News

November 2009

Interlocutory Issues EC CPR r.9.7 and English CPR r.9.7

Glovers acted as Privy Council Agents for four Appellants from the British Virgin Islands in respect of an Appeal relating to three important procedural points. Judgment was delivered on 26 November by Lord Collins.

The British Virgin Islands has, like many other Commonwealth jurisdictions, largely adopted the English Civil Procedure Rules. The decision could therefore be of guidance, not only to those jurisdictions, but also to lawyers in England and Wales.

The issues in the appeal were:

1. Whether the BVI court has an inherent jurisdiction to grant a stay on forum non conveniens grounds, independent of the provisions of EC CPR r.9.7 (the equivalent of English CPR Part 11.)
2. Whether EC CPR r.9.7(4) requires that evidence in support of the application must be filed at the same time as the notice of application is filed, and, if so whether failure to file means that the application is a nullity, or whether the court has power to excuse non-compliance (and if so, whether the power should be exercised).
3. Whether the application may be made within the time for the defence as extended by the court, and, if not, whether the court has power to excuse or cure non-compliance (and, if so, whether it should be exercised).

Lord Collins observed that the modern tendency is to treat the inherent jurisdiction as inapplicable where it is inconsistent with the CPR, on the basis that it would be wrong to exercise the inherent jurisdiction to adopt a different approach and arrive at a different outcome from that which would result from an application of the rules: Raja v Van Hoogstraten (No 9) [2008] EWCA Civ 1444, [2009] 1 WLR 1143. That decision concerned the court’s power under its inherent jurisdiction to set aside an order made without notice as a matter of right. It was held that although the inherent jurisdiction may supplement rules of court, it cannot be used to lay down procedure which is contrary to or inconsistent with them, and therefore where the subject matter of an application is governed by CPR it should be dealt with in accordance with them and not be exercising the court’s inherent jurisdiction.

In dealing with the procedural points, Lord Collins said “it has often been said that, in the pursuit of justice, procedure is a servant and not a master”.

In respect of issue 1 Lord Collins held : -

(a) If at the time the proceedings are first served, there are circumstances which would justify a stay, the application should be made promptly under EC CPR r.9.7/English CPR Part 11;
(b) Any failure to comply strictly with time-limits may be dealt with by an extension of the time-limits, and any formal defect in the application may be cured by the court;
(c) If circumstances arise subsequently which would justify an application for a stay, the application would be made under the inherent jurisdiction or EC CPR r. 26.2(q)/English CPR r.3.1(2)(f).

In respect of Issue 2 Lord Collins decided there was no basis for the Respondent’s contention that a failure to serve evidence with the application meant that the application was not made or was a nullity. The evidence of the Appellants was served less than 7 clear days before the court was due to deal with the application, but no objection was taken. In any event the High Court had a discretion to treat the notice as sufficient (EC CPR r.11.11(3)) and a discretion to put matters right if there had been a failure to comply with a rule: EC CPR r.26.9(3).

In respect of Issue 3, Lord Collins expressed doubts as to whether the decision in Monrose Investments Ltd v Orion Nominees Ltd is correct. However he said that it did not apply to this appeal. EC CPR r.9.7(3) has a note to the effect that EC CPR r.10.3 sets out the period for filing a defence. EC CPR r.10.3 deals not only with the initial time periods but also provides for extension by agreement or order of the court. Consequently even if Monrose were right, its reasoning would in any event lead to the conclusion that the application was made in time. The application for an extension of time for defence was not a submission to the jurisdiction because the Appellants were in any event subject to the jurisdiction as BVI companies. It was not necessary, as the judge thought, to resort to the inherent jurisdiction. There was no waiver of the right to apply by virtue of the application for an extension of time, and the application was made in time. The application could have been made either under the inherent jurisdiction or under the court’s powers of management in the Civil Procedure Rules.

To read the full judgment visit http://tinyurl.com/JCPC2

Please note that this information is provided for general knowledge only and therefore specific advice should be sought for individual cases.

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