37(5)(b) and/or 6.15(2), that the steps taken on 22 October 2009 to bring the claim form to the attention of the respondent amounted to good service of the claim form. The Court of Appeal held that the judge should not have made that declaration, that various extensions of the validity of the claim form for service should not have been granted, that the respondent had not been properly served with the claim form and that it followed that the claim must be dismissed. The principal issue in this appeal is whether the Court of Appeal was correct to hold that the judge should not have declared that the events of 22 October 2009 amounted to good service of the claim form.
As stated in the agreed statement of facts and issues, the underlying claim is for damages for fraud in connection with a contract for the purchase of shares in an Italian company called Gama SpA ("Gama"), made in March 2002, between the third appellant, as purchaser, and the respondent and Cicines Holdings Ltd ("Cicines"), as vendors, for a total consideration of US$14m. The contract expressly provided that it was governed by English law and contained a nonexclusive English jurisdiction clause. The appellants claim that the shares were worthless or worth far less than the amount paid for them. The claim alleges that the fraud involved corruption on the part of a Mr Haan, a lawyer for the appellants, who acted for them in connection with the sale and is said also to have acted secretly for the respondent without the appellants' knowledge.
The claim form in this action was issued on 30 April 2009, following the settlement of an action ("the Haan action") by the appellants against Mr Haan and a firm of solicitors ("Hammonds") who were said to be vicariously liable for the torts of Mr Haan, in order to recover such part of the moneys paid under the contract as were not recovered in that action. The background facts are set out in some detail by the judge at paras 2 to 12 of his judgment of 28 January 2011, [2011] EWHC 116 (Ch). It is not necessary to set them out here, save to note that the action against Mr Haan and Hammonds came to trial on 11 March 2009 and was settled after eight days by a payment by the defendants in that action to the appellants of a sum which included costs. The claims in this action mirror those in the Haan action, although, if this action were to succeed, credit would presumably have to be given for sums recovered in the Haan action.
The causes of action pleaded in this action are fraudulent misrepresentation and/or conspiracy and/or dishonest assistance and/or unconscionable bargain and/or undue influence, arising out of the alleged bribery and corruption of Mr Haan in order to bring about the contract for the purchase of shares in Gama in March 2002. They are summarised by the judge at para 19 of his judgment. The claims were brought against both the respondent and Cicines, but Cicines is not a party to this appeal.
It follows from the fact that the claim form was issued on 30 April 2009 that its validity for service out of the jurisdiction would expire after six months, on 29 October 2009. The appellants took no steps for some three and a half months until they instructed counsel to settle the particulars of claim in mid-August 2009. The particulars of claim were signed on 9 September 2009 and on 14 September 2009 an application for permission to serve the proceedings on the respondent outside the jurisdiction was made to Morgan J, without notice to the respondent. Both the particulars of claim and a detailed skeleton argument were put before the court. Morgan J was satisfied that there was a good arguable case for service out of the jurisdiction and for the extension of the validity of the claim form. By an order made on 14 September 2009, he gave permission under CPR 6.36 and 6.37 to serve the claim form and all other documents upon the respondent at an address at Farid Trad Street in Beirut in Lebanon ("the Farid Trad Street address"). He extended the time for serving the claim form from 29 October 2009 until 31 December 2009 and, to the extent required, gave permission to serve the claim form and documents by alternative means, namely by personal service of an untranslated copy of all the documents at the Farid Trad Street address.
The evidence before Morgan J comprised the first and second witness statements of Mr Mascarenhas of the appellants' solicitors and the first witness statement of the appellants' Lebanese lawyer, Mr Houssami. The evidence in support of the application included the following. The address in the claim form was in fact that of the respondent's lawyer in Beirut. The respondent's home address was believed to be the Farid Trad Street address, which was the appropriate address for service if he was to be served personally. That belief was based on what Mr Houssami had been told by individuals not identified in his witness statement and, more importantly, on the fact that he had previously effected service of legal proceedings there in late 2006 or early 2007 by leaving the documents with the respondent's wife. Lebanon was not a party to any bilateral convention on service of judicial documents and, in particular, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1965) (Cmnd 3986) (the "Hague Service Convention") did not apply. Service of originating process through the judicial authorities or the British Consulate would be likely to take several months.
The appellants' evidence is that Mr Houssami used a notary to seek to serve the respondent by causing a service agent or clerk to attend at the Farid Trad Street address over a period of four consecutive days between 7 am and 4 pm, which were official working hours. The respondent could not be located at that address. The respondent denies that he lived there. However, on 22 October 2009, an untranslated copy of the claim form, which was in English, together with other relevant documents were delivered to the offices of Mr Azoury, who was the respondent's Lebanese lawyer in Beirut. This was not the method of service authorised by the order of Morgan J, although on the respondent's application to set aside the various orders of the court, including the order of Morgan J, which came before the judge, the appellants contended that it amounted to good service on the respondent under Lebanese law. However, the Court of Appeal resolved this issue against the appellants, and there is no appeal against that decision.
The appellants continued to try to effect service through diplomatic channels at the Farid Trad Street address. They also obtained Arabic translations of the documents for service and a request for service out was delivered to the Foreign Process Section of the High Court on 19 November 2009 together with certified translations. There were some delays and, shortly before a hearing before Sales J on 16 December 2009, the appellants' solicitors were told by the Foreign and Commonwealth Office that service through diplomatic channels in Lebanon might take a further three months from receipt of the documents.
On 16 December Sales J heard a further without notice application and granted a four-month extension of the validity of the claim form from 31 December 2009 until 30 April 2010 so as to enable service to take place at the Farid Trad Street address through diplomatic channels. The use of diplomatic channels caused further delays. Under cover of a letter dated 11 February 2010, Mr Azoury communicated with the appellants' solicitors and returned the documents received by him on 22 October 2009. In the letter he noted that the address for service in the order of 14 September 2009, namely the Farid Trad Street address, was not that of the respondent, who had not to his knowledge ever lived there or had any connection with it. He further said that he had never had instructions to accept service of documents other than in connection with the Lebanese proceedings (referred to in para 15 below) and that the respondent had confirmed that that was the case. He gave no indication where the respondent could be served.
On 17 February 2010, the appellants' solicitors, PCB Litigation ("PCB"), replied to the letter dated 11 February asserting that Mr Azoury held a general power of attorney to act on behalf of the respondent in any legal proceedings, that the respondent had expressly elected Mr Azoury's office as a domicile in the power of attorney and that the proceedings were validly served under Lebanese law. If that was not accepted, they asked Mr Azoury to provide them with the respondent's usual address and to agree a date and time for service on the respondent. Mr Azoury replied that the general power of attorney could only be...
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