“A rigorous approach to the limited scope of the appellate function may be of particular importance in the context of applications underCPR 7.6 (2).
“Where an application is made without notice to the other parties, it is the duty of the applicant to fully disclose all matters relevant to the application, including those matters adverse to the applicant. The application must specifically direct the court to those passages in the evidence which disclose matters adverse to the application. Failure to do so may result in the order being set aside.”
“…those authorities in this court bring their reminder of the essential principles: that there is a “golden rule" that an application 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 granting of such relief; that a due sense of proportion must be maintained between the desiderata of marking the courts displeasure at the non-disclosure and doing justice between the litigants;”
“(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 that 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 in 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 court should therefore 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.”
“It is the necessary corollary of the court being prepared to depart from the principle that it will hear both sides before reaching a decision, which is a basic principle of fairness. Derogation from that basic principle is an exceptional course adopted in cases of extreme urgency or the need for secrecy. If the court is to adopt that procedure where justice so requires, it must be able to rely on the party who appears alone to present the evidence and argument in a way which is not merely designed to promote its own interests, but in a fair and even-handed manner, drawing attention to evidence and arguments which it can reasonably anticipate the absent party would wish to make. It is a duty owed to the court which exists in order to ensure the integrity of the court’s process. The sanction available to the court to preserve that integrity is not only to deprive the applicant of any advantage gained by the order, but also to refuse to renew it. In that respect it is penal and applies notwithstanding that even had full and fair disclosure been made the court would have made the order. The sanction operates not only to punish the applicant for the abuse of process, but also, … to ensure that others are deterred from such conduct in the future…”
“In the present case, LIA should have identified that the claims sought to be advanced against Mr Giahmi and Lands were, under English law, prima facie time barred subject to the application ofsection 32 of the Limitation Act 1980 , and should have provided sufficient particulars of the basis on which the LIA said that it could not with reasonable diligence have discovered all necessary elements of a proper plea of fraud until after6 April 2012 , so that the judge could consider whether he or she was satisfied that the claims nevertheless had a real, as opposed to fanciful, prospect of success. The LIA did not do so. It is no answer to say that limitation is a point taken by way of defence - when applying for permission to serve out of the jurisdiction the LIA knew that such a defence would be taken given the stance Mr Giahmi had adopted in the SocGen proceedings, and the fact that the JP Morgan proceedings had been commenced very much more than six years after the Bear Stearns note. It was obvious that limitation was relevant to a reasonable prospect of success. … Whilst it is rightly not suggested (and could not be suggested) that there was an intention to mislead the court, there was, nonetheless, a conscious, and therefore deliberate, decision not to inform the court of such matters, and the degree and extent of the culpability was of a high order. Nor did the LIA recognise the non-disclosure and apologise for the same. An assertion that there was no need to inform the court of such matters was maintained on behalf of the LIA throughout the three-day hearing before me, and indeed Mr Masefield stated that he wished to make clear that LIA apologised if it was felt that there had been a non-disclosure (my emphasis). That is not an apology, nor does it demonstrate true contrition on the LIA’s part. Rather it is an attempt by the LIA to brazen matters out. Indeed, when pressed by the court, it was not accepted that there had been any non-disclosure. All that the LIA was willing to say (in the words of Mr Masefield) was that “with the benefit of hindsight…we accept that the alternative exposition under English law in Allen 1 could have been fuller and clearer”
“In the above circumstances, and for the reasons I have identified, the LIA’s breach of the duty of full and frank disclosure was both conscious, and therefore deliberate, and was, in my view a substantial, indeed an egregious, breach of duty in relation to a matter, limitation, which, on any view, went to the heart of the merits of the application for permission to serve out against Mr Giahmi and Lands. I address in due course below the other allegations of failure to give frank disclosure. However, I consider that the breach under consideration in itself justifies, and indeed necessitates, that permission to serve out be set aside.”
“Second, I do not think that the failure was a deliberate or reckless one. The Claimants went to considerable trouble, in Diss 1 and in their written and oral submissions at the First Hearing, to address their duties of disclosure and fair presentation. There was no pattern of misconduct on the part of the Claimants, at the First Hearing, in relation to non-disclosure and lack of fair presentation. The failure was isolated. The Claimants' skeleton argument for this hearing refers to the Claimants having made a "decision" not to make reference to the Kroll 2014 Report at the First Hearing; see paragraph 391 of the skeleton argument. I accept that this was a decision made in good faith, and was not deliberate in the sense of seeking to conceal from me the existence of the Kroll 2014 Report. Putting these factors together I do not think that I can or should infer that the failure was deliberate (in the sense in which I have just identified deliberate) or reckless. My finding is that the failure was the result of what was, in my judgment, the wrong judgment call on whether reference to the Kroll 2014 Report was required at the First Hearing. In that sense I regard the failure as inadvertent and innocent.”
