Mr Osman Inan Tanir v Mr Erol Tanir

Hearing dates: 18 th November 2015

Introduction

On 18 ^th September 2012 the Istanbul Fourth Court of First Instance gave judgment for Mr Osman Tanir in an action for the recovery of a loan €115,000 it was alleged was made by Mr Tanir to his son Erol. The Judgment was for the principal sum of €115,000 together with TL (Turkish Lira) 79,998.60 for "collection refusal compensation" and 11,879.79TL for reimbursement of court fees.

Mr Tanir Senior (who for convenience was called by his first name, "Osman", during the course of the hearing before me) commenced proceedings in England for enforcement of that Judgment. A claim form was issued on 15 ^th December 2014. In the absence of any Acknowledgement of Service, Judgment in Default was entered on 20 ^th January 2015. The Defendant, Erol Tanir (who has been referred to as "Erol") issued an application to set aside the default judgment on the 17 ^th February 2015. On the 11 ^th June 2015, following exchange of witness statements and Turkish law expert reports, the hearing of the application to set aside the default judgment came on before Master Leslie.

Master Leslie gave an ex tempore judgment that same day dismissing the application to set aside the judgment. He continued interim charging orders that had been issued and ordered the Defendant to pay the Claimant's costs.

Erol Tanir gave notice of his intention to appeal Master Leslie's order on the 2 ^nd July 2015. Four days later, Edis J made an order staying the enforcement of the judgment pending the hearing of this appeal and requiring Counsel to prepare a note setting out how the issues relating to service of the proceedings were determined at the hearing before the Master.

The Hearing Before Me

At the hearing before me, Erol Tanir was represented by Mr Louis Weston and Osman Tanir by Mr Robert Avis. I am grateful to both of them for their clear and helpful written and oral submissions. By the time this appeal came on for hearing, Erol's arguments had become somewhat refined from how they were first advanced. A number of untenable arguments were abandoned.

Erol's primary contention was that the claim form had never been served on him and that accordingly the judgment was irregular and ought to have been set aside under CPR 13.2. His secondary submission, if that argument did not succeed, was that the Master should have set aside the Judgment under CPR 13.3 on the basis that he had a real prospect of successfully defending the claim. In support of the latter contention Mr Weston advanced three arguments; first he said that the Turkish judgment had been obtained by fraud; second he said that the award of collection refusal compensation amounted to a penalty which it was contrary to public policy to permit the Claimant to enforce. Third, he argued that he should have been permitted to prosecute his counter-claim in respect of 57,250TL, which he had been awarded by the Turkish courts in separate proceedings in relation to legal expenses incurred by him.

Mr Avis for Osman Tanir contended in reply that the Master was entitled to conclude that this was a regular judgment and was right to reject the argument that there was a real prospect of the Defendant resisting the claim on any of the other grounds. I deal with the grounds of appeal in the same order as Counsel, but first I set out the relevant rules of court and the relevant parts of Master Leslie' decision.

The Civil Procedure Rules

CPR 6.18 provides;

"6.18 (1) Where

(a) the court serves the claim form by post; and

(b) the claim form is returned to the court

the court will send notification to the claimant that the claim form has been returned.

(2) The claim form will be deemed to be served unless the address for the defendant on the claim form is not the relevant address for the purposes of rules 6.7 to 6.10"

The time for acknowledging service is prescribed by Rule 10.3:

" 10.3(1) The general rule is that the period for filing an acknowledgment of service is –

(a) Where the Defendant is served with a claim form which states that particulars of claim are to follow, 14 days after service of the particulars of claim and

(b) In any other case, 14 days of service of the claim form."

CPR 12.3 provides (as material):

" 12.3(1) The Claimant may obtain judgment in default of an acknowledgment of service only if –

(a) The Defendant has not filed an acknowledgement of service or defence to the claim (or any part of the claim); and

(b) The relevant time for doing so has expired."

CPR 13 provides:

"2. The Court must set aside a judgment entered under Part 12 if judgment was wrongly entered because –

(a) In the case of a judgment in default of an acknowledgement of service, any of the conditions in Rule 12.3(1) and 12.3(3) was not satisfied.

3. In any other case, the court may set aside or vary a judgment entered under part 12 if

(a) The defendant has a real prospect of successfully defending the claim; or

(b) It appears to the court that thee is some other good reason why (i) the judgment should be set aside or (ii) the defendant should be allowed to defend the claim."

The Decision of the Master

A note of the judgment of Master Leslie was prepared by Counsel after the hearing and approved by the Master on 9 ^th July 2015. It is relevant to Erol's alternative argument to the effect that he has real prospect of successfully defending the claim and I consider it when addressing that issue.

Following the order of Edis J of 6 ^th July 2015 Counsel who had appeared before the Master prepared a Supplementary Note setting out what had occurred at the hearing relevant to the issue of service of the claim form. That Note included the following:

" Master Leslie agreed that a form N205A was prima facie sufficient evidence of service for the purposes of entering default judgment.

Master Leslie observed that the claim form was endorsed "served by the Court". It was not in dispute that the correct address for the Respondent was shown on the claim form. Master Leslie requested that the court file be brought up.

Upon examining the file Master Leslie noted that there was not a note on the file as to how the claim form had been served.

Master Leslie asked the court staff to make further inquires. The court staff returned with a print out from a court database; a complete copy of the screenshots (or computer print-outs) is attached to this note. The print out did not indicate the date or address of service. Moreover, it did not indicate the service had been effected by the Court. In particular it declares that, by an entry dated 17 ^th December 2014, "service method amended".

Master Leslie confirmed that the computer record he had been provided with was entirely unsatisfactory, as it failed to confirm the date on which service took place together with any relevant details. Moreover, there should have been a document on the court file giving a date of service. The court staff were directed to draw this issue to the attention of Edward Boswell and that there was a need for something to appear on the court file as one did not know the date when service was completed, the address sent to (which was assumed to be the address on the claim form). Master Leslie confirmed that the documents had not been returned. Noting that (in accordance with CPR Rule 6.18 "notification of outcome of postal service by the Court") therefore the database indicated the service had been effected by the Court, Master Leslie decided that CPR Rule 13.2 was not engaged and that he would proceed to hear the Appellant's application under CPR Rule 13.3."

Discussion: CPR 13(2)

As noted in the Note, there was produced to the Master a copy of the Notice of Issue, form N205A. That was issued by the Court to the Claimant's solicitors, Brian Harris & Co. It read as follows:

" Your claim was issued on 15 ^th December 2014. The Court sent it to the Defendant by first class post on and it will be deemed to be served on The Defendant has until to reply."

As will be apparent, Court staff had inserted on the N205A form the date on which the claim was issued but not the date on which it was posted, nor the date on which it was deemed to be served, nor the date by which the Defendant was to be required to reply.

The claim form itself, which had been prepared by Osman's solicitors, was sealed by court staff and a Claim number entered on it. It had been date stamped to indicate that the claim form was issued on 15 December 2014. That is consistent with the indication set out in the notice of issue. The claim form also contains two endorsements. The first reads "served by the Court"; the second reads "Assigned to Master Leslie". The indication that the form was served by the Court is consistent with CPR r6.4 which sets out the circumstances in which the court will serve the claim form.

On 13 ^th January 2015 HM Courts and Tribunal Service wrote to Brian Harris & Co. solicitor for Osman, referring to the case of Tanir v Tanir. The letter reads " Your judgment dated 8 January 2015 has been returned to you for the following reason: You must file a Certificate of Service".

As noted above, during the course of the hearing before...