Laurence Rabinowitz QC (sitting as a Deputy High Court Judge):
- The matter before me involves a number of related applications, including an application to set aside a default judgment. Further details of the nature of these applications and the relevant facts are set out below.
- Alvaro De Armas Davila (Alvaro) and Ricardo De Armas Davila (Ricardo) are brothers. Both are sons of Marina Davila De Armas (Marina). All of them are or were part of a prominent Venezuelan family, some of whose members have been engaged in an unfortunate and long-standing family dispute. It was against this background that, on 8 January 2013, Ricardo completed a certificate of suitability, by which he consented to act as litigation friend for Marina in a claim to be issued out of the High Court in England against Alvaro and Sumsti Trading Corp. (Sumsti), a Panamanian joint stock company associated with Alvaro. It is common ground that Marina was, by 2013, not able herself to manage the conduct of a claim. The Claim Form was issued on the following day, 9 January 2013.
- Marina's claim related to the transfer more than 6 years earlier, on or about 31 May 2006, of some £2.6 million from an account (the Account) held by her with Credit Suisse, Zurich (Credit Suisse) to Sumsti. Credit Suisse made the transfer in accordance with a written instruction from Alvaro dated 19 May 2006. Put shortly, Marina's claim was that, in giving this instruction, Alvaro had acted in breach of a number of duties owed to her, including breach of contract, breach of fiduciary duty and breach of duty as a trustee, and that she was therefore entitled to relief against him on a number of bases.
- The Claim Form having been issued, the next hurdle to be surmounted was service on Alvaro. This however created a difficulty because Alvaro is a somewhat private and secretive individual, especially as regards his Venezuelan family. More particularly, whilst Alvaro was understood to live in or around London, his precise address was unknown to Ricardo and Marina, although contact with him could be made through an email address that had been used for communications between Alvaro and Ricardo De Armas (Ricardo Jnr), son of Ricardo and grandson of Marina.
- This formed the basis for an application made to Master Price on 29 April 2013 for an order permitting service by an alternative method upon Alvaro, namely by means of email to be sent to the address used by Ricardo Jnr when communicating with Alvaro. The order made by Master Price on that day expressly provided that delivery of the copy of the sealed Claim Form together with copies of the Particulars of Claim and response pack would be deemed good and sufficient service on Alvaro on the fifth business day following the sending of the email attaching these documents.
- On 2 May 2013, Ms Kirsty O'Connor of Reed Smith LLP (Reed Smith), solicitors for Marina and Ricardo, sent the Claim Form and the other required documents to the email address identified in Master Price's order. The subject line of the email was left blank, apparently out of a concern that if Alvaro were forewarned of its contents he would take measures to avoid opening or considering the documents attached. Alvaro's evidence is that he did not discover the contents of this email until nearly two years later.
- The documents having been served in this way on 2 May 2013, the deadline for acknowledging service was 23 May 2013. No response was received from Alvaro by that time. In due course, Ricardo applied for judgment against Alvaro in respect of the £2,600,423.35 removed from the Account, together with interest and costs.
- On 27 August 2013, judgment was entered against Alvaro in the sum of £4,105,106.67 (the sum transferred from the Account together with an amount in respect of interest) as well as costs. On the same day, 27 August 2013, just before midnight UK time, Marina died.
- Perhaps because of Marina's death, there was a material delay in taking any formal steps to serve the default judgment on Alvaro. Indeed, it was not until February 2015, some eighteen months later, that applications were made to the court that Marina be substituted as Claimant by Ricardo, acting as personal representative on behalf of Marina's estate. At the same time, application was made for permission to serve a copy of the judgment on Alvaro by email.
- On 20 March 2015, Master Price made an order to that effect. Shortly thereafter, on 24 March 2015, the judgment was served on Alvaro by an email sent to the address specified in the order. Once again the subject line of the email was left blank. Once again Alvaro says he did not discover the contents of this email at that time.
- Whilst formal service of the judgment on Alvaro only occurred in March 2015, it is common ground that Alvaro had become aware of the judgment at least ten months earlier, when, on 5 May 2014, in the course of proceedings between himself and Ricardo in Venezuela, evidence adduced on behalf of Ricardo referred both to the claim and the judgment. A copy of the judgment was also disclosed at that time.
- Despite becoming aware of the default judgment in this way, it was only in February 2015 that Alvaro engaged English solicitors, Mishcon de Reya (Mishcons), and it was not until about four months later, 18 June 2015, that Alvaro issued the present applications. This followed shortly after, and may have been prompted by, an application made by Ricardo for a certification of the judgment in order to enforce it abroad.
The nature of the present applications
- The applications made by Alvaro involve a multipronged assault on the default judgment and the procedural steps leading up to its being granted. More particularly:
(1). Alvaro contends that the order permitting service by email made by Master Price on 29 April 2013 should be discharged or set aside on the basis that the evidence adduced in support of that application contained material misstatements and/or failed to make full and frank disclosure, alternatively that there was no good reason to authorise service by an alternative method. Arising from this, Alvaro contends that there was therefore never any proper service of the Claim Form in these proceedings. If this is right, then the default judgment obtained against him, pursuant to proceedings for which there has never been any proper service, necessarily falls away.
(2). Alvaro further contends that the litigation friend certificate signed by Ricardo on 8 January 2013 should be discharged, set aside or terminated on the grounds that Ricardo does not and did not at the material time satisfy the conditions set out in CPR 21.4(3)(a) and (b) and/or that the certificate of suitability filed by Ricardo contained material misstatements and/or that there was a failure to comply with paragraph 2.2(c) of the Practice Direction to CPR 21 because no relevant medical opinions or records were attached to the certificate. Arising from this, Alvaro contends that Ricardo in truth had no authority to issue these proceedings on behalf of Marina. If this is right, then, contends Alvaro, the proceedings as a whole should be treated as a nullity so that the default judgment obtained against him, again, necessarily falls away.
(3). Furthermore, if the court is against him on his primary case that the proceedings generally, service of the Claim Form and the default judgment should be set aside for the reasons identified above, Alvaro then contends, in the alternative, that the court should at least set aside the default judgment pursuant to CPR 13.3.
- By way of a further part of his applications, Alvaro also seeks, "so far as may be necessary", extensions of time for the filing of an acknowledgement of service, Alvaro having purported to file one on 18 June 2015, and for the applications which are currently before the court.
- It is to be noted that whichever way the present applications are decided is very likely to be determinative of the dispute as a whole. This is because, whilst a determination by the court that the judgment should not be set aside would mean that the merits of the claim against Alvaro will never be tested at trial, this would very likely also be the result of a determination by the court that Alvaro is correct and that these proceedings are unauthorised or that service of the Claim Form should be set aside. This follows from the fact, that, given the limitation position, it would probably now be too late to bring a new claim in respect of the same subject matter.
The application to set aside the default judgment
- Whilst the first two of Alvaro's applications, if successful, would result in the proceedings as a whole being felled in a way that would make it unnecessary even to consider the application to set aside the default judgment, it is nonetheless convenient to begin a consideration of the issues arising by looking first at the factors relevant to that application, and only thereafter to consider the remaining applications. This is so not least because the issues arising in that context provide a useful framework in which to consider the issues that arise in relation to the other applications.
- The rules relevant to obtaining a default judgment are set out at CPR Part 12. Those relevant to setting aside such judgments are set out at CPR Part 13. CPR 13.3 provides (so far as relevant) as follows.
"(1) … the court may set aside or vary a judgment entered under Part 12 if –
(a) the defendant has a real prospect of successfully defending the claim; or
(b) it appears to the court that there is some other good reason why –
(i) the judgment should be set aside or varied; or
(ii) the defendant should be allowed to defend the claim.
(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."
- A great many authorities have considered the meaning and effect of CPR 13.3. Among those to which I was referred is the decision of the Court of Appeal in Standard Bank Plc v Agrinvest International Inc  EWCA Civ 1400. The judgment of Moore-Bick LJ (with whom Etherton and Ward LLJ agreed) contains a number of instructive passages.
- At paragraph 15 of his judgment, Moore-Bick LJ said:
"In the ordinary way a defendant who seeks to set aside a regular default judgment must be able to show that he has a real prospect of successfully defending the claim. Whatever the circumstances of the case, there is nothing to be gained, and much to be lost, by setting aside a judgment that will be reinstated after the parties have incurred the cost and delay of a trial. If that requirement has been satisfied, however, the court will still need to consider the circumstances of the case more generally before deciding whether to grant the relief sought. One factor that it is required to take into account, as the rule makes clear, is whether the application was made promptly."
Later, at paragraphs 20-24, Moore-Bick LJ highlighted the change in approach introduced by the CPR, with the need for greater emphasis to be placed on promoting efficiency and avoiding delay. Thus:
"20. Before the introduction of the CPR judgment could be entered in default of notice of intention to defend under O.13 of the Rules of the Supreme Court. Applications to set aside default judgment were governed by O.13, r.9, which provided as follows:
'Without prejudice to rule 7(3) and (4) the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.'
21. The authorities relating to setting aside default judgments laid considerable emphasis on the desirability of doing justice between the parties on the merits. Delay in making an application to set aside rarely appears to have been a decisive factor if the defendant could show that he had a real prospect of successfully defending the claim against him. Thus in J.H. Rayner (Mincing Lane) Ltd v Cafenorte S.A. Importadora e Exportadora S.A.  EWCA Civ 2015 judgment was set aside after 7½ years on the applicants' showing that they had a defence with a real prospect of success.
22. The Civil Procedure Rules were intended to introduce a new era in civil litigation, in which both the parties and the courts were expected to pay more attention to promoting efficiency and avoiding delay. The overriding objective expressly recognised for the first time the importance of ensuring that cases are dealt with expeditiously and fairly and it is in that context that one finds for the first time in rule 13.3(2) an explicit requirement for the court to have regard on an application of this kind to whether the application was made promptly. No other factor is specifically identified for consideration, which suggests that promptness now carries much greater weight than before. It is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that relief should be granted, even though the application was not made promptly. The strength of the defence may well be one. However, promptness will always be a factor of considerable significance… and if there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial.
23. … The important questions for these purposes are when did [the defendant] learn that [the claimant] had entered judgment against it and how quickly did it take steps to have it set aside. …
24. Mr. de Lacy drew our attention to a number of cases decided since the introduction of the Civil Procedure Rules which he submitted support the conclusion that the court will set aside a default judgment despite a delay of several months, or in some cases years, in making the necessary application. Since, on the view that I have taken of the merits of [the defendant's] defence, the issue does not arise for determination on this appeal, it would be inappropriate to embark on a detailed analysis of those decisions…. It is clear, however, that much is likely to depend on the particular circumstances of the case…."
- More recently, in Regione Piemonte v Dexia Crediope SpA  EWCA Civ 1298, Christopher Clark LJ (with whom Lewison and Jackson LLJ agreed), had this to say about the test to set aside a default judgment contained in CPR Part 13:
"33. In  and  of his judgment [Eder J] set out the provisions of CPR 13 and what, in broad terms, he accepted were the applicable principles:
"30 CPR 13 provides in material part as follows: …"(1)…the court may set aside or vary a judgment entered under Part 12 if – (a) the defendant has a real prospect of successfully defending the claim; or (b) it appears to the court that there is some other good reason why – (i) the judgment should be set aside or varied; or (ii) the defendant should be allowed to defend the claim.(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly."
31 As to this, Ms Tolaney submitted that the applicable principles are, in summary, as follows:
i) The court's power to set aside a default judgment pursuant to CPR 13.3 is discretionary.
ii) The burden rests upon the defendant to satisfy the court that there is good reason why a judgment regularly obtained should be set aside: ED&F Man Liquid Products Ltd v Patel  EWCA Civ 472. Furthermore, depriving the claimant of a regular judgment which the claimant has validly obtained in accordance with CPR 12 is not something which the court will do lightly.
iii) In particular, CPR 13.3(2) gives added emphasis to the need for a defendant to show that it has acted "promptly" in seeking to set aside. More specifically:
a) "Promptly" in this context means "with alacrity" or "with all reasonable celerity in the circumstances": Regency Rolls Ltd v Carnall  EWCA Civ 379.
b) Promptness will always be a factor of considerable significance and, if there has been a marked failure to make the application promptly, a court may well be justified in refusing relief, notwithstanding the possibility that the defendant may well succeed at trial: Standard Bank plc v Agrinvest International Inc  EWCA Civ 1400 per Moore-Bick LJ at .
c) It follows that, by contrast with the test for summary judgment under CPR 24, under CPR 13.3 the merits of any proposed defence are just a factor which can be taken into account – and an unimportant or irrelevant factor where the failure to act promptly is particularly egregious.
d) Promptness is such an important factor because of the public interest in the finality of litigation, the need under the CPR to act expeditiously, and the requirement to have regard to the proper allocation of courts' resources: Mullock v Price  EWCA Civ 1222, per Ward LJ at .
iv) As regards the time period in which applications have been deemed to be "prompt", the limit appears to be some way short of the 11 months that have elapsed in this case. Thus, 30 days has been deemed to be too long: Khan v Edgbaston Holdings  EWHC 2444 (QB), per HHJ Coulson QC. It has been suggested that 59 days is "very much at the outer limit of what could possibly be acceptable": Hart Investments v Fidler  EWHC 2857."
