Non compliance with EU Service Regulation leads to Court judgment being set aside

In Grovit v. Jan Jansen [2018] IEHC 22 the High Court set aside a judgment due to procedural irregularities in the manner in which the proceedings were served. The case offers a number of insights into the interpretation of the rules of court and the EU regime in respect of the service of documents which may be of use to practitioners. The case also examines the implications of a party to litigation knowingly holding back procedural objections in the hope that they may invalidate the final judgment of the court.

 

 

In 2010 a judgment was obtained by Mr. Jansen in the Dutch Courts against a company called Carigna Investments NV (which is registered in Curacao). It was subsequently claimed in the Dutch Courts that Carigna was being stripped of assets by Mr. Grovit in an attempt to avoid the judgment. Mr. Jansen claimed that because the controllers of Carigna had no known address and their lawyer refused to accept service of documents it was necessary to publish a Notice in newspapers both in the Netherlands and in England putting them on notice of the Dutch proceedings.

 

When this notice came to the attention of Mr. Grovit he instituted defamation proceedings in Ireland against Mr. Jansen. Mr. Grovit's solicitors then purported to serve these proceedings on Mr. Jansen at the address stated in the Notice i.e. the address of his lawyers in Amsterdam. Mr. Grovit also claimed proceedings were served personally on Mr. Jansen by Mr. Grovit's lawyers in the Amsterdam Court in August 2014.

 

Mr. Jansen acknowledged his awareness of the Irish proceedings but claimed that they were never properly served upon him and accordingly he had no obligation to enter an appearance or otherwise engage with them. The defamation proceedings progressed through a motion for judgment in default of appearance which was granted and subsequently damages and costs were assessed in 2015 by Kearns P. who also ordered that a correction notice be published in an Irish newspaper. After the matter was sent for costs to be taxed Mr. Jansen entered a conditional appearance and sought to set aside the order pursuant to Order 13 rule 11.

 

 

Mr. Grovit relied on Article 14 of the 'Service Regulation' - Regulation (EC) 1393/2007 of the European Parliament and of the Council on the Service in Member States of Judicial and Extrajudicial Documents in Civil or Commercial Matters).

 

Mr. Grovit submitted that Article 14 entitles individuals to serve proceedings directly by registered post, and that he was entitled to do so at the address nominated by Mr. Jansen in the Notice. Binchy J. disagreed and held that Article 14 applied to transmitting agencies as described in the Service Regulation and not to individual litigants.

 

Mr. Jansen also argued that the service at the address in the Notice was invalid because if Mr. Grovit did not know his address, the Service Regulation did not apply. The Court held that it could not be inferred from the Notice that Mr. Jansen was authorising his lawyers to accept service of any other legal proceedings or was providing an address for any purpose other than the proceedings to which the Notice related.

 

Notwithstanding the errors in the service of the proceedings the Court was mindful that Mr. Jansen was well aware of the litigation and had chosen to delay in the hope that he might overturn any judgment against him based on procedural errors of service.

 

 

Mr. Grovit failed to file and serve an affidavit of verification as required by section 8(1) of the Defamation Act 2009. Binchy J. found that the non-compliance was a further procedural irregularity.

 

 

Order 4 rule 1A provides that an indorsement of claim must be endorsed with a statement that the Court has the jurisdiction to hear the case and specify the particular provision of the Brussels Regulation or otherwise upon which jurisdiction is assumed. Mr. Grovit had endorsed the plenary summons in barely legible handwriting stating that Article 5(1) gave the Court jurisdiction to hear the claim. In fact Article 5(3) is the relevant provision of the Brussels Regulation which denotes a defamation claim. Mr. Grovit relied on Order 124 which states that non compliance with the rules shall not render any proceedings void unless the court shall so direct. He also referred to Order 28 rule 1 which provides that the Court may at any stage of the proceedings allow either party to alter or amend his endorsement or pleadings in such manner and on such terms as the court may consider just. Order 19 rule 26 states: "no technical objection shall be raised to any pleading on the ground of any alleged want of form".

 

Weighing up the above rules with the strict approach taken by the courts in relation to the necessary endorsement for the purposes of the Brussels Regulation, Binchy J. held that at the time the judgment was granted the plenary summons invoked the incorrect jurisdiction which meant another irregularity had been identified.

 

 

Since Mr. Jansen is not an Irish citizen, it was necessary, pursuant to Order 11 rule 8 for Mr. Grovit to serve a "notice of plenary summons", as distinct from a plenary summons itself. Binchy J. ruled that the requirement to serve a notice of summons, rather than the summons itself, is anachronistic and could hardly be necessary in circumstances where the EU regime and the many Conventions to which states adhere to mean that the service of documents within the EU is relatively uniform. Furthermore, since no precise form is outlined in the rules the service of a draft of the plenary summons in advance of serving the plenary summons had the same practical effect of demonstrating compliance with the rules. As such there was no irregularity under this heading.

 

 

Order 122 forbids the delivery or amendment of pleadings during the long vacation save with permission of the Court. On that basis there was a breach of the rules by serving proceedings in August 2014.

 

The effect of Mr. Grovit's actions meant that on the date of the motion for judgment in default of appearance Mr. Jansen actually still had time to enter an appearance within the times specified by the rules. This was noted as yet another procedural irregularity.

 

 

Notwithstanding the procedural irregularities Mr. Jansen submitted that he had a "real chance of success" in defending the proceedings on two grounds. First, the Notice was published was either qualified or absolute privilege insofar as it pursuant to an order made by the Dutch Court. Second, he maintained that it was necessary to publish the order in The Times of London because, while he did not have an address for Mr. Grovit, he was aware that he resided in England. Moreover, lawyers previously acting on behalf of Carigna had refused to accept service of proceedings on behalf of Mr. Grovit.

 

Binchy J. found that if the matter proceeds to full hearing, Mr. Jansen has a good chance of succeeding with a defence that the Notice did not constitute a defamatory statement since it simply stated that Mr. Grovit was required to attend court in the Netherlands as a witness in relation to proceedings referred to in the Notice.

 

 

The Court held that while there were procedural irregularities Mr. Jansen had a good chance of success in defending the proceedings at a full trial. However, that finding had to be tempered by his delay in bringing the application to set aside the judgment – a delay of about 18 months which was not explained to the Court.

 

Overall, notwithstanding the extraordinary delay, the judgment was set aside in light of the procedural irregularities and the good chance of the proceedings being successfully defended. Binchy J. ordered that the costs of the High Court proceedings to date be paid by Mr. Jansen and a defence delivered within a short time frame.