Summary of Court of Appeal Opinion (Anonymized)

Factual and Procedural Background

The Plaintiff brings a substantial claim alleging that the First Defendant, who served as the Plaintiff's Director General from 1984 to 2014, orchestrated corrupt schemes and obtained secret commissions with the assistance of other defendants. The First Defendant defended the claim until his death on 6 September 2022. The First Defendant's children (Defendants 42–45) and the Second Defendant (the deceased's spouse) are his heirs.

The trial on the core claim is extensive and is being heard in England and Wales. The Plaintiff amended its pleadings to join Defendants 42–45 as defendants on the basis that they are the deceased's heirs and therefore "necessary or proper parties" (Gateway 3 of CPR Practice Direction 6B). The Plaintiff also sought permission to serve the claim form on Defendants 42–45 out of the jurisdiction.

Procedural history (as stated in the opinion):

• 14 November 2022: an order appointed the Second Defendant to represent the deceased's English estate under CPR rule 19.12(1)(b).
• 26 March 2023: Judge Henshaw appointed the Second Defendant as administrator of the deceased's English estate pursuant to limited grants ad litem and ad colligenda bona.
• 25 April 2024: the trial judge gave the Plaintiff permission to amend pleadings to join Defendants 42–45 pursuant to rule 19.2(4) alternatively 19.2(2)(b).
• 11–12 June 2024: the Plaintiff was granted permission to serve the claim form on Defendants 42–45 out of the jurisdiction on a without-notice basis.
• 23 July 2024: Defendants 42–45 applied to challenge jurisdiction and to set aside service.
• 16 December 2024: Judge Jacobs dismissed Defendants 42–45's jurisdictional challenge and granted permission to appeal; that order is the subject of the present appeal.

It is common ground for the jurisdictional issues that Defendants 42–45 are resident outside the jurisdiction. The 44th defendant (Defendant 44) had been served at an English address used for service in relation to two English companies; the Plaintiff relied, if necessary, on service under section 1140 of the Companies Act 2006.

The Plaintiff relied on unchallenged expert evidence on Swiss law from an expert witness. The expert evidence established (summarised in the opinion) that Swiss law follows a principle of universal succession (heirs automatically succeed to assets and liabilities as a community of heirs), that Swiss enforcement requires the judgment to bind those who own the estate (which will ordinarily require the heirs to be bound), and that under Swiss private international law the relevant connecting factor for jurisdiction is the domicile or habitual residence of the defendant at the time the claim was filed and that the principle of universal succession extends to procedural attributes (so proceedings against a deceased person in England that established jurisdiction over the deceased would continue to be relevant as against heirs).

Legal Issues Presented

1. Whether Defendants 42–45 are "necessary or proper parties to the claim" within Gateway 3 of CPR Practice Direction 6B such that the Plaintiff has a "good arguable case" to serve them out of the jurisdiction — specifically whether they are properly joined on the "Enforcement Basis" and/or on a "Substantive Basis".
2. Whether Defendant 44 was validly served within the jurisdiction pursuant to section 1140 of the Companies Act 2006 (this ground was pleaded on the basis that it arises only if the first issue is resolved against Defendants 42–45).

Arguments of the Parties

Defendants 42–45's Arguments

• The English law distinction between administration of an estate and succession prevents joining foreign heirs merely because they are successors under foreign law; the correct defendant to survive claims against a deceased is the personal representative for English assets.
• The Second Defendant (appointed administrator of the English estate) is the proper party in England; any authority of a foreign personal representative has no operation in England and cannot render foreign heirs subject to English orders in respect of foreign assets.
• It is wrong in principle to join parties who have no connection to proceedings purely to bind them for purposes of enforcement abroad.