34. Subject to an important qualification I would accept this as a broad summary of the relevant principles. CPR 13 makes clear (i) that the power to set aside is discretionary; (ii) that the conditions specified in CPR 13.3 (1) (a) or (b) are necessary, but not necessarily sufficient, conditions for the exercise of the discretion; and (iii) that the question as to whether the application has been made promptly is a mandatory and obviously, therefore, important consideration. It follows that a court may be entitled to refuse to set a judgment aside even if the defendant shows a real prospect that he may or might succeed in his defence at trial.
35. I, also, agree with the observation of the judge that there is no arbitrary time limit and that each case must ultimately depend on its own facts.
36. The qualification is that it does not seem to me that the merits of any defence are ever irrelevant if by that the judge meant that the court will not even consider them. When it does consider them, it may conclude that they are of little or no weight. The court is engaged in an exercise of weighing delay against merits, which will include considering the nature and extent of the delay, the reason and any justification for it, the strength of the supposed defence and the justice of the case. The stronger the merits (and any justification for the delay) the more likely it is that the Court may be prepared to exercise its discretion to set aside a judgment regularly obtained despite the delay and vice versa. That is not to say that a real or even a good case on the merits will usually lead to the judgment being set aside despite significant delay since delay is now a much more potent factor than heretofore. If there is a marked and unjustified lack of promptness, that, itself, may now justify a refusal of relief because the delay is a factor that outweighs the defendants' prospect of success. As Moore Bick LJ recognised in Agrinvest the climate has changed with the introduction of the CPR from that which applied when this court in JH Rayner (Mincing Lane) Ltd v Cafenorte S.A. Importadora e Exportadora S.A.  2 Lloyds Rep 750 upheld a decision of his own setting aside a judgment after a delay of 7 ½ years."
- In addition to the foregoing, it is to be noted that it now appears to be settled that an application to set aside default judgment pursuant to CPR 13.3 is an application for relief against sanctions to which CPR 3.9(1) applies. See, e.g., Regione Piemonte (above), para 39. This requires any court considering such an application to "consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need – (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, directions and orders."
- The manner in which a court should approach CPR 3.9(1) has been explained in a number of important recent decisions of the Court of Appeal, most notably Mitchell v Newsgroup Newspapers Ltd  1 WLR 794 and Denton and ors v TH White Limited  1 WLR 3926. In Altomart v Salford Estates (No 2) Ltd  EWCA Civ 1408, Moore-Bick LJ provided the following helpful summary of the principles emerging from those decisions, noting that the Court of Appeal in Denton:
"19…identified three stages of enquiry: (i) identifying and assessing the seriousness and significance of the default which engages rule 3.9; (ii) identifying its cause; and (iii) evaluating all the circumstances of the case, including those specifically mentioned [i.e., the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules etc], so as to enable the court to deal with the application justly. The court clearly contemplated that if the default is not serious and significant, relief is likely to be granted. For these purposes a default which does not disrupt the progress of the litigation or the business of the courts more generally may well not be regarded as serious or significant. The court did not consider it appropriate to elaborate on the second stage, given the range of circumstances likely to arise. One of the most significant aspects of the decision, however, [is that]… even if there is a serious and significant default for which no good reason can be given, the application will not automatically fail. Although the factors mentioned in rule 3.9 are of particular importance, they are not of overriding significance."
- In Regione Piemonte, Christopher Clarke LJ, after noting that the application to set aside or vary a default judgment was one to which CPR 3.9 applied and so was affected by the principles in Mitchell and Denton, went on, at paragraph 40, to provide a useful summary as to how this affected the overall position. He said:
"In my judgment the matter stands thus. CPR 13.3 requires an applicant to show that he has real prospects of a successful defence or some other good reason to set the judgment aside. If he does, the court's discretion is to be exercised in the light of all the circumstances and the overriding objective. The Court must have regard to all the factors it considers relevant of which promptness is both a mandatory and an important consideration. Since the overriding objective of the Rules is to enable the court to deal with cases justly and at proportionate cost, and since under the new CPR 1.1 (2) (f) the latter includes enforcing compliance with rules, practice directions and orders, the considerations set out in CPR 3.9 are to be taken into account: see Hussein v Birmingham City Council  EWCA Civ 1570 per Chadwick LJ at ; Mid-East Sales v United Engineering and Trading Co (PVT) Ltd  EWHC 1457 at . So also is the approach to CPR 3.9 in Mitchell/Denton…."
- In addition to the foregoing, I was referred to a number of other cases said to illustrate the application of CPR 13.3. These included Regency Rolls Ltd and anor. v Carnall  EWCA Civ 379; Nolan v Devonport and another  EWHC 2025; Sandong Chemming v Saga  EWHC 1055 (Comm); Mullock v Price  EWCA 1222; Samara v MBI & Partners UK Ltd and anor.  EWHC 563 (QB); Mid-East Sales Limited v United Engineering and Trading Company (Pvt) Limited and anor.  EWHC 1457 (Comm); Salford Estates (No 2) Ltd v Altomart Ltd  EWCA Civ 1408; Avanesov v Shymkentpivo  EWHC 394 (Comm); Priestley v Dunbar & Co (a firm)  EWHC 987 (Ch); and Tubelike Limited (in liquidation) and ors. v. Visitjourneys.com Limited  EWHC 43 (Ch). It will be clear from the foregoing that some of these authorities pre-date the Mitchell and Denton decisions and will need to be considered in that light.
- Having regard to these authorities, the following observations may be made about applications in accordance with CPR 13.3 to set aside or vary default judgments. In particular:
(1). The burden is on the defendant to persuade the court that it ought to set aside a judgment regularly obtained in accordance with CPR Part 12. This is not something that a court should lightly be willing to do.
(2). CPR 13.3(1) identifies a preliminary threshold that must be satisfied before the court is empowered to exercise the discretion set out in CPR 13.3(2). Put differently, it is only where the court is satisfied that the "defendant has a real prospect of successfully defending the claim" or that "there is some other good reason" why the judgment should be set aside or varied or the defendant be allowed to defend the claim, that the court even has the jurisdiction to set aside or vary the judgment that has been obtained.
(3). If the defendant is able to satisfy the preliminary threshold identified in CPR 13.3(1), this does not mean that the merits of the defence, or the existence of some other good reason for setting aside or varying the judgment, cease to be relevant: on the contrary, those are factors that may be relevant and indeed important in relation to the manner in which the court's discretion is to be exercised.
(4). Thus, the fact that the defence only just satisfies the 'real prospect of success' threshold may be something that makes it more difficult to persuade a court that the justice of the case requires that the judgment be set aside than would be the position where the potential defence appears overwhelmingly strong.
(5). A further factor of material relevance to the way in which the court's discretion will be exercised is the promptness with which the application to set aside or vary the judgment has been made. More particularly, a "marked and unjustified lack of promptness" may justify a refusal to set aside the default judgment even where the defence appears to have substantial merit. Whether or not this is so will always depend on the facts of the particular case.
(6). Promptness, which in this context means "with all reasonable celerity" or "alacrity", is an especially important factor here because of the public interest in the finality of litigation and "the need under the CPR to act expeditiously, and the requirement to have regard to the proper allocation of courts' resources". See, e.g., Regione Piemonte (above).
(7). In considering the issue of promptness, the starting point for measuring the time taken to make the application is the date on which the defendant becomes aware of the judgment. This reflects the approach taken by CPR 39.3, applicable in the analogous situation where an application is made to set aside a judgment by a party who did not attend trial. See Mullock (above), Ward L.J., at paras 20 to 23; Samara (above), para 26. One might ordinarily expect that the defendant's knowledge of the judgment would follow in time after service of the judgment on him, but it is clear from the present case that that will not always be so. In cases where knowledge precedes service, it would appear from what is said above that the date of service may be of little or no relevance.
(8). No distinction is drawn, as regards knowledge of the judgment, between the knowledge of the defendant and the knowledge of his legal adviser and little or no regard is likely to be paid to arguments that the matter was put into the hands of a legal adviser and that it was the legal adviser, and not the party, that failed to act promptly. See Mullock (above), paras 22 to 24.
(9). The consideration given to whether the applicant has acted promptly involves more than simply considering the time taken to make the application. The court will have regard not only to the nature and extent of the delay, but also the "reason and any justification for it". See Regione Piemonte (above), para 36.
(10). Where the reason for any delay is, for example, the result of the defendant or his solicitor suffering from a debilitating illness or having been involved in an accident (examples taken from Mitchell (above), para 41), or where the delay otherwise arises from circumstances beyond the control of the party (again, Mitchell (above), para 43), these are likely to be persuasive factors in justifying a delay. So too, perhaps, where the claimant has deliberately taken steps intended to delay the applicant responding to the default judgment.
(11). By contrast, it will not generally behove an applicant (certainly a well- resourced applicant) to say that no application was made because he did not understand or appreciate the significance of a default judgment or the importance of acting with alacrity. See Regione Piemonte (above), esp. at para 45. This is because someone against whom a judgment has been made would generally be expected to take advice without unreasonable delay and act accordingly.
(12). Equally, where the reason for the delay relates to a conscious and deliberate decision on the part of the defendant to 'sit on his hands' in the hope, for example, that no steps would be taken to enforce the judgment or that it was likely that he would be able to avoid any such enforcement steps, this is in most cases unlikely to provide a good justification. See, e.g., Samara (above), para 52. I am not sure it is necessary to go so far as to say, as was suggested in Nolan (above), para 17, that applying to set aside a judgment only out of a concern that enforcement steps were about to be taken would constitute an abuse of process, but the question how one should properly characterise the position of a defendant who so acts is not a matter of any significance in the present context. I note also in this context that Burton J in Mid-East Sales Limited (above), was willing to set aside the default judgment notwithstanding what appears to have been a deliberate policy of non-engagement, but this simply reflects the fact that each case will turn on its own particular facts.
(13). Although there are suggestions in the authorities that the scale by reference to which delay, absent good reasons, is likely to be measured is days (Avanesov (above)) or perhaps weeks rather than months or years (Regione Piemonte (above); Tubelike Limited (above)), it is clear that there is no arbitrary time limit by which an application will need to be made; each case will depend on its own facts.
(14). Whilst delay and the existence or otherwise of a meritorious defence or some other good reason for trial are important, they are certainly not the only factors to which the court will have regard. On the contrary, the court will have regard to all the circumstances of the case and the overriding objective, including the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with the rules, which, in a sense, may serve to emphasise again the significance in this context of any delay.
- It was suggested in the course of argument that other factors to be taken into account when considering the exercise of its discretion might include, for example, (a) any attempt made by the applicant to mislead the court as to the facts or circumstances relating to the delay in making the application; (b) the prejudice or lack thereof that would be caused to the claimant in the event that the default judgment is set aside; and (c) the fact that the defendant has shown a general disregard for the rules of the court, in effect 'picking and choosing' the rules with which he would comply. Given the broad discretion the court is required to exercise, these, as it seems to me, are all factors to which regard might be had in an appropriate case. That having been said, matters of this kind appear to me materially less significant than, for example, the merits of the case or the promptness with which the application was made so that, whilst such matters may carry at least some weight, they are, for most cases, not likely of themselves to be sufficient to lead to the discretion being exercised in one direction or the other.
- One other matter identified as something to which regard might be had when considering the exercise of the court's discretion was the speed or lack thereof with which the claimant himself had proceeded in the prosecution of the claim in the first place. Whilst it would be wrong to say that a factor of this sort could never be relevant, I do find it difficult, for myself, to see in what way this should matter in a case, as here, where a claimant ensures that any necessary step required to be taken to pursue the claim and apply for judgment, is taken within the time permitted by the rules.
A real prospect of successfully defending the claim: the merits
- As already noted, it is a threshold requirement for any application to set aside a default judgment that the defendant be able to satisfy the court that he has a "real prospect of successfully defending the claim" (CPR 13.3(1)(a)).
- As foreshadowed above, the claim against Alvaro for which judgment has been obtained relates to the transfer on or about 31 May 2006 of some £2.6 million from the Account held by Marina with Credit Suisse in accordance with a written instruction given by Alvaro. According to Marina's claim, this was unauthorised and in breach of Alvaro's agreement not to transfer money from the Account for the benefit of anyone other than Marina save where she had expressly and in writing authorised the same.
- Alvaro strongly disputes the claim. He contends that the Account, opened in 1998, was simply a continuation of an arrangement Marina had put in place some time earlier to ensure that Alvaro, although estranged from the family in Venezuela, should have adequate funds for both himself and his own family in London. He contends that, to that end, Marina had in 1992 set up an earlier account with Credit Suisse (the Joint Account) into which she had made deposits for his benefit and from which he was permitted to make withdrawals as and when needed.
- According to Alvaro, Marina had always intended that the Account should be operated in precisely the same way as had the Joint Account, and that the only reason the arrangement operated since 1992 changed in 1998 when the Account was opened, was because he, Alvaro, was at this time going through a divorce and Marina did not wish funds she was making available to Alvaro to become a contentious part of any possible divorce settlement. Moreover, as Alvaro notes, whilst the Account was not formally a joint account, in 1998, at about the same time as it was opened, Marina signed a Power of Attorney providing Alvaro with substantial authority in respect of the Account.
- Furthermore, as Alvaro notes, the 1998 Power of Attorney contains no limitations on his authority in relation to the Account and Alvaro disputes the suggestion made in the claim that he at any time made any agreement with Marina, governed by English law, limiting his right to make withdrawals. Put shortly, Alvaro's contention is that the allegations made against him are simply untrue and the product of a vendetta that Ricardo has sought to pursue against him, in part at least in revenge for proceedings affecting Ricardo that Alvaro had instigated in Venezuela (referred to in more detail below).
