Staines v Walsh & Anor

For service out of the jurisdiction, the claimant must show a good arguable case that a gateway in the Civil Procedure Rules applies. The claimant must also establish a serious issue to be tried and that England is clearly the appropriate forum. The good arguable case threshold is flexible and is assessed on the evidence available at the interlocutory stage. Where the evidence is sharply disputed, contemporaneous documents may materially support one account without finally determining the facts. Forum suitability depends on the circumstances as a whole, including the location of the parties, contract, documents and witnesses, and the practical demands of assessing credibility.

The claimant sought an account of profits from the first defendant, alleging an oral agreement concerning equity trading facilities and profit sharing. The first defendant challenged the court’s jurisdiction and argued that any trial should take place in Hong Kong. Earlier orders had permitted service of the claim forms outside the jurisdiction, subject to an application under CPR 11 to set them aside.

The court considered whether the claimant had shown a good arguable case that the contract was made within England or was governed by English law, whether there was a serious issue to be tried against the first defendant personally, and whether England was clearly the most appropriate forum.

1. Jurisdictional gateway. The claimant established a good arguable case that the contract was made in England, engaging CPR 6.20(5)(a). The test is an interlocutory threshold, below proof on the balance of probabilities but above a serious question to be tried. It requires the court to assess which side has the much better argument on the material available, bearing in mind the absence of full discovery and cross-examination.
2. Serious issue to be tried. There was an arguable case that the first defendant contracted personally, rather than solely as agent for an unidentified Hong Kong company. The corporate structure, profit-sharing arrangements and evidence concerning the parties’ dealings justified allowing the issue to proceed to trial.
3. Appropriate forum. Applying the principle in Spillada Maritime Corporation v Cansulex [1978] AC 460, the claimant had to show that England was clearly the appropriate forum. That requirement was met. Relevant factors included the claimant’s residence, the place where the contract was arguably made, the preparation of the disputed accounts in England, the location of witnesses, and the importance of assessing credibility. The case was a comparatively modest accounting dispute likely to require only a short trial.
4. Proper law. The court did not need to determine the contract’s proper law. It nevertheless considered that there was a good arguable case that the contract was most closely connected with England under Articles 3 and 4 of the Rome Convention. That observation was not the basis of the decision.
5. The first defendant’s application under CPR 11 was refused.

First-instance decision. No prior judgment is stated in the judgment.