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Articles, News | Tue 2nd May, 2023
For an area of law that’s supposed to be perfectly intuitively straightforward, jurisdiction certainly generates a lot of case law, doesn’t it? This week Henk Soede examines another recent case on service and jurisdiction, whilst Sarah Prager grapples with the judgment of the Supreme Court in a case on vicarious liability, another one of those areas practitioners find universally bothersome.
Service, Jurisdiction and Related Matters
In Dr Markus Boettcher v XIO (UK) LLP (In Liquidation) & Ors [2023] EWHC 801, Peter Macdonal Eggers KC, sitting as a Deputy High Court Judge (the “Judge”), considered a host of issues relevant to service of proceedings both within and outside of the jurisdiction. This note focuses on two aspects of the decision, namely, the decision as to ‘last known residence’ within the meaning of CPR 6.9 and the defendants’ application for a stay on the grounds that Germany was clearly and distinctly the more appropriate forum.
Background
The claimant sought damages for misrepresentations which allegedly induced him to enter into a contract of employment with the first defendant. The claim was brought in deceit, under the Misrepresentation Act 1967, and for breach of a tortious duty of care.
On 24th September 2021, the claimant’s claim was issued against Xio UK, Mr Geyer and Mr Pacini. On 1st October 2021, Mr Geyer was served with the claim form at an address in Savile Row (“33SR”). On the same date, Mr Pacini was served with the claim form at an address in the Shard. In the event, Mr Pacini did not dispute the validity of service within the jurisdiction.
On 13th October 2021, the claimant made a without notice application for permission to serve Mr Geyer at his address in Switzerland and Mr Pacini at his address in the USA. On 19th October 2021, Mr Geyer and Mr Pacini acknowledged service and intimated an intention to contest jurisdiction.
On 26th October 2021, Waksman J made an order permitting the claimant (on his without notice application) to serve the proceedings on Mr Geyer and Mr Pacini out of the jurisdiction. Both parties subsequently sought to set aside the order of Waksman J.
A number of issues fell to be determined: see [38] and [39]. This note focuses on two specific issues, namely, the analysis of whether 33SR was Mr Geyer’s ‘last known residence’ within the meaning of CPR 6.9(2) and the defendants’ application for a stay on the grounds that Germany was clearly and distinctly the more appropriate forum.
Service within the jurisdiction
The claimant alleged that 33SR was Mr Geyer’s last known address and, therefore, that service was valid pursuant to CPR 6.9. CPR 6.9 permits service on an individual at the individual’s “usual or last known address”, provided that CPR 6.5(1), 6.7 and 6.8 do not apply: CPR 6.9(1)-(2). Further, CPR 6.9(3)-(6) provide for additional requirements:
“(3) Where a claimant has reason to believe that the address of the defendant referred to in entries 1, 2 or 3 in the table in paragraph (2) is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant’s current residence or place of business (“current address”).
(4) Where, having taken the reasonable steps required by paragraph (3), the claimant—
(a) ascertains the defendant’s current address, the claim form must be served at that address; or
(b) is unable to ascertain the defendant’s current address, the claimant must consider whether there is—
(i) an alternative place where; or
(ii) an alternative method by which, service may be effected.
(5) If, under paragraph (4)(b), there is such a place where or a method by which service may be effected, the claimant must make an application under rule 6.15.
(6) Where paragraph (3) applies, the claimant may serve on the defendant’s usual or last known address in accordance with the table in paragraph (2) where the claimant—
(a) cannot ascertain the defendant’s current residence or place of business; and
(b) cannot ascertain an alternative place or an alternative method under paragraph (4)(b).“
The claimant submitted that service on Mr Geyer at 33SR was valid: see [51] for the fuller arguments as to why. Mr Geyer submitted evidence (which was uncontested) that he had surrendered his lease on the flat on 31st March 2018 and had ceased residing there from 1st January 2018. It was submitted that, inter alia, by August/September 2021 the claimant knew that Mr Geyer resided in Switzerland, having previously resided in Switzerland, and did not reside at 33SR: see [53].
At [49], the Judge extrapolated the following principles from the authorities on the concept of the defendant’s ‘last known address’:
“(1) The claimant must establish that there is a good arguable case that the address at which service was effected was the defendant’s last known residence. This means that, on the evidence available, the claimant has the better of the argument on this issue than the defendant.
(2) The defendant’s last known residence need not be the defendant’s usual residence.
(3) The defendant may have more than one last known residence.
(4) The defendant’s last known residence may be a residence at which the defendant is residing or no longer resides (having once resided there) at the time of the purported service of process. It cannot be an address at which the defendant never resided.