- According to Alvaro, not only was his instruction to Credit Suisse to transfer the money from the Account not a breach of any agreement made with Marina, it was, he says, also entirely in line with a discussion he had with Marina in 2006 when she had visited him in England. During that visit, says Alvaro, he had advised Marina of the incorporation of Sumsti and that he proposed to transfer the funds from the Account to Sumsti. According to Alvaro, Marina had thought this a good idea.
- There is certainly some real support for Alvaro's account of events, not least given the fact that the 1998 Power of Attorney on its face did indeed give him authority to make transfers of the sort in question and that neither in that document, nor in any other document brought to my attention, is there any restriction imposed on Alvaro in relation to his exercise of that authority.
- One difficulty with Alvaro's account, however, is that, in 2007, two letters were written by Marina to Credit Suisse both of which might be taken to suggest that, contrary to Alvaro's evidence, Marina was not in fact aware of the transfer nor content with its having been made.
- Thus, on 10 January 2007, Marina appears to have written to Credit Suisse requesting that it transfer the funds in the Account to a different account at another bank. Alvaro's transfer had however already cleared out the Account, something apparently unknown to the writer of the January 2007 letter. Thereafter, on 15 March 2007, a further letter was written to Credit Suisse in Marina's name expressing dismay at the removal of the £2.6 million "without my authorisation and without even notifying me". This letter went on to suggest that any transfer from the Account was illegal and without authority and that, in the circumstances, Credit Suisse should provide compensation to Marina. By letter dated 14 May 2007, Credit Suisse responded to this, stating that the transfer had been made with appropriate legal instructions and drawing her attention to the 1998 Power of Attorney. Credit Suisse refused to pay Marina any compensation.
- This correspondence, taken at face value, is difficult to square with Alvaro's version of events, Alvaro's response, however, is to suggest that the letters, especially the one dated 15 March 2007, were not written by Marina at all, but were instead the work of Ricardo who had procured Marina's signature without her being told what the letter said. Alvaro makes a number of textual and contextual points in support of this contention. He also points to the fact that, following this exchange, nothing at all was done by Marina to pursue any claim against him for many years and that, according to him, neither Marina nor Ricardo levelled any accusation against him at that time relating to this transfer.
- Whilst there is some force in the points Alvaro makes, it is material in this regard to refer to meetings and discussions that took place in August 2013 between Alvaro and Ricardo Jnr. The meetings were in part secretly recorded by Ricardo Jnr and transcripts (in translation) produced at the hearing by Ricardo's solicitors. Alvaro initially objected to my being permitted to see these transcripts, but withdrew that objection on the morning of the hearing.
- It is apparent from these transcripts that the August 2013 discussions were wide-ranging, covering a number of the matters that were the cause of friction between Alvaro and Ricardo. It seems clear that the claim in England in respect of the transfer from the Account, or at least the possibility of such a claim, was among the topics touched upon, as was the attitude of Marina to that transfer. It will be necessary to come back to the substance of what was said in those discussions later in this judgment. For present purposes however, two matters are material.
- First, it is clear from those transcripts that Alvaro's explanation to Ricardo Jnr, in 2013, of the position in relation to the transfer from the Account, was generally consistent with his evidence to the court in these proceedings, namely that the Account was set up by Marina for his benefit and was simply a continuation of the 1992 arrangement in relation to the Joint Account. This would appear to provide some support for Alvaro's position. Secondly, and by contrast, Alvaro appears in these conversations to accept that Marina was outraged when told of the 2007 transfer, going so far as to accuse Alvaro of theft. This would appear to cut against Alvaro's suggestion that the March 2007 letter represented the view, not of Marina, but of Ricardo and that Marina had known and approved of the transfer.
- Pausing here, therefore, so far as concerns the merits of the defence, Alvaro's case is strongly supported by the express terms of the 1998 Power of Attorney and by the absence of any contemporaneous documentary evidence qualifying or countermanding that grant of authority. On the other hand, the letter of March 2007, at least on its face, is inconsistent with Alvaro's version, as is the fact that, Marina, at the time, had been angered by the transfer, as Alvaro himself appeared to accept in August 2013. Both these matters lend at least some credence to the possibility that there had indeed been a qualification or countermanding of the authority with which the 1998 Power of Attorney would otherwise have clothed Alvaro. There is no way, at this stage, of judging which story is more likely to be correct.
- Further, whilst it is fair to observe that both parties are able to make a number of other forensic points leading one way or the other, none of the points made comes anywhere near being decisive. It follows that whether or not Alvaro had authority to give the instruction for the transfer turns on a factual dispute not capable of being resolved at this time.
- In addition to the factual argument relating to the Account and Alvaro's authority outlined above, there is a further point taken by Alvaro in relation to the merits, namely his contention that the claim was in any event brought out of time and, as a result, is capable of being defeated by a limitation defence.
- As noted above, the transfer from the Account took place on or about 31 May 2006, the instruction having been given a little earlier. The Claim Form was however only issued on 9 January 2013, more than six and a half years later. Putting to one side the claim brought against Alvaro on the basis he was a trustee in respect of the Account for which a different limitation regime would apply, the failure to issue the Claim Form within six years means, contends Alvaro, that Marina's claim was in fact time-barred by virtue of the provisions of the Limitation Act 1980. The trust claim, says Alvaro, is misconceived for other reasons: in particular, says Alvaro, since Marina was the legal owner of the Account, it is difficult to see how Alvaro could properly have been regarded as the trustee and Marina the beneficiary in respect of that Account.
- Whilst there is, here too, some force in the points made on behalf of Alvaro, as Mr Casey QC, counsel for Alvaro fairly accepted, the nature of the various claims pursued against Alvaro means that the provisions of section 32(1)(c) of the Limitation Act 1980 need to be considered. This provides, so far as relevant, that:
"… [W]here in the case of any action for which a period of limitation is prescribed by this Act, either—
(a) the action is based upon the fraud of the defendant; or
(b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
(c) the action is for relief from the consequences of a mistake;
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it."
- It follows that Alvaro's limitation defence would only succeed if he was able to establish either that, as a matter of fact, the claims could not come within the ambit of section 32(1)(c), or, alternatively, that in any event, having regard to what Marina knew or could with reasonable diligence have discovered, even allowing for the postponement of the limitation period, this would still have expired prior to the date on which the Claim Form was actually issued.
- Mr Casey drew attention in this regard to the fact that Marina was entitled to receive statements in relation to the Account. This, he suggested, was likely to mean that the state of the Account, including the transfer of 31 May 2006, either would or could with reasonable diligence have been discovered fairly quickly.
- Whilst, again, I consider that Mr Casey's point has at least some force, as already noted, the issues to which the potential limitation defence gives rise are all issues likely to turn on facts not capable of resolution at this time.
- Put shortly, having regard to the matters set out above, it is my view that, were the default judgment to be set aside, Alvaro would have at least a real prospect of successfully defending the claim. Indeed, this was a point that Mr Cunningham QC, counsel for Ricardo, very properly and sensibly conceded at the start of the hearing.
- This, of course, is sufficient to enable Alvaro to satisfy the threshold requirement set by CPR 13.3(1) so that the question whether to set aside the default judgment simply becomes one for the discretion of the court. However, as noted above, the merits of the defence may be relevant not only to the threshold test set out at CPR 13.3(1), but also to the manner in which the court's discretion should be exercised. This is pertinent in the present case because, according to Alvaro, even at this time it is plain that he has a very strong defence and not merely a defence that has a "real prospect" succeeding: this, he says, is something to which the court should give substantial weight at the discretion stage.
- I certainly accept, as noted above, that on the materials currently available to the court Alvaro's defence has at least a "real prospect" of succeeding. However, given the many unresolved disputes of fact on which any final determination of the merits would be likely to turn I do not feel able to go much beyond this rather general assessment of the merits. Whilst there are certainly good arguments available to Alvaro, there are, as noted above, equally, material difficulties with his position.
- With this in mind, I consider below whether the court should exercise its discretion to set aside the default judgment.
Factors relevant to whether the default judgment should be set aside
- In terms of the matters relevant to whether, in the circumstances of this case, the default judgment should be set aside, it is convenient to deal first with the factor expressly mandated for consideration by CPR 13.3(2), namely "whether the person seeking to set aside the judgment made the application to do so promptly."
- As noted above, Alvaro accepts he became aware of the judgment in May 2014. Ricardo contends that Alvaro learned of it some time earlier. However, as I explain further below, I have for the purposes of the matters I am required to determine in these applications proceeded on the basis that the relevant date for Alvaro's knowledge was indeed in May 2014.
- There is, as mentioned above, some general support in the authorities for the proposition that the starting point for considering whether a defendant has acted promptly in applying to set aside the judgment, is the date when the defendant acquired knowledge of the judgment. This was also common ground between the parties, making it unnecessary for me to consider whether the court's approach should be any different where, as here, knowledge of the judgment precedes service of that judgment (in this case by some 10 months).
- Although Alvaro had knowledge of the judgment at least by May 2014, as already noted above, it was only some thirteen months later, on 18 June 2015, that his application to set aside that judgment was made.
- On the face of it and in the context of the particular emphasis put by CPR 13.3(2) on the need for a prompt application to be made, as well as the indication in the authorities that delay should in general be measured in days or perhaps weeks rather than months, this would appear at first sight to be an unacceptably long delay. However, since it is important when assessing whether a defendant has acted promptly, always to have regard to the reasons identified and justifications advanced for any delay, it is necessary to place the skeletal facts identified above within their proper context.
- Placing the facts relevant to the present application in context requires that I set out some further background to the unfortunate dispute that enveloped Alvaro, Ricardo and the family. I have sought, below, to keep this as brief as possible.
The factual context in more detail
- The acrimony affecting relations between Alvaro and his family in Venezuela stretches some way back in time, to 1991, when Alvaro left Venezuela following his dismissal from a family company amidst suggestions that he was responsible for the organisation of a strike against that company. It is unnecessary to get any further involved in the detail of the accusations and counteraccusations or the various skirmishes to which this gave rise.
- It is however relevant to note that, in 2007, many years after these family troubles had emerged, Marina suffered a stroke. By September 2011, both her health and that of Salvador - her husband and the father of Alvaro, Ricardo and another brother, Alejandro (who had long suffered from mental illness) - had sharply declined. On 20 September 2011, Salvador passed away. With Salvador deceased and Marina in poor mental and physical shape, in late 2011 Ricardo was appointed as legal guardian of Alejandro. At around this time, Ricardo also appears to have taken greater control of Marina's personal affairs, having already obtained some authority to act on her behalf under a Power of Attorney, purportedly concluded in April 2011.
- This was the general background when, in March 2012, Alvaro filed a criminal complaint against Ricardo in Venezuela alleging, amongst other things, that the 2011 Power of Attorney mentioned above was invalid and that Ricardo had been mistreating Marina and Alejandro. This was followed, on 28 November 2012, by Alvaro causing a search to be conducted by criminal investigators of Marina's residence, ostensibly to verify the state of Marina's health. This involved seven officials of the Venezuela Prosecutor's Office and the Forensic Criminal Investigations Unit entering the premises with a search warrant, an experience that is said to have left Marina deeply troubled. Shortly thereafter, on 12 December 2012, a search of Ricardo's office was carried out by criminal investigators apparently with a view to collecting documents relating to family companies, again apparently at the instigation of Alvaro.
- According to Alvaro, it was his taking of steps in Venezuela against Ricardo of the kind described above, that led Ricardo to begin to make inquiries about the Account and, indeed, that resulted in Ricardo deciding to launch the present proceedings in this jurisdiction. Whether or not this is so, it is certainly correct that on 8 January 2013, barely a month after the search of Ricardo's offices, the litigation friend certificate was signed by Ricardo with the Claim Form being issued on the following day.
- At around the same time, Ricardo Jnr began to correspond with Alvaro via email, leading to a meeting between them at Heathrow airport on 18 February 2013 when Ricardo Jnr was passing through on his way to his honeymoon.
- As noted above, following this, on 29 April 2013, Master Price gave permission for service of the Claim Form on Alvaro by email and, consequent on this, on 2 May 2013, the Claim Form and Particulars of Claim were served in this way on Alvaro, although, as noted above, Alvaro claims that he did not discover the contents of the email until very much later.
- Not long thereafter, on 30 May 2013, Ricardo's wife, Andry Roque De Armas (Andry Roque), commenced interdiction proceedings in Venezuela the purpose of which was apparently to assess whether or not Marina had mental capacity. This was followed, in June 2013, by a visit by representatives of the 11th Municipal Court of Caracas to Marina's home. The following day, 21 June 2013, Alvaro paid a surprise visit to Marina, accompanied by a camera crew, security guards, locksmiths and lawyers. This led to an altercation with Andry Roque, and to Alvaro being arrested and taken away by police, although he was later released.
- On 9 August 2013, the 11th Municipal Court in Caracas determined that Marina did not suffer from any disabling intellectual defects and that her legal capacity to act remained intact. On the following day, 10 August 2013, Ricardo Jnr and Alvaro began a meeting at Brown's Hotel in London that continued over three days, until 13 August 2013. These are the meetings parts of which were recorded and are evidenced by the transcripts to which I have already referred.
