Kuwait Oil Tanker Company SAK and Another v Al Bader and Others

JurisdictionEngland & Wales
JudgeLORD JUSTICE STAUGHTON,LORD JUSTICE WAITE,LORD JUSTICE ALDOUS
Judgment Date18 May 2000
Judgment citation (vLex)[1997] EWCA Civ J0324-1
Docket NumberQBCMI 96/0438/B
CourtCourt of Appeal (Civil Division)
Date18 May 2000
(1) Kuwait Oil Tanker Company S.A.K.
(2) Sitka Shipping Incorporated
Plaintiffs
and
(1) Abdul Fattah Sulaiman Khaled Al Bader
(2) Hassan Ali Hassan Qabazard
(3) Timothy St. John Stafford
Defendants

[1997] EWCA Civ J0324-1

Before:

Lord Justice Staughton

Lord Justice Waite

Lord Justice Aldous

QBCMI 96/0438/B

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

(His Honour Judge Diamond QC)

Royal Courts of Justice

MR. D. GERRANS (instructed by Messrs. Brian Harris & Co., London W1) appeared on behalf of the Appellant Third Defendant.

MR. J. MALINS QC and MISS H. DAVIES (instructed by Messrs. Shaw & Croft, London EC3) appeared on behalf of the Respondent Plaintiffs.

1

Monday, 24th March 1997

LORD JUSTICE STAUGHTON
2

In this action there are two plaintiffs: Kuwait Oil Tanker Company S.A.K. and Sitka Shipping Incorporated. There are three defendants: Mr Al Bader, Mr Qabazard and Mr Stafford. We do not need to enter upon the circumstances which have given rise to the action, save to say that they apparently are complicated.

3

The plaintiffs (or perhaps I should say the intended plaintiffs) applied to Mr Justice Cresswell on 21st July 1994 for world-wide prior restraint on the defendants from disposing of their assets and also for leave to serve the second and third defendants out of the jurisdiction. That leave was granted. Later the same day the first defendant, Mr Al Bader, was served in this country. Mr Qabazard was served in Kuwait pursuant to leave granted by the judge on some date which is not material. He, we were told, applied to set aside service on a number of grounds, not including the point taken by Mr Stafford on the present appeal. His application failed.

4

Mr Stafford was served in Australia on or about 29th July 1994. He applied to Judge Diamond QC, sitting as a judge of the Commercial Court, to set aside service on himself on the ground that, on the date when leave was given to serve him under Order 11, rule 1(1)(c), there was no other defendant who had already been served. As I have mentioned, Mr Al Bader was served on the same day, but later in the day. Judge Diamond considered the application with great care. He concluded that Order 11, rule 1(1)(c) requires that one defendant shall have been served within or out of the jurisdiction before leave can be given to serve another defendant under Order 11, rule 1(1)(c). However, he held that he had power retrospectively to validate the service, and he exercised that power. Consequently, it is Mr Stafford who now appeals.

5

However, there is a respondent's notice on behalf of the plaintiffs raising again the question which the judge decided against them as to the construction of Order 11, rule 1(1)(c). We decided to hear the argument on the construction of the rule first, before coming to discretion, and we now express our views on the construction point.

6

The 1993 version of Order 11, rule 1(1), which is that relevant to the present case, provides, so far as material:

"…service of a writ out of the jurisdiction is permissible with the leave of the Court if in the action begun by the writ…

(c) the claim is brought against a person duly served within or out of the jurisdiction and a person out of the jurisdiction is a necessary or proper party thereto".

7

The previous version of the rule was somewhat different. Prior to 1983 it provided:

"…service of a writ, out of the jurisdiction is permissible with the leave of the Court in the following cases, that is to say…

(j) if the action begun by the writ being properly brought against a person duly served within the jurisdiction, a person out of the jurisdiction is a necessary or proper party thereto".

8

Under the old rule it was well recognised, even by students at the Inns of Court School of Law, that one defendant had to be served within the jurisdiction before there could be an application for leave to serve another out of the jurisdiction. That conclusion is supported by the judgments in Yorkshire Tannery v. Eglinton Chemical Co. (1884) 54 LJ Ch 81; Collins v. North British & Mercantile Insurance Co. [1894] 3 Ch 228; and Tassell v. Hallen [1892] 1 QB 321. There was some doubt expressed on the matter by Lord Coleridge CJ in Tassell v. Hallen, but otherwise authority has been uniform to that effect and so has the practice.