Plaintiff's Arguments

• The Plaintiff advances two alternative bases for joinder: (a) a Substantive Basis that the heirs are jointly and severally liable under Swiss law as successors to the deceased's civil liability; and (b) an Enforcement Basis that heirs should be joined so that an English determination of the deceased's liability will bind the heirs and therefore facilitate enforcement of any English judgment against estate assets in Switzerland.
• On the Enforcement Basis the Plaintiff contends that, given the expert evidence on Swiss law and the prospective need to enforce a substantial English judgment against Swiss assets, it is necessary and proper to join the heirs so the issue of the deceased's liability is determined once and binds the heirs for enforcement purposes.
• The Plaintiff relied on the principle that parties with an interest in the subject matter may be bound by determinations (and on analogous examples where non-claimant parties have been joined to secure effectiveness of relief).

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by accepting the unchallenged expert evidence on Swiss law that (i) Swiss succession operates by universal succession so heirs automatically succeed to assets and liabilities as a community, and (ii) recognition and enforcement in Switzerland will ordinarily require a judgment binding those who own the estate (i.e., the heirs) if enforcement against the entirety of the estate is to be effective.

The court applied the established test for "proper party" (Precedent 1) and analysed the Plaintiff's two pleaded bases for joining the heirs:

• Enforcement Basis: The court reasoned that the very issue to be decided at trial — whether the deceased was liable to the Plaintiff — is the same issue that would arise as between the Plaintiff and the heirs if enforcement proceedings were initiated in Switzerland. If the heirs are not bound by the English determination, the Plaintiff may have to relitigate the same fact-intensive liability question in Swiss enforcement proceedings, undermining finality and effectiveness of the English trial.
• The judge considered it reasonably possible that Swiss enforcement proceedings would be pursued, given that English assets would be insufficient to satisfy a large judgment and Swiss assets exist. The expert evidence indicated that an English judgment against the English administrator alone would not, in many cases, be sufficient to bind the heirs for Swiss enforcement purposes; rather, the heirs need to be defendants recorded in the judgment.
• Given that the heirs are directly and closely associated with the deceased (they are his statutory heirs) and given the prospective enforcement issues, the court concluded that it was both necessary and proper to join them under rule 19.2(2)(b) so the issue of the deceased's liability could be determined in the same proceedings and thereby bind the heirs for enforcement.

The court rejected the submission that allowing joinder on the Enforcement Basis improperly collapses the English distinction between administration and succession. The court explained that determining whether the deceased was liable to the Plaintiff as between the Plaintiff and the heirs does not itself determine succession issues under foreign law (for example, any Swiss application to disclaim would remain a matter for Swiss courts).

The court also noted illustrative examples where parties with an interest in the subject matter have been joined or bound by proceedings (e.g., freezing injunction contexts, joinder of assignors, and rule-based orders), treating these as analogous illustrations of the broader principle permitting joinder to secure finality and enforceability.

Because the court resolved the appeal in favour of the Plaintiff on the Enforcement Basis, it did not need to determine whether the Substantive Basis also provided a good arguable case against the heirs. For the same reason, the court did not need to decide the separate issue whether Defendant 44 was validly served under section 1140.

Holding and Implications

HOLDING: The appeal was DISMISSED. The court upheld Judge Jacobs's decision that the Plaintiff had a good arguable case that Defendants 42–45 are necessary or proper parties on the Enforcement Basis and therefore may be joined for the purposes of the English proceedings.

Implications (as stated in the opinion):

• Direct effect: Defendants 42–45 remain joined to the English proceedings so that the issue of the deceased's liability may be determined in the current trial and thereby, if appropriate, bind the heirs for the purposes of enforcement proceedings in Switzerland.
• The court did not decide the Substantive Basis (substantive relief against the heirs) and did not resolve the separate service issue under section 1140, because those matters were unnecessary to decide in light of the ruling on the Enforcement Basis.
• No broader or novel legal principle was purportedly established beyond applying established tests and existing authorities to these facts; the decision turns on applying existing principles (the proper-party test and the accepted Swiss-law evidence) to the circumstances presented.

The panel judges (Judge Nugee and Judge Asplin) agreed with the result and reasoning set out above.