Andrew Edward McCarthy v Graham Brian Proctor
| Jurisdiction | England & Wales |
| Judge | Keyser |
| Judgment Date | 26 March 2024 |
| Neutral Citation | [2024] EWHC 684 (Ch) |
| Year | 2024 |
| Court | Chancery Division |
| Docket Number | Case No: BL-2022-CDF-000019 |
[2024] EWHC 684 (Ch)
HIS HONOUR JUDGE Keyser KC
sitting as a Judge of the High Court
Case No: BL-2022-CDF-000019
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN WALES
BUSINESS LIST (ChD)
Cardiff Civil Justice Centre
2 Park Street, Cardiff, CF10 1ET
George McPherson (instructed by Blake Morgan LLP) for the Claimant
Matthew Parker KC (instructed by Acuity Law Limited) for the Defendant
Hearing dates: 21 February 2024
Approved Judgment
This judgment was handed down remotely at 10am on 26 March 2024 by circulation to the parties or their representatives by email and by release to the National Archives.
HIS HONOUR JUDGE Keyser KC
Judge Keyser KC:
Introduction
By an order made on 31 July 2023, at a hearing on a without-notice basis, I granted to the claimant permission to serve the claim form in these proceedings on the defendant out of the jurisdiction. By an application notice dated 18 October 2023 the defendant applies for an order setting aside that order and refusing permission to serve out of the jurisdiction or staying the claim on the grounds of forum non conveniens. This is my judgment on the defendant's application.
The defendant's application was made more than 14 days after he filed his acknowledgment of service, and it included an application for a retrospective extension of time and for relief from the consequences stipulated in CPR r. 11(5). I considered the application for an extension of time at the beginning of the hearing and granted it for reasons explained in an extempore judgment.
The most relevant facts will be set out below; a summary of the main points will suffice at this stage. The claimant and the defendant are Welsh businessmen. They were formerly business associates, but the relationship between them broke down a few years ago. The present proceedings concern dealings between the parties in respect of a property in Spain (“the Spanish Villa”). The background to the dealings is rather complicated, but the central point is that by an agreement between the parties in May 2016 (“the May 2016 Sale Agreement”) the defendant sold or purported to sell the beneficial interest in the Spanish Villa to the claimant for €950,000. The claimant, who had for some years been the legal owner of the Spanish Villa, paid the purchase price to the defendant. In November 2016 the claimant sold the property to a third party. There was no issue or argument between the claimant and the defendant at that stage.
However, another former associate of the parties, Mr Allan Jones, then alleged that the claimant's sale of the Spanish Villa to a third party in November 2016 was in breach of an earlier contract between Mr Jones and the claimant, by which Mr Jones had acquired beneficial ownership of the Spanish Villa. Mr Jones brought proceedings in this court against the present claimant (“the Jones Claim”), claiming damages for breach of contract. Underlying Mr Jones' claim was the contention that the present defendant had not had the right or power to sell to the present claimant the beneficial ownership of the Spanish Villa. The present defendant was not a party to the Jones Claim and had no involvement in it; the present claimant did not approach him to be a witness, because their relationship had by that time broken down, and as I understand it no attempt was made to add him to the proceedings as a Part 20 defendant. After a two-day trial of the Jones Claim, His Honour Judge Jarman QC, sitting as a Judge of the High Court, gave judgment for Mr Jones against the present claimant for €1,025,000 for damages for breach of contract: see [2022] EWHC 2186 (Ch). An appeal against that judgment was dismissed by the Court of Appeal: see [2023] EWCA Civ 589.
These proceedings were commenced by the issue of a claim form on 26 August 2022, shortly after HHJ Jarman QC gave judgment in the Jones Claim. The claim form alleged three causes of action against the defendant: (1) breach of contract; (2) negligent misstatement; (3) restitution of the price paid under the May 2016 Sale Agreement. At the hearing on 31 July 2023, I refused to permit the claim in breach of contract to proceed, because I was not satisfied that the claimant had a real prospect of success in relation to that claim: the contract would not have been valid in English law for want of formality and no case had been advanced under the law of any other jurisdiction. (No application has been made for permission to amend to sue on a valid contract under Spanish law.) However, I permitted service out of the jurisdiction of the claims for negligent misstatement and restitution. At that stage, there were no particulars of claim. The claimant served the claim form and particulars of claim on the defendant in Spain on 7 September 2023.
