DATE: 1888 June 1, July 6.

JUDGES: Wills and Grantham, JJ.
Lord Esher, M.R., Lindley and Lopes, L.JJ.

COUNSEL: Gorell Barnes, Q.C., and F. W. Hollams, for the appellants. French, Q.C., and W. English Harrison, for the plaintiffs

SOLICITORS: For appellants: Waltons, Bubb, & Johnson.
For respondents: Botterell & Roche.

Practice – Notice of Writ – Service out of the Jurisdiction – “Proper” Parties – Order XI., r. 1 (g).

By Order XI., r. 1, service out of the jurisdiction of a writ of summons or notice of a writ of summons may be allowed by the Court or a judge whenever (g) “Any person out of the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the jurisdiction.”

In an action against defendants in London for breach of warranty of authority it appeared that they had assumed as agents for foreign principals to enter into a contract to be performed out of the jurisdiction, and that there had been a breach out of the jurisdiction, the supposed principals having repudiated the contract as being made without their authority:—

Held (affirming the judgment of the Queen’s Bench Division), that the foreign principals were “proper” parties to the action within Order XI., r. 1 (g), and that service on them out of the jurisdiction of notice of the writ might be allowed.

MOTION that an order giving the plaintiffs liberty to issue a concurrent writ, and serve notice thereof abroad, together with the writ and judgment, and all other proceedings thereunder, might be set aside so far as the defendants Schenker & Co. were concerned.

It appeared that Schenker & Co., who were Austrian subjects, in business as merchants at Fiume, gave telegraphic instructions to the defendants, Heynes & Co., shipbrokers in London, to effect a charterparty, who accordingly made a charterparty with the plaintiffs, shipowners in London, which was to be performed in the Mediterranean.

Schenker & Co. afterwards repudiated the charterparty, on the ground that it was not in the form authorized by them. The plaintiffs brought the action against Heynes & Co. for breach of implied warranty of authority to effect the charterparty, and obtained an order for leave to serve notice of the writ on Schenker & Co. abroad, in order to claim against them for breach of the charterparty in the same action. Notice of the writ having been served, judgment by default was signed against Schenker & Co. An application by Schenker & Co. in the terms of the motion [*331] was refused by Denman, J., in chambers. The defendants, Schenker & Co., appealed.

F. W. Hollams, for the defendants Schenker & Co. The subsection of Order XI., r. 1, under which service out of the jurisdiction may be allowed, on which the plaintiffs rely to support the order, is sub-s. (g)(1). But it does not apply to mere alternative remedies against two defendants. The plaintiffs must shew that both defendants can be made liable in the action. The Austrian firm can, however, only be liable on the assumption that there is not a cause of action against the defendants within the jurisdiction. If the charterparty binds the Austrian firm, their London agents are not liable; on the other hand, if it was made without authority, the Austrian firm are not liable for the breach of it. They cannot be made parties to the action merely in order to obtain discovery: Wilson v. Church. (2)

W. English Harrison, for the plaintiffs. The foreign firm are “proper” parties within Order XI., r. 1 (g), which is not limited to joint defendants. Either firm may be liable. The plaintiffs cannot obtain the original correspondence between the Austrian firm and their agents, on which the case depends, unless the Austrian firm is made party to the action. The decision in Wilson v. Church (2) was only that an officer of a corporation was improperly joined with the corporation as a defendant for the purpose of discovery, inasmuch as the discovery could be obtained by an order to interrogate him. That case, therefore, does not apply.

Hollams, in reply. The person abroad who may be served must be a proper party to “an action” properly brought against some other person within the jurisdiction. The action in this

(1) Order XI., r. 1, provides that service out of the jurisdiction of a writ of summons or notice of a writ of summons may be allowed by the Court or a judge whenever –

“(e.) The action is founded on any breach or alleged breach within the jurisdiction of any contract wherever made, which, according to the terms thereof, ought to be performed within the jurisdiction, unless the defendant is domiciled or ordinarily resident in Scotland or Ireland; or,

“(g.) Any person out of the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the jurisdiction.”

(2) 9 Ch. D. 552.

