Cathrineholm A/S v Norequipment Trading Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL,Sir GORDON WILLMER |
| Judgment Date | 10 February 1972 |
| Judgment citation (vLex) | [1972] EWCA Civ J0210-3 |
| Date | 10 February 1972 |
| Court | Court of Appeal (Civil Division) |
[1972] EWCA Civ J0210-3
The Master of the Rolls (Lord Denning)
Lord Justice Roskill and
Sir Gordon Willmer
In The Supreme Court of Judicature
Court of Appeal
Appeal.(by leave) by plaintiffs from order of Mr Justice Donaldson (in chambers) on 7th December, 1971.
Mr. FREDERICK REYNOLD (instructed by Messrs. Bennett, Welch & Co.) appeared on behalf of the ppellent Plaintiffs.
Mr. KONRAD SCHIEMANN (instructed by Messrs. Medleys) appeared on behalf of the Respondent Defendants.
In 1968 and 1969 a Norwegian company, A/S Cathrineholm, sold and delivered goods to an English company, Norequipment Trading Ltd., and desired payment. The plaintiffs' solicitors issued a writ on 15th July 1971, claiming a sum in Kroner, which, converted into sterling, came to £6,609.49. Seeing fiat the defendants were an English limited company, the plaintiffs' solicitors went to the Companies Register to find the registered office. It was given as "34/35 Norfolk Street, London, W.C.2. On 21st July the solicitors sent that writ by first class mall in a prepaid envelope addressed to the company at "34/35 Norfolk Street, London W.C.2. In the ordinary way that letter would have been delivered at that address on 22nd July 1971. But it was not delivered there and for this reason: four weeks previously, on 24th June 19719 the company had moved. from 34/35 Norfolk Street to 23 Ridgmount Street, London,. C.l. But it had not done that it ought to have done. It had not sent to the Companies Register a notice of change of address as by section 107 of the Companies Act it ought to have done within 14 days. The Companies Register still contained: 34/35 Norfolk Street" as the company's registered office.
It appears that on 24th June 1971 the defendants quitted Norfolk Street. So did the other tenants. On 5th July 1971 the building was handed over to demolition contractors. By 22nd July, when the postman arrived with the letter, the premises were derelict, the windows were broken and boarded up; the letterbox had been removed? and there was a pneumatic drill working outside the door. We do not know what the postman did with the letter. Perhaps he threw it away. At any rate, it was not returned through the dead letter office to the plaintiffs.
The plaintiffs, of course, knew nothing of all this. They assumed that the letter had been delivered. Accordingly, when the time expired for appearance and no appearance entered, the plaintiffs solicitors on 16th August 1971 signed judgment in default of appearance. They sent the copy judgment to the same address which still stood in the Company's file as "34/35 Norfolk Street", the registered office.
It appears, however, "hat by this time the defendants had made an arrangement with the Post Office by which all letters addressed to them at 34/35 Norfolk Street were to be re-addressed to 23 Ridgmount Street. So this letter of 16th August 1971 was re-addressed to 23 Ridgmount Street. On 18th August 1971 the defendants received the copy judgment. They at once realised that judgment in default had been signed against them. They applied be the Court to set aside that judgment in default.
The question is whether or no the defendants in the circumstances are entitled to have that judgment set aside as of right — ex debito justitiae, as it is called - on the ground that it was obtained irregularly. The plaintiffs say that it was obtained regularly and that it should not be set aside except on an affidavit of merits.
The Judge held that the defendants' were entitled to have the writ set aside ex debito justitiae. The plaintiffs appeal to this Court. The case has a piquant flavour because there are two judgments of this Court which are inconsistent, the one with the other. The first case was decided on 5th March 1970, Saga of Bond Street Ltd. v. Avalon Promotions Ltd. Lord Justice salmon was presiding in that Court with Lord Justice Winn and Lord Justice Cross beside him. A writ was issued against the company for the amount of a bill. On 17th December 1969 it wassent through the post by a pre-paid envelope. No appearance was entered. On 30th December 1969 judgment was entered in default of appearance. A few days later, on 5th January, the envelope containing the writ was returned to the plaintiffs through the dead letter office marked "Not know". The Court held that the judgment was perfectly regular and was not to be set aside except on an affidavit of merits. Lord Justice Salmon referred to a dictum of mine in The Queen v. County of London Quarter Sessions Appeal Committee. Ex parte Ross,. 1956 1 Q.B. 694. He said that the law was correctly set out there. It was this.
"To sum up, when service of process is allowed by registered post, without more being said on the matter, then if the letter is not returned, it is assumed to have been delivered In the ordinary course of post and any judgment or order by default obtained on the faith of that assumption is perfectly regular. It will not as a rule be set aside except on payment of costs and showing of merits. But if the letter is returned undelivered and nevertheless, notwithstanding its return, a judgment or order by default should afterwards be obtained, it is irregular and will be set aside ex debito justitiae".
I was then dealing with service by registered post: but the same applies to service by pre-paid post
Having read that passage, Lord Justice Salmon went on
"In the present case, the judgment by default was obtained not after but before the Writ came back through the Dead Letter Office; and, in my view, the service of this Writ was undoubtedly regular."
Being regular, it would not be set aside unless there were merits. That case was not reported anywhere. The transcripts of the judgment were filed in the Bar Library, but stayed there unnoticed.
The second case was decided on 18th November 1971 It is Thomas Bishop Ltd. v. Helmville Ltd. and is reported in 1972 2 W.L.R. 149. Again Lord Justice Salmon was presiding, and Lord Justice Buckley and Lord Justice Orr were sitting with him.It is apparent that Lord Justice Salmon did not recall the previous case of 18 months before. He referred once again to my dictum in Rossi's case. But this time he went clean contrary to it. Whereas he had previously said it was correct, now he said that he could not accept it. In this second case a copy of the writ was posted to the defendants at their registered office. It was never returned undelivered: No appearance was entered. Judgment was entered by default. The defendants applied to set it aside. The managing director of the defendant company made an affidavit in which he swore quite categorically that no copy of the writ had been received by the defendants. Lord Justice Salmon thought that his statement should be accepted, as no application had been made to cross-examine him. So although the plaintiffs had acted entirely properly, he held that the judgment was irregular, and the defendants were entitled to have it set aside ex debito justitiae. Lord Justice Buckley agreed with him. out Lord Justice Orr dissented. He agreed with what I had said in Rossi's case He pointed out that in Rossi's case Lord Justice Morris and Lord Justice Parker did not differ from me. He added that in Cooper v. Scott-Farnell (1969) 1 W.L.R.120, Lord Justice Willmer and Lord Justice Edmund Davies had expressly accepted my dictum from Rossi's case, and Lord Justice Phillimore had impliedly accepted it too.
We have now to decide between those two decisions. The only relevant statutory provision is section 437(1) of the Companies Act 1948, which says:
"A document may be served on a company by leaving it or sending it by post to the registered office of the cotrany
Section 26 of the Interpretation Act 1889 says:
"Where an Act passed after the commencement this Act authorises or requires any document to be served by post, whether the expression 'served, or the expression 'give' or 'send', or any other expression is used, then, unless the contrary intention appears, the service shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the document, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
That section falls into two parts. The first part deals with the time of delivery. That was pointed out by Lord Justice Parker in Rossi's case at page 700. In this case we are only concerned with the first part, i.e., the fact of service, not with the...
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