“(i) First, the Court’s power to extend time is to be exercised in accordance with the overriding objective (Hashtroodi v Hancock[2004] 1 WLR 3206 at [18]; Al-Zahra at [49(2)]; (ii) Second, it is not possible to deal with an application for an extension of time underCPR 7.6 (2) “justly” without knowing why the claimant has failed to serve the claim form within the specified period (Hashtroodi at [18]; Al-Zahra at [49(3)]. Thus, the reason for the failure to serve is a highly material factor. Where there is no good reason for the failure to serve the claim form within the time permitted under the rules, the court still retains a discretion to extend time but is unlikely to do so (Hashtroodi at [40]; Al-Zahra at [49(5)]. (iii) Thirdly, a “calibrated approach” is to be adopted, so that where a very good reason is shown for the failure to serve within the specified period, an extension will usually be granted; but generally, the weaker the reason, the more likely the court will refuse to grant the extension (Hashtroodi at [19]; Al-Zahra at [49(4)]). Weak reasons include: a claimant who has overlooked the matter (Hashtroodi at [20]; Al-Zahra at [49(5)]), and an applicant who has merely left service too late (Hashtroodi at [18], citing from Professor Zuckerman on Civil Procedure at p 180; Al-Zahra at [50]). (iv) Fourthly, whether the limitation period has expired is of considerable importance; Al-Zahra at [50] and [51(3)]; Hoddinott v Persimmon Homes (Wessex) Ltd at [52]. Where an application is made before the expiry of the period permitted under the rules for service, but a limitation defence of the defendant will or may be prejudiced, the claimant should have to show at the very least that he has taken ‘reasonable steps': (Cecil v Bayat[2011] EWCA Civ 135 at [48]; Al-Zahra at [52(3)]. A claimant’s limitation defence should not be circumvented save in ‘exceptional circumstances’ (Cecil v Bayat at [55]; Al-Zahra at [52(3)]).”
“As is common on applications of this sort, the claimant submitted that success for the first defendant would produce a windfall for him and reward the playing of technical games. There is nothing technical about a defendant insisting on service of a claim form within the period for its validity set down in the Rules and resisting an extension of that time when it is not justified on the facts. … I say nothing as to whether new proceedings against the first defendant would be statute-barred but, if they are, the responsibility for the claimant’s inability to pursue a claim against the first defendant would not lie with him.” (2) SMO v TikTok Inc[2022] EWHC 489 (QB) , in which the defendants had instructed English solicitors (Hogan Lovells) who the claimants asked to accept service; Hogan Lovells informed the claimant that she would need to apply for permission to serve out and the defendants did not agree to accept service via Hogan Lovells. Nicklin J relied upon the distillation of principles set out by Blackburn J from Sodastream Ltd, adding (on the basis of Euro-Asian Oil SA v Abilo (UK) Ltd[2013] EWHC 485 , “Joinder of a foreign defendant is an exercise of extra territorial jurisdiction, and no criticism can be made of such a defendant who refuses to instruct English solicitors to accept service”). At [77] Nicklin J then held: “The Claimant’s side is entirely at fault for the position the Claimant now finds herself in. The Defendants have done nothing to obstruct service of the Claim Form. They did not mislead the Claimant as to the position on service. This is not a case where the Claimant has been lulled into believing that service will be accepted only for the position to change shortly before the deadline for service. The Defendants have simply refused to accept service otherwise than in accordance with the CPR. They are entitled to do so, and Hogan Lovells have been consistent in making the position clear throughout. It is for a claimant to establish the jurisdiction of the Court over a defendant by service of the Claim Form in the time permitted and, where necessary, to obtain the Court’s permission to serve out of the jurisdiction. These might be considered to be fundamental and basic principles of civil litigation.”
