The Public Institution for Social Security v Al-Wazzan & Ors

The court dismissed an application by the 42nd–45th Defendants (the heirs) to set aside an earlier joinder and the grant of permission to serve out of the jurisdiction. The key legal issue was whether the heirs were "necessary or proper" parties under Practice Direction 6B paragraph 3.1(3). The judge held there was a good arguable case that, applying the evidence of Swiss succession law, the heirs are successors to the deceased defendant's liabilities and that absent joinder an English judgment might not be enforceable against assets in jurisdictions such as Switzerland. The court therefore concluded it was appropriate to join and permit service out on the heirs to ensure they would be bound by the result of the forthcoming English trial.

This was an application by four defendants, the 42nd–45th Defendants (the children and heirs of the late Mr Fahad Al-Rajaan), who sought to set aside a joinder order and the court's permission to serve them out of the jurisdiction. The joinder and service out followed the death of Mr Al-Rajaan and the prior appointment of his wife, Muna Al-Rajaan Al-Wazzan, as administrator/representative in these English proceedings.

The applicants sought orders that the court had no jurisdiction or, alternatively, would not exercise its jurisdiction, that the service of the Amended Claim Forms be set aside, and that the joinder order be set aside. The contest focussed on whether the heirs were "necessary or proper" parties under Practice Direction 6B paragraph 3.1(3). Other questions (for example, whether one heir had valid in‑jurisdiction service under Companies Act 2006 s.1140, or service under the Brussels Recast Regulation / Lugano Convention) were argued to fall away if the necessary/proper party point favoured the claimant.

The claimant (PIFSS) alleged substantial corrupt conduct by the deceased and alleged that, under Swiss succession law (the law said to govern the deceased's succession), heirs automatically succeed to assets and liabilities and are jointly and severally liable, subject to a three month window to disclaim. The claimant relied on expert Swiss law evidence that, for an English judgment to be enforced against the entirety of estate assets in Switzerland, the judgment must be binding on all heirs (or otherwise meet limited exceptions).

The court framed the principal issues as:

• whether there was a good arguable case that the heirs were necessary or proper parties to the claim such that permission to serve out of the jurisdiction was appropriate; and
• whether, if the heirs were not joined, the claimant would be put to substantial practical disadvantage in enforcing any English judgment against assets abroad.

The judge reviewed authorities on necessary/proper parties, including the AK Investment test and the decision of the Court of Appeal in Viegas v Cutrale, and considered competing submissions about the distinction between administration and succession. The court declined to finally determine whether the English court could, at trial, apply Swiss succession law to impose joint and several liability; instead it concluded on the available evidence (notably the unchallenged Swiss expert report) that there was a realistic prospect that heirs would be followed up in foreign enforcement proceedings and that an English judgment solely against the administrator might not be enforceable in Switzerland. Given that the English estate was unlikely to satisfy any substantial judgment, and absent any undertaking from the heirs that they would accept being bound, the court concluded there was a good arguable case that joinder and service out were appropriate to protect enforcement and the interests of justice.

Relief sought: setting aside joinder and permission to serve out; the court refused that relief and dismissed the heirs' application.

The heirs' application is dismissed. The court held there was a good arguable case that the heirs were necessary or proper parties under Practice Direction 6B para. 3.1(3) because, on the expert evidence of Swiss succession law, the heirs may be successors to the deceased's liabilities and an English judgment solely against the English personal representative might not bind those heirs for enforcement in Switzerland. In those circumstances joinder and permission to serve out were appropriate to ensure the heirs are bound by the result of the forthcoming trial.