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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Trumann Investment Group Ltd v Societe Generale SA & Ors [2004] EWHC 1769 (Ch) (27 July 2004) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2004/1769.html Cite as: [2004] EWHC 1769 (Ch) |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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Trumann Investment Group Limited (suing on behalf of itself and all other shareholders in the First and Second Defendants) |
Claimant |
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- and - |
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1) Societe Generale SA (A company incorporated in the Dominican Republic) 2) Cyport Communications International Limited 3) Hilmi Kansu 4) Canan Kansu 5) Cyport Communications Limited |
Defendants |
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Joe Smouha QC (instructed by Addleshaw Goddard) for the 5th Defendant
Hearing dates: Friday 2nd July 2004
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Crown Copyright ©
Mr Justice Peter Smith :
INTRODUCTION
NEXUS BETWEEN THE PARTIES
THE BUSINESSES OF CCI AND CCL
ALLEGATIONS
ABUSE OF PROCESS
GROUNDS FOR SETTING ASIDE ORDER
FURTHER CONSIDERATION OF PLEADINGS
PRINCIPLES AS TO JOINDER AND SERVICE OUT OF THE JURISDICTION
"6.20 In any proceedings to which rule 6.19 does not apply, a claim form may be served out of the jurisdiction with the permission of the court if-
General grounds
…
(3) a claim is made against someone on whom the claim form has been or will be served and –
(a) there is between the claimant and that person a real issue which it is reasonable for the court to try; and
(b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.
(3A) a claim is a Part 20 claim and the person to be served is a necessary or proper party to the claim against the Part 20 claimant.
…
Claims in relation to contracts
(5) a claim is made in respect of a contract where the contract –
(a) was made within the jurisdiction;
(b) was made by or through an agent trading or residing within the jurisdiction;
(c) is governed by English law; or
(d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract."
"(a) if it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or
(b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue".
It will be seen that the wording under the two rules is very different.
MR SMOUHA QC'S CONTENTIONS
"[34] Mr Page initially submitted that para (c) only applies where the party to be served is a necessary or proper party to the very cause of action against a person who has been duly served. He later accepted that this was too narrow but submitted that it was not sufficient merely that there was a close connection between the claims against the person already duly served and the claims against the person to be served if the claims—ie the facts giving rise to the claims—were not the same. He submitted that the claims by UPIE against the father and Fairdeal failed to meet this requirement.
[35] I consider that Mr Page stated the position too narrowly.
[36] The meaning of the expression 'proper party' in the phrase 'necessary or proper party' appearing in para (c) of Ord 11, r 1(1) was explained by Lord Esher MR in Massey v Heynes & Co (1888) 21 QBD 330 at 338, [1886–90] All ER Rep 996 at 1000:
'The question, whether a person out of the jurisdiction is a proper party to an action against a person who has been served within the jurisdiction, must depend on this, supposing both parties had been within the jurisdiction would they have been proper parties to the action? If they would, and only one of them is in this country, then the rule says that the other may be served, just as if he had been within the jurisdiction.'
In the same case Lindley LJ said:
'Where the liability of several persons depends upon one investigation, I think they are all "proper parties" to the same action and, if one of them is a foreigner residing out of the jurisdiction, rule 1(g) of Order XI applies.'
That was said in reference to r 1(g) of Ord XI which was the then equivalent of what later became para (c) of Ord 11, r 1(1) and what is now CPR 6.20(3). I am not aware that any doubt has ever been cast on the accuracy of that approach to the meaning of 'proper party' as used in Ord 11, r 1(1)(c).
[37] In Barings plc (in administration) v Coopers and Lybrand (1996) 140 SJ LB 210, Chadwick J (as he then was) pointed out that whether a person is a 'proper party' to an action in which he has been, or is to be, joined as co-defendant with another must depend on the relevant rules of procedure and the practice under such rules. Order 15, r 4(1) permitted joinder of two or more persons as defendants with the leave of the court or where:
'(a) if separate actions were brought º against each of them º some common questions of law or fact would arise in all of the actions and (b) all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions.'
As Chadwick J observed, it would be beyond argument that any person who has or could have been joined as a party without leave under Ord 15, r 4(1) must be a 'proper party' for the purposes of the rules and, in particular, that such a person must be a 'proper party' for the proposes of Ord 11, r 1(1)(c). He did not find it necessary to decide whether any person whom the court itself could join under r 6(2)(b)(ii) of Ord 15 must be treated as a 'proper party' for the purpose of Ord 11, r 1(1)(c) but saw no reason in principle why the court should not, in appropriate circumstances, give leave to serve out of the jurisdiction in circumstances in which it could order the person to be added as a party to existing proceedings.
[38] Although the Rules of the Supreme Court have been replaced by the Civil Procedure Rules, it is not suggested that the power of the court to give permission for service out under r 6.20(3) is narrower than under Ord 11, r 1(1)(c) or that the circumstances in which a person may properly be joined as a defendant to a claim are narrower under CPR 19.2(2) than under its relevant predecessors, namely Ord 15, rr 4(1) and 6(2)(b) of the Rules of the Supreme Court. CPR 19.1(2) provides that the court may order a person to be added as a new party if (a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings or (b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue. The court's power to add or substitute a party is wide. Although the expression 'necessary or proper party' to the claim does not appear in that rule it can scarcely be supposed that the court would order a person to be added or substituted as a party on the ground that it is 'desirable' to do so if that person were not either a necessary or a proper party to the claim in question. In my judgment the court's power to permit service out under what is now r 6.20(3) (formerly Ord 11, r 1(1)(c)) is not less wide than the court's wide power to add or substitute a party under r 19.1(2).
[39] It is not suggested that the claims by the two claimants against the other defendants do not give rise to real issues which it is reasonable for the court to try. The sole question therefore is whether, in the sense explained above, the father and Fairdeal are 'proper parties' to some or all of UPIE's claims (and UFD's other claims).
[40] It is manifest, in my view, that UPIE's claims against the father and Fairdeal on the one hand and against the son and other defendants on the other give rise to common questions of fact. Notable among those are the terms of and circumstances in which the joint venture agreement, as varied from time to time, was made and whether, in particular, as the claimants assert, it was agreed that the father and Fairdeal should act as agents. If they were to act as agents of UFD, it is not less likely that they were also to act as agents of UPIE assuming that the claimants can make good their contention in paras 14 and 15 of the particulars of
claim that the parties to the joint venture agreed that UPIE would function effectively as a subsidiary of UFD.
[41] Equally clearly, in my view, UPIE's claims against the father and Fairdeal arise out of the same series of transactions as are the subject of UPIE's (and UFD's) claims against the son and UFD's claims against the father and Fairdeal. The underlying substance of the various claims is that Mr Bhatia, Mr Thakrar and the father and son were together engaged in the acquisition and exploitation outside India of the distribution rights to a number of Indian films. Their vehicles for doing so were the claimants. As the courts below recognised, it would be quite unreal to suggest that UFD should be free to litigate its claims against the various defendants in this jurisdiction but that UPIE, although it functioned at all material times effectively as UFD's subsidiary and is able to pursue its claims against the son and his companies in this jurisdiction, should be compelled to pursue its claims against the father and Fairdeal in India"
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