Before turning to the detail of the application, I shall summarise the relevant law.
The relevant law
In order to obtain permission to serve a claim form out of the jurisdiction pursuant to CPR r. 6.36 a claimant must show (r. 6.37) that
i. he has a reasonable prospect of success in relation to each claim for which permission is sought,
ii. he has a good arguable case that the claim falls within a ground (or gateway) in paragraph 3.1 of Practice Direction 6B,
iii. England and Wales is the proper place to bring the claim.
These general principles were summarised as follows by Lord Collins of Mapesbury JSC in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804, at [71] (citations omitted):
“On an application for permission to serve a foreign defendant (including an additional defendant to counterclaim) out of the jurisdiction, the claimant (or counterclaimant) has to satisfy three requirements … First, the claimant must satisfy the court that in relation to the foreign defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law, or both. The current practice in England is that this is the same test as for summary judgment, namely whether there is a real (as opposed to a fanciful) prospect of success …. Second, the claimant must satisfy the court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. In this context “good arguable case” connotes that one side has a much better argument than the other …. Third, the claimant must satisfy the court that in all the circumstances the [jurisdiction where the case is proceeding] is clearly or distinctly the appropriate forum for the trial of the dispute, and that in all the circumstances the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction.”
For the purposes of this application, the defendant does not dispute that the claimant has a good arguable case that the claims he advances fall within applicable gateways. His application is based on three grounds:
1) The claim for negligent misstatement has no real prospect of success;
2) This is not the appropriate jurisdiction in which to bring the claim;
3) The claimant was in breach of his duty to make full and frank disclosure to the court when he made his without-notice application for permission to serve out of the jurisdiction.
Serious question to be tried
As Lord Collins observed in the Altimo Holdings case, the test here is the same as that for summary judgment under CPR Part 24. The classic summary of the relevant principles is that of Lewison J in EasyAir Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]; I shall not set it out, though of course I have regard to it. For present purposes, the main points appearing from that and other cases are these. The question is whether the claim has a real, as distinct from a merely fanciful, prospect of success. A case that is merely arguable but carries no conviction will not have a real prospect of success. The court will not conduct a mini trial and, accordingly, where disputed questions of fact arise it will not generally attempt to determine where the probabilities lie. However, the court is not prohibited from carrying out a critical examination of the material, and where it is clear that the factual case is self-contradictory, or inherently incredible, or inconsistent with reliable objective evidence, the court can reject that case. The court will have regard both to the evidence that is currently available and to any further evidence that can reasonably be expected to be available at trial. However, it will not proceed on the basis of mere Micawberism, the chance that something might turn up. If the case turns on a point of law and the court is confident that it has all the necessary evidence and arguments, the court can determine the issue. On the other hand, there will be circumstances when the correct legal position will better be known in the light of a trial than on the basis of the facts as they appear to be on a summary application.
Appropriate forum
As for the requirement that the claimant demonstrate that England and Wales is the appropriate forum for the litigation (the forum conveniens), the requirement is to show “that England [and Wales] is clearly or distinctly the appropriate forum for determination of the issues in [the] case”: VTB Capital plc v Nutritek International Corpn [2013] UKSC 5, [2013] 2 AC 337, per Lord Mance JSC at [71].
In the Altimo Holdings case, Lord Collins said at [88]:
“The principles governing the exercise of discretion set out by Lord Goff of Chieveley in Spiliada Maritime Corpn v Cansulex Ltd [1987] AC 460, 475–484, are familiar, and it is only necessary to restate these points: first, in both stay cases and in service out of the jurisdiction cases, the task of the court is to identify the forum in which the case can be...
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