YA II PN Ltd v Frontera Resources Group [2021] EWHC 1380 (Comm): Take care when drafting an order granting permission to serve out the jurisdiction

October 18, 2021

Practice point

There is a standard form of order for permission to serve out of the jurisdiction (which can be found here), but parties commonly do not use the standard form. If the standard form is not used the claimant should ensure that the order expressly provides for service “elsewhere in the jurisdiction” (the “magic words”) and not only at specified addresses.

YA II PN Ltd v Frontera Resources Group

In YA II PN Ltd v Frontera Resources Group the order granting permission to serve out specified two addresses for service, but did not include the magic words.

YA II attempted to serve at one of the addresses (in the USA), but there was a notice on the door at that address saying the landlord had changed the locks as the tenant had not paid the rent. Attempts were then made to serve on officers of Frontera using details obtained from Frontera’s public filings. Service was not possible at the addresses given for the chairman or CEO, but YA II did manage to serve the documents on the person named in the public filings as vice president. Unfortunately, the public filings had not been kept up to date and he was not in fact an officer of Frontera at the time. He did, however, make the chairman aware that he had been served with the court documents.

Frontera did not file an admission or defence and default judgment was given. Frontera applied to set aside the default judgment on the basis that the claim form had not been validly served.

The Judgment

Validity of service

  • If an order does not contain the words “or elsewhere in the jurisdiction”, service at any address not specified in the order is invalid.
  • If a place for service has been specified in the order and the magic words not included, CPR r.6.40(3)(c), which provides that “where a party wishes to serve a claim form or other document on a party out of the United Kingdom, it may be served … by any other method permitted by the law of the country in which it is to be served”, does not allow service at another place.

Validation of invalid service

  • If there is “good reason”, the court can make an order under CPR r.6.15 that steps taken to bring the claim form to the attention of the defendant is good service.
  • While the authorities refer to relevant factors, what constitutes “good reason” for validating the non-compliant service of a claim form is essentially a matter of factual evaluation.
  • In the circumstances of this case there was a good reason to validate the service made on the former vice president.

Effect of invalid service on a default judgment

  • If default judgment has been entered following invalid service, it must be set aside.
  • This will be the case even if (as in this case) there is subsequent retrospective validation of service, and even if the defendant in fact knew of the proceedings before the order for default judgment.

Take away

Omit the magic words at your peril. There is no good reason not to include them, but potentially increased costs and delay if you do not.