QB-2022-002353 - [2025] EWHC 1836 (KB)

‘i) The defendant has a right to be sued (if at all) by means of originating process issued within the statutory period of limitation and served within the period of its initial validity of service. It follows that a departure from this starting point needs to be justified;

The reason for the inability to serve within time is a highly material factor. The better the reason, the more likely it is that an extension will be granted. Incompetence or oversight by the claimant or waiting some other development (such as funding) may not amount to a good reason. Further, what may be a sufficient reason for an extension of time for service of particulars of claim is not necessarily a sufficient reason for an extension for service of the claim form;

Where there is no good reason for the need for an extension, the court still retains a discretion to grant an extension of time but is not likely to do so;

Whether the limitation period has or may have expired since the commencement of proceedings is an important consideration. If a limitation defence will or may be prejudiced by the granting of an extension of time, the claimant should have to show at the very least that they have taken reasonable steps (but not all reasonable steps) to serve within time;

The discretionary power to extend time prospectively must be exercised in accordance with the overriding objective.’

‘[35] As Senior Master Fontaine correctly identified at [55] of her Judgment, in Qatar Investment v Phoenix Ancient Art S.A. [2022] EWCA Civ 422, at [17] Whipple LJ identified what were described as 'key points' arising in that appeal, which were also relevant to the set aside application:

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)];

Second, it is not possible to deal with an application for an extension of time under CPR 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)].

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]).

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)])."

[36] As to what constitutes a 'good reason' (referred to in (ii) and (iii) above), generally speaking, the good reason must be a difficulty in effecting service: Cecil v Bayat [2011] 1 WLR 3086 at [49] (Stanley Burnton LJ).

[37] The authorities also demonstrate that a defendant should not be criticised for refusing to accept service otherwise than in accordance with the CPR , and that a defendant has no duty to help the Claimant in effecting service. See:

American Leisure Group Ltd v Garrard [2014] EWHC 2101 (Ch), [2014] 1 WLR 4102 at [27] David Richards J) at [32]:

"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."

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 ")….

[38] Not criticising the defendant for refusing to accept service otherwise than in accordance with the CPR is not, of course, inconsistent with recognising that the additional time required to effect service through the Foreign Process Service ('FPS') process or difficulties which present themselves during the FPS process which are outside the control of the claimant can amount to a good reason by which a party may justify an extension of time. They clearly can …. However, it is necessary to consider what the actual reasons for delay were, before determining whether or not they are 'good'. This was explained and illustrated by Whipple LJ in the context of potential FPS delays in Qatar at [36]-[37]…

[39] Therefore, although delays in fact caused/predicted to be caused by a defendant insisting (as it is entitled to do) upon a particular form of service can amount to good reasons justifying an extension of time, the authorities demonstrate that fondly hoping that the defendant will agree to accept service in a way other than that which a defendant is entitled under the rules to require (subject to any order obtained, for example, for substituted service) does not constitute "good reason". …

[40] … Even where an application is made within time, however, it remains correct that problems which are of a party's own making will not amount to a 'good reason' and, even though the effect of refusing to grant an extension of time may have a significant impact because the claim is statute-barred, the absence of good reason will still mean that the court's indulgence (even when the extension is sought within time) will be limited.

[41] Sub-paragraph (iv) of the passage from Qatar Investment emphasises that whether the limitation period has expired is of considerable importance, as Senior Master Fontaine also identified at [56] of her judgment when quoting the explanation for this approach by Rix LJ in Aktas v Adepta [2010] EWCA Civ 1170 at [91]:

"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."

[42] Rix LJ also gave the following guidance in Cecil v Bayat [2011] EWCA Civ 135 at [108] and [109]:

"… It is therefore for the claimant to show that his "good reason" directly impacts on the limitation aspect of the problem, as for instance where he can show that he has been delayed in service for reasons which he does not bear responsibility, or that he could not have known about the claim until close to the end of the limitation period. If he cannot do that, he is unlikely to show a good or sufficiently good reason in a limitation case. …That means that in a limitation case, a claimant must show a (provisionally) good reason for an extension of time which properly takes on board the significance of limitation. If he does not do so, his reason cannot be described as a good reason. It is only if a good reason can be shown that the balance of hardship should arise".

