Phillips & Anor v Symes & Ors

The House held that for the purposes of article 21 of the Lugano Convention the English court was first seised of the proceedings no later than 19 January 2005 because the service actually effected on that date could properly be regarded as effective. The court concluded that, applying domestic law and the Civil Procedure Rules (in particular CPR r.3.10 and r.6.9), it was permissible in exceptional circumstances to treat an imperfect attempt at service as valid for the purposes of establishing seisin. Article 21 therefore did not require the English court to stay or decline jurisdiction in favour of the Swiss proceedings.

The decision addresses the interplay between: (i) the Lugano Convention (article 21 and related provisions); (ii) the Hague Convention on service abroad; and (iii) the Civil Procedure Rules concerning errors of procedure and the court's power to dispense with service. The House rejected the Court of Appeal's conclusion that the CPR power to dispense with service could not operate to affect priority under an international convention in these circumstances.

Background and facts:

• The appellants, administrators of an estate, issued English proceedings on 16 December 2004 claiming US$3m for the unpaid purchase price of an antiquity sold in breach of earlier orders. A worldwide freezing order had been obtained on 15 December 2004.
• Service out of the jurisdiction on the Swiss respondents had to proceed under the Hague Convention. A package of translated documents was forwarded for service; on 19 January 2005 the Swiss court's officer handed documents to one respondent but had removed the English-language claim form because it bore an erroneous stamp. The particulars of claim (in English and German) and other documents were served.
• The respondents issued rival proceedings in Switzerland on 3 February 2005. The appellants sought declarations that the English court was first seised under article 21 of the Lugano Convention and obtained such an order at first instance. The Court of Appeal reversed and stayed the English proceedings; the appellants appealed to the House of Lords.

Nature of the claim/application:

• The appellants sought a declaration that the English court was the court first seised under article 21 of the Lugano Convention so that the English action should proceed and the Swiss action be stayed.

Issues framed by the court:

• When is a court "first seised" for the purposes of article 21 — at issue, at effective service, or upon interlocutory orders (for example freezing orders)?
• Whether CPR r.3.10 and r.6.9 permit the court to treat imperfect service as effective (including, if necessary, retrospectively) so as to determine the date of seisin for article 21.
• Whether the facts warranted the exercise of discretion to validate the service in this case.

Court's reasoning and decision:

• The House concluded that the English court had been seised of the proceedings as against the respondents no later than 19 January 2005 because the documents served that day (notwithstanding the omission of the English-language claim form) were sufficient and could, consistently with domestic law, be treated as effecting service for seisin purposes.
• The court held that CPR r.3.10 (power to remedy procedural error) and r.6.9 (power to dispense with service) provided the domestic law basis for treating the attempted service as valid. Such powers can be exercised, sparingly and in exceptional cases, even where their effect changes international priority, and the facts here were exceptional (mistakes by Swiss authorities, no prejudice to the respondents, and respondents seeking to exploit the omission to obtain priority).
• Lord Mance also expressed willingness to adopt a broader test — seisin at issue or at the date of the freezing order — but the dispositive conclusion was that seisin was established no later than 19 January 2005. The House allowed the appeal and restored the first instance orders.

Wider context:

• The opinion noted the impending changes in EU and Lugano instruments which would redefine the time of seisin autonomously, reducing the future relevance of older domestic rules determining seisin.

Appeal allowed. The House held that the English court was seised of the proceedings no later than 19 January 2005 because the service effected on that date could be regarded as effective; the court may, in exceptional circumstances and under CPR r.3.10 and r.6.9, treat or validate defective service for the purpose of establishing seisin under article 21 of the Lugano Convention. The Court of Appeal's order was set aside and the first-instance order restored.

At first instance Peter Smith J (Chancery Division) made orders on 19 August 2005 declaring the High Court seised and dispensing with service of the claim form ([2005] EWHC 1880 (Ch)). The Court of Appeal (Pill, Neuberger and Wilson LJJ) allowed the respondents' appeal and stayed the proceedings ([2006] EWCA Civ 654; reported [2006] 1 WLR 2598). The appellants appealed to the House of Lords, which allowed the appeal ([2008] UKHL 1).