Next week, we will write about a recent decision on strike out and submission to the court’s jurisdiction. The key practice point is that it is vital for defendants to be crystal clear if they wish to keep jurisdiction in dispute.

That is also borne out by the recent decision in Hand Held Products, Inc & Anor v Zebra Technologies Europe Ltd & Anor [2022] EWHC 640 (Ch).

The claimants claimed to have served a Delaware corporation (registered in Illinois) at offices in the UK said to be one of the corporation’s places of business.

The corporation disputed that it could be served in this way.

It served a notice under CPR r. 7.7(1), which allows a defendant to demand that an issued claim be served on it within 14 days, in default of which it can apply to the court for dismissal of the claim under CPR r. 7.7(3). (PSA: if, like me, you have found yourself wondering what this odd rule is for then the case you want is Brightside Group Ltd (formerly Brightside Group Plc) v RSM UK Audit LLP [2017] EWHC 6 (Comm)).

The claimants maintained that service had been validly effected in the UK and so no further service (in the USA) was required. The corporation duly applied for dismissal of the claim under CPR r. 7.7(3).

The claimants argued that serving the notice in the first place amounted to a submission to the jurisdiction. Also, a challenge to the validity of service had to be made under CPR Part 11.

Nugee LJ rejected a submission that the defendant’s service of a notice under CPR r. 7.7(1) amounted to a submission to the English court’s jurisdiction.

Not only did the letter contain a statement that nothing in it was or should be construed as a submission, but the form of the notice contained in the letter itself indicated that although ZTC was calling on the claimant to serve or discontinue, such service would have to be out of the jurisdiction pursuant to a successful application for permission to serve out. That does not seem to me to be a step that is, or would appear to a disinterested bystander to be, “inconsistent with the making and maintaining of [ZTC’s] challenge”; I would go further and say that it is in fact inconsistent with a waiver, as in that case there would be no need to require the Claimants to go to the trouble of seeking permission to serve out.

Again, the key point was the defendant’s insistence that no submission was being made. But the position might have been different had they not been so clear about this:

I need not consider what the position would have been if ZTC had simply served a notice under CPR r 7.7(1) without at the same time making it clear that ZTC’s position was that it needed to be served, if at all, out of the jurisdiction with permission to do so; I can see that the position then might have been different, but those are not the facts.

He also rejected the argument that a defendant who denies that service been effective must make an application under Part 11.

The situation is different where there has been service followed by an acknowledgment of service:

I agree that that follows from the decision in Hoddinott, which is in my judgment authority for the proposition that if a defendant has been served and has acknowledged service, then the defendant must use an application under CPR r 11(4) to set aside the service

But it did not follow that Part 11 was the only route to challenging the effectiveness of service:

It is not obvious to me that Hoddinott stands as authority for the wider proposition that if the claimant claims to have served the defendant and the defendant denies that there has been any effective service, the defendant must still use Part 11 to challenge the effectiveness of the service. It is possible that that follows, but I do not think it necessarily follows.

Nugee LJ thought that a defendant who had not acknowledged service might be able to raise the issue in some other way than under CPR Part 11:

The reasoning of Dyson LJ in Hoddinott is that where a defendant has acknowledged service and has not brought an application under CPR r 11(4) within 14 days thereafter, the consequences in CPR r 11(5) follow. But that does not necessarily apply where a defendant has not acknowledged service. The logic of Dyson LJ’s judgment does not compel the conclusion that a defendant who has not acknowledged service can only raise the issue whether service has been effected at all by using Part 11.

In the course of this discussion, Nugee LJ floated the question of whether an application under Part 11 would also be needed to challenge a default judgment where there were issues about the validity of service. It just so happens that we blogged on a case dealing with this very issue a few weeks ago: “Default judgments and invalid service – CPR Part 11 or Part 13?”

However, Nugee LJ did not conclusively resolve the general question since he did not need to in order to resolve the issue before him:

Whatever the general position may be in the case of a defendant who wishes to raise the issue of the validity of service, in my judgment it must be open to a defendant who claims not to have been served at all to use CPR r 7.7(3). The structure of the rules does not make sense otherwise.

In this view, it would be “absurd” if the court could not determine a dispute about whether service had been validly effected on an application under CPR r. 7.7(3):

The whole question under that rule is whether the claimant has “fail[ed] to comply with the notice”, as that is what gives the Court discretion to dismiss the claim. So if there is a dispute whether the claimant has or has not served the defendant within the relevant period, the Court must resolve it. To my mind it follows that the Court must have power to resolve it on that application.

James Beeton Service

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