- As noted above, two weeks later, on 27 August 2013, judgment in default was granted against Alvaro for the sum of £4,107,371.67. Later that same day, Marina died in Venezuela. This led to something of an abeyance in terms of further steps taken in the English litigation in part because, before Ricardo could be appointed administrator of Marina's estate in the UK, certain administrative steps were required to be taken, including the making of declarations to HMRC.
- In the meantime, in September and October 2013, there were, according to Jesus Escudero, a lawyer engaged by Ricardo in Venezuela, a number of calls that took place between himself and Alvaro. During one of those calls Mr Escudero was introduced to a Mr Carlos Vivas. Mr Escudero says in his evidence that he was told by Alvaro that Mr Vivas was his lawyer and was authorised to negotiate with Mr Escudero with a view to reaching a global settlement in relation to all issues about which the brothers were in dispute. According to Mr Escudero, it was in this context that, on 6 November 2013, he told Mr Vivas about the default judgment. The following day, 7 November 2013, Mr Escudero sent Mr Vivas a copy of the judgment. This was under cover of an email which (in translation) said the following:
"As I mentioned in our meeting, [Marina], through her agents, sued Alvaro in the courts of London for having appropriated funds she kept deposited at Credit Suisse.
As requested, I attach a copy of the decision, which is dated August 27, 2013. Alvaro knows of the existence of judgment and can tell you more about the facts giving rise to the judgment and the content of the request, given that this was sent by the authorities in due course and he also discussed the case with his nephew Ricardo [Jnr] when they met in London.
The judgment in the Chancery Division of the High Court of Justice and the order amounts to £4,107,371.67. This sum generates interest of 8% until it is paid by Alvaro.
I will be pleased to send you any further information you may require."
- Mr Vivas acknowledged receipt of the email on that same day. However, on 26 November 2013, Mr Vivas sent a WhatsApp message to Mr Escudero informing him that contact had been lost with Alvaro. It is Alvaro's evidence that Mr Vivas at no time passed on to him the information about the judgment, and, indeed, that Mr Vivas was never his lawyer but, at most, only a facilitator or go-between. His lawyer at this time, says Alvaro, was Ms Liliana Betancourt.
- Among the many actions proceeding in Venezuela in early 2014, was a claim launched by Alvaro, on 14 April 2014, to have Ricardo removed as Alejandro's legal guardian. It was in this context that, on 5 May 2014, evidence was served on behalf of Ricardo the ostensible purpose of which appears to have been to suggest that Alvaro would not be a suitable guardian for Alejandro. That evidence referred to the default judgment granted by the High Court. It identified the nature of the claim and stated the amount of the judgment. It also exhibited a copy of the judgment.
- This evidence was responded to on behalf of Alvaro by Ms Betancourt, Alvaro's Venezuelan lawyer, on 15 May 2014. Ms Betancourt (according to the translation before this court) submitted that Alvaro had previously had no knowledge either of the claim or the judgment. She also referred in this context to the existence of the 1998 Power of Attorney and sought to pour scorn on the suggestion that had been made by Ricardo that Alvaro had stolen the money from the Account. She continued:
"As for the rest, decisions of Equity [presumably a reference to the Chancery Division of the High Court] do not have or cause legal effects in the Venezuelan jurisdiction, but they do in the jurisdiction offshore where [Ricardo] assisted by the collaboration of his son and daughter from his first marriage…and through several intermediary companies, rushed to silently place great part of the fortune of his parents…"
- Pausing here, therefore, it is clear that, at this time, Alvaro would have been aware of the following, namely (a) that there was a judgment against him in the High Court in an amount of over £4 million; (b) that this related to a claim brought in the name of Marina in respect of which Ricardo had acted as her litigation friend; (c) that Reed Smith were the solicitors acting for the Claimant in relation to this dispute; and (d) that if he did not pay the amount for which judgment had been given, there might be enforcement steps taken against him, if not in Venezuela, then certainly in other jurisdictions in which he might have an interest in assets.
- Despite knowing of (at least) these matters, and despite the fact that he was receiving legal advice from his lawyers in Venezuela, and despite his obvious intelligence and experience of litigation and the fact that he had lived in England for over 20 years so that this was not a jurisdiction with which he was unfamiliar, as has already been noted, it was not until February 2015, that is to say after another nine months had passed, that Alvaro decided to consult English lawyers about his position. I return to this below.
- Back in Venezuela, the flurry of claims continued. Thus, on 30 June 2014, Alvaro applied to the Venezuelan court for a number of injunctions against Alejandro's assets, with such injunctions being granted in July 2014 although subsequently revoked in December 2015. On 3 July 2014, Alvaro's petition to remove Ricardo as legal guardian of Alejandro was rejected by the Venezuelan court, a decision from which Alvaro unsuccessfully appealed. Alvaro, however, continued to take steps in Venezuela in relation to Alejandro, the precise details of which are unimportant for present purposes.
- Whilst much was happening in Venezuela, matters moved far more slowly in England. However, on 9 January 2015, Ricardo was granted letters of administration over Marina's estate. Not long thereafter, on 3 March 2015, Reed Smith issued an application to substitute Ricardo as Claimant in place of Marina as well as for an order allowing for service of the judgment on Alvaro by email. An order to this effect was made by Master Price on 20 March 2015. On 24 March 2015, a copy of Master Price's order, together with the judgment, was duly served on Alvaro by email. I have already noted that it is Alvaro's evidence that he did not discover the content of the email at that time, although he had long since been aware of the judgment anyway.
- By this time, of course, Alvaro had instructed Mishcons who, on 3 March 2015, had submitted a 'non-party' office copy request form to the court seeking copies of various documents arising out of the claim, including the Claim Form, the Particulars of Claim, Public Judgments and Public Orders. It is not clear why this was submitted as a 'non-party' request: the suggestion by Mr Cunningham on behalf of Ricardo, is that this was part of an attempt by Alvaro to keep as low a profile as possible in relation to the English proceedings and to avoid any acknowledgement of the fact that he had instructed solicitors within the jurisdiction in relation to the claim. Whether or not this is so, by 16 March 2015, the court had responded to the request and provided Mishcons with the documents sought.
- It is right to observe that, even during this period, Alvaro continued to be active in the Venezuelan courts, filing a number of petitions or claims against Ricardo. So far as I can tell, Alvaro has not generally been successful in his Venezuelan actions, although this is not a matter of particular relevance in the context of the present applications.
- On 28 April 2015, Mishcons wrote to Reed Smith asking for certain documents to be provided, in particular those submitted to the court in support of the application for service by email, with a further chasing letter as well as a letter seeking further documents being sent on 5 May 2015. On 6 May 2015, Reed Smith provided Mishcons with most of the documents they had sought. Further correspondence ensued between the solicitors. On 1 June 2015, Alvaro obtained from the court a copy of the litigation friend certificate signed by Ricardo on 8 January 2013.
- On 12 June 2015, Reed Smith applied to the High Court for a certificate of attestation of the judgment, as a prelude to seeking to enforce the judgment against assets that Alvaro might have abroad. Shortly thereafter, on 18 June 2015, Alvaro issued the present application.
Explanation offered by Alvaro for the delay
- In his evidence to this court, Alvaro has sought to explain his response to finding out about the default judgment by placing this firmly in the context of the ongoing litigation battle being conducted between the parties in Venezuela. He says:
"These legal proceedings in Venezuela have been very heavy and demanding: as a result (and also because I did not understand the significance of the Default Judgment) my present application is being issued now although I first learned of the Default Judgment in May 2014…. I did not appreciate then [in May 2014] that I needed to act more promptly to apply to set it aside. My understanding at the time was that the Default Judgment was not a priority. I believed that whilst it was damaging to my reputation it was not something that I had to deal with immediately. In February of this year upon the recommendation of my Swiss lawyer I instructed [Mishcons] to advise me and … it was only at this point did I discover that there was a requirement under English law to act promptly when making an application to set aside a default judgment (there is no equivalent obligation under Venezuelan law). On 26 February 2015 I instructed [Mishcons] to obtain office copies of the court records pursuant to CPR 5.4C…On 16 March 2015, the Court provided [Mishcons] with statements of case and some of the orders that have been made for this matter…
Since then I and my legal team have been working on the preparation of these applications. I appreciate that some time has passed but there has been a lot of material to cover, and I understand it is important to deal with the material fully. For the avoidance of doubt I should say therefore that these applications are not in any way made responsively to Ricardo's recent activity in taking steps to have the Default Judgment enforced abroad…"
- In other words, the matters on which Alvaro sought to rely in his statement as explaining any lack of promptness in making the application, were (a) that he was very occupied by the ongoing demands of the litigation in Venezuela and (b) that he did not at that time have a proper understanding of the need to challenge a default judgment promptly and that it was only nine months later that he even sought advice from English solicitors.
- In the course of the hearing, Mr Casey for Alvaro added further flesh to these reasons. He suggested that, in considering whether this application has been made promptly, account should be taken of the fact that, when in May 2014 Alvaro was confronted by the default judgment, he was beginning from a 'cold start', there having been no pre-action correspondence between the parties in which the substance of the dispute might have been aired and it being Alvaro's contention that he had not opened the email containing the Claim Form until some-time in 2015 so that he would have had no clear idea as to what the claim was about. Mr Casey suggested also that, in any event, Alvaro could not actually have made the application to set the judgment aside at any time prior to 20 March 2015, this being the date when Ricardo became Claimant in place of the deceased Marina. Until this point, observed Mr Casey, Marina's death would have meant that the proceedings were in stasis.
- In addition to the foregoing points, Mr Casey also places reliance on what he says would have been the position but for the fact, as Alvaro contends, that Ricardo Jnr had wrongly procured the order allowing service of the Claim Form by email. As already noted above, Alvaro's primary contention is that the order permitting service of the Claim Form by email be set aside with the consequence that there never was effective service of the Claim Form so that, on this basis alone, any judgment obtained in these proceedings must necessarily fall. I deal with that application below. However, and by way of a fall back position, Mr Casey contends that, in the context of considering whether the default judgment should be set aside, regard should be had to the counterfactual that would have existed but for Ricardo Jnr having, as Alvaro contends, misled the court. On this hypothesis, suggests Mr Casey, and in this counterfactual world, Master Price would have required the Claim Form to be served by normal means and Alvaro would most certainly have been alerted to the existence of the proceedings and would have instructed solicitors to deal with it, all of which would have meant, suggests Mr Casey, that there never would have been a default judgment.
- Before setting out my conclusions in relation to these arguments, there are two preliminary points that I should mention. First, I should make clear that, as already noted above, when considering whether Alvaro has acted promptly in seeking to set aside the judgment, I have proceeded on the basis that the date on which he acquired knowledge of the judgment was May 2014. I have taken this date notwithstanding the evidence of Mr Escudero referred to above, suggesting that Mr Vivas, whom he understood to be Alvaro's lawyer, was informed about the judgment in November 2013. This is not because I reject Mr Escudero's evidence, but rather because I consider it neither necessary in light of the view I take about Alvaro's delay (explained below), nor appropriate in circumstances where no request was made to cross-examine Alvaro on his evidence in this regard, to make a finding on this issue that involves disbelieving Alvaro's evidence.
- Secondly, and despite the existence of a lively debate about this, I also make no finding as to the date when Alvaro in fact learnt about the service of the Claim Form and the institution of the High Court proceedings. More particularly, as noted above, Alvaro claims not to have opened the email enclosing the Claim Form sent to him in May 2013 prior to doing so in the spring of 2015. He also claims not to have understood from anything said to him by Ricardo Jnr in the course of their discussions in August 2013 that proceedings in England had been instituted, so that, according to him, the first time he learned about the proceedings was when he learned of the judgment having been obtained in May 2014. Against this, however, Mr Cunningham, on behalf of Ricardo, was able to direct my attention to a number of pieces of evidence, including especially passages in the transcripts of the August 2013 meetings, which suggest that Alvaro might well have become aware of the proceedings, if not in May 2013 when he was sent the email to which the Claim Form was attached, then certainly by August 2013. However, given the approach I have taken to this part of the application and the fact, as noted above, that it is the date Alvaro came to know about the default judgment, rather than the time when he knew about the institution of the proceedings (which necessarily would predate the judgment) that is relevant when considering the promptness or otherwise of Alvaro's application to set aside the judgment, I have not found it necessary to make any findings on this issue.
- Having cleared those two preliminary points out of the way, I turn next to deal with the reasons and justifications advanced by Alvaro for the delay in making the application to set aside.
- It is convenient to deal first with the suggestion made by Mr Casey for Alvaro, that, in assessing whether or not Alvaro acted promptly in making the application to set aside the judgment, the court should in effect ignore the period between 27 August 2013, the date of the judgment, and 20 March 2015, the date of the order substituting Ricardo as Claimant, on the basis that, following Marina's death, the proceedings were in stasis. If Mr Casey is right about this, this would have the effect of reducing the period of delay from thirteen months (May 2014 – June 2015) to three months (March 2015 – June 2015).
- Mr Casey contends that, on the death of Marina, whilst the action did not abate, the fact remains that for the purposes of the proceedings the Claimant (Marina) ceased to exist. Accordingly, he suggests, unless and until the position was somehow remedied, no step in the action could be taken by Alvaro. Reference was made in this regard to the decision of the Court of Appeal in Piggott v Aulton  C.P. Rep. 35 and to the earlier case of In re Amirteymour  1 WLR 63. I was referred also to a passage from Williams, Mortimer & Sunnucks (20th ed) at para 64-18, making the point that "[t]he authority of a solicitor in proceedings is determined by the death of his client". All of this seems to me to be plainly correct.
