Deemed Service - Societe Generale V Goldas Kuyumculuk

Case Alert - [2018] EWCA Civ 1093

Court of Appeal examines the requirements for an order for deemed service by an alternative method

After the grant of freezing orders in favour of the claimant, the claimant issued proceedings and purported to serve out of the jurisdiction, on the defendants in Turkey and Dubai. However, it failed to serve in either country by a valid method. In both cases, though, the claim form came to the notice of the defendant.

The English proceedings were then put on hold for some 8 years whilst insolvency proceedings in Turkey continued (the freezing orders were maintained throughout). The defendants then applied to strike out the English proceedings and the claimant applied for an order for deemed service by an alternative method (CPR r6.15) or an order dispensing with service (CPR r6.16). Popplewell J refused the claimant's application and struck out the claim and the claimant appealed.

At first instance, the judge had said that "negligence or incompetence on the part of the claimant's legal advisers is not a good reason; on the contrary it is a bad reason, a reason for declining relief". The Court of Appeal accepted that that had gone too far, and in the context of alternative service, it can't be said that negligent legal advice is always a "bad reason" (although that doesn't necessarily make it a "good reason" either). However, it also held that that error by the judge was not enough to vitiate his evaluation of the case as a whole.

The judge had also said that a good reason is needed for an order under CPR r6.15, but exceptional circumstances are needed if the good reason has not impacted on the expiry of the limitation period. The Court of Appeal rejected the claimant' argument that it should be irrelevant whether the good reason impacted on the expiry of the limitation period. It held that "Once it is clear that the claim is (or is arguably) time-barred, that must be highly relevant to the exercise of the court's discretion. A failure to serve by the proper method may be permissible if... the claimant did not know he had a claim until close to the end of the limitation period but the requirement of a good reason for the purpose of CPR 6.15 must contemplate an inquiry into the reason for not achieving proper service before the expiry of the limitation period; otherwise limitation becomes irrelevant and that is not the law".

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