MICHAEL WILSON AND PARTNERS LIMITED v JOHN FORSTER EMMOTT AND OTHERS

Under paragraph 3.1(3) of Practice Direction 6B, service out of the jurisdiction requires a real issue reasonably to be tried against a defendant within the jurisdiction and the foreign defendant to be a necessary or proper party to that claim. The requirements are distinct. A defendant may be a proper party even if it is not necessary, because the word “or” is disjunctive. A separate cause of action against the foreign defendant will not ordinarily make it a necessary or proper party to the domestic claim. The application must be supported by conventional evidence identifying the facts relied upon for each requirement. Where the claim and evidence are inadequately formulated, fairness may require an adjournment to permit reformulation rather than immediate dismissal.

The claimant sought permission, without notice, to serve the seventh defendant, SOCOL, out of the jurisdiction. The claim against the first to sixth defendants alleged a fraudulent conspiracy to obtain costs orders despite the alleged absence of any obligation by the first defendant to pay his lawyers. The proposed claim against SOCOL concerned money allegedly advanced to it by Mr Sinclair and subsequently used to fund the litigation.

The court considered whether the pleaded claims disclosed a real issue to be tried and whether SOCOL was a necessary or proper party to the claims against the defendants within the jurisdiction. The court also considered the inadequacy of the claimant’s evidence and the pending strike-out applications.

1. The application was adjourned, with liberty to restore it, and was not dismissed immediately. It was not to be heard before final determination of the second to sixth defendants’ strike-out applications.
2. Paragraph 3.1(3) of Practice Direction 6B requires both a real issue between the claimant and a defendant already served or to be served within the jurisdiction, which it is reasonable for the court to try, and that the proposed foreign defendant be a necessary or proper party to that claim.
3. The “necessary or proper party” requirement is disjunctive. A foreign defendant can qualify as a proper party without being necessary. Necessity is only one relevant factor. The court applied the principle stated in Massey v Haynes [1888] 21 QBD 330, asking whether both defendants would have been proper parties if both had been within the jurisdiction.
4. The claims against the first to sixth defendants were based on an alleged fraudulent conspiracy concerning the obtaining of costs orders. The proposed claim against SOCOL was materially different: it sought recovery of money allegedly advanced to SOCOL and then used to fund the litigation. That separate cause of action created substantial difficulty in treating SOCOL as a necessary or proper party to the domestic claims, particularly since the claim against SOCOL had not been adequately pleaded.
5. A service-out application should be supported by carefully formulated evidence identifying the facts and matters relied upon to satisfy each requirement of the gateway. The claimant’s presentation was seriously inadequate, but fairness required an opportunity to amend the claim against SOCOL and make a properly formulated application, taking account of the strike-out proceedings.