Law Report: Action becomes pending on issue of the writ: Arab Monetary Fund v Hashim. Court of Appeal (Lord Justice Fox, Lord Justice Nourse and Lord Justice Woolf), 16 July 1992

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For the purpose of ordering the consolidation of actions under Order 4 rule 9(1) of the Rules of the Supreme Court, a cause or matter became 'pending' once the writ was issued and not only when it was served.

The Court of Appeal dismissed an appeal by Jalal Ohan Stephan from Mr Justice Hoffmann's refusal (1992) 1 WLR 553 to set aside service of a writ issued by the Arab Monetary Fund out of the jurisdiction.

On 8 December 1989 Mr Justice Hoffmann ordered two actions commenced by the Arab Monetary Fund, the main action and the secondary action, to be consolidated under Order 4 rule 9(1) of the Rules of the Supreme Court. Mr Stephan, a resident of the state of Texas, was a defendant to the secondary action, but not to the main action.

When the order for consolidation was made, the writ in the secondary action had not been served on him or any of the defendants in that action.

The AMF was granted an order for the renewal of the writ, an order under Order 11, rule 1(1)(c) giving leave for the issue of a concurrent writ for service on Mr Stephan out of the jurisdiction and also the service itself. Mr Justice Hoffmann refused to set aside service of the writ.

Mr Stephan contended that the secondary action was not 'pending' within Order 4 rule 9(1) and therefore the order for consolidation was invalid; that if the consolidation order was invalid so that the secondary action retained its separate existence, it could not have been said that 'the claim is brought against a person duly served within or out of the jurisdiction' within Order 11 rule 1(1)(c) and therefore the application to set the service aside must succeed.

Daniel Serota QC (Proctor Gillette) for Mr Stephan; Charles Flint (Freshfields) for the AMF.

LORD JUSTICE NOURSE said that Order 4 rule 9(1) provided that 'Where two or more causes or matters are pending in the same division . . . the court may order those causes or matters to be consolidated . . '.

Immediately following rule 9 in the Supreme Court Practice 1992, there was a note which read: 'There is a discretion to consolidate 'pending' actions, that is to say actions in which the writ has been served (The Helenslea (1882), 7 PD 57) and in which judgment has not yet been obtained and satisfied.'

The Helenslea was the foundation of the argument that the writ must be served before the action could become 'pending'.

In 1881 when that case was decided the rule did not refer to 'pending' actions. In The Helenslea Sir Robert Phillimore declined to consolidate two cross actions between the owners of two vessels which had been involved in a collision on the ground that the writ in one of the actions had not been served.

Sir Robert thought that two suits could only be consolidated after each of them had become a pending action, and a suit in personam did not become such until after service of the writ. However, Sir Robert must be taken to have been applying the practice of the Admiralty Court. It did not follow that the practice of that court would have been a reliable guide to the effect of the modern Order 4 rule 9.

The Helensea could have no decisive application to Order 4 rule which must be construed on its own merits.

Mr Serota referred to, among other authorities, Dresser UK Ltd v Falcongate Freight Management Ltd (1992) 2 WLR 319. In that case, the Court of Appeal had to decide whether, for the purposes of article 22 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, the English court became 'seised' of an action on the issue of the writ or only when it was served. The Court of Appeal, having considered Zelger v Salinitri (1984) ECR 2397, held that for the purposes of article 22 proceedings in the English court became 'definitively pending' only when the writ was served.

The court made it clear that it was interpreting the expression 'definitively pending' only for the purposes of the provision before it and that for other purposes proceedings might become 'pending' on the issue of the originating process. Mr Flint submitted that the purpose of Order 4 rule 9 was to give the court wide powers to control its own process, that a broad construction was appropriate, and that an action was begun by the issue of the writ and that the writ, once issued, had legal effect if only by stopping the limitation period from running.

Mr Flint's submissions were correct. The court was not here concerned, as in Dresser, with a competition between two different jurisdictions.

The court was concerned with a rule regulating the practice of the courts within a single jurisdiction. It was not the leaning of our courts to restrict procedural powers which might be useful to them unless the wording of the rules or the interests of justice required it.

Here the utility of a wide power, the inconveniences of a narrow one and the absence of injustice were more than adequately demonstrated by Mr Justice Hoffmann at (1992) 1 WLR 559. His construction of Order 4 rule 9 was correct. In holding that he had power to make the consolidation order, he did not err in law.

Once it was established that there was power to make the order for consolidation, the making both of that order and of the subsequent order for service was within the discretion of the judge, notwithstanding that the AMR might thereby have gained a limitation advantage. It could not be said that by refusing to set the service aside the judge erred in principle in the exercise of his discretion.