9

At the same time as Order 11, rule 1(1) was altered in 1983, there was an alteration in Order 11, rule 4. Previously that had provided, so far as material:

"(1) An application for the grant of leave under Rule 1 or 2 must be supported by an affidavit stating the grounds on which the application is made and that, in the deponent's belief, the plaintiff has a good cause of action, and showing in what place or country the defendant is, or probably may be found.

(2) No such leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction…"

10

Since 1983 rule 4 has provided, so far as material:

"(1) An application for the grant of leave under rule 1(1) must be supported by an affidavit stating—

(a) the grounds on which the application is made,

(b) that in the deponent's belief the plaintiff has a good cause of action,

(c) in what place or country the defendant is, or probably may be found, and

(d) where the application is made under rule 1(1)(c), the grounds for the deponent's belief that there is between the plaintiff and the person on whom a writ has been served a real issue which the plaintiff may reasonably ask the Court to try.

(2) No such leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction…"

11

Mr Malins QC, for Mr Stafford, argues that under the new rule the relevant point of time at which to judge whether the case comes within rule 1(1) is the time when service is effected pursuant to subparagraph (c). If he be right about that, service was valid in the present case because at that time both leave had been granted and service had been effected on Mr Al Bader.

12

In my judgment that is not the proper interpretation of the rules. It seems to me, first, that leave must be given before service. That is plain from the opening words of the rule: "…service of the writ out of the jurisdiction is permissible with the leave of the Court…" Secondly, it seems to me that, before leave can be given, one of the requirements in subparagraphs (a) to (v) must be satisfied. In the case of subparagraph (c) a person must have been duly served within or out of the jurisdiction before leave can be given to serve another defendant under that paragraph. That is a condition of leave being given.

13

I reach that conclusion also by reason of the wording of rule 4. That says in plain terms that there must be between the plaintiff and the person on whom a writ has been served a real issue which the plaintiff may reasonably ask the court to try before leave can be granted.

14

Mr Malins' answer to that point is that there are cases which show that the requirements of rule 4 and its predecessor are not mandatory. He submits that they can be relaxed. The authorities which he refers to for that purpose are, first, Fowler v. Barstow (1881) 30 WR 112; secondly, Borealis AB v. Stargas Ltd. (16th July 1996) New Law Digest; and thirdly, Collins v. North British and Mercantile Insurance Co. [1894] 3 Ch. 228.

15

I say nothing as to whether those authorities do establish the proposition that the requirements as to an affidavit are not mandatory but merely directive. It would seem rather odd if the requirement, for example, that the deponent of the affidavit shall state his belief that the plaintiff has a good cause of action is something which can be dispensed with. But whether that be so or not, the importance of Order 11, rule 4, in my view, is that it shows what the Rule Committee thought to be the meaning of rule 1(1)(c). After all, both rules came into existence at the same time in 1983 and one would suppose that when the Rule Committee devised the new rule 4 it did so because it thought that that was the proper construction of rule 1.

16

I would on those grounds hold that rule 1(1)(c) requires another defendant to have been served before leave can be given under that paragraph. That, as the judge held, was in line with the construction long adopted for the old rule, and that is an additional ground, to my mind, for reaching the conclusion which I have done on the wording of the rules.

17

Mr Malins says that this will create difficulties. Supposing that all the defendants are out of the jurisdiction? There no longer is a requirement that the defendant first served under rule 1(1)(c) has to be served within the jurisdiction. Mr Malins says that in such a case you will have to serve one defendant first out of the jurisdiction, which might take some time, even months, and then come back and obtain leave to serve the other. I am afraid that does not wring any tears from me. If that is what the rules provide, so be it.

18

The same is true of his second practical objection. He says that if there are two defendants and the plaintiffs desire to obtain a prior restraint injunction against both of them, they ought to make the application for the injunction and for leave to serve one or both out of the jurisdiction at the same time; otherwise there will be a risk that the defendant who is served first in order to comply with the construction of the rule, if such it be, will tell the defendant not yet served what is coming to him at a time when that defendant is not yet injuncted....

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