Formal Holdings Ltd & Anor v Frankland Assets Inc & Ors [2021] EWHC 1415 (Comm)

“19.1 This Agreement shall be governed by the laws of England. 19.2 The Parties do hereby irrevocably agree and undertake that the courts of England shall have exclusive jurisdiction to determine any matter which may arise out of or in connection with this Agreement and to enforce the provisions thereof and to issue any process or enforce any judgment against any of the Parties.”

“20.1 The Parties choose as their domicilia citandi et executandi for all purposes under this Agreement, whether in respect of payments, court process, notices or other documents or communications of whatsoever nature the following addresses: …the Borrowers c/o Applegate FS SA [(“Applegate”)] 6 Avenue de Frontenex …the Borrowers c/o Applegate FS SA [(“Applegate”)] 6 Avenue de Frontenex PO Box 3036 6. Switzerland 7. Telefax No: +41 22 849 09 99 20.2 Any notice or communication required or permitted to be given in terms of this Agreement shall be valid and effective only if given in writing but it shall be competent to give notice by telefax, provided receipt is received confirming due completion of transmission.”

“FIHAG has a receivable including interest Wellcourt Investment £25.950.957,36 FIHAG has a payable including interest Formal Holdings Ltd. £25.950.957,36 Both parties herewith agree that the above stated receivables and payables of FIHAG can be settled. Formal will inform Wellcourt Investment to repay the loan directly to Formal Holdings Ltd. Both parties herewith confirm the remaining balances £0,00”

“A debt claim arising from two loan agreements. The First Claimant made an initial loan agreement with the Second Claimant, who in turn made a loan agreement with the Defendants. The Second Claimant has assigned to the First Claimant the right to recover the debt from the Defendants.”

“Despite such demand and in breach of the Loan Agreement, the Defendants have failed to pay to the First Claimant, alternatively the Second Claimant, the Loan sum of £25,000,000; the sum of £950,957.36 due in interest to 31st December 2017 and/or the sum of £288,660.205 due in further interest to 26th April 2018 or any part of such sums. Further the First Claimant, alternatively the Second Claimant, is entitled to and claims to recover pursuant to clause 6.1 of the Loan Agreement further interest due to it on the Loan sum claimed under paragraph 16 at the contractual Interest Rate of 3.5% per annum from 27April 2018 to the date hereof amounting (21 days) to £52,257.45 and thereafter interest at the daily rate of £2,488.45 until judgment or sooner payment. In the alternative, the First Claimant, alternatively the Second Claimant, is entitled to and claims to recover pursuant to section 35A of the Senior Courts Act 1981 interest due to it at a rate of 8% per annum on the Loan sum claimed under paragraph 16…, alternatively at sum rate and on such sums and for such period as the Court shall deem fit.”

“1. Following His Honour Judge Klein’s Order of 25 July 2018 (perfected 16 August), the Claimants instructed my firm to prepare and file – without prejudice to the Claimant’s Application for Judgment in Default – a Request to the Foreign Process Section (“FPS”) for service of the Claim Form and other documents pursuant to Swiss law (“the Request”). 2. Consequently we lodged the Request and accompanying documents on Monday 3 September 2018. I attach a true copy of FPS’s receipt. FPS has declined to say how long service on the Defendants’ contractual nominee, Applegate FS SA (“Applegate”) in Switzerland might take, but based on our experience of other cases I have reason to believe that the process might take 12 weeks. 3. Such a period would expire on 26 November 2018, which is later than the 6-month time limit for service of the Claim Form. The current deadline for service falls on 17 November 2018. 4. Under the circumstances, the Claimants seek an adjournment of the Application for Judgment in Default until after service has taken place pursuant to the Request. 5. As a precaution. the Claimants also seek an extension of the time allowed for service of the Claim Form. Because of the unpredictable length of time of the process by which the Swiss authorities are effecting service following the Request. we respectfully propose that the Court extends the six-month period by three months, until 17 February 2019, to allow for possible delays and the Christmas holiday period and to save the need for and costs occasioned by a further application. 6. The Claimants demanded payment of the principal sum claimed pursuant to the Loan Agreement on 27 April 2018 (as pleaded in paragraph 14 of the Particulars of Claim), the court issued the claim on 17 May 2018 and the original 6-month time limit is due to expire on 17 November 2018 and so the court will not be concerned with limitation in this case. 7. At the time of this Application, although Applegate has acknowledged receipt of the Claim Form and other documents through its representative, Noirmont (as mentioned in my Affidavit of 13 July 2018 at paragraphs 7 –10 inclusive), the Defendants have yet to respond to the claim nor appoint solicitors. We are making the Application without notice to them, but shall serve details of both Applications and related documents in early course. 8. For the sake of completeness, we served a copy of His Honour Judge Klein’s Order of 25 July 2018 on Wilton Trustees (IoM) Limited by email to that company and its solicitors on the day that we received the perfected order, which was 20 August 2018”