- There was some debate before me as to the extent to which Alvaro, had he wished to, could have made an application under CPR 19.8(1)(b) for the court to order that the claim proceed in the absence of a person representing the estate of the deceased or that a person be appointed to represent the estate of the deceased.
- In the end, however, it seems to me that the insuperable difficulty for Alvaro in relation to this issue is the absence of any evidence whatsoever that the death of Marina, and the stasis which resulted, in fact constituted either a reason or a justification for his inaction. Put differently, this is not a case in which Alvaro says that, in the period following his learning about the judgment in May 2014, he gave any consideration at all to seeking to set aside the judgment but was unclear how to proceed given the death of Marina. Nor does Alvaro anywhere say in his evidence that, but for the legal stasis consequent upon Marina's death, he would have made the application earlier than he did. On the contrary, as noted above, the only reasons advanced by Alvaro in the evidence for the delay are that (a) he was very busy dealing with the ongoing litigation in Venezuela, and (b) he did not understand the importance of acting promptly when dealing with a default judgment obtained from a court in England. Indeed, as noted by Mr Cunningham for Ricardo, the first occasion on which the stasis point was raised was in Alvaro's skeleton argument, exchanged two days prior to the hearing of the application.
- Moreover, it would in any event have been difficult to square any suggestion by Alvaro that it was the delay on the part of Ricardo in securing letters of administration and an order substituting himself for Marina as Claimant which constituted a reason or justification for the delay, with the facts, and more particularly with the lack of any application being made on his part in the immediate aftermath of Ricardo becoming Claimant on 20 March 2015. The fact is that, even then, no application was made for some three months and not until Ricardo took steps towards the enforcement of the judgment.
- It follows that in my view, at least in the context of considering whether Alvaro acted promptly in making the application, the fact that, following the obtaining of the judgment, Marina died so that no step could be taken in the action is a matter that can be put to one side as a justification or reason that would explain Alvaro's delay. It plainly did not constitute such a reason or justification at all. Whilst this is so, however, the fact that the claim went into stasis may still be a matter to which regard will need to be had when considering the position in the round, i.e., when looking at factors additional to delay, a point to which I return below.
- The effect of the conclusion above is that the period of delay with which I am concerned remains thirteen months, and the reasons and justifications to be considered remain those advanced by Alvaro in the evidence, namely that (a) he was very busy dealing with the ongoing litigation in Venezuela, and (b) he did not understand the importance of acting promptly when dealing with a default judgment obtained from a court in England.
- In my view these matters do not constitute adequate or sufficient reasons or justifications for the thirteen month delay before the application to set aside was made. I would make the following observations:
(1). Whilst it may be possible to imagine circumstances in which being busy, even very busy, with other matters might provide a justification for a short delay, measured in days, before making an application to set aside a judgment, it is most unlikely that being busy could, save in an exceptional case, begin to justify a delay as long as thirteen months.
(2). Moreover, even if Alvaro was busy dealing with litigation in Venezuela, it cannot be said that this left him no reasonable time to deal with the English litigation. Indeed, on his case (see further below), the English litigation was just another front in the litigation war being waged between himself and Ricardo: if Alvaro had time, as he appears to have had, to pursue battles on the Venezuelan front, it is difficult to see how it can realistically be said that he had no time to deal with an issue that had arisen on the English front.
(3). As already noted above, Alvaro is plainly an intelligent individual, well accustomed to litigation and with ready access to legal advice. He was also someone who had lived in England for many years. Even if, as he says, he did not himself appreciate the significance of a default judgment having been awarded against him, it is difficult to understand how it was that, once the judgment came to his attention in (at the latest) May 2014, he did not take any steps to receive advice about his position from someone familiar with English law. This is all the more so given that, as is clear from the evidence given by Ms Betancourt in response to Ricardo's deployment of the judgment in the Venezuelan proceedings, Alvaro well understood that it was a judgment that might be enforced against his assets, and that, on his case, there was no basis whatever for the claim.
(4). Moreover, by February 2015, Alvaro appears to have discussed the judgment with three sets of lawyers, Ms Betancourt in Venezuela, his Swiss lawyer, and also Mishcons. But still no application was made to set aside the judgment for a further four months.
(5). In any event, as noted by Christopher Clark LJ in Regione Piemonte (above), para 45, want of familiarity with the English court process will not generally be regarded as a good justification for a delay, certainly not, in my opinion, one of this length involving a defendant having Alvaro's resources.
(6). Nor do I regard the fact that Mishcons were engaged in a process of gathering in documents as justifying the further delay of four months following their instruction. It would have been immediately clear that a default judgment had been obtained and that, in accordance with the English procedural rules, an application to set aside needed to be made promptly.
(7). It is, in my view, also difficult to regard the fact that the application to set aside was only made after Ricardo had taken legal steps to enable the judgment to be enforced as merely a coincidence. I have already referred to the fact that there is some authority for the proposition that a delay prompted by the defendant adopting a 'wait and see' approach in the hope that the judgment will 'go away' or otherwise be practically irrelevant because of a failure to enforce, will not in general be regarded as a good reason for the failure to act promptly in issuing the application. See, e.g., Samara (above), para 52.
- So far as concerns the suggestion by Mr Casey for Alvaro that regard must be had to, as he contends, the fact that Alvaro, when he came to learn of the judgment in May 2014 was starting 'cold' because, so it is suggested, he was not previously aware of the claim, not least because there had been no compliance with the pre-action protocols which would have ensured he was alive to the existence of a dispute, I am willing to accept that, in an appropriate case, a defendant who has no prior warning even of the existence of a dispute should be entitled to some leeway when it comes to assessing if he has acted promptly in making the application to set aside. In the present case, however:
(1). Whether or not Alvaro had seen the Claim Form when it was emailed to him in May 2013, it is plain from the transcripts of the meetings between himself and Ricardo Jnr in August 2013 that he would certainly have become aware of the existence of at least a dispute (if not a claim) relating to the May 2006 transfer of funds from the Account by no later than then. It follows that Alvaro would have been well aware, in May 2014, of the nature of the claim to which the judgment related, a fact that is in any event apparent from the evidence given by Ms Betancourt to the Venezuelan court at the time.
(2). In any event, even allowing for some leeway for a defendant receiving information about the judgment 'cold', I find it impossible to see how this could justify a delay running to thirteen months, the period with which we are concerned in the present case.
- It is necessary, next, to address Mr Casey's suggestion that regard should be had to the counterfactual that would have existed but for Ricardo Jnr having, as Alvaro contends, misled the court in relation to the order made by Master Price on 29 April 2013 permitting service by email. As already noted, according to Mr Casey, in this counterfactual world, (a) Master Price would have required the Claim Form to be served by normal means, (b) Alvaro would as a result most certainly have been alerted to the existence of the proceedings and would have instructed solicitors to deal with it, and, (c) this would have meant that there never would have been a default judgment. As to this:
(1). This argument obviously proceeds on the basis that the application for the order permitting service by email would not have been made had all relevant facts and matters been revealed to Master Price. As explained below, I do not accept this. It follows that, for this reason alone, this argument falls away.
(2). In any event, whilst I can see how, if the argument were well founded on the facts it might well be relevant generally to the question whether the court should be willing to set aside the default judgment, it does not seem to me that an argument of this sort is capable of being usefully deployed when considering the promptness with which the application to set aside is made, concerned as this should be only with the extent, reasons and justifications for the delay that actually existed, rather than what might hypothetically have happened had the procedural steps in the litigation happened in a different way.
(3). The same point can, to an extent, also be made about the failure of a claimant to comply with the pre action protocols and what might have happened had there been compliance, although the failure to comply with the pre-action protocols may at least be relevant to a consideration whether any delay in making the application might be explained by the defendant learning about the judgment 'cold', as above.
- In summary, and for all the reasons identified above, in my view the application to set aside the default judgment was not one made promptly and no adequate or sufficient reason or justification has been put forward such as would excuse Alvaro's very substantial delay in making the application. That, of course, is not the end of the matter, since, as already noted, the promptness of the application is only one factor, albeit a mandated and important one, to be taken into account in deciding whether or not the judgment should be set aside where, as here, the defendant has a real prospect of successfully defending the claim.
- I turn next to consider the other factors of which account should be taken in deciding whether or not the default judgment should be set aside. In considering these other factors, I keep in mind the comments made by Christopher Clark LJ in Regione Piemonte to the effect that the court's discretion under CPR 13.3 is to "be exercised in the light of all the circumstances and the overriding objective", that the court is to have "regard to all the factors it considers relevant of which promptness is both a mandatory and an important consideration" and that, since "the overriding objective of the Rules is to enable the court to deal with cases justly and at proportionate cost" including "enforcing compliance with rules, practice directions and orders, the considerations set out in CPR 3.9 are to be taken into account".
Other factors of which account should be taken
- Among the other facts of which account is to be taken in deciding whether to set aside the default judgment are the following.
- First, there is the strength of the defence. As I have noted above, Alvaro would, at the least, have a real prospect of successfully defending the claim. I have already noted that it is difficult to go further than this given that the strength of the arguments on which reliance is placed by Alvaro all ultimately turn on issues of fact and cannot be resolved at this stage. Be that as it may, I regard the merits of the defence as a material and positive factor in favour of setting aside the judgment, although I do not regard the merits of the defence, as things stand at the moment, as being so strong as to mean that it would, taken alone, be sufficient to overcome whatever other factors may point in the other direction.
- Secondly, Mr Casey contends that regard should be had to what he suggests was a deliberate attempt on the part of Ricardo that the claim should 'fly below the radar' so that Alvaro would only become aware of its existence when it was too late and judgment had already been obtained. In my view, however:
(1). The suggestion that Ricardo was concerned that Alvaro should be kept in the dark about the existence of the claim until too late is difficult to square with the facts. In particular:
(a). The reality is that, whether or not it might have been better had the email attaching the Claim Form contained information in the subject box alerting Alvaro to what was contained in the attachment, it would still have been clear to Alvaro simply by looking at the email that it was from Reed Smith (albeit that Alvaro's position is that he was not aware of the firm at the time) and, had the email been opened, he would have seen that the Claim Form was attached. Given this, I cannot accept that there was, here, a deliberate scheme intended to reduce the likelihood of Alvaro becoming aware of the existence of the claim.
(b). Equally, whether or not Alvaro, in his discussions in August 2013, did appreciate that proceedings had by then already been launched, there was certainly at least some talk in the meetings about the possibility of a claim and, here again, I do not accept that there was any deliberate attempt on the part of Ricardo Jnr to withhold information about those proceedings from him.
(c). Moreover, whether or not there was any attempt to keep Alvaro in the dark about the claim for as long as possible (and, as I have made clear above, I do not accept that there was), it is common ground that, from May 2014, Alvaro knew about the judgment and it is only from that point that his response (prompt or otherwise) to the judgment (and the claim) is to be assessed. As noted above, it is my view that Alvaro failed promptly to apply to have the judgment set aside without adequate justification for the delay, and the question whether there was any attempt, prior to this, to keep him in the dark, does nothing to change that conclusion.
(2). Put differently, it seems to me that whatever was done, or not done, by Ricardo in the period prior to May 2014 when Alvaro became aware of the judgment but failed to act promptly in setting it aside, is causatively irrelevant to Alvaro's failure so to do. Furthermore, whilst, in cases where this is so, the fact that a claimant had sought to conduct the proceedings in a manner intended to enable judgment to be obtained without the defendant properly appreciating what was happening might well be a relevant factor to be taken into consideration at the discretion stage of CPR 13.3, this is simply not that sort of case.
- Third, there is, again, the suggestion by Mr Casey that regard should be had to what would have happened in the counterfactual world that would have existed, he says, but for Ricardo Jnr misleading Master Price into making the order of 29 April 2013 allowing service by way of email. As to this, however:
(1). Again it seems to me that, in an appropriate case, the fact that proceedings have taken a wrong turn and that, had matters been dealt with properly it might be said that the claim would never have reached a stage at which default judgment was obtained, is properly a matter of which account might be taken when considering whether to set aside that default judgment.
(2). But even in such a case, the significance of this factor should not be overstated. After all, whatever the history of a claim, the rules of the CPR permit a court to set aside a default judgment provided that the defendant is able to satisfy the court that it ought to do so. An aggrieved defendant need only ensure, where he has a defence that has a real prospect of success, that the application is made promptly in order to have at least a reasonable chance of such an application being successful. And, unless the procedural step that has in the past gone wrong can be said to be responsible, directly or indirectly, for the way in which the defendant has approached the making of the application to set aside, any past procedural irregularity may well be regarded as of insufficient weight to overcome the importance attached by the court to the finality of judgments and the need to comply with the court's rules and procedures.
(3). Moreover, in the present case, as I have already noted (and further explained below), I do not accept that these proceedings have taken a wrong turn or that the turn that has been taken explains or exonerates the delay in making the application to set aside. In particular, I do not regard the fact that service took place by email as a wrong turn in the litigation. In my view, whether or not Alvaro decided to read the email by which service was accomplished was a matter entirely within his own control (see Mitchell (above)) and Alvaro's failure to look at the email is not something for which anyone else is properly to blame. Nor am I satisfied that the course these proceedings would have taken would have been that different to the course in fact followed even if the mode of service in this case had been by way of one of the normal methods of service and I note in this regard that Alvaro has provided no evidence as to what he would have done had service been other than by way of email.
