Members of 3VB in Contested Jurisdiction Challenge

On 26 March 2024, HHJ Keyser KC handed down judgment in McCarthy v Proctor [2024] EWHC 684 (Ch). Members of 3VB were on both sides, with Matthew Parker KC acting for the Defendant Applicant and George McPherson acting for the Claimant Respondent.

On an application made without notice to the Defendant in July 2023, the Claimant had obtained an order from HHJ Keyser KC granting him permission to serve proceedings on the Defendant out of the jurisdiction in Spain (the “Service Out Order”). At a hearing on 21 February 2024, the Defendant sought to set aside that Order and challenge the jurisdiction of the Courts of England and Wales to hear the claim.

The underlying claim arises out of a dispute concerning the ownership of a villa in Mallorca. That dispute has already been the subject of litigation in this jurisdiction, involving the Claimant (then, as now, represented by George McPherson), which went as far as the Court of Appeal last year: see [2023] EWCA Civ 589. The Defendant was not a party to the earlier litigation, which was brought by Mr Allan Jones against the Claimant only (the “Jones Claim”).

The outcome of the Jones Claim was that the Claimant (the defendant to the Jones Claim) was held liable in damages to Mr Jones. That was after the Court found that the Claimant had wrongfully, and in breach of his contract with Mr Jones, sold the villa in 2016 to a third party. That breach came about as a result of the Court finding that the Claimant had sold the villa without first having acquired beneficial ownership to it from the Defendant, despite paying the Defendant EUR 950,000 on that understanding.

In his claim against the Defendant, the Claimant now seeks (among other matters) to recoup the sums awarded in damages and costs in the Jones Claim from the Defendant, as damages for negligent misstatement. In support of this claim, the Claimant alleges that the Defendant impliedly represented to him that he was entitled to transfer beneficial ownership in the villa to the Claimant, that he was not in fact so entitled, and that the alleged implied representations were accordingly false and made negligently.

At the hearing on 21 February 2024, the Defendant sought to set aside the Service Out Order on three grounds:

• The negligent misstatement had no real prospect of success: [38]-[52].
• The Courts of England (and more particularly Wales) were not the appropriate jurisdiction to hear the claim: [53]-[56].
• The Claimant was in breach of his duty to make full and frank disclosure at the without notice hearing: [57]-[62].

In a careful analysis, the Judge ultimately rejected each of these grounds.

The Judgment contains a helpful synthesis of the legal principles relevant to a jurisdiction challenge: [7]-[19]. It is also a useful reminder to practitioners of how those principles are applied in practice: [38]-[62].

George McPherson was instructed by Lee Fisher and Daniel Taylor of Blake Morgan.

Matthew Parker KC was instructed by Hugh Hitchcock of Acuity Law.

The judgment is available here.