(5) Knowledge of the defendant’s residence in this context refers to the claimant’s actual knowledge or constructive knowledge, i.e. knowledge which the claimant could have acquired exercising reasonable diligence. An honest or even reasonable belief is not sufficient if the defendant never resided at the relevant address.
(6) The claimant’s state of knowledge is to be assessed as at the date on which the proceedings were served at the address in question.”
With those principles in mind, the Judge found that the evidence established a good arguable case that 33SR was Mr Geyer’s last known address. Firstly, Mr Geyer had resided at 33SR until January 2018. The claimant had been informed by Mr Geyer, whilst the claimant worked for Xio UK, that he lived at 33SR but also had a property in Germany. However, Mr Geyer was not then a resident in Germany: [55]. Secondly, the claimant had made a number of enquiries, by way of direct contact with Mr Geyer, a private investigation consultant, and instructing his solicitors to make enquiries with the porter at 33SR. The enquiries revealed that Mr Geyer still had a residence at 33SR, even if that was not accurate, and also had a residence in Germany and/or Switzerland. The fact that Mr Geyer had multiple residences was not a reason why 33SR could not be a last known, or even a usual, residence: Relfo Ltd (in liquidation) v Varsani [2009] EWHC 2297 at [34]. CPR 6.9(5) only applied if the claimant had no reason to believe that Mr Geyer no longer resided at 33SR: [57]. Thirdly, a “critical step’ in the claimant’s conclusion that 33SR was Mr Geyer’s last known residence was a conversation between his solicitors and the porter at 33SR. The solicitor’s evidence as to that conversation reinforced the conclusion that Mr Geyer continued to reside at 33SR: [58]. Fourth, the claimant’s solicitors had sent letters of claim to Mr Geyer by email with 33SR as the identified address but Mr Geyer took no steps to inform the claimant that he no longer resided at 33SR. The Claimant was entitled to rely on Mr Geyer’s failure to correct any impression that Dr Boettcher had that 33SR was Mr Geyer’s last known residence: [59].
forum (non) conveniens
The next issue which fell to be determined was the defendants’ application for a stay on the basis that Germany was the more appropriate forum. There was an antecedent issue as to whether the defendants had submitted to the jurisdiction but this was resolved in the defendants’ favour: see [63]-[82].
Given that proceedings were served in England as of right, the question was not whether England is the more appropriate forum, but whether Germany was clearly and distinctly a more appropriate forum: see [96] and, e.g., Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 at 476-478. Even if that burden was discharged, the court retained the discretion to refuse the stay on the grounds that there are other factors which would entail a real risk that the claimant would be denied justice in the alternative forum: see [84] and Municipio de Mariana v BHP Group (UK) Ltd [2022] EWCA Civ 951 at [333]. At [88], the Judge summarised the authorities as to some of the factors which may be taken into account:
“(1) The connection between the factual elements of the dispute to the competing jurisdictions.
(2) The law governing the transaction.
(3) The location of the parties to the dispute both at the time of the events giving rise to the dispute and also during the course of the proceedings.
(4) Whether proceedings relating to the dispute between the applicant and the respondent would be fragmented by any order for or against a stay which the Court might make, and whether there would be concurrent proceedings in more than one jurisdiction, with the risk of inconsistent judgments being obtained in those jurisdictions.
(5) The location and availability of documentary evidence (although whether this is a material practical consideration depends on the ease with which such documents can be digitally copied and transferred and whether there are caches of documents which require review only at particular locations).
(6) The location and availability of witnesses (bearing in mind that this last consideration may be mitigated if evidence can or is to be given remotely consistent with the requirement of a just and fair proceeding).”
The Judge found that the defendants had failed to establish that Germany was clearly and distinctly the more appropriate forum. Firstly, as regards the alleged misrepresentations themselves, they could not be said to be more connected with Germany than England: see [98]-[102]. Secondly, the case advanced by the claimant was concerned with the truth or falsity of allegations made as to the Xio Group’s funds under management. The inquiry into the truth of any such representations would not be focused solely or principally on the source of funds or investments in Germany: [103]. Thirdly, a significant connecting factor to England was the fact that the claimant was being recruited to work for Xio UK, a business domiciled in England, and were made for the purpose of getting the claimant to work for Xio UK in England: [104]. The employment contract was intended to be governed by English law in that the offer letter referred to English legislation. Further, Mr Geyer and Mr Pacini both had a presence in Xio UK’s London office in so far as they both had offices and a personal assistant there: [106]. Fourthly, the practical considerations underlying the trial did not gravitate towards Germany or England. The claimant was domiciled in Germany but other witnesses were located elsewhere and, in any event, the location of witnesses was less a matter of practical convenience to the extent that evidence could fairly be given remotely: [107]. Fifthly, there was presently one set of proceedings against Xio UK, Mr Geyer, Mr Pacini and Mr Qiao. However, if the proceedings against Mr Geyer and Mr Pacini would be stayed, there would perhaps be two sets of proceedings, one in England and the other in Germany, all connected with the same set of factual issues: [108]. Sixthly, there was a good arguable case that the matter would be governed by English law: see [110].