[*332] case is for breach of warranty of authority, but the Austrian firm is not a proper party to such action. There is no case on the point except Sykes v. Scholfield (1), in which it was held that, if the party to be served is a “proper” party, he need not also be a “necessary” one. [He also argued that the judgment should be set aside and leave given to Schenker & Co. to appear and defend the action.]

Cur. adv. vult.

1888. June 1. WILLS, J. This is an application to set aside service of notice of a writ issued in England out of the High court against two defendants, one being a firm of English shipbrokers, the other a foreign firm resident and carrying on business at Fiume, in Austria, in respect of a contract the breach of which was not in England, and as to which, therefore, the Austrian firm could not have been made defendants under Order XI., r. 1, s. (e), to an action in this country. The service of the notice of the writ must therefore be justified, if at all, by sub-s. (g) of the same order and rule, and that is the only ground on which the leave for service was obtained. Order XI., r. 1, provides that service out of the jurisdiction may be allowed whenever – “(g) Any person out of the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the jurisdiction.” The nature of the complaint in the present case against the two separate sets of defendants was this: The brokers in England had undoubtedly been instructed by the firm abroad to make a charterparty in England. The brokers made a charterparty with the plaintiffs which had to be performed in the Mediterranean, and was there broken. On complaint made to the defendants abroad, they answered that the brokers in England had exceeded their authority in effecting the charterparty in the terms which it contained, and therefore that the foreign firm was not liable. Thus two sets of persons were involved in the transaction, against whom the plaintiffs had no joint remedy or joint cause of action, but in respect of each of whom the suggested cause of action against one excluded that against the other: for if the firm abroad had given authority to

(1) 28 Sol. J. 477.

[*333] the brokers in London to make this charterparty, no action would lie against the brokers; if, on the other hand, the firm had not given authority to the brokers, no action would lie against the Austrian firm, but an action would lie against the brokers for breach of their implied warranty of authority. So that perhaps no case could be put in which the objections which have been raised to the service out of the jurisdiction would be more strikingly illustrated. The Austrian firm certainly could not have been served alone, because under none of the sub-sections of Order XI., r. 1, would a case for service out of the jurisdiction against them arise. Also, if the action succeeded against the foreign firm, it would be on the ground that the English defendants were not liable, and therefore, in one sense, ought not to have been sued.

The question, therefore, is whether, under these circumstances, the foreign firm can be said to be “proper” parties to “an action properly brought against some other person duly served within the jurisdiction.” The words “other person duly served within the jurisdiction” are satisfied by the service on the brokers in England. The action against them is, no doubt, “properly brought.” Then what is meant by the words person who is a “proper party to an action”? It is quite clear that he may be a “proper” party without being a “necessary” party, for the words are used in the alternative. It was not suggested that there were any persons who according to the practice of our Courts would be “proper” and yet not “necessary” parties, apart from the new practice introduced by the Judicature Act and Rules, under which alternative claims against defendants arising out of the same transactions can now be prosecuted by means of the same writ and proceedings; and I am myself unable to point out any instances where, under the old practice, persons would be “proper” parties without being “necessary” parties. It may be that under the Chancery Practice there are such persons, and that my information is imperfect on the subject, but no instances of such persons have been given in argument. Therefore it seems to me that the word “proper,” which is not a technical but a descriptive word, must have been directed towards such cases as the present, and intended to enable persons to be made [*334] parties who under the old practice could not be served with the same writ, and whose cases are mutually exclusive. The injustice and hardships of dealing with them in separate actions gave rise to Order XVI., which provides for alternative claims in the same action. Before that provision was made, great injustice often arose because a plaintiff did not know, and could not find out, amongst the several persons involved in a transaction, who was really liable, when certainly some one of them was so, and the persons themselves knew where the truth lay, yet it was their interest to conceal it. Often a plaintiff could not get redress from the real defendant until the plaintiff had gone through the expensive and troublesome process of suing them separately and failing against one or more of them. Order XVI. was meant to get rid of that state of things. If a person is mixed up in a transaction carried out in this country by English subjects, I see no reason why he should not be dealt with for the purposes of service of process as if he was amenable to the jurisdiction of the Courts here. If he does not choose to submit to the jurisdiction he must take his chance, and no remedy will be effective against him unless he has property in this country. I see no particular hardship in saying that he must come to the courts of this country if he wishes to defend himself. Of course if any clear principle of international law or comity existed for construing the rules otherwise than according to the natural meaning of the words used there would be some reason for doing so, but there is no such reason. I think the rule was intended to apply precisely to this class of case. It is clear that it is no objection to our construction of the rule that the case does not come within sub-s. (e), for if sub-s. (g) did not deal with something not dealt with in sub-s. (e) there was no reason for sub-s. (g). Of course the jurisdiction must be exercised with care and forbearance, but ample power is given to the Court to prevent abuse of the process by the limitation carefully inserted in sub-s. (g), that the person sought to be made a defendant must be a “proper” party to an action “properly brought” against some other party in this country. If there was the least ground for saying the action was brought against the brokers in this country malâ fide, and with the knowledge that they were not liable, simply to try in [*335] England a case which otherwise could not be tried here, then although the action was against a person in this country it would not be “properly” brought. The Court must be satisfied of bona fides before the jurisdiction ought to be exercised, and the Court must be further satisfied that the person to be served abroad is a “proper party.” It is hard to define it exhaustively, but I think that if according to the regular practice of the Courts of this country – supposing all parties subject to the jurisdiction – the person to be served is one who as a matter of course would be joined on the same writ and be treated as one of the defend- ants in the action, he is a “proper,” if not a “necessary,” party to the action.