“It is submitted that this is not an application that raises problematic issues between the parties or has an impact on the wider case (see for example the more complex cases considered in the notes and in the authorities set out at §7.6.2 of the White Book). Rather it is a straightforward matter in which there is good reason for not having served in time and where there can be no prejudice to Ds by an extension (not least because they are relieved of a complex argument as to whether past service was effective) especially on account of the claim being made so early with no issues arising as to limitation.”

“Counsel: …I think the court might have been party to…considerable correspondence between basically all sorts of people who are making numerous allegations in relation to Applegate, which is the party--- Judge: In this case? Counsel: In this case. Judge: I haven’t--- All I know, Mr Cook, is that there was a request that I approve a copy of the transcript of the proceedings last time… Counsel: Right, yes. You may recall that there was a letter from Wiltons last time making a host of allegations in relation to breach of trust and conspiracy, and there were issues as to whether Applegate, which is the party to be served under the contract, remained the appropriate trustee and serving party. Judge: Is this because it is suggested that the individual standing behind your client has taken control over Applegate? Counsel: Certainly has a considerable interest, possibly even a controlling interest, in the defendants…And so the matter has got rather protracted. Days before we came before you, there was a letter from Applegate to my instructing solicitors saying that they accepted that the claim form had been served for the purposes of clause 20 of the loan agreement. So, after I came before you, this matter got more and more complicated--- Judge: Applegate are those who--- I confess, I am getting confused. Applegate are those who were nominated under the loan agreement…for the service of certain notices. Counsel: Yes, that’s right. Judge: And before the last hearing they had said…they have received the claim form. Did they accept there had been proper service?”

“Counsel: …Now, my understanding is, although I am not involved in the dispute in the BVI and in Liberia but my understanding is that there are mooted if not commenced proceedings in the BVI… Counsel: …May I also say that there is comfort, in my submission, in the fact that once the defendants have service of this order they can apply to set aside.”

“…Applegate, Fihag, Formal and/or Mr King have combined with the intention of injuring [the Erica Settlement] and its beneficiaries by…unlawfully procuring the appointment of Mr King as a director of Wellcourt [and the Defendants] [and by] intending and/or using the issue of 1,000 shares to Fihag and/or the appointment of Mr King as the sole director of Wellcourt and [the Defendants] to disable [the Defendants] from being able to mount a defence to [the present claim (i.e. the claim in the Circuit Commercial Court in Leeds)] and thereby causing damage to [the Erica Settlement]…”

“…if your firm were able to procure sufficient assurances (in the form of a written undertaking) from the claimants in the English Proceedings (Claim No. E40LS341) that they will not pursue the application for judgment in default (currently listed to be heard on 13 September 2018) on that date and will procure that that application be adjourned to a date not less than 14 days after the determination of the receivership application, then we would be prepared to explore the possibility of adjourning the hearing of the receivership application to a later date, and to agree directions to that end.”

“We refer to the hearing listed before His Honour Judge Klein next Thursday, 13 September. The Claimants wish to withdraw their Application for judgment in default. Please ensure that this letter is placed on the court file in advance of the hearing. Counsel for the Claimants…will appear before His Honour Judge Klein at the hearing with instructions to confirm the withdrawal of the Application.”