- Fourth, and of a similar nature, as already mentioned, Mr Casey points to the failure on the part of Marina or Ricardo to comply with the pre-action protocols so that the issues in the case were never debated in correspondence before Claim Form was issued, as well as what he says were the failings on the part of Ricardo in relation to obtaining the litigation friend certificate, as factors of which account should be taken in the exercise of the discretion. As to this:
(1). As foreshadowed above, factors of this sort are, in my view, matters to which regard might properly be had in the context of CPR 13.3(2). The weight given to them will obviously depend upon the circumstances particular to the case in which they arise.
(2). However, as noted above and explained in more detail below, I do not accept that the failings in relation to the production of the litigation friend certificate were as fundamental or as serious as Alvaro has contended and, to my mind therefore, little weight is to be attached to any deficiencies existing in that regard.
(3). Moreover, whilst it is fair to say that there was a failure in this case to comply with any applicable pre-action protocols, I do not consider that this was causatively linked to the way in which Alvaro responded to the claim or the judgment in default subsequently obtained, and I note in this regard that there is no evidence from Alvaro as to what he would have done differently had there being compliance with the pre-action protocol. This being so, this is not a matter which, to my mind, should carry much weight in any consideration as to whether the judgment should be set aside.
- Fifth, Mr Cunningham for Ricardo suggested that I should have regard to the fact that Alvaro was, as he contended, evasive, guilty of abusive conduct, and vexatious. The evasiveness was said to relate to an exchange that took place in the discussions of August 2013, in which Alvaro is recorded as saying, "No one will never ever know where I live. I changed the scenario completely. Moreover, due to my work issues…I have to maintain a number of precautionary measures and special resources with regards to my true whereabouts" and the refusal of Alvaro, even in the context of witness statements made for this hearing, to provide details of his residential address. The abuse of process was said to relate to Alvaro not applying to set aside the default judgment until enforcement steps were taken. The vexatious conduct was said to relate to the propensity of Alvaro, as it was put by Mr Cunningham, to think he could 'pick and choose' the rules of court with which he was willing to comply, ignoring those with which he wished not to comply. In this context, I was referred to CPR 32.8, which requires a witness statement to comply with the requirements of Practice Direction 32, something that Alvaro failed to do by being unwilling to include his residential address, contrary to paragraph 18.1 of that Practice Direction. I was also referred to Alvaro's unwillingness to make his passport available for inspection, said to be contrary, in the circumstances of this case, to CPR 31.14. I was, in addition, also referred to the failure of Alvaro, until the eve of the hearing, to serve a draft defence, a matter apparently regarded in Regione Piemonte (above), para 60 – certainly at first instance - as "most unsatisfactory".
- A further factor of this sort on which reliance was placed by Mr Cunningham was his contention that Alvaro had been less than frank in his evidence about the discussions of August 2013 and his knowledge, for example, of the existence of the claim in this jurisdiction, something, he said, was a matter that should also weigh in the balance against setting the judgment aside.
- As to these matters:
(1). Again, as noted above, there is in my view no reason in principle why matters of this kind should not be relevant to the court's exercise of discretion. After all, the defendant comes before the court seeking an indulgence and it hardly behoves a party in that position to be anything other than open, honest, cooperative and rule-abiding.
(2). However, in the present case I regard these matters as being of little material moment. In particular:
(a). The unwillingness of Alvaro to reveal details of his residential address and personal circumstance seems to me to have been a consequence of what appears to be his compelling need for privacy in dealing with his family, rather than in any way evincing a desire on his part to withhold cooperation or information from the court. Put differently, to the extent that there has been evasiveness about these matters, that has, in my view, been the result, not of a desire on the part of Alvaro to subvert the proper process of the proceedings, nor in any way with a view to his wishing deliberately and contemptuously to flout court rules: rather, this is simply part and parcel of his response to the ongoing dispute with his family in Venezuela.
(b). Whilst it may have been preferable for Alvaro to have produced a draft defence at an earlier stage, the nature of his defence, at least on the facts, has been clear at least since August 2013, and, again, it seems to me that any delay that might be said to attach to the provision of the defence has been largely irrelevant to the conduct of the application.
(3). Moreover, whilst I think that some criticism can fairly be made about the nature of Alvaro's evidence in relation to what was said in the course of the discussions in August 2013 and the account he provided to the court (before the transcripts were disclosed) about what had been said between himself and Ricardo Jnr about the existence of proceedings in England, I do not regard any inaccuracy in his evidence as being of so egregious a nature as to count this against him to any real extent.
- Sixth, there is the suggestion by Mr Casey that regard should be had to the fact that Ricardo, and before him, Marina, were themselves somewhat tardy in relation to the steps that they took in their pursuit of the proceedings. As to this:
(1). Whilst it would in my view be wrong to say that a factor of this sort could never be relevant other than, perhaps, in the respect I identify below, as noted above I find it difficult, for myself, to see in what way this should matter in a case, as here, where a claimant ensures that each required step in the litigation is taken within the time permitted or required by the rules.
(2). The way in which a 'lack of pace' on the part of a claimant who has procured a judgment in default may be of some relevance, is where this is relied upon as part of an argument as to why, on the facts of any particular case, a claimant is unlikely to be prejudiced by the setting aside of a judgment in default where this is in the interests of justice. More particularly, absent other factors, a claimant who has shown no real interest in matters being dealt with expeditiously, may find it difficult to claim to the court that he would be prejudiced by the delay consequent on the proceedings having been further delayed by the fact of a judgment in default then being set aside.
(3). All that having been said, however, it seems to me that, as the authorities have emphasised, one of the main interests at stake here is the court's concern with the finality of judgments and the need to ensure compliance with the rules of court as well as the interests of justice which will, necessarily, require regard to be had to the underlying merits of the dispute. Weighted against these interests, I consider that a factor of this kind is in the general run of cases not likely to carry great weight and that is how I have treated it in the present context.
- Seventh, there is the point taken on behalf of Alvaro that the proceedings were in stasis almost immediately following Marina's death later on the same day as that on which the default judgment was given. I have already said that I do not regard this as relevant to whether Alvaro acted promptly in making his application, but, as noted above, it seems to me that this may be a factor of wider relevance and, in particular, may be a matter going towards indicating that the delay in making the application caused no real prejudice to Ricardo (or Marina's estate). Indeed, it seems to me that this is in fact the case, given that, even had Alvaro wished to do so, he would (at the very least) have had some difficulty in making and pursuing an application. This being so, I do consider that some weight must be given to this factor when considering whether or not the judgment should be set aside.
Conclusion as to whether to set aside the judgment in accordance with CPR 13.3.
- Having considered the matters to which my attention was drawn, and the particular factors identified above, I have come to the decision that the judgment should not be set aside.
- Without wishing in any way to give the impression that I have not included and weighed all the factors identified above in my consideration, I would note that, ultimately, it seems to me that the delay on the part of Alvaro in making the application, and his inability to provide an adequate justification for his failure to take any action, allied with the fact that the application was brought forth only after Ricardo had taken enforcement steps, means that this is not a case where the court should be willing to set aside a judgment, despite the fact, as noted above, that it is my view that Alvaro would have had a real prospect of successfully defending the claim.
- By way of a side point, I would note that, in the course of the hearing, Mr Casey for Alvaro also suggested that there had been an error in relation to the calculation of the interest for which the judgment was obtained. This was however not something greatly developed in submission. In any event, it seems to me that if, as I have concluded, the judgment as a whole should not be set aside because of, in particular, Alvaro's delay in making the application, it is difficult to see why the position should be different in relation to the interest element of that judgment. One can imagine that there will be cases in which different considerations might apply, but none were suggested to me in the present case.
- This, of course, is not the end of the matter. After all, if Alvaro is right in relation to his other applications, and more particularly, (a) his contention that these proceedings should be regarded as a nullity from the outset on the basis that they were pursued without any authority prior to and up to the obtaining of the default judgment, and/or (b) his contention that Master Price's order of 29 April 2013 permitting service by email should be set aside with the consequence that no effective service of the Claim Form was ever made, then this would provide an independent and a priori reason why the judgment should be of no effect. It is therefore to those matters that I now turn.
The application to set aside the litigation friend certificate
- As noted above, a certificate of suitability to act as a litigation friend was completed by Ricardo on 8 January 2013, the day before and as a necessary prelude to the issue of the Claim Form by Ricardo acting as Marina's litigation friend. The reason this was a necessary prelude to any claim issued by Marina was because by 2013, as is common ground, Marina was a 'protected party' for the purposes of CPR Part 21, defined by CPR 21.1(2) to mean "a party, or an intended party, who lacks capacity to conduct the proceedings", and CPR 21.2(1) provides that a protected party must have a litigation friend to conduct proceedings on his or her behalf.
- CPR 21.4(3), dealing with who may be a litigation friend without a court order, provides that a person may act as a litigation friend if he "(a) can fairly and competently conduct proceedings on behalf of the …protected party; (b) has no interest adverse to that of the … protected party; and (c) where the … protected party is a claimant, undertakes to pay any costs which the…protected party may be ordered to pay in relation to the proceedings, subject to any right he may have to be repaid from the assets of the … protected party." CPR 21.5 sets out the procedure to be followed to become a litigation friend without a court order, including the need to file a certificate of suitability stating that he satisfies the conditions specified in CPR 21.4(3).
- Ricardo, in completing the certificate of suitability or litigation friend certificate, which he signed certifying it to be correct, expressly confirmed that he consented to act as litigation friend for Marina and that he believed that Marina was a protected party. He also expressly confirmed that he was "able to conduct proceedings on behalf of [Marina] competently and fairly and [that he had] no interests adverse to those of [Marina]."
- The reasons Ricardo provided on the certificate as to why he believed Marina to be a protected party included the following:
"On 26 April 2011, my Father and Mother conferred a Power of Attorney on me. This Power of Attorney was executed by them in Caracas and is governed by Venezuelan Law. It is a very broad power and includes the power to represent them in proceedings…
My Mother's mental health deteriorated rapidly in late 2011, after she was hospitalized in Clinica El Cedral in September 2011 and then in Clinica El Avila later that same month. After that, it was apparent that she could no longer look after herself. In September 2011 she was diagnosed with dementia. Since then, she has had a team of full time carers looking after her.
She is not able to manage the conduct of this claim. Although she can understand information, she is generally unable to retain it. It is not possible for her to make sound decisions on such complicated matters.
I therefore consider that my Mother is a protected party, and requires a litigation friend to act for her in any litigation."
- Mention should also be made in this regard of CPR Practice Direction 21, supplementing CPR Part 21, which provides further guidance including, at paragraph 2, an explanation of how the litigation friend certificate is to be completed. More particularly, paragraph 2.2(c) of the Practice Direction notes that where one seeks appointment as a litigation friend for a protected party, in addition to stating the grounds for believing the party to be a protected party, "if the belief is based upon medical opinion or the opinion of another suitably qualified expert" then "any relevant documents" should be attached to the certificate.
- As noted above, Alvaro now applies for an order pursuant to CPR 11(6) and/or CPR 21.7 and/or pursuant to the inherent jurisdiction of the court, discharging, setting aside or terminating ab initio the appointment of Ricardo as Marina's litigation friend. He does so on the basis that:
(1). Ricardo does not and did not at any time satisfy the conditions set out in CPR 21.4(3)(a); and
(2). The certificate completed by Ricardo contained material misstatements in particular in suggesting (a) that Ricardo did not have interests adverse to those of Marina, and (b) that Marina had capacity on 26 April 2011 when giving Ricardo a power of attorney but only later became incapacitated; and
(3). Ricardo, in breach of paragraph 2.2(c) of the Practice Direction to CPR Part 21, failed to attach relevant medical opinions or records.
- Consequent on these matters, Alvaro seeks an order declaring that Ricardo had no authority to issue the proceedings on behalf of Marina and, in addition, and pursuant to CPR 11(6) and/or the inherent jurisdiction of the court, an order setting aside the Claim Form and the default judgment.
- Further detail about the reasons why, according to Alvaro, Ricardo's statements in the certificate were false or misleading, were provided in the skeleton argument filed by Mr Casey on behalf of Alvaro. In summary, Alvaro contends that:
(1). Contrary to what he said in the certificate, Ricardo was in fact not able to conduct the proceedings on behalf of Marina fairly and competently, and/or that he had interests adverse to hers, because (a) he had abused his powers under his 2011 Power of Attorney for his own gain; (b) he had procured that his wife and others influence Marina to alter her affairs to his advantage (and Alvaro's disadvantage); (c) his conduct of the present proceedings showed that he had no intention of conducting them fairly and competently; (d) he was at the time he signed the certificate under criminal investigation in Venezuela in relation to the matters identified above, such an investigation having been instigated by Alvaro, and; (e) his conduct in relation to the tax affairs of the estate further demonstrated his inability to conduct the proceedings on behalf of Marina fairly and competently.
(2). The inconsistent evidence that it is said Ricardo or his privies have from time to time given about Marina's health and capacity, caused, it is suggested, by Ricardo's concern not to say anything that might undermine the validity of his 2011 Power of Attorney, provided a further indication of the nature of the conflict of interest between himself and Marina.
- To the extent necessary, I will say more about the factual basis for these allegations below. Before doing so, however, it is helpful to have regard to the rules of court under which this application is made.