Such is my opinion on the construction of the rule. Is there any authority on the point? There are only two cases, one, Yorkshire Tannery and Boot Manufactory, Limited v. Eglinton Chemical Co., Limited (1), which, however, does not throw much light on this case, for the decision was on the purely technical ground that the defendant within the jurisdiction had not been served at the time when leave to serve the person outside the jurisdiction was asked, and therefore Pearson, J., held that it was not an action already properly brought against a person within the jurisdiction, and the provisions of Order XI., r. 1 (g), had not been satisfied. But the judgment contains observations in which I entirely concur, to the effect that both the persons abroad to be joined as defendants and the persons sought to be sued in this country must be parties really and substantially concerned with the questions to be litigated, and I do not think that the observation goes further than this, viz., that the jurisdiction must be carefully exercised, and the Court must see that persons are not to be unreasonably and mal‰ fide sued as British subjects here in order to make a case under sub-s. (g) against a foreigner abroad. There is another case much nearer the present one, and which, although different in circumstances, is not different in principle: Sykes v. Scholfield. (2) We have obtained the original affidavits and order of court in that case that we might ascertain exactly how it stood. It was an action brought on the promissory note of a person in New York who could not have been sued alone in

(1) 54 L. J. (Ch.) 81.

(2) 28 Sol, J. 477.

[*336] this country; there were no circumstances to bring him within the other sub-sections of Order XI., r. 1, and therefore the jurisdiction to add him as a defendant depended entirely on sub-s. (g). One of the indorsees was an accountant in Dewsbury, and therefore the action against him was properly brought in England, and an application was made to amend the writ by adding the person abroad, and giving leave to serve him in New York. That was a case of two actions substantially joined in the same writ. It is true that they were not mutually exclusive causes of action; they were concurrent, but separate and distinct, and if the fact that the person in New York could not have been sued alone was a good objection, the order would not have been made; but although there is that distinction of circumstance there is no distinction in principle. According to the practice and system of the Courts in this country both of the defendants if resident here might have been sued in this country, but were not necessary parties to the action. So both answered to the description of “proper” parties to the action. That case tends to support our decision in this case. [The learned' judge then examined the merits of the application on affidavits to set aside the judgment signed, and refused to set it aside.]

