Apollon Metaxides v Swart and others

A procedural misnomer does not necessarily make proceedings a nullity. The question is whether the defect is so fundamental that justice requires the order to be set aside. Where the intended body recognises itself as defendant, enters an unconditional appearance, participates in the proceedings and enters a consent order, it waives irregularity in the title or in formal amendment. It cannot later deny that it was a party. The nullity principle applicable where proceedings are brought against a defendant that had ceased to exist does not apply to an agreement and consent order made between existing parties. A consent order binds its parties, not non-parties merely because they may be affected. A procedural defect in an order would not, without more, invalidate the underlying agreement.

The appeals arose from proceedings concerning Silver Point Condominium Apartments in The Bahamas. Mr Metaxides had commenced an action naming Silver Point Limited, a company which no longer existed, although the intended defendant was the statutory body corporate, Silver Point Condominium Apartments. The body corporate entered an unconditional appearance, participated in the proceedings and entered into consent orders with the Metaxides group.

The Swart group later sought declarations that the consent orders were invalid. Longley SJ dismissed the claim on 16 March 2012. The Court of Appeal treated the validity of the proceedings as a preliminary issue and held on 2 May 2013 that they were a nullity. The central question before the Board was whether that ruling was correct.

Disposition

Lord Toulson delivered the judgment of the Board. The Board advised Her Majesty that the appeal should be allowed. The matter was remitted to the Court of Appeal to determine the remaining grounds of appeal.

1. Statutory context. Under the Law of Property and Conveyancing (Condominium) Act 1965, the condominium’s operation was vested in a body corporate. The declaration identified that body as Silver Point Condominium Apartments. Silver Point Limited, the declarant, had no responsibility for the condominium’s operation and had ceased to exist before the proceedings began.
2. Nullity. The Court of Appeal had wrongly treated the case as governed by Lazard Brothers and Company v Midland Bank Ltd [1933] AC 289. That decision concerned proceedings issued against a defendant which had already ceased to exist, with no valid underlying judgment. The present consent orders were founded on agreements between existing parties which had invoked or submitted to the court’s jurisdiction.
3. Fundamental defect. In deciding whether an order should be set aside ex debito justitiae, the ultimate question was whether the defect was so fundamental that justice required the order to be set aside, applying White v Weston [1968] 2 QB 647, 659, and Singh v Atombrook Ltd [1989] 1 WLR 810, 819.
4. Effect of conduct. The documents showed that Mr Metaxides intended to proceed against the body responsible for operating the property. The original summons contained a misnomer and the amended version showed uncertainty about the correct name. Those defects were inconsequential because SPCA recognised itself as defendant by entering an unconditional appearance and thereafter conducting the litigation on the merits. It thereby waived any irregularity in the title or absence of formal leave to amend, and could not later deny that it was a party bound by the consent order.
5. Non-parties and underlying agreement. The Swart group, not being parties to the consent order, had no right to set it aside. The order was not of itself binding on non-parties, although the possible effect of section 14 of the Act on the underlying agreement was a separate issue for the Court of Appeal. The Board also observed that, even if the consent orders had been procedurally void, that would not have affected the validity of the underlying agreement between SPCA and the Metaxides group.

The parties were directed to make written submissions on costs within 14 days.

• Privy Council: In [2015] UKPC 32, the Board allowed the appeal on the preliminary nullity issue and remitted the case to the Court of Appeal for the remaining matters.
• Court of Appeal of the Commonwealth of The Bahamas: On 2 May 2013, the Court of Appeal overturned Longley SJ on the preliminary issue and held that the Metaxides proceedings were a nullity.
• Supreme Court of The Bahamas: Longley SJ dismissed the Swart group’s claim on 16 March 2012.