- CPR 21.7(1) provides that the court may (a) direct that a person may not act as a litigation friend; (b) terminate a litigation friend's appointment; or (c) appoint a new litigation friend in substitution for an existing one. It is to be noted that each of the expressly identified powers envisaged by this rule appears to be forward looking: none appears to envisage or extend so far as to permit the court to revoke an appointment as litigation friend retrospectively ab initio. I would note that I was not referred to any authority that would suggest that CPR 21.7(1) is of wider effect than appears from the face of the rule.
- This, to my mind, is of some relevance in the present case. That is because little purpose would seem to be served in considering whether, going forward, Ricardo's appointment as litigation friend should be allowed to stand. Indeed, in circumstances where, since March 2015, Ricardo has been Claimant in the action in substitution for Marina rather than acting as litigation friend, such a consideration would be pointless. This is all the more so in light of my decision, above, that the judgment should not be set aside.
- Put shortly, and for the reasons set out above, it is my view that in the circumstances of the present case CPR 21.7(1) simply does not assist Alvaro.
- As noted above, however, Alvaro also applies to set aside the appointment of Ricardo as litigation friend retrospectively under CPR 11(6).
- CPR Part 11 contains rules concerned with disputes in relation to the court's jurisdiction. It is most usually of relevance to cases where a defendant is not within the jurisdiction of the court or where, for example, the parties have agreed that any dispute between them should be resolved by way of arbitration. Alvaro, however, appears to be resident in London and does not suggest that the English court lacks jurisdiction to deal with this claim; his complaint is a different one, namely that the proceedings against him were unauthorised and also that no valid service of the proceedings on him was ever made. In these circumstances, I am unclear as to the basis on which CPR Part 11, or CPR 11(6) can be relevant to this application and I do not consider that CPR Part 11 can assist Alvaro in his application, retrospectively, to set aside the appointment of Ricardo as litigation friend.
- I note, in any event, that an application under CPR Part 11 is required by CPR 11(4) to be made within 14 days after filing an acknowledgement of service. The importance of any application under this rule challenging the jurisdiction being made without unnecessary delay is perhaps obvious. I will return to this point below.
- In addition to his reliance on CPR 21.7 and CPR Part 11, Alvaro also relies upon the inherent jurisdiction of the court for the purpose of seeking retrospectively to set aside Ricardo's appointment as litigation friend. It seems to me that, whether or not expressly set out in a rule, the court must indeed have a power to address serious transgressions affecting proceedings before it and that this is likely to include dealing with the consequences of a wrongful appointment of a litigation friend.
- This being so, it is next necessary to consider how any delay on the part of Alvaro might affect his application to attack Ricardo's appointment as litigation friend.
- Whilst it must be open to the court at any stage of the proceedings to be able to address the on-going ability of a particular individual to continue to act as litigation friend, it does seem to me important, given the serious consequences of it being successful, that any application for relief of that type, once the conditions for it arise, should be pursued without delay.
- This, to my mind, presents a serious difficulty for Alvaro in the present case in circumstances where the application attacking the appointment was only made in June 2015, nearly two and a half years after the certificate was filed and the appointment made, and some three months after the time at which Ricardo in fact ceased to be a litigation friend following the order substituting him as Claimant made by Master Price in March 2015. Indeed, it seems to me, in particular following the guidance given by the Court of Appeal in Mitchell and Denton, above, that unless Alvaro is able to explain and justify the delay, his application should be dismissed on the basis that it is materially out of time.
- It is again relevant to note that Alvaro accepts that he became aware of the default judgment in May 2014, at which time (if not before) he would also have become aware of the fact that the claim was brought against him by Marina on the basis that she was a protected party assisted by Ricardo acting as her litigation friend and attorney. I have already noted that Alvaro is an intelligent man familiar with litigation who had ready access to legal advice, but did nothing in terms of seeking such advice from an English solicitor in relation to the claim for some nine months, until, in February 2015, Mishcons were instructed.
- Although, as noted above, Mishcons had from late February 2015 begun to take steps to obtain documents and materials relating to the claim, it was only on 13 May 2015, some three or so months after they had been instructed and two months after Ricardo had become Claimant and ceased acting as a litigation friend, that a letter was written to the court seeking to obtain a copy of the litigation friend certificate.
- Whilst Alvaro in his evidence does address the reasons for the delay in seeking to set aside the default judgment, beyond what is said in that context no part of Alvaro's evidence is addressed to, or seeks to explain, the delay in taking steps to attack Ricardo's appointment as Marina's litigation friend.
- In my view, in circumstances where Alvaro was, by May 2014, aware of the fact that Ricardo had been acting as Marina's litigation friend, it is simply far too great a delay for no application seeking to attack that appointment to be made until June 2015, some thirteen months later. Insofar as the explanation given for that delay is the same as that relied upon in relation to the application to set aside the default judgment, again I regard the reasons and justifications offered as insufficient to excuse the delay. Insofar as reliance is sought to be placed on the fact that it was only in May 2015 that Mishcons applied to be provided with the litigation friend certificate so that it was only thereafter that it became possible to see what had been said by Ricardo in that regard, this seems to me no more than another incident and consequence of what had already been an unacceptable delay rather than a justification for this delay.
- In short therefore and for the reasons set out above, I reject Alvaro's application that Ricardo's appointment as litigation friend to Marina be retrospectively revoked. It follows that I also reject Alvaro's contention that the litigation was at all times unauthorised.
- In light of the conclusion I have reached, it is not strictly necessary that I deal with the substantive grounds advanced by Alvaro in support of this part of his application. Be that as it may, for the sake of completeness I set out below my views on those substantive grounds. I would make the following observations on this issue:
(1). As noted above, CPR 21.4(3)(b) stipulates that in order for a person to act as a litigation friend that person must have "no interest adverse to that of the …protected party". The relevant inquiry here is directed towards the conduct and outcome of the litigation for which the individual is to be appointed as litigation friend, and it will in most cases not be relevant to search, outside the bounds of the particular litigation, for some factor that might suggest some potential conflict between the interests of the party and the interests of the litigation friend unless it can reasonably be said that this potential conflict may also affect the manner in which the litigation friend is likely to approach the conduct of the litigation itself.
(2). Moreover, what this prohibition is directed towards is an interest that is "adverse" to that of the protected party. It follows that the fact that the person appointed as litigation friend has his own independent interest or reasons for wishing the litigation to be pursued ought not, in general, to be a sufficient reason for impeaching that appointment. Such an interest would, at least in general, run in the same direction as the protected party rather than being adverse to the protected party's interests.
(3). However, it is necessary in this context to have regard to the decision of the Court of Appeal in Nottingham CC v Bottomley and another  EWCA Civ 756, the only authority on this issue to which I was referred. In dealing with the position of a litigation friend, Stanley Burnton LJ (with whom Rix and Maurice Kay LLJ agreed) emphasised the need for the litigation friend to "seek the best outcome" for the protected party and for a litigation friend to "be able to exercise some independent judgment on the advice she receives from those acting for a claimant, and …be expected to accept all the advice she is given", something that might be difficult where, as in that case, the litigation friend worked for an organisation that would benefit from a settlement in a form that might not necessarily be to the benefit of the protected party itself.
(4). This highlights the fact that, even where the interests of the protected party and litigation friend generally run in parallel or coincide, this does not of itself preclude the possibility that, in some contexts, those interests might diverge and become adverse. Whether or not that is so will, of course, always depend upon the facts of the particular case.
(5). In the present case, however, the starting point must be that the interests of Marina lay in pursuing a claim against Alvaro in respect of funds which were, it is contended, wrongly withdrawn from the Account in circumstances that apparently led to her characterising Alvaro as a thief. The question for the court is whether or not Alvaro is right to say that Ricardo had an interest that was adverse to Marina's in relation to the pursuit of the litigation.
(6). In one sense it might be said that the proof of the pudding is in the eating, and since Ricardo has pursued that litigation to a successful conclusion, this is enough to show that he had no adverse interests. I accept, however, that this may not necessarily be the case and that an adverse interest might exist even if, in the event, it does not in the end affect the conduct of the litigation party. Be that as it may, this, to my mind, does highlight the rather artificial circumstances in which the question arises in the current case, where Alvaro seeks this inquiry to be made not only long after Ricardo has ceased to be litigation friend, but also long after the litigation has effectively been concluded.
(7). So far as concerns the position of Ricardo, it seems to me indisputable that, by 2013, Ricardo certainly had his own independent reasons for wishing litigation to be pursued against Alvaro. This was so, not least because of (a) the general animosity that appears to have existed between the brothers; (b) the fact that Alvaro had, the previous year, filed a criminal complaint against Ricardo in Venezuela (subsequently dismissed) accusing him of alleged property crimes relating to Marina's estate, aggravated document forgery, fraudulent powers of attorney and the like; (c) the November 2012 search of Marina's residence by criminal investigators apparently instigated by Alvaro that had caused Marina distress; and (d) the December 2012 search that subsequently took place of Ricardo's office seeking to obtain documents relating to family companies which appears also to have been inspired or instigated by Alvaro. To my mind, however, the effect of all of these matters was to give Ricardo an interest in acting against Alvaro that coincided with Marina's own interest in seeking to bring Alvaro to account in relation to the withdrawn funds.
(8). I do not regard this as a case like Bottomley (above) where despite generally parallel interests, a clear adverse interest could also be identified, nor in my view is there any basis for saying that Ricardo, in pursuing this claim, would have had any difficulty in accepting and following legal advice as to what steps should be taken, including in terms of settlement. Put shortly, had I been required to decide this issue, I would have concluded that, whilst Ricardo certainly had his own interests for this litigation to be pursued, I am not satisfied, on the facts, that he had any interests adverse to those Marina would have had in relation to the pursuit of this claim.
(9). But Alvaro's attack on Ricardo's appointment does not stop there, because Alvaro contends not only that Ricardo had an adverse interest but also that Ricardo could not satisfy the requirement in CPR 21.4(3)(a), that only someone who can "fairly and competently conduct proceedings on behalf of …the protected party" is able to seek appointment as a litigation friend.
(10). Again, as it seems to me, the purpose of the requirement that the litigation friend be able "fairly and competently" to conduct proceedings on behalf of the protected party is likely to be to ensure that the litigation friend has the skill, ability and experience to be able properly to conduct litigation of the sort in question. At the same time, what the requirement is in my view unlikely to have envisaged, at least in general and save perhaps in exceptional cases, is that the court should be required to conduct a general inquiry extending far beyond issues of skill, ability and experience, and instead venturing into a consideration of unproven allegations of a series of potential transgressions said to have been committed over a period of years by the litigation friend in transactions not directly related to the matters giving rise to the litigation itself.
(11). I should make it clear that this is not intended to suggest that a court would not willingly consider in this context a finding or determination by a court or tribunal, domestic or foreign, to the effect that the litigation friend has been guilty, for example, of dishonesty, a crime, or conduct incompatible with the role of litigation friend. By contrast, what I would suggest is unlikely in general to assist the court in a case such as the present, are simply allegations, contested on all sides, about matters arising in the context of other transactions, which are said to establish unsuitability.
(12). This, to my mind, is a problem with the attack that Alvaro currently makes on Ricardo's appointment. Alvaro, for example, alleges that Ricardo has been guilty of abuse of his powers under the 2011 Power of Attorney in a number of respects that he has explained in his evidence. He also points to the fact that he, Alvaro, had caused criminal proceedings to be instituted against Ricardo in Venezuela involving allegations of property crimes relating to Marina's estate, although he accepts that those proceedings were subsequently dismissed. Ricardo in his evidence, and in correspondence on his behalf, disputes and denies the matters alleged by Alvaro in this regard. Alvaro also contends that Ricardo has made a false statement in a document he completed for HMRC in the context of obtaining a Grant of Administration for Marina's estate in this jurisdiction in 2012. Alvaro suggests that Ricardo intentionally misled HMRC, but this is disputed by evidence before the court from Mr Fox, a partner from Reed Smith who explains that he has liaised closely with HMRC and is satisfied that nothing has been said to cause HMRC to be misled.
(13). In the end, whilst I am unable to say on the evidence I have seen that there is nothing whatever in any of the allegations made by Alvaro, Alvaro has not been able to satisfy me that I should accept his allegations to be correct. Put shortly, therefore, had I been required to make a finding on this, I would have concluded that Alvaro has not established that Ricardo lacked the ability to "fairly and competently" conduct these proceedings as litigation friend to Marina.
(14). Before leaving this subject, I should also deal with the suggestion by Alvaro, developed by Mr Casey in the course of the oral hearing, that Ricardo's statement in the certificate of reasons for believing Marina to be a protected party was false and unsatisfactory. In particular:
(a). Whilst Ricardo, in the certificate, suggests that September 2011 is the date from which Marina's mental health deteriorated such as to mean she lacked sufficient capacity to litigate without assistance, Alvaro, whilst not disputing that Marina, by 2013, would indeed have come within the protected party category, contends that Ricardo's selection of the September 2011 was misleading and simply intended to ensure that he said nothing that would enable Alvaro to impeach the validity of the 2011 Power of Attorney, entered into about five months earlier, in April 2011.
(b). In fact, contends Alvaro, Marina's mental capacity had started to deteriorate much earlier, perhaps as early as 2007. Alvaro also refers to the fact that, in August 2013, shortly before Marina's death, evidence was produced to a court in Caracas, including from friends of Ricardo or members of his family, that led that court to conclude that Marina was not suffering from any disabling intellectual defects. All of this, says Alvaro, shows that Ricardo has been inconsistent in the impression he has sought to give in relation to Marina's mental capacity.
