Default judgments and invalid service – CPR Part 11 or Part 13?

We previously blogged about the options available to a foreign defendant who wishes to challenge a default judgment entered against them.

Where the defendant accepts that they were validly served but wishes to challenge the court’s jurisdiction, they may choose to proceed purely under CPR Part 11 without combining this with an alternative application to set aside the judgment on the basis of a real prospect of successfully defending the claim under CPR Part 13.

The reason they may choose to do this is to avoid any suggestion that they have submitted to the English court’s jurisdiction by making the CPR Part 13 application.

But what about the situation in which the defendant wants to challenge the default judgment on the basis that service was not validly effected at all? Does such an application have to be made under CPR Part 11?

In Mann v Towarzystwo Ubezpieczen Inter Polska SA & Ors [2021] EWHC 2913 (QB), Master Thornett explained that the answer is “no”.

The successful Claimant was represented by Aliyah Akram of 12 King’s Bench Walk.

The case related to allegedly negligent cosmetic surgery carried out in Poland. Proceedings were served on the relevant liability insurer in Poland and judgment in default was subsequently entered against it.

The insurer made an application under CPR r. 13.2 to set aside the judgment on the basis that service against it had not been validly effected.

It later tried to amend its application so that it would be “treated as having been brought under Part 11 of the Civil Procedure Rules”.

The Defendant said that it had to do this because it was the only procedurally correct way in which to challenge the validity of service.

Despite dismissing the application on other grounds (namely, huge delay), Master Thornett also dealt with this contention.

He pointed out that a previous case had already determined that a foreign defendant was entitled to apply for the setting aside of a default judgment as of right under CPR Part 13 on the basis of invalid service.

In Shiblaq v Sadikoglu [2003] EWHC 2128 (Comm), Colman J rejected an argument that such an application had to be made under CPR Part 11.

such a judgment would clearly be irregular for the reason that it would have been obtained where there had been no relevant “default” … If he was under no such duty [to file an acknowledgement of service] the omission cannot be sensibly described as a default, which would entitle the Claimants to judgment.

The parties in the more recent case of YA II PN Ltd v Frontera Resources Corporation [2021] EWHC 1380 (Comm) had agreed that a defendant was entitled to submit that a default judgment should be set aside on the basis of invalid service:

I accept, that, as was decided in Shiblaq v Sadikoglu [2004] EWHC 1890 (Comm), [2005] 2 CLC 380, first judgment paragraphs 20-24, if there was no valid service, there will have been no obligation on the defendant to serve an Acknowledgment of Service, and no default in failing to do so, and a judgment in default entered in such circumstances must be set aside, subject only to the possible effect of an order retrospectively validating such service …

The Defendant’s application to proceed under CPR Part 11 was therefore “pointless”.

The CPR r. 13.2 application innately raised the issue of jurisdiction, so that there was also no inconsistency with the Court of Appeal’s emphasis in Hoddinott and Others v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203 on making jurisdictional challenges in the correct way via CPR Part 11:

The reasoning in Shiblaq is entirely compatible with Hoddinott if … the substance of the post-service Application innately draws upon jurisdiction because it directly challenges whether there has been service at all. This analysis precedes the emphasis in Hoddinott of the importance of a party disputing jurisdiction in the Acknowledgment of Service if jurisdiction is to be challenged and so justifies separate consideration.

However, that was not to say that the defendant challenging past service must always seek the setting aside of a default judgment CPR r. 13.2 rather than CPR Part 11:

This is not to say that a party must instead always follow CPR 13.2 rather than CPR 11 in these circumstances, the interplay of which I note was discussed (but not ruled upon) at Para 18 Newland Shipping v Toba Trading [2017] EWHC 1416 (Comm).

Newland Shipping is one of the cases discussed in our previous blog on this subject.

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