“But the Court's task when faced with an application for extension of time underCPR 7.6 (2) is to determine the reasons for the application for extension. That is a fact-finding exercise rooted in the evidence provided to the Court. Once the facts are found, the Court evaluates the reasons as good (i.e., are they sufficiently good to justify extension?) or not so good. The Claimants are wrong to suggest that the Court should investigate what the position would or might have been "in any event". That is a different exercise altogether. It is possible to envisage a case where the closure of the FPS might have been a good reason for the extension application. Mr Cooper gave the example of two claimants who issue on the same day against foreign defendants: the first makes sensible preparations for service and submits the papers to the FPS, only to find that the FPS is closed for the remainder of the period for service; the second does nothing towards service and then finds out that the FPS has in fact been suspended and that service could not have been effected anyway; both are in the same position so far as the outcome is concerned, because the FPS is closed; both make applications for extensions of time for service. Mr Cooper submits that the Court's sympathy might very well be with the first claimant, who can show that the FPS' closure was a reason for seeking an extension, but not with the second claimant who (like these Claimants, he argues) did nothing until it was too late and then relied on the fact of closure opportunistically. I agree that the closure of the FPS would be a reason (arguably, a good reason) for the first claimant seeking an extension of time, but it would not be a reason for the second having to do so. I agree that this example illustrates the flaw in the Claimants' argument.”
“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.”; (2) Al-Zahra (PVT) Hospital and Others v DDM[2019] EWCA Civ 1103 , the Court of Appeal allowed an appeal against the decision of Foskett J, itself overturning a decision of Senior Master Cook who had set aside an extension of time granted in the context of service through the FPS in the UAE. Haddon-Cave LJ at [79] observed: “…Foskett J was wrong to place weight, let alone considerable weight, on the fact that the Defendants had not responded to the Claimant’s initial communications and to suggest that “all” the Claimant’s preparations had been hampered by the Defendants’ failure to respond to any of the correspondence from the Claimant’s solicitors ….”
“Claimants' representatives need to bear in mind that, unless and until proceedings are validly served on the foreign Defendant, that party is under no obligation to respond at all. Correspondingly, they need to give proper attention to the requirements of the rules as regards service outside the jurisdiction….”
“The reason why failure to serve in time has always been dealt with strictly… is in my judgment bound up with the fact that in England, unlike (all or most) civil law jurisdictions, proceedings are commenced when issued and not when served. However, it is not until service that a defendant has been given proper notice of the proceedings in question. Therefore, the additional time between issue and service is, in a way, an extension of the limitation period….. In such a system, it is important therefore that the courts strictly regulate the period granted for service. If it were otherwise, the statutory limitation period could be made elastic at the whim or sloppiness of the claimant or his solicitors.”
“It is well-settled that when debatable issues of limitation arise, it is inappropriate to attempt to decide them on an interlocutory application for an extension of time for service of a claim form. If the claimants' argument that the claims are not time-barred is correct, they can always begin a fresh action in which, if a time-bar is asserted, it can be adjudicated upon. It is enough for a defendant to show that he might be deprived of a defence of limitation if time for service of a claim form is extended; if he can show that, an extension should not be granted or, if granted without notice, such extension should be set aside, see Hashtroodi v Hancock[2004] 1 WLR 3206 (paragraph 18) and Hoddinott v Persimmon Homes (Wessex) Ltd[2008] 1 WLR 806 (paragraph 52).”
“Whether the limitation period has expired is also of considerable importance. If an extension is sought beyond four months after the expiry of the limitation period, the claimant is effectively asking the court to disturb a defendant who is by now entitled to assume that his rights can no longer be disputed.”
“At their outer limit, the words ‘exceptional circumstances’ can be taken to mean ‘very rare’ (or ‘very rare indeed’). In the present context, however, the phrase should not be taken to mean more than its literal sense, namely ‘out of the ordinary’. It means, as identified for example in Hoddinnott at [52], that the actual or potential expiry of a limitation defence is a factor of considerable importance. The factors in favour of an extension of time will have to be, either separately or cumulatively, out of the ordinary. Only in this way can the phrase "exceptional circumstances" be reconciled with the primary guidance in Hashtroodi (at [18]) and [22]) that the discretion underCPR 7.6 (2) is to be exercised in accordance with the overriding objective and in a "calibrated" way, as emphasised in Qatar at [17(iii)]. It is neither helpful nor necessary to go further in terms of guidance, by reference to a need for "powerful good reason", as the judge suggested, or otherwise.”
