Moloobhoy & Anor v Kanani

Where a defendant challenges jurisdiction, Civil Procedure Rules 1998, Parts 11 and 24 must be read together. Rule 11.1(7)(c) requires directions about a defence after an unsuccessful challenge, but does not require the court to direct that a defence be filed before determining a pending summary judgment application. The rarity constraint applies chiefly when merits evidence is ordered before jurisdiction is resolved. Once evidence is before the court under an extant direction, the application may be determined without reopening the procedure. A defendant who intends to contest the merits and does not seek time to decide whether to submit cannot rely on the further acknowledgment period to postpone summary judgment. Summary judgment was upheld where no arguable defence existed.

The claimants sought an account and associated relief concerning their alleged share of proceeds from the sale of property in Dubai. The defendant challenged service and sought a stay on forum non conveniens grounds.

A Deputy Judge of the Commercial Court held that service was valid, refused a stay, and entered summary judgment for the claimants. Permission to appeal was refused on the service and forum issues but granted on whether summary judgment could be determined before the defendant filed a further acknowledgment of service or defence under CPR 11.1(7). The central issue was the interaction between CPR Part 11 and Part 24.

Appeal dismissed. Lord Justice Longmore gave the judgment, with Lord Justice Lloyd and Lord Justice Kitchin agreeing.

1. Civil Procedure Rules 1998, Parts 11 and 24 had to be read together. Rule 11.1(7)(c) required the court to give directions concerning the filing and service of a defence after an unsuccessful jurisdiction challenge. It did not require the court to direct that the defence be filed before a pending summary judgment application was determined. Directions could be stood over until after that application.
2. The court’s power to permit summary judgment before completion of the ordinary merits procedure was subject to a rarity constraint. That constraint operated principally when deciding whether to require merits evidence to be served while a jurisdiction challenge remained outstanding. It did not prevent determination of the application once evidence had been served under an existing direction. The earlier direction was understandable because the forum challenge required some assessment of the likely issues at trial and the possible defence.
3. The defendant did not seek the further period in which to choose between submitting to the jurisdiction and allowing default judgment. He intended to contest the case. He therefore had to deal with the summary judgment application and could not rely on the further acknowledgment procedure to delay it. The reasoning in European Capital Trade Finance Limited v Antenna Hungaria RT (27 March 1995) arose under the former procedure and did not compel a different result under the CPR.
4. Summary judgment was justified on the material before the court. The defendant had repeatedly accepted an obligation to account, had accounted for the proceeds of the other property, and did not seriously dispute the sale or receipt of the proceeds. In those circumstances, it was inconceivable that there could be a defence. The appeal was dismissed.

• Court of Appeal (Civil Division) — [2013] EWCA Civ 600: dismissed the appeal against summary judgment.
• High Court of Justice, Queen’s Bench Division, Commercial Court — the Deputy Judge held that service was valid, refused a stay on forum non conveniens grounds, and entered summary judgment for the claimants.