“I confirm that I did give consideration as to whether I ought to cause the Subsidiaries [(i.e., the Defendants)] to take steps to defend the English Proceedings. However, as I was unaware of any defence to the claims, I did not think that it was in the best interests of the Subsidiaries to do so. Although Wilton sent a letter to the Leeds Court dated 24 July 2018 referring to an “unlawful means conspiracy” the full facts of which were “complex and will need to be pleaded in due course”, it was not until 15 August 2018 that Covington provided any detail of the alleged conspiracy on an “open” basis. In essence, I understand that the Trustees are contending that the Subsidiaries are entitled to set aside the [loan agreement] on the basis that it was entered into as the result of a fraudulent misrepresentation...I have taken advice in relation to that allegation. I do not waive privilege over that advice. The conclusion that I have come to is that it would not be in the best interests of the Subsidiaries to raise that allegation in the English Proceedings. Amongst other things, as I understand it, even if the loan agreement were to be set aside, the Subsidiaries would not simply get to keep the £25 million, but would have to pay it back. I therefore maintain the view that it is not in the best interest of the Subsidiaries to defend the English proceedings. Doing so will only be a waste of time and money, and may ultimately lead to substantial adverse costs orders being made against them. I certainly do not think it would be in the interests of Wellcourt or the Subsidiaries for receivers to be appointed over their businesses, not least because of the significant expense that that would involve. I fully understand and intend to comply with my duty to act in the best interests of Wellcourt”

“While we very much doubt that your clients (or indeed, for that matter, the parties who have retained Covington Burling LLP in relation to this matter) have any standing to make an application in the English proceedings, there should be no need to add to the costs of the dispute by making any such application because our clients have no intention of applying for a Default Judgment. Should that position change, we will obviously give notice to the Defendants in the English proceedings, as appropriate.”

“…I wish to record that at every stage the Claimants and I acted in ways that we thought were appropriate and in accordance with our obligations to the Court and the Defendants. To the extent that steps were taken that the Court now finds should not have been taken, those steps were taken mistakenly and I would suggest have not caused any prejudice to the Defendants, and I apologise to the Court and the Defendants. In particular, without waiving privilege, the Claimants considered at the outset that it was appropriate to proceed with the claim and to seek default judgment notwithstanding Mr King’s position as sole director given that there is no defence to the liability to repay the £25 million. I wish to remind the court that, in light of the Director Conflict Issue (as defined in Mr King’s witness statement), the Claimants decided not to proceed with the [default judgment application] and, on deciding that permission was not needed, they chose not to proceed with [the application for permission to serve out of the jurisdiction]. Once the Claim Form was served on the Defendants, no further substantive steps were taken until a second director was in place and the Defendants are now in a position to seek to defend the claim on the merits if they can.”

“It seems that, on 19 July 2018, Mr King sent Mr Evans “a quick reminder for the acknowledgement letter we referred to yesterday if you can make sure we get it today please”

“OK thanks, it will shorten the whole process by at least 3 months if we can be successful next Wed in court. There can be absolutely no come back on you or J-noel and if they try I will fund it.”

“Letter emailed to David earlier - trust received ok”

“Days before we came before you [on 25 July 2018], there was a letter from Applegate to my instructing solicitors saying that they accepted that the claim form had been served for the purposes of clause 20 of the loan agreement.”

“The discretion to extend time under rule 7.6(2) is at large: the rule does not lay down any explicit guidance as to how the discretion is to be exercised. As might be expected, however, the correct approach has been the subject of judicial decision, notably Hashtroodi v. Hancock [2004] EWCA Civ 652; [2004] 1WLR 3206, Collier v. Williams, Carnegie v. Drury [2007] EWCA Civ 497 and Hoddinott & ors v. Persimmon Homes (Wessex) Ltd. [2007] EWCA Civ 1203; [2008] 1WLR 806, from which I derive the following propositions. (1) An application to set aside an order extending time obtained on a without notice application is a rehearing of the matter, not a review of the decision to extend time. (2) The principal and frequently the only question is to determine whether there was a good reason for the claimant’s failure to serve the claim form within the period allowed by the rules. (3) If there was a very good reason for the failure to serve within the specified period, an extension of time will usually be granted, for example where the court has been unable to serve the claim form or the claimant has taken all reasonable steps to serve but has been unable to do so. (4) Conversely, the absence of any good reason for the failure to serve is likely to be a decisive factor against the grant of an extension of time. (5) The weaker the reason for failure to serve, the more likely the court will be to refuse to grant the extension. (6) Whether the limitation period applicable to the claim has expired is of importance to the exercise of the discretion since an extension has the effect of extending the period of limitation and disturbing the entitlement of the potential defendant to be free of the possibility of any claim. (7) The fact that the claimant has delayed serving the claim form until the particulars of claim were ready is not likely to provide a good reason for the failure to serve. (8) The fact that the person to be served has been supplied with a copy of the claim form or is otherwise aware of the claimant’s wish to take proceedings against him is a factor to be considered. (9) Provided he has done nothing to put obstacles in the claimant’s way, a potential defendant is under no obligation to give any positive assistance to the claimant to serve the claim form, so that the fact that the potential defendant has simply sat back and awaited developments (if any) is an entirely neutral factor in the exercise of the discretion.”