For those reasons, the Judge held that Germany was not clearly and distinctly a more appropriate forum for the determination of the dispute than England. Accordingly, the English court was entitled to exercise jurisdiction over the claims brought against Mr Geyer and Mr Pacini: see [113]-[114].
Conclusion
The decision is a useful reminder of the principles applicable to CPR 6.9 and the forum non-conveniens analysis. The decision also contains an exploration of a number of issues which have not been dealt with in this note, namely, submission to the jurisdiction (see [63]-[82]); the jurisdiction gateways in CPR PD 6B, para 3.1(3) and 3.1(9)(a) (see [115]-[143]); and the duty of full and frank disclosure (see [161]-[168]). Our readers are directed to the judgment for a fuller exploration of those points.
About the Author
Henk Soede was called to the Bar in 2019. He has developed a specialist practice in the field of travel and private international law and is a contributing editor to the leading practitioner text in this area, Saggerson on Travel Law and Litigation (7th Ed.). Henk has built up expert knowledge in all private international law matters, including issues relating to jurisdiction, foreign applicable law and the enforcement of foreign judgments. He also acts in contractual disputes between travel business which necessitate detailed understanding of the package travel legislation landscape. He is presently instructed by a major UK tour operator as sole counsel in a high value arbitration concerning the Covid-19 pandemic and various indemnity provisions linked to liability under package travel legislation. Henk is listed in the Legal 500 2023 as a Rising Star.
Vicarious Liability Revisited: Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB [2023] SC 15
The facts of the latest decision of the Supreme Court on vicarious liability are all too familiar. S was an elder of the Congregation of Jehovah’s Witnesses. The respondent (B) and her husband became friends with S and his wife when they began attending services of the Jehovah’s Witnesses. B became concerned when S’s behaviour towards her changed and he began hugging and kissing her. She spoke to his father, who was also an elder. S’s father explained that S was suffering from depression and needed emotional support. It was accepted at trial that, had it not been for S’s status as an elder and the instruction from his father to support him, the friendship would have come to an end at that time; as it was, however, B and her husband continued providing S with support. After they had been out evangelising together, S and B returned to his home, where he raped her. He was subsequently convicted of rape, and B brought a claim for damages in the civil courts against the Congregation, alleging that it was vicariously liable for B’s acts as an elder. The High Court and the Court of Appeal upheld her claim, finding that the trustees were vicariously liable for the rape. The Supreme Court has reversed these decisions, finding that the Congregation was not so liable because although the relationship between the organisation and the tortfeasor was ‘akin to employment’, the rape had been committed while the victim was in the tortfeasor’s home, offering him emotional support, and not while the tortfeasor was carrying out his authorised activities as an elder. Accordingly, there was no sufficiently close connection between the tortfeasor’s position as elder and the rape such that it could be regarded as having been committed in the course of his quasi-employment.
The legal principles
The Supreme Court reminds us that the two stages in determining vicarious liability are concerned with:
(i) the relationship between the defendant and the tortfeasor; and
(ii) the link between that relationship and the commission of the tort.
The Court held that the same stages and tests apply to cases of sexual abuse as they do to other cases on vicarious liability, there being no special rules for a particular class of case. This rather destroys the author’s previous theory that cases arising out of sexual abuse might fall into a different category to other cases, since this appeared to be the only way of reconciling previous differing decisions on vicarious liability. Back to the drawing board.
(i) The relationship between the defendant and the tortfeasor
The test at stage one was whether the relationship between the defendant and the tortfeasor was one of employment or ‘akin to employment’. In the latter case, the court had to consider the features of the relationship that were similar to, or different from, a contract of employment, including: whether the work was being paid for in money or in kind; how integral to the organisation was the work carried out by the tortfeasor; the extent of the defendant’s control over the tortfeasor in carrying out the work; whether the work was being carried out for the defendant’s benefit or in furtherance of the aims of the organisation; the situation with regard to appointment and termination; and whether there was a hierarchy into which the relevant role fitted, Barclays Bank Plc v Various Claimants [2020] UKSC 13 followed (para. 58).
The application of the legal principle to the facts of the case
The relationship between S and the Jehovah’s Witness organisation was akin to employment. Although the work of an elder was unpaid, economic dependence was not a necessary feature of a relationship akin to employment. As an elder, S was carrying out work on behalf of, and assigned to him by, the organisation and was performing duties which were in furtherance of and integral to its aims and objectives. There was an appointments process by which individuals could be made or removed as elders, and a hierarchical structure into which elders fitted. Elders were required to conduct themselves within the rules of the organisation, Various Claimants v Institute of the Brothers of the Christian Schools [2012] UKSC 56 followed, A v Trustees of the Watchtower Bible and Tract Society [2015] EWHC 1722 (QB) applied. The reasoning in the courts below was correct with regard to stage one of the test (paras 65-69).
