Golden Ocean Assurance Ltd v Martin (Golden Mariner)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,LORD JUSTICE McCOWAN,SIR JOHN MEGAW |
| Judgment Date | 29 June 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J0614-4 |
| Docket Number | 90/0546 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 June 1990 |
and
[1990] EWCA Civ J0614-4
Lord Justice Lloyd
Lord Justice McCowan
Sir John Megaw
(not Present)
90/0546
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE PHILLIPS)
Royal Courts of Justice
MR J.N. GRUDER, instructed by Messrs Ince & Co., appeared for the Appellants (Plaintiffs).
MR S.M. TOMLINSON Q.C. and MR S.P.N. RAINEY, instructed by Messrs Hill Taylor Dickinson, appeared for the Respondents (Defendants, excluding Defendant No. 14).
We have been concerned with three questions on this appeal, of which only one is of any general interest. It concerns the scope of the court's powers under RSC Order 2, rule 1. That rule provides that a failure to comply with the rules in beginning or purporting to begin any proceedings shall not nullify the proceedings, but should be treated by the court as an irregularity. The question is whether what happened in this case can properly be described as "a failure to comply" with the rules, or whether it was something altogether more fundamental, as Phillips J. has held.
The facts are fully set out in the judgment below. I do not repeat them. The claim arises out of a serious casualty suffered by the Goldean Mariner on 17th December 1984 in the course of a laden voyage from Tubaro to Japan. There was a fracture of the shell plating in way of number five hold, which flooded. Salvage services were rendered under Lloyds Open Form. The salvors were awarded $2M. An average adjustment drawn up in London quantified the cost of repairing the damage at $1.5M.
The plaintiffs claim an indemnity under various contracts of insurance and re-insurance against 46 defendants in 26 different jurisdictions. The writ was issued on 26th November 1986. Only 24 out of the 46 defendants are now pursued, of which 16 are foreign companies. Those defendants which could be served in England were served at the beginning of December 1986. For reasons which will appear later, there was no attempt to serve the foreign defendants until Hirst J. granted leave, ex parte, on 2nd May 1988. We are concerned here with the 9th, 10th, 12th and 15th-18th defendants. They are all American companies, with whom part of the risk was placed by C.E. Heath & Co. (Marine) Ltd ("Heaths"), the London placing brokers, through a New York broker, John F. Curry Agency Incorporated ("Curry"). Of the American defendants, the 12th and 15th-18th, but not the others, were members of a pool from whom Curry, it seems, held a binding authority.
The concurrent writ for service on these seven defendants was in the prescribed form, as set out in Appendix A to the Supreme Court Practice. All 46 defendants appear in the title to the writ. Beneath the title appears the individual name and address of each of the defendants to be served. There was no misdescription or error of any kind. Unfortunately, owing to an error on the part of the American process servers, each of the writs was then "served" on the wrong defendant. Thus the writ addressed to the 9th defendant was served on the 16th defendant, and the writ addressed to the 16th defendant was served on the 18th defendant, and so on. The 10th defendant received no writ at all. All the 10th defendant received was a form of acknowledgement of service.
RSC Order 2, Rule 1
The plaintiffs contend that in each case the error must be treated as an irregularity, and is therefore capable of cure under RSC Order 2, rule 1. The document to be served on each defendant should be treated as a writ addressed to, and impleading that defendant. The incorrect name and address must have been understood by the recipient as a misdescription, and should be disregarded. As for the 10th defendant it was contended that he must also have understood that he was intended to be sued and served, and the fact that he never received a writ at all may also be treated as an irregularity. The learned judge rejected these arguments. As to the 10th defendant I consider that he was unquestionably correct.
Until 1964, the old Order 70, rule 1 provided:
"Non-compliance with any of these rules…shall not render any proceedings void unless the court or a judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the court or judge shall think fit".
In Re Pritchard [1963] Ch. 502 proceedings under the Inheritance (Family Provisions) Act 1938 were begun in the District Registry. They should have been begun in the Central Office. It was argued that the mistake was a mere irregularity. But a majority of the Court of Appeal held that it was "much more than an irregularity", to use the language of Lord Herschell in Smurthwaite v. Hannay [1894] A.C. 494. It was a fundamental defect, which had the effect that the proceedings were a nullity. There had in that case undoubtedly been a "non-compliance with the rules", since Order 54 in its then form specifically provided that the proceedings should be started by originating summons in the Central Office. Yet the defect was so serious that the proceedings were rendered void, despite the language of Order 70, rule 1.
The following year the rule was amended. The mistake which had been made in Re Pritchard was covered by the new Order 2, rule 1(3) which provides:
"The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these rules to be begun by an originating process other than the one employed".
But the opportunity was also taken to replace the old Order 70 by a provision of much greater length and elaboration. However with one important exception, I do not notice any change of substance. Thus "where there has been a failure to comply with these rules…the failure shall not nullify the proceedings" seems to be no wider than "non-compliance with any of these rules…shall not render any proceedings void". Nor can I see any difference in effect between the obligation to treat such a failure as an irregularity which may result in the proceedings being set aside under the new rule, and the provision that the proceedings might be set aside either wholly or in part as irregular, under the old rule. The only important difference is that the new rule makes clear for the first time that it covers a failure to comply with a requirement of the rules "in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings". It is on these words that Mr Gruder for the plaintiffs founds his case.
He concedes that the commencement of proceedings by or against a non-existent party is a nullity. So also is total non-service of a party. But nothing else, he says, is a nullity. In particular a writ issued against a defendant who exists, but is misdescribed, is an irregularity. So is a complete failure to serve, provided the existence of the proceedings comes to the notice of the defendant.
Mr Tomlinson for the defendants argues that if there is a fundamental defect in the service of a particular defendant, the proceedings against that defendant have never been joined. Accordingly, there are no "proceedings" for the purpose of Order 2, rule 1.
But that ignores the opening words of Order 2, rule 1 "where, in beginning or purporting to begin any proceedings…". There is no doubt that the plaintiffs did at least purport to begin proceedings against all 46 defendants; indeed they did in fact begin proceedings. There was no defect in the issuing of the writ. The defect lay in its service. So I would reject that particular argument advanced on behalf of the defendants. The proceedings as such were valid.
But it does not follow that I accept Mr Gruder's argument to its full extent. I agree with the note to Order 2, rule 1 in the Supreme Court Practice that, despite the change in wording between the old Order 70 and the new Order 2, rule 1, there may still be a failure to comply "with statutory requirements or other improprieties so serious as to render the proceedings in which they occur, and any order made therein, a nullity". It is difficult to define in advance the sort of failure which would still have this effect; and certainly it would be undesirable to revert to the many refined distinctions and injustices which prevailed under the old rule. But the failure to serve the 10th defendant with anything at all, except an acknowledgement of service, is an omission which is so serious that in my judgment it cannot be cured under Order 2, rule 1. It cannot be described "as a failure to comply with the requirements of the Rules by reason of something left undone". It is more accurately described as doing nothing. It is no better than serving a blank piece of paper, or a writ in some other proceedings in which the person served is not even named as a defendant. The service of the form of acknowledgement cannot make up for the absence of the writ.
It is true that the 10th defendant could have done nothing himself. He could have awaited events. But it has long been established that a defendant in these circumstances has the option of ignoring the purported service, or going to the court to ask for it to be set aside: see Harkness v. Bell's Asbestos & Engineering Ltd [1967] 2 Q.B. 729 per Diplock L.J. at 736. The fact...
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