“The applicable principles are well settled. It is sufficient for present purposes to quote the summary of Ralph Gibson LJ in Brink’s Mat Ltd. v. Elcombe [1998] 1WLR 1350 at 1356F to 1357G: “In considering whether there has been relevant nondisclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following. (1) The duty of the applicant is to make “a full and fair disclosure of all the material facts:” see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac [1917] 1 KB 486, 514, per Scrutton LJ. (2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord CozensHardy MR, at p.504, citing Dalglish v. Jarvie (1850) 2 Mac & G 231, 238, and Browne-Wilkinson J in Thermax Ltd. v. Schott Industrial Glass Ltd. [1981] FSR 289, 295. (3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour [1985] FSR 8. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries. (4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson [1987] Ch 38; and (c) the degree of legitimate urgency and the time available for the making of inquiries: see per Slade LJ in Bank Mellat v. Nikpour [1985] FSR 87, 92-93. (5) If material non-disclosure is established the court will be “astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure…is deprived of any advantage he may have derived by that breach of duty:” see per Donaldson LJ in Bank Mellat v. Nikpour, at p.91, citing Warrington LJ in the Kensington Income Tax Commissioners’ case [1917] 1 KB 486, 509. (6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the nondisclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was or perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented. (7) Finally, it “is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes afforded:” per Lord Denning MR in Bank Mellat v. Nikpour [1985] FSR 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms: “when the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant…a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:” per Glidewell LJ in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings plc, ante, pp.1343H-1344A.”

“when the whole of the facts, including that of the original non-disclosure, are before [the court, it] may well grant…a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:” per Glidewell LJ in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings plc, ante, pp.1343H-1344A.”

“We have of course read the letter which your client [(i.e., Wilton)] wrote to the court on 24 July (sending us a copy), quoting its reference E220.005NH.TJB, ahead of the hearing before His Honour Judge Klein the following day. At the hearing, he adjourned the matter until 13 September. We await the perfected order and shall share it with you and your client as soon as we have it. Our Application was made without notice to the Defendants, because we and our clients had no obligation to make such an Application on notice. Under the circumstances, we wonder how you found out about the Application. Please explain. Notwithstanding Judge Klein taking account of your client’s letter, your client is not a party to the proceedings and has no standing in relation to it. That position will not change by virtue of your client succeeding Applegate FS SA as Trustee of Erica Trust (if indeed such a change takes place; we understand that there remain certain formalities to be discharged). Under the circumstances and subject to only to sharing the perfected order and receiving from you the explanation which we have requested, we see no reason to indulge in correspondence with you about the proceedings. For the avoidance of doubt, our reluctance to comment on any point that your client raised in its letter to the court should not be construed as an admission on our clients’ part and we reserve their position accordingly.”

“While we very much doubt that your clients (or indeed, for that matter, the parties who have retained Covington Burling LLP in relation to this matter) have any standing to make an application in the English proceedings. there should be no need to add to the costs of the dispute by making any such application because our clients have no intention of applying for a Default Judgment. Should that position change, we will obviously give notice to the Defendants in the English proceedings, as appropriate.”

“During that period, I had control of the Defendants in the sense that I was the director, but I regard my control as notional. This is because I soon discovered that Wellcourt did not have its own bank account, nor records of the Wellcourt Portfolio’s rental income and expenditure on property maintenance, etc. I found that Wellcourt relied on two service companies, Cedar Estates Limited…and Propfurn Limited (whose director and ultimate beneficial owner is [Mr Sussman]). Cedar acted as Wellcourt’s letting and managing agent under a series of service agreements – one for each property. Propfurn also acted under a service agreement, which related to all of the properties, but its engagement was less frequent...”

“The classic statement of the law with respect to striking out a claim as an abuse of the process of the court is to be found in the speech of Lord Diplock in Hunter v. Chief Constable of the West Midlands Police [1982] AC 529 at p.536: “My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.”