…

[45] … (1) on an application such as this, it is not generally appropriate to resolve the limitation issue (so establishing that limitation 'might' be relevant is sufficient); and (2) where limitation 'might' be an issue, it is to be regarded as a matter of 'considerable importance' in deciding whether or not to grant an extension of time for service.’

‘i) The duty of an applicant for a without notice injunction is to make full and accurate disclosure of all material facts and to draw the court’s attention to significant factual, legal and procedural aspects of the case;

It is a high duty and of the first importance to ensure the integrity of the court’s process. 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, a basic principle of fairness. Derogation from that principle is an exceptional course adopted in cases of extreme urgency or the need for secrecy. The court must be able to rely on the party who appears alone to present the 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;

Full disclosure must be linked with fair presentation. The judge must be able to have complete confidence in the thoroughness and objectivity of those presenting the case for the applicant. Thus, for example, it is not sufficient merely to exhibit numerous documents;

An applicant must make proper enquiries before making the application. He must investigate the cause of action asserted and the facts relied on before identifying and addressing any likely defences. The duty to disclose extends to matters of which the applicant would have been aware had reasonable enquiries been made. The urgency of a particular case may make it necessary for evidence to be in a less tidy or complete form than is desirable. But no amount of urgency or practical difficulty can justify a failure to identify the relevant cause of action and principal facts to be relied on;

Material facts are those which it is material for the judge to know in dealing with the application as made. The duty requires an applicant to make the court aware of the issues likely to arise and the possible difficulties in the claim, but need not extend to a detailed analysis of every possible point which may arise. It extends to matters of intention and for example to disclosure of related proceedings in another jurisdiction;

Where facts are material in the broad sense, there will be degrees of relevance and a due sense of proportion must be kept. Sensible limits have to be drawn, particularly in more complex and heavy commercial cases where the opportunity to raise arguments about non-disclosure will be all the greater. The question is not whether the evidence in support could have been improved (or one to be approached with the benefit of hindsight). The primary question is whether in all the circumstances its effect was such as to mislead the court in any material respect;

A defendant must identify clearly the alleged failures, rather than adopt a scatter gun approach. A dispute about full and frank disclosure should not be allowed to turn into a mini-trial of the merits;

In general terms it is inappropriate to seek to set aside a freezing order for nondisclosure where proof of non-disclosure depends on proof of facts which are themselves in issue in the action, unless the facts are truly so plain that they can be readily and summarily established, otherwise the application to set aside the freezing order is liable to become a form of preliminary trial in which the judge is asked to make findings (albeit provisionally) on issues which should be more properly reserved for the trial itself;

If material non-disclosure is established, the court will be astute to ensure that a claimant who obtains injunctive relief without full disclosure is deprived of any advantage he may thereby have derived;

Whether or not the non-disclosure was innocent is an important consideration, but not necessarily decisive. Immediate discharge (without renewal) is likely to be the court’s starting point, at least when the failure is substantial or deliberate. It has been said on more than one occasion that it will only be in exceptional circumstances in cases of deliberate non-disclosure or misrepresentation that an order would not be discharged;

The court will discharge the order even if the order would still have been made had the relevant matter(s) been brought to its attention at the without notice hearing. This is a penal approach and intentionally so, by way of deterrent to ensure that applicants in future abide by their duties;

The court nevertheless has a discretion to continue the injunction (or impose a fresh injunction) despite a failure to disclose. Although the discretion should be exercised sparingly, the overriding consideration will always be the interests of justice. Such consideration will include examination of i) the importance of the facts not disclosed to the issues before the judge ii) the need to encourage proper compliance with the duty of full and frank disclosure and to deter non-compliance iii) whether or not and to what extent the failure was culpable iv) the injustice to a claimant which may occur if an order is discharged leaving a defendant free to dissipate assets, although a strong case on the merits will never be a good excuse for a failure to disclose material facts;

The interests of justice may sometimes require that a freezing order be continued and that a failure of disclosure can be marked in some other way, for example by a suitable costs order. The court thus has at its disposal a range of options in the event of non-disclosure.’

