Capital Alternatives Sales and Marketing Ltd ((in Liquidation)) v Vitoria Nabas
| Jurisdiction | England & Wales |
| Judge | His Honour,Judge Klein |
| Judgment Date | 11 December 2018 |
| Neutral Citation | [2018] EWHC 3345 (Comm) |
| Date | 11 December 2018 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No: LM-2018-000036 |
[2018] EWHC 3345 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (QBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
HIS HONOUR Judge Klein SITTING AS A JUDGE OF THE HIGH COURT
Claim No: LM-2018-000036
Francis Collaco Moraes (instructed by Gowling WLG (UK) LLP) for the Claimants
David Turner QC (instructed by DWF LLP) for the First Defendant
Hearing date: 27 November 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
HIS HONOUR Judge Klein
This is the judgment following the hearing of two applications; namely:
i) an application, by a notice originally issued on 15 August 2018 and amended, most recently, on 26 August 2018, by the Claimants for the following remedies:
a) a declaration that the First Defendant was validly served with the claim form and the Particulars of Claim at Unit 44, City Business Centre, St Olav's Court, Lower Road, Canada Water, London, SE16 2XB (“Unit 44”) (which is the registered office of the Second Defendant and which, the First Defendant accepts, is a “registered address” of the First Defendant for the purpose of s.1140 of the Companies Act 2006 (“section 1140”));
b) pursuant to CPR r.6.15(2), an order giving retrospective permission for the Claimants to serve the claim form and Particulars of Claim on the First Defendant by leaving them at an alternative place or address for service, being the offices of Cubism Ltd. (the Third Defendant) at 1 Plough Place, London, EC4A 1DE (“Plough Place”) (which the First Defendant accepts is her postal address for business purposes but which is not a registered address of the First Defendant for the purpose of section 1140) and/or at the offices of the Second Defendant at Unit 44;
c) pursuant to CPR r.6.16, an order that service of the claim form and Particulars of Claim on the First Defendant be dispensed with;
d) pursuant to CPR r.7.6(2) and/or CPR r.3.1(2)(a), an order extending the time for service of the claim form and Particulars of Claim on the First Defendant to 14 days after the date of the order on the application, together with an order that such service may be effected by service on the First Defendant's solicitors;
e) pursuant to CPR r.3.9 and/or CPR r.3.10, an order for relief from any sanction imposed by CPR rr.6.9, 7.5(1) and 7.6(2) and/or to remedy any error caused by the failure to follow those provisions;
ii) an application, by a notice issued on 18 July 2018, by the First Defendant, for the following remedies:
a) a declaration that the court has no jurisdiction, alternatively that it will not exercise any jurisdiction, to try the claim against the First Defendant;
b) an order that the claim form and/or its purported service be set aside.
There are three preliminary points I must make about the Claimants' application. First, by the time of the hearing before me, it had been amended twice. David Turner QC, who represented the First Defendant at the hearing, indicated that the First Defendant consented to the Claimants' application being determined on its re-amended basis and, to the extent I needed to do so, I permitted the amendments to the Claimants' application. Secondly, Francis Moraes, who represented the Claimants at the hearing, did not pursue that part of their application by which an order was sought under CPR r.7.6(2) or under CPR r.3.1(2). Thirdly, as Mr Moraes made the application under CPR rr.3.9, 3.10 at the hearing, the procedural defect which he contended had occurred (on the Claimants' alternative case) and which ought to be rectified, he contended, was a failure, by the Claimants, to comply with CPR r.6.8.
It was agreed by the parties, that, unless the Claimants' application succeeds, the proceedings against the First Defendant cannot continue (but that, if it does succeed, the proceedings will continue against her, and her application will fail). Indeed, the Claimants went somewhat further and accepted that, if their application fails, the First Defendant's application should succeed, in the light of the decision of the Court of Appeal in Hoddinott v. Persimmon Homes (Wessex) Ltd. [2008] 1 WLR 806, at [21]-[29].
Because of the parties' positions on the effect, on the First Defendant's application, of the outcome of the Claimants' application, I only received submissions on the Claimants' application, so that, in this judgment, I only address further that application.