“…a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process”

“The rule of law depends upon the existence and availability of courts and tribunals to which citizens may resort for the determination of differences between them which they cannot otherwise resolve. Litigants are not without scrupulous examination of all the circumstances to be denied the right to bring a genuine subject of litigation before the court… This does not however mean that the court must hear in full and rule on the merits of any claim or defence which a party to litigation may choose to put forward.” “My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.” “…a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process”. “The rule of law depends upon the existence and availability of courts and tribunals to which citizens may resort for the determination of differences between them which they cannot otherwise resolve. Litigants are not without scrupulous examination of all the circumstances to be denied the right to bring a genuine subject of litigation before the court… This does not however mean that the court must hear in full and rule on the merits of any claim or defence which a party to litigation may choose to put forward.”

“The principles to be applied to breaches of full and frank disclosure were summarised in OJSC ANK Yugraneft v. Sibir Energy plc [2008] EWHC 2614 (Ch), in which Christopher Clarke J. approved the following guidance at [102]: “Mr Boyle drew my attention, with appropriate diffidence, to a decision of his own, sitting as a Deputy Judge of the Chancery Division, as to the approach to be taken by the Court in the event that there is culpable non-disclosure. In The Arena Corporation Limited v. Schroeder [2003] All ER (D) 199 (May) at paragraph 213, he summarised the main principles which should guide the Court in the exercise of its discretion as follows: (1) If the Court finds that there have been breaches of the duty of full and fair disclosure on the ex parte application, the general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial. (2) Notwithstanding the general rule, the court has jurisdiction to continue or re-grant the order. (3) That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure. (4) The Court should assess the degree and extent of the culpability with regard to non-disclosure. It is relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge of the order. Equally, there is no general rule that a deliberate breach will attract that sanction. (5) The Court should assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the court. In making this assessment, the fact that the Judge might have made the order anyway is of little if any importance. (6) The Court can weigh the merits of the plaintiff’s claim but should not conduct a simple balancing exercise of which the strength of the plaintiff’s case is allowed to undermine the policy objective of the principle. (7) The application of the principle should not be carried to extreme lengths or be allowed to become the instrument of injustice. (8) The jurisdiction is penal in nature and the courts should have regard to the proportionality between the punishment and the offence. (9) There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the court should take into account all relevant circumstances.”

“65. The leading cases remain Brink’s Mat Ltd v. Elcombe [1988] 1 WLR 1350 and Behbehani v. Salem [1989] 1 WLR 723. Those authorities in this court bring their reminder of the essential principles: that there is a “golden rule” that an applicant for relief without notice must disclose to the court all matters relevant to the exercise of the court’s discretion; that failure to observe this rule entitles the court to discharge the order obtained even if the circumstances would otherwise justify the grant of such relief; that a due sense of proportion must be maintained between the desiderata of marking the court’s displeasure at the non-disclosure and doing justice between the litigants; that for these purposes the degree of any culpability on the part of the applicant or of any prejudice on the part of the respondent are relevant to the reviewing court’s discretion; and that a balance must be maintained between undermining “the heavy duty of candour and care” which falls on applicants and promoting a “tabula in naufragio” to save respondents who lack substantial merits.”” (see also, to similar effect, Dar Al Arkan Real Estate Development Co. v. Al Refai [2012] EWHC 3539 (Comm) at [148]-[149], Fundo Soberano at [82], and The Public Institution for Social Security v. Amouzegar [2020] EWHC 1220 (Comm) [139]-[143] (and, in particular, [141])). “Mr Boyle drew my attention, with appropriate diffidence, to a decision of his own, sitting as a Deputy Judge of the Chancery Division, as to the approach to be taken by the Court in the event that there is culpable non-disclosure. In The Arena Corporation Limited v. Schroeder [2003] All ER (D) 199 (May) at paragraph 213, he summarised the main principles which should guide the Court in the exercise of its discretion as follows: (1) If the Court finds that there have been breaches of the duty of full and fair disclosure on the ex parte application, the general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial. (2) Notwithstanding the general rule, the court has jurisdiction to continue or re-grant the order. (3) That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure. (4) The Court should assess the degree and extent of the culpability with regard to non-disclosure. It is relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge of the order. Equally, there is no general rule that a deliberate breach will attract that sanction. (5) The Court should assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the court. In making this assessment, the fact that the Judge might have made the order anyway is of little if any importance. (6) The Court can weigh the merits of the plaintiff’s claim but should not conduct a simple balancing exercise of which the strength of the plaintiff’s case is allowed to undermine the policy objective of the principle. (7) The application of the principle should not be carried to extreme lengths or be allowed to become the instrument of injustice. (8) The jurisdiction is penal in nature and the courts should have regard to the proportionality between the punishment and the offence. (9) There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the court should take into account all relevant circumstances.” “65. The leading cases remain Brink’s Mat Ltd v. Elcombe [1988] 1 WLR 1350 and Behbehani v. Salem [1989] 1 WLR 723. Those authorities in this court bring their reminder of the essential principles: that there is a “golden rule” that an applicant for relief without notice must disclose to the court all matters relevant to the exercise of the court’s discretion; that failure to observe this rule entitles the court to discharge the order obtained even if the circumstances would otherwise justify the grant of such relief; that a due sense of proportion must be maintained between the desiderata of marking the court’s displeasure at the non-disclosure and doing justice between the litigants; that for these purposes the degree of any culpability on the part of the applicant or of any prejudice on the part of the respondent are relevant to the reviewing court’s discretion; and that a balance must be maintained between undermining “the heavy duty of candour and care” which falls on applicants and promoting a “tabula in naufragio” to save respondents who lack substantial merits.””