GRANTHAM, J. I am of the same opinion. It is clear that one of the objects of the legislature in passing the Judicature Acts and Rules was to do away with the technical objections that the wrong person was sued or that some one else might have been made a defendant, although the plaintiff had no means of finding it out, and to remedy those evils the rules in Order XVI., must have been passed. They prescribe, inter alia, that “all persons may be joined as defendants against whom the right to any relief is alleged to exist, whether jointly, severally, or in the alternative. And judgment may be given against such one or more of the defendants as may be found to be liable, according to their respective liabilities, without any amendment:” rule 4. Then, that every defendant need not be interested as to all the relief prayed for: rule 5; and that the plaintiff may, at his option, join as parties to the same action all or any of the persons severally, or jointly and severally liable on any one contract, including [*337] parties to bills of exchange and promissory notes: rule 6. Then comes rule 7: “Where the plaintiff is in doubt as to the person from whom he is entitled to redress, he may, in such manner as hereinafter mentioned, or as may be prescribed by any special order, join two or more defendants, to the intent that the question as to which, if any, of the defendants is liable, and to what extent, may be determined as between all parties.” It is possible that in the present case the firm in England and the firm in Austria might have cast the liability on each other, and so framed their case that whoever was made sole defendant might have succeeded by shewing that the whole responsibility was on the other. I think that rule 7 was intended to meet such a case. But then comes the question whether the same principle can be adopted where one of the parties is resident abroad? It is clear that he could not be sued in this case except for the special rule (g ]) of Order XI., r. 1. I think we could not possibly have had a better case to shew the expediency of such a rule. Any injustice in bringing in a party resident out of the jurisdiction will be prevented by the necessity for an application to the Court, which must no doubt exercise great care in allowing service abroad. It seemed at first that the English firm might have been made defendants simply in order to bring in the foreign principals, but on the facts it is clear that the plaintiffs had no such intention, but had a real difficulty, viz., they had not the means of knowing whether the repudiation of the charterparty by the foreign firm was justified or not. I think that the plaintiffs could not do better than bring both parties before the Court, in order that the “question which, if any, of the defendants is liable, and to what extent, may be determined as between all parties.”

J. R.

From this decision the defendants Schenker & Co. appealed to the Court of Appeal.

1888. July 6. Gorell Barnes, Q.C., and F. W. Hollams, for the appellants.

French, Q.C., and W. English Harrison, for the plaintiffs, were not heard upon the question of the service of the writ.

[*338] The arguments were in substance the same as those in the Divisional Court, and the same cases were cited, and also Re Steamship Thanemore, Limited, v. Thompson (1) and Speller & Co. v. Bristol Steam Navigation Co. (2)

LORD ESHER, M.R. The question is, what is the true construction of rule 1 (g) of Order XI. According to our present practice in such a case as this, there being one transaction, and the plaintiff having an alternative remedy against one or other of two persons, he is entitled to claim relief in the same action alternatively against one or the other of the two, – to state facts which, if his allegations are true, shew that he is entitled to this alternative relief against one or other of the two parties who have been concerned in the one transaction. To what period of time does the rule in question apply? It must certainly apply to the time of the service of the writ or notice of the writ. How can the Court deal with the case then? Not according to the result of the trial of the action; they cannot take into account what may be the result of the trial, or they could never decide who would be a “proper party” to the action until the trial was over. The question, whether a person out of the jurisdiction is a “proper party” to an action against a person who has been served within the jurisdiction, must depend on this, – supposing both parties had been within the jurisdiction would they both have been proper parties to the action? If they would, and only one of them is in this country, then the rule says that the other may be served, just as if he had been within the jurisdiction. This is the legislation on the subject, and we are bound by it. It is admitted by the appellants that they gave authority to Heynes & Co. to make a charterparty, but they say that Heynes & Co. exceeded their authority.

LINDLEY, L.J. I have no doubt that the rule applies to such a case as this. When the liability of several persons depends upon one investigation, I think they are all “proper parties” to the same action, and, if one of them is a foreigner residing out of the jurisdiction, rule 1 (g) of Order XI. applies.

(1) 52 L. T. (N.S.) 552.

(2) 13 Q.B.D. 96.

[*339] LOPES, L.J. At what time must it be determined whether a person is a “proper party” to an action? Clearly, I think, at the time when the writ is issued. The words “an action properly brought against some other person” evidently point to that. If both these parties were within the jurisdiction it could not be contended that they were not both “proper parties” to the action. As one of them is out of the jurisdiction, I can see no reason why the rule should not apply.

Appeal dismissed.