(ii) The ‘close connection’ test
The test at stage two was whether the wrongful conduct was so closely connected with acts that the tortfeasor was authorised to do that it could fairly and properly be regarded as done by the tortfeasor while acting in the course of his employment or quasi-employment, Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, and WM Morrison Supermarkets Plc v Various Claimants [2020] UKSC 12 followed. In order to be comprehensive, the test had to include situations where the stage one relationship was ‘akin to employment’. A ‘but for’ causal connection between the wrongful conduct and the authorised activities was not in itself sufficient to satisfy the test (para. 58).
The application of the legal principle to the facts of the case
Neither the High Court nor the Court of Appeal had set out the correct ‘close connection’ test, and both had wrongly relied on factors which had no relevance to vicarious liability. Applying the correct test, S did not commit the rape while carrying out his activities as an elder, but while at his own home at a time when he was not exercising control over B because of his position as an elder. B was in S’s home because of her close personal friendship with him and because of her desire to offer him emotional support. Moreover, unlike “grooming” cases involving the sexual abuse of children, the rape was not an objectively obvious progression from what had gone before; it was a shocking one-off attack. Accordingly, the ‘close connection’ test was not satisfied (paras 70-71, 74-75, 78, 81).
Underlying policy considerations
The tests were a product of the underlying policy justification for vicarious liability and invoked legal principles that could usually be applied without continually turning back to examine that policy, Lister v Hesley Hall Ltd [2001] UKHL 22 and Barclays Bank followed. However, it could be a useful final check on the justice of the outcome to stand back and consider whether it was consistent with the underlying policy, Cox followed. Although subject to debate, the core policy appeared to be that the employer or quasi-employer who was taking the benefit of the activities carried on by a person integrated into its organisation should bear the cost or risk of the wrong committed by that person in the course of those activities. There was no convincing justification for the organisation to bear the cost or risk of the rape committed by S (paras 58, 82).
Postscript
Although the appeals to the Court of Appeal and to the instant court had been made by the trustees as second defendants to B’s claim, the first defendant in that claim was the Watch Tower and Bible Tract Society of Pennsylvania (Watch Tower), which had agreed to satisfy any judgment against the trustees. The precise nature of the relationship between those defendants, the legal status of the trustees or the structure of the Jehovah’s Witness organisation had not been investigated. In considering ‘quasi-employment’, the Watch Tower was the correct defendant for the purposes of vicarious liability. The Congregation was an unincorporated association and it was not obvious that its trustees had been correct defendants, as they lacked power to appoint or remove elders and were therefore not in the position of a ‘quasi-employer’ (paras 59, 61-64).
Comment
Apart from the obvious and depressing point that a great many of these cases on vicarious liability for sexual abuse seem to involve religious organisations of one kind or another, this decision of the Supreme Court is notable in that it is a further attempt by the higher courts to render the law in this area coherent, in the face of what the author regards as overwhelming odds. In truth, the law on vicarious liability is, like the law on secondary victims, a policy-driven mess. The courts accepted B’s evidence that she had previously expressed discomfort as a result of S’s behaviour towards her, and that had S not been an elder, and had his father (also an elder) not asked her to provide him with emotional support, she would not have been evangelising with him and would not have returned to his home. They ought, the author believes, to have been driven to the conclusion that S misused his status as an elder, compounded by his father’s intervention as an elder, as well as taking the opportunity afforded to him by the fact that members of the Congregation are expected to evangelise.
The Supreme Court asked itself where the burden of risk posed by elders raping members of the Congregation should lie, and appears to have concluded that it should lie on those individuals lower down the church hierarchy than those who prey on them. This sits uneasily with decisions of the higher courts in other spheres, in which judges have evinced a distinct lack of sympathy for institutional entities capable of insuring against legal claims. After all, as Sir Brian Leveson famously said, although I recognise that tour operators will complain that they are being held liable for events outside their control, there are many ways in which protection from exposure in this area can be achieved. Surely the same is true of the Congregation and of other religious organisations? And if so, how can the policy of placing the burden of risk on congregants rather than on their deeper-pocketed spiritual guides be justified?
About the Author
Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at Deka Chambers, Matthew Chapman KC, Jack Harding, Dominique Smith, Tom Yarrow and Henk Soede, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases. She was appointed a KC in March 2023.
Call: 1997 Silk: 2023
Call: 2019
