Taylor v Giovani Developers Ltd

For an acknowledgment of service to be in accordance with Part 10 under CPR r 11(2), it must comply with the time requirements as well as the formal requirements. An out-of-time acknowledgment is ineffective for defending the claim, challenging jurisdiction or preventing default judgment unless time is extended. Relief from such default requires consideration of seriousness and significance, cause, and all the circumstances, including efficient and proportionate litigation and compliance with the rules. A serious delay caused by a deliberate decision not to participate, without an adequate explanation, ordinarily warrants refusal. Default judgment entitlement is assessed when the application is made. The court may grant rescission and damages or restitution, with monetary relief assessed as appropriate.

The claim arose from off-plan property sales in Cyprus. The Claimants alleged that the First Defendant developer and the Second Defendant financial adviser had made misrepresentations concerning finance, rental potential, completion and location. The First Defendant was served in Cyprus but filed its acknowledgment of service 64 days late, indicating an intention to challenge jurisdiction. It then applied retrospectively for extensions of time for the acknowledgment and the jurisdiction challenge.

The Claimants applied for judgment in default of acknowledgment of service. The court considered whether the late acknowledgment was effective, whether time should be extended, whether service and jurisdictional requirements under the Judgments Regulation were satisfied, and what relief could be granted on default.

The First Defendant’s application for retrospective extensions of time was refused. The Claimants’ application for default judgment was granted against the First Defendant, subject to a limited opportunity to challenge the quantification of the monetary relief.

1. Acknowledgment of service. CPR r 11(2) requires an acknowledgment of service to comply with Part 10 in full, including its time requirements. A defendant who files late must obtain an extension if the acknowledgment is to be effective for defending the claim, challenging jurisdiction or preventing default judgment. The reasoning of Talos Capital Ltd & Ors v JSC Investment Holdings XIV Ltd [2014] EWHC 3977 (Comm), at paras 30, 33 and 44, supported that analysis.
2. Extension of time. Applying the three-stage approach associated with Mitchell and Denton, the 64-day delay was serious and significant. The evidence disclosed no adequate explanation. The inference was that the First Defendant had deliberately decided not to participate because it believed proceedings belonged in Cyprus. The interests of efficient litigation, proportionate cost, compliance with the rules and justice therefore required refusal. The Claimants’ lack of alacrity did not outweigh the substantial injustice of reopening the position.
3. Default judgment and jurisdiction. Entitlement to default judgment was assessed at the date of the application. The subsequent late acknowledgment could not defeat that entitlement where no extension had been granted. The evidence defect caused by reliance on witness statements rather than an affidavit could be cured by an undertaking to verify the evidence by affidavit. The Claimants were consumers under Article 15 of the Judgments Regulation; the First Defendant had directed activities to England through its agent; and the harmful event for the tort claims occurred in England under Article 5(3). Clause 25(b) of the sale contract was a governing-law clause, not an exclusive jurisdiction clause.
4. Relief. Under CPR r 12.11, the court could grant the relief appearing from the statement of case. It declared that the contract had been validly rescinded and entered judgment for £71,870, with interest at 2% over base rate from 28 July 2008 to judgment. Execution was stayed for 21 days, with a limited locus poenitentiae to apply, supported by evidence, concerning the amount only. The First Defendant was ordered to pay the Claimants’ costs.

No appellate history is stated in the judgment. The judgment records an earlier claim, 2013 Folio 978, which was not served on the First Defendant before expiry, followed by the present proceedings.