“42. Factors that I consider to be relevant to the issue of discretion, in relation to this [limitation] issue are that: i) Limitation was referred to in the Claimants’ omnibus application applications for extension of time (see Oldnall 13 at §16.1(c)). ii) If the orders were set aside, this would not only affect those claims where a limitation defence was available, but those claims which were brought before the expiry of limitation. iii) The Claimants’ solicitors did not know, and still do not know, whether and if so, how many, or what proportion of claims, may be prima facie time barred, so had only limited information to provide to the court. The English domiciled Defendants had access to the relevant information (see Oldnall 14 §§6 – 33). iv) The Claimants made the decision to include both time barred and non-time barred claims in all claim forms. v) This is a group action, with tens of thousands of claimants whose claims would be affected by the sanction, rather than a unitary action. vi) If the orders granting permission to serve out are set aside, the Claimants can still proceed against the remaining English-domiciled Defendants. … i) Limitation was referred to in the Claimants’ omnibus application applications for extension of time (see Oldnall 13 at §16.1(c)). ii) If the orders were set aside, this would not only affect those claims where a limitation defence was available, but those claims which were brought before the expiry of limitation. iii) The Claimants’ solicitors did not know, and still do not know, whether and if so, how many, or what proportion of claims, may be prima facie time barred, so had only limited information to provide to the court. The English domiciled Defendants had access to the relevant information (see Oldnall 14 §§6 – 33). iv) The Claimants made the decision to include both time barred and non-time barred claims in all claim forms. v) This is a group action, with tens of thousands of claimants whose claims would be affected by the sanction, rather than a unitary action. vi) If the orders granting permission to serve out are set aside, the Claimants can still proceed against the remaining English-domiciled Defendants. … 44. Factors relevant to both issues of non-disclosure are that: i) The German Defendants had been provided with the first service out and extension applications by way of information (not by way of service) on11 November 2021 , but did not mention any concerns regarding failure to mention the issues of limitation or Germany as an appropriate alternative jurisdiction or ask that these issues be included in the evidence when the applications were issued and brought before the court. That would have dealt with any prejudice that the German Defendants say was caused by the omissions. ii) The German Defendants have noted that there has been no acceptance of the breaches, or contrition or apology to the court by the Claimants.”
“In Altimo Holdings at [71] a “serious issue to be tried on the merits” was said to be “a substantial question of fact or law, or both” and the test was stated to be the same test as for summary judgment. I would have been so satisfied had the issue of limitation been disclosed, because it would not have been possible to conclude that there was no real prospect of success for many individual claims relying on section 32, where oral evidence may be required. I would have considered that there was a real issue to be tried, both for those claims where the claims were not prima facie time barred and those which would have to rely on a section 32 application in order to defeat a limitation defence.”
“The Claimants were hoping in that correspondence to narrow the issues between the parties both as to the subject matter of the claims on the case management issues. In the light of relevant judicial guidance provided over the years, particularly in the VW NOx Emissions Group Litigation, the Claimant firms were attempting to coordinate and engage in substantive discussions so as to adopt a common approach at the time of making the application and it was not possible to rush such coordination in advance of the impending deadlines for service, partly because of delays in engagement by the Defendants in pre-action correspondence, and the lack of information from the German Defendants in relation to the claim.”
“in this litigation the Defendants had instructed London solicitors, who were actively corresponding in the litigation. This was not a factor in either Sodastream or Al-Zahra. In SMO v Tik Tok the relevant defendant had instructed London solicitors, who were not willing to accept service, similarly to this litigation. But SMO v Tik Tok was not a case involving an order for an application for an extension of time for service, but an application for service by an alternative method. The reason why Nicklin J. would not grant such an order was because the claimants had not attempted service by means of The Hague Convention and had applied for an order for alternative service on the defendant's solicitors. Nicklin J. said at [93]: “On its own, delay caused by the requirement to serve a claim form on a defendant in compliance with the Hague Convention cannot justify bypassing its requirements by the simple expedient of an alternative service order. A litigant must recognise this, factor in the potential delay and prosecute his litigation accordingly…. There is neither a good reason for authorising alternative service nor exceptional or special circumstances justifying such an order in respect of the Fifth defendant.”
“In my judgment this factor, namely the co-ordination of multi-party litigation, with tens of thousands of Claimants, is sufficient to constitute the exceptional circumstances referred to in Qatar Investments at [17(iv)] with regard to both the potential circumventing of a defendant's limitation defence, and in respect of "good reason" for the delay. There were of course four firms of solicitors acting for the Claimants, and solicitors acting in complex high value High Court litigation are expected to act efficiently and in an organised manner. But the amount of work and difficulties involved in litigation involving approximately 90,000 Claimants should not be underestimated, particularly where the rules relating to issue and service of claim forms are the same whether for unitary or group claims. I do consider that this factor is a sufficiently good reason for the extensions granted by the order of16 March 2022 . It was reasonable for the Claimant firms to seek agreement on service before embarking to the very complex and expensive exercise of producing thousands of pages of documents, incurring the costs of translation and the administrative burden of submitting judicial documents for service via the Hague Service Convention (see Oldnall 13 §§96-99). That was a proportionate decision in respect of this particular multi-party litigation. It may not have been so in respect of a single claim or claims in single figures.”