‘In my judgment, that entirely misunderstands the nature of the duty of full and frank disclosure. It should be known to all practitioners that what is material to place before the judge on a without notice application is not to be judged solely from the point of view of the applicant. Material facts are those which it is material for the judge to know in dealing with the application as made. That duty requires an applicant to make the court aware of the issues likely to arise, which includes making the court aware of the possible difficulties which the applicant may face, either in the claim or in the particular application. What is required is a fair presentation. Although that need not extend to a detailed analysis of every possible point which may arise, it necessarily involves making the court aware of the main difficulties which the application, if contested, could face and of the principal arguments which the other side would be likely to raise.’

‘[104] Limitation under English law (the only law being advanced at this time in the JP Morgan Proceedings) was on any view, and without any benefit of hindsight, a very important potential defence to the claims being advanced. Indeed (as I have found) it was a matter that meant that the LIA did not have a real prospect of success, and as such service should be set aside. But whether that was so or not, it was a matter which indisputably might reasonably be thought to weigh against the making of the order for permission to serve out of the jurisdiction, as it went to the question of a real prospect of success of the LIA’s claims. Equally, in terms of the duty of full and frank disclosure, the issues that arose in relation to limitation are matters which might reasonably have caused the judge to have doubt whether he should grant permission to serve out of the jurisdiction, in the context of whether the LIA had a real prospect of success and as such were relevant matters which ought to have been disclosed (MRG v Engelhard Metals Japan, supra, at [29] per Toulson J).

…

[107] The duty of an applicant on an application for permission to serve out of the jurisdiction is a duty to make full and frank disclosure of all material facts. The material facts are those which it is material for the Judge to know in dealing with the application made - Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350 and 1356 G-H––here an application to serve outside the jurisdiction which would have the effect of bringing a person and an entity outside the jurisdiction, into the jurisdiction. 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 of section 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 after 6 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.

[108] There was accordingly a failure to comply with the requirements of Appendix 9 paragraph 2(c) of the Commercial Court Guide, and a breach of the duty of full and frank disclosure. Importantly this was not, and was not suggested to be, an inadvertent failure to address such matters (due to lack of familiarity with the case, or pressure of time or the like).

…

[110] 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. ….

[120] The importance of the duty of full and frank disclosure, on applications for permission to serve out, just as in the context of a freezing injunction, cannot be over-stated. There is a difference in terms of what the disclosure must be directed at, and the matters being considered, but the underlying reason and rationale for the duty remains the same, as is the need to comply with the same. A failure to comply with that duty is by its very nature serious – an individual or entity has been brought into the jurisdiction without having had any opportunity to address the court as to why permission should not be granted, and as demonstrated by the present case, they are then exposed to very considerable costs upon an application to set jurisdiction aside.’

‘[103] I would add that the Judge does not appear to have refocussed, when considering the applications for an extension of time, upon the failure within the applications to give full and frank disclosure of the position relating to limitation. Unlike in the context of the Service Out Applications, the existence of potential limitation defences was highly material to the initial exercise of considering whether, and if so for how long, an extension of time ought to have been granted. The existence of limitation defences changed the very test the Judge had to consider and apply when considering the matter ex parte: it was not enough to show a 'good reason': the circumstances were required to be exceptional, in the sense of something out of the ordinary, as considered above. Seen through this lens, the conscious decision not to refer to limitation issues in the evidence supporting the Extension Applications was, in my view, a significantly more serious transgression of the duty of full and frank disclosure. In the exercise of my discretion this factor, of itself, militates much more strongly towards setting aside the order and strongly supports the determination I have otherwise arrived at, namely that the extensions of time sought from 10 November 2021 should not be granted.’