“In summary: i) The onus is on [the claimant] to establish that they have a “good arguable case” that the English court has jurisdiction. ii) The burden is on them to show that it has the “better argument on the material available” (making due allowance for the limitations of the material available at an early stage of the case). iii) The standard is, for the purposes of the evidential analysis, between proof on the balance of probabilities (which is not the test) and the mere raising of an issue (which is not the test either). iv) The test is context specific and flexible and, if there is an issue of fact, the court must use judicial common sense and pragmatism, not least because the exercise is to be conducted with due despatch. ING urged me to follow the recent consideration of the test given by Sir Michael Burton in Alta Trading Ltd. v. Bosworth [2020] EWHC 2757 (Comm) at [10] to [13]. In Alta, the Judge cited the three stage test in Brownlie at [7]: “What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.”

“(i) In limb (i) the Court must decide if it can who has the better of the case. If it decides that the claimant has the better of the case, he will have a good arguable case or a plausible evidential basis. If the defendant has the better of the case then the claimant fails. (ii) Limbs (ii) and (iii). The judge may have to struggle because at the jurisdiction stage the evidence may be wholly uncertain and insufficient and, in particular, because there has been no testing of that evidence by cross-examination or otherwise, and usually no adequate disclosure of documents by either side. He or she may not be able to reach even a provisional conclusion as to which party has the better case, and even if the judge tried to do so he or she may well turn out to be wrong. In such a circumstance where the judge cannot decide, after conscientiously doing his or her best, who has the better of the case, then it is sufficient if the claimant has a plausible evidential basis and that will suffice for a good arguable case.”” (see also Alta Trading UK Ltd. v. Bosworth [2021] EWCA Civ 687 at [30], where Sir Michael Burton’s decision was recently upheld on appeal). “What is meant is (i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.” “(i) In limb (i) the Court must decide if it can who has the better of the case. If it decides that the claimant has the better of the case, he will have a good arguable case or a plausible evidential basis. If the defendant has the better of the case then the claimant fails. (ii) Limbs (ii) and (iii). The judge may have to struggle because at the jurisdiction stage the evidence may be wholly uncertain and insufficient and, in particular, because there has been no testing of that evidence by cross-examination or otherwise, and usually no adequate disclosure of documents by either side. He or she may not be able to reach even a provisional conclusion as to which party has the better case, and even if the judge tried to do so he or she may well turn out to be wrong. In such a circumstance where the judge cannot decide, after conscientiously doing his or her best, who has the better of the case, then it is sufficient if the claimant has a plausible evidential basis and that will suffice for a good arguable case.””

“The House of Lords in Canada Trust Co v. Stolzenberg (No.2) (above) identified the date of issue of proceedings as the relevant time to establish domicile for the purposes of Article 8(1). The only authority cited to me as to the time at which jurisdiction pursuant to Article 25(1) is to be established was Sebastian Holdings Inc. v. Deutsche Bank AG [2010] EWCA Civ 990. At [62], Thomas LJ said “…the question as to whether a claim falls within the jurisdiction clause is an issue that has to be determined at the time the proceedings are issued.”