The background to the dispute
Both counsels' skeleton arguments helpfully summarise the substantive dispute between the parties, in a similar way. The summary of the substantive dispute I set out below is derived from those skeleton arguments.
The Third Claimant is the liquidator of the First Claimant and the Second Claimant. Terras de Extremoz Investimentos Imobillarios Ltda. (“GP Brazil”) is a Brazilian subsidiary of the Second Claimant. In 2011, GP Brazil acquired a property, in Extremoz, in the Capim District of Brazil, called White Sands Country Club (“the Property”). Development plots at the Property were disposed to retail investors and the First Claimant and the Second Claimant received £14.7 million in return. The Claimants allege that (i) title to those development plots has not been transferred to those retail investors, (ii) the development plots remain registered in the name of GP Brazil, (iii) the development plots have no value, (iv) the retail investors are entitled to prove in the liquidations of the First Claimant and the Second Claimant and (v) the First Claimant and the Second Claimant have lost the £14.7 million to which I have referred.
The First Defendant is a Brazilian national, resident in the UK, who is a Registered Foreign Lawyer. She was the founder of the Second Defendant and was a member of it from 30 December 2010 until 20 September 2012 and from 31 July 2014. The Second Defendant, was a legal practice, but ceased to be one on 30 September 2016. The Third Defendant is, according to the Claimants at least, the successor practice to the Second Defendant.
The Claimants allege that the First Claimant and/or the Second Claimant retained the Second Defendant to provide legal services and advice in relation to the disposals, to investors, of the development plots at the Property. They also allege that the First Defendant owed the First Claimant and/or the Second Claimant a duty of care in tort in relation to the legal services and advice for which the Second Defendant was retained.
Although Mr Turner did not say so in terms at the hearing, the parties proceeded, realistically, on the basis that the First Defendant disputes the allegations against her.
Background – chronology
Having summarised the substantive dispute, I need to set out, chronologically, some events.
The Claimants contend that they retained the Second Defendant in February or March 2012.
In September 2012, a legal opinion, signed by the First Defendant, was given.
The Claimants contend that GP Brazil lost the ability to dispose of the development plots at the Property on 7 November 2012.
The Third Claimant was appointed the First Claimant's and the Second Claimant's liquidator on 13 August 2014.
By August 2015, the Third Claimant had instructed the Claimants' present solicitors (“the Solicitors”). (It might be more accurate to say that that the Third Claimant in fact appointed a predecessor practice of the Solicitors, but nothing turns on the actual legal practice acting for the Claimants, in relation to the dispute, from time to time).
The Third Claimant was conducting interviews with the staff or former staff of the First Claimant by October 2015, from which interviews it appeared that the First Defendant had played a role in the First Claimant's legal affairs.
On 18 December 2015, the Third Claimant sought documents and information from the Second Defendant and, thereafter, between March 2016 and August 2016, the Third Claimant sought information and documents from the First Defendant and the Second Defendant. Whether those requests have been fully complied with may be a matter of dispute.
The Solicitors entered into a conditional fee agreement with the Claimants on 5 April 2016.
On 10 January 2017, the Solicitors wrote to the Solicitors Regulation Authority asking for details of the Second Defendant's professional indemnity insurers because the Solicitors believed that “limitation in respect of some causes of action may expire on 1 February 2017”.
The claim form was issued on 20 February 2018 (and so it was required, by CPR r.7.5, (in the circumstances of this case) to be left at a permitted place for service by 20 June 2018).
By the Professional Negligence Pre-action Protocol:
i) as soon as the Claimants decided that there was a reasonable chance that they would bring a claim against the First Defendant, they were encouraged to notify her in writing;
ii) as soon as the Claimants decided that there were grounds for a claim against the First Defendant, they should have written a detailed letter of claim to her.
In fact, the first intimation of a claim against the First Defendant was a letter, dated 7 June 2018, from the Solicitors to her, under cover of which they enclosed “by way of notice...
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... [2002] 1 WLR 997 [50]; Steele v Mooney [2005] 1 WLR 2819 [22]–[23]; and Capital Alternatives Sales and Marketing Limited v Nabas [2018] EWHC 3345 (Comm) 82 My conclusion is that CPR 3.10 cannot assist the Claimant in this case: i) I consider that Barton is a clear statement of the underl......