(c). Allied to this, Alvaro also relies upon Ricardo's failure to provide, as he contends was required by paragraph 2.2(c) of CPR Practice Direction 21, relevant documents containing the opinion of medical experts on which his belief about Marina's mental capacity was based.
(15). Once again, Ricardo takes issue with Alvaro's contentions, claiming that nothing he said about Marina's mental incapacity in the certificate was in any way misleading.
(16). In my view, whilst even if there was force in some of the points made by Alvaro as to the accuracy of Ricardo's statement in the certificate about the precise time when Marina's mental capacity deteriorated, given that, as noted above, it is common ground that, certainly by January 2013 when the certificate was completed, Marina was indeed lacking in mental capacity and properly to be treated as a protected party, I do not consider any lack of accuracy on timing to provide any basis on which that certificate could or should be retrospectively set aside.
(17). Nor, in my view, would this be the result of any failure on the part of Ricardo to have attached any documents that came within the scope of paragraph 2.2 of CPR Practice Direction 21. In the first place, I am doubtful as to whether paragraph 2.2 would have been applicable in any event, given that, as it seems to me, the requirement to attach documents arises only where the belief is "based upon medical opinion or the opinion of another suitably qualified expert", but in the present case Ricardo's belief about the central statement in his report that Marina was not able to manage the conduct of the claim appeared to be based, not on expert medical opinion, but rather upon his own observations (albeit as a qualified doctor). Secondly and in any event, I would not regard non-compliance with paragraph 2.2, in the context of a case where it is common ground that Marina was indeed a protected party, to be a sufficient basis for rejecting Ricardo's appointment as litigation friend.
- For all these reasons, then, I reject Alvaro's contention that Ricardo's appointment as litigation friend should be set aside ab initio, whether on the basis that Ricardo was not capable of acting as litigation friend, or on the basis that the certificate contained misrepresentations. Given my decision to refuse to set aside the judgment, and in light of the fact that Ricardo is in any event no longer acting as litigation friend, it is unnecessary to consider what the position would be had Ricardo, at the date of the application, still been acting as Marina's litigation friend.
The application to set aside the order for service of the Claim Form by email
- I turn next to Alvaro's application to set aside Master Price's order of 29 April 2013 permitting service of the Claim Form by email.
- As foreshadowed above, the application to Master Price leading to his making this order was supported by a witness statement, dated 22 April 2013, made by Ricardo Jnr. It is necessary to set out in some detail what was said by Ricardo Jnr in that statement. Thus:
(1). In addition to giving details about Marina, and the fact that relations between Alvaro and the family had for a long time been strained, Ricardo Jnr's statement provided information about Alvaro's departure from Venezuela, and the fact that he had come to settle in England where his children attended school and then university. The statement also explained that Alvaro continued to live in England, most likely in the London area, and went on to identify some earlier London addresses where Alvaro had previously, but no longer, resided.
(2). The statement also referred to a number of searches that had been conducted to establish Alvaro's current address, including by PwC and also by Harswood International, a private investigations company. It went on to express the view that, due to Alvaro's "secretive behaviour in the past" he will have kept his address confidential so that it was no surprise that the investigations had been unable to locate him.
(3). The statement continued that, this being so, "there is a real risk that Alvaro's current residential address will not be obtained before the expiry of the four month window for service of the Claim Form and Particulars of Claim on him". The Claim Form having been issued on 9 January 2013, the four month window was due to expire by about 9 May 2013, only a short time after the date of the application to Master Price.
(4). The statement then identified the email address that Alvaro had used for some time and that appeared still to be in use by him. It also referred to the fact that, in February 2013, Ricardo Jnr had married in the Dominican Republic and then had a honeymoon in Asia, which was to involve a stop-over for a few hours at Heathrow on 18 February 2013. The statement then explained that Ricardo Jnr had emailed Alvaro and arranged to meet at Heathrow whilst he, Ricardo Jnr, waited for his connecting flight and that, as a result, there had been a meeting at Heathrow Terminal 5, following which they had continued to talk at the Sofitel Hotel, Heathrow. The purpose of the meeting, according to Ricardo Jnr, had been to "discuss, without prejudice, some family matters that have arisen".
(5). The statement then noted that, "I was not able to obtain an address for Alvaro during this meeting".
- As already mentioned above, Master Price's order provided that the delivery by email of a copy of the sealed Claim Form together with Particulars of Claim and response pack and the order itself was to be deemed good and sufficient service of documents on Alvaro on the fifth business day after the day of sending the documents. The order also expressly noted by way of notice to Alvaro, that, "You may apply within seven days after the date of service of this Order on you to have the Order set aside or varied".
- I have referred above to the fact that, on 2 May 2013, an email attaching the Claim Form and other documents specified in the order was sent by Reed Smith to the email address stipulated in the order, with the subject box left blank and that, according to Alvaro, he was not aware of the order until some time later, when, on 20 April 2015, following his instructing Mishcons, he discovered it when going through unread emails.
- As already noted, Alvaro issued the present application to set aside Master Price's order for service by email on 18 June 2015. The application is made on two grounds, namely (a) that Ricardo Jnr's witness statement failed, as it was obliged to do, to comply with the duty to make full and frank disclosure and to give a fair and accurate presentation of the relevant facts and arguments, and (b) that there was in reality no good reason for permitting service by alternative methods.
- Before dealing with its substance, it is again necessary to consider the delay on the part of Alvaro in making the present application. Here again, even if he had not seen the order for service or the attached documents before this, by May 2014 Alvaro was aware of the judgment, but did nothing about this, only engaging Mishcons in February 2015. Even thereafter, things moved rather slowly.
- By 23 April 2015, Alvaro even on his own case would have known that an order had been obtained allowing service by an alternative method. He would also have known of the notice in the order expressly providing that an application to set aside or vary the order should be made within seven days of the date of service of the order, a date which in this case had long since passed. By 6 May 2015 Mishcons were also in possession of Ricardo Jnr's witness statement. However, a further period of nearly six weeks was to go by before the present application was issued on 18 June 2015.
- I have already expressed the view in the context of dealing with Alvaro's application to set aside Ricardo's appointment as litigation friend that the delay involved here was all far too great. I have also made clear my view that Alvaro has no satisfactory justification for simply doing nothing in relation to these proceedings after May 2014, a point that applies as much to this application as it does to the applications considered above.
- Moreover, even if this could be excused, having regard to the time that had already gone by it seems to me to have been unacceptable, following Mishcons' instruction in February 2015, for the matter to have proceeded with such a lack of urgency that a further two months were allowed to pass before, on Alvaro's case, he even saw the order permitting service of the Claim Form by email, and even then that a further two months went by before the present application was made. It may be that this was the result of a deliberate strategy of lying low in the hope that no steps would be taken to enforce the judgment, but, as noted above, I would not regard that as a satisfactory reason for delay.
- Put shortly, as with the application challenging the appointment of Ricardo as litigation friend, I find that the application to set aside the order permitting service of the Claim Form by email, advanced (a) over two years after that order had been made and served, (b) little short of two years after judgment had been entered against Alvaro, (c) more than a year after Alvaro, on his own case, found out about the judgment, (d) four months after solicitors in this jurisdiction were instructed, and (e) nearly six weeks after, finally, Alvaro had taken the steps required to enable him to consider the witness statements by reference to which that order had been obtained, is made too late and for this reason should be dismissed.
- Given the conclusion I have reached above, it is again unnecessary for me to consider the substance of Alvaro's challenge to the order permitting service of the Claim Form by email, but, again, and for the sake of completeness, I set out below and in summary my findings on those matters.
- I deal first with Alvaro's contention that Ricardo Jnr failed to make full and frank disclosure or to provide the court with a fair presentation. Alvaro says the following, namely that:
(1). Ricardo Jnr's statement, in relation to the meeting at Heathrow on 18 February 2013 that he "was not able to obtain an address for Alvaro during this meeting" was misleading because it suggested that Ricardo Jnr had tried but failed to obtain an address and also that Alvaro was seeking to evade service. Both suggestions, Alvaro contends, would have been highly material to the question being considered by Master Price.
(2). Ricardo Jnr's presentation of the meeting with Alvaro at Heathrow made the meeting appear spontaneous when, in truth, it followed a number of email exchanges between them and was an extension of an existing dialogue, a dialogue which actually continued thereafter and which held out the possibility of further meetings taking place. All of this, says Alvaro, would have been highly material to the question being considered by Master Price because, if meetings were possible, there should have been no need for service by some alternative method, and Alvaro's willingness to meet would have scotched any concern that Alvaro was deliberately evading service.
(3). The position is exacerbated by Ricardo Jnr's acceptance that he actually considered the possibility of seeking to serve the proceedings on Alvaro at the Heathrow meeting, but decided against it because of a concern that it would interfere with the without prejudice discussions it was intended they would have about the wider family disputes. Again, says Alvaro, this would have been highly material to Master Price because it would have highlighted further the fact that personal and conventional service had been possible but that this course had not been taken for what Alvaro describes as 'tactical reasons'.
(4). By failings of commission and omission, the effect of the foregoing was, says Alvaro, to give Master Price the impression that this was a paradigm case of a defendant seeking to evade service, when this was in no way the position in this case.
(5). To make matters worse, says Alvaro, Ricardo Jnr failed to disclose the fact that the service of the Claim Form was in respect of a dispute in relation to which there had been no pre-action exchanges so that Alvaro would or might be taken unawares by the claim and that, had there been compliance with the rules in this regard, Alvaro would have appointed solicitors so that service might have been accomplished by ordinary means, none of which was revealed to Master Price.
- Having regard to the points made above, I consider that Alvaro is right to say that the statement made by Ricardo Jnr, by reference to which Master Price made his order could and should have provided more detail than it did and I think Alvaro is also right to say therefore that there are respects in which Ricardo Jnr's statement was unsatisfactory. But I do not accept that the problems with the statement were as serious as Alvaro seeks to suggest, or (if this is suggested) that there was any intention on the part of Ricardo Jnr deliberately to mislead the court.
- In particular:
(1). As it seems to me, the application for an order allowing service by an alternative method was made, as Ricardo Jnr explained in his statement, in circumstances where, for whatever reason, Alvaro's address was not known and despite serious attempts could not be discovered. It was also made, again as Ricardo Jnr's statement made clear, at a time when the deadline by which the Claim Form would need to be served was fast approaching.
(2). Moreover, whilst it is true that Ricardo Jnr's reference to his not being "able to obtain an address for Alvaro" during the Heathrow meeting could have been clearer if, as Ricardo Jnr says, what he intended to convey was that he considered that it would not have been productive to have pushed Alvaro to reveal the address at this meeting, I regard this lack of clarity as inadvertent and forgivable and certainly not as providing a basis for setting the order aside.
(3). The same applies to his presentation of the Heathrow meeting itself. I do not accept that the impression given in the statement would necessarily have been that this was either spontaneous or isolated: on the contrary, Ricardo Jnr's statement expressly refers to email exchanges between himself and Alvaro in the month before that meeting and I do not think that there was any real problem with this aspect of the statement. Whilst, of course, Ricardo Jnr might have speculated in the statement that further meetings were possible at which personal service might be made, given the impending need to serve the Claim Form and what would have been the unlikelihood or at least uncertainty of such a meeting taking place in time, this, again, does not seem to me to provide a strong basis for criticism of Ricardo Jnr's statement.
(4). As regards Alvaro's suggestion that the failings with the statement are exacerbated by the fact that Ricardo Jnr had, prior to the Heathrow meeting, actually considered personal service but decided against this because he calculated that this might derail the main purpose of the meeting, whilst it would have been better if Ricardo Jnr had explained this in the statement, again I do not regard this as a material failing and certainly not one that would justify setting aside the order: it seems to me that Ricardo Jnr's calculation was a perfectly reasonable one to have made and, in any event, having regard to what was said in the statement, the Master would not have needed telling that this might have been an opportunity to serve the proceedings that was not taken; this would have been plain and obvious from what Ricardo Jnr did say about the meeting.
(5). I agree with Alvaro that it would have been better for Ricardo Jnr to have made express reference to the fact that there had been no compliance with the pre-action protocol and that this might have given rise to an argument on the part of Alvaro that, had this been done, he would have appointed solicitors so that service by non-conventional means was only the result of a failure to abide by the pre-action protocol. But, certainly with hindsight, it is clear that Alvaro, even when alerted to the existence of the claim, indeed even after being alerted to a judgment in relation to the claim, took no (and certainly no immediate) steps to appoint English solicitors to act for him. Again, therefore, I do not regard the failure of the witness statement to consider this argument to mean that the order should be set aside.
(6). Finally, I do not accept at all that the impression given by Ricardo Jnr in his statement was that an order permitting service by email was required because Alvaro was deliberately seeking to take steps to evade service. Rather, the thrust of Ricardo Jnr's statement was focussed on the fact that Alvaro had long been a secretive individual and that it was the result of this that his address was neither known nor likely to be discovered.
- It follows, for all the reasons set out above, that I reject Alvaro's application to set aside Master Price's order of 29 April 2013 permitting service of the Claim Form by email.
- In light of the conclusions at which I have arrived above, the judgment obtained against Alvaro on 27 August 2013 remains effective and there is no reason for setting it aside or regarding it as a nullity or otherwise not binding on Alvaro. In other words, Alvaro's applications are rejected.