“…If Mr. Askins genuinely believed that there was such jurisdiction, then it was incumbent upon him to set out in the claim form the factual basis for that belief, in a manner that was transparent and comprehensible. It is very important in cases said to fall under the Regulation, where this court takes jurisdiction on the basis of a statement in a claim form pursuant (now) to CPR 6.33, and accordingly there is no requirement for the court’s leave to serve the proceedings out of the jurisdiction, that solicitors issuing proceedings take particular care to ensure that they have a reasonable basis for their belief, and that the facts supporting it are stated in a transparent fashion in the claim form. First seisure under the Regulation may obviously have important consequences for both parties, and for proceedings in other jurisdictions. It is therefore vitally important: (a) that jurisdiction is not wrongly asserted without reasonable belief; and (b) the grounds are clearly stated so that a jurisdictional challenge can, if necessary, be speedily and easily made. This did not happen in the present case.”

“…this court does not have, and has never had, power to hear the claim made in Folio 64 pursuant to Article 23 of the Regulation. The evidence now shows (as, indeed, was common ground) that both the relevant charters contained London arbitration clauses, and, therefore, necessarily did not contain clauses agreeing to submit to disputes to the exclusive or nonexclusive jurisdiction of the English courts, such as to invoke this court’s jurisdiction based on Article 23. Unless, therefore, there is another sustainable ground for supporting the jurisdiction of the English court under the Regulation in respect of Folio 64, the claim must be dismissed. It would clearly be wrong for this court to maintain jurisdiction in the light of a valid jurisdictional challenge simply in order to permit one party to take advantage of the “first-seised status” of the Commercial Court Action, when such proceedings were issued in circumstances where the English court in fact had no jurisdiction under the Regulation, and the asserted basis for jurisdiction was incorrect.”

“Form of words. No particular form of words need be used for an assignment provided that they express “a final and settled intention to transfer the property to the assignee there and then”

“The mere existence of some unexpressed intention in the breast of the owner of the property does nothing: there must at least be some expression of that intention”

“The claimant commenced proceedings seeking damages for personal injury, allegedly caused by an accident while employed at the defendant’s factory. The claim form erroneously gave details of the claim as arising from abuse at work rather than from the accident. After the expiry of the primary limitation period the claimant served the claim form accompanied by the particulars of claim and the medical report, both of which related solely to the accident. The defendant applied to strike out the particulars of claim as inconsistent with the claim form. The claimant applied to amend the claim form by deleting the word “abuse” and inserting “an accident” to rectify the error. The district judge, holding that CPR r.17.4 precluded the court from allowing the amendment sought after the expiry of the limitation period, refused the claimant’s application and struck out the particulars of claim. The judge dismissed the claimant’s appeal on the basis that the proposed amendment to the claim form raised a new cause of action after the expiry of the limitation period and was therefore barred by rule 17.4.”

“I start by applying the usual rules of interpretation. The claim form is a unilateral document which sets out the cause of action which the claimant claims to have and wants to rely upon. It must be interpreted objectively – that is, by reference to the words according to their objective meaning. On the other hand, account must be taken of the factual matrix. That matrix would include communication between the parties made before or at the same time as the service of the claim form. As Lord Steyn said in R (Daly) v. Secretary of State for the Home Department [2001] 2 AC 532, para 28: “in law, context is everything.”… …It is true that the rules impose a number of requirements which touch and concern the claim form. The claim form has a very important function in our procedural system. It is the document which commences proceedings. There are special rules about its service, and I need only summarise the most important rules. There are, as I said, special rules about service, and the time for service, and then the extension of time of service. There are special rules about what the claim form must contain. There is a special rule about amendment and there are, importantly, special rules about adding or substituting new parties or claims, or altering a party’s capacity after the limitation has expired: see rule 17.4. But I do not see any basis in any of the rules to which we have been referred for saying that the rules regulate the interpretation or meaning of the claim. Nor do I see any rules which, by necessary implication, require some special rule to be applied in this context (contrast the position in Totty v. Snowden [2001] 2 WLR 1384 as regards the use of the power to waive irregularities in the context of an extension of time for service). Nor do I consider that because the claim form is a public document the court is compelled to interpret the claim form without reference to the other document once it is issued. So far as the parties are concerned, the claim form is intended to be read with the particulars of claim. As it happens, the public can in general inspect statements of case filed after October 2006, unless the court otherwise directs. Of course, the overriding objective applies, but no one suggests that that would require a contrary interpretation in this case.”

“I agree with both judgments. The decisions below represent a stark surrender of substance to form. We should not allow such a thing unless irresistibly driven to do so. For the reasons given by Toulson and Arden LJJ, we are not so driven.”