The claimant insurer had alleged that the defendant to this action, a broker, misrepresented information relating to policies placed by the broker on its behalf. The insureds under the policies commenced proceedings in New York against the insurer, alleging the insurer was in breach of contract ("the Main Action"). The insurer subsequently commenced proceedings in New York against the broker relating to the broker's conduct in various proceedings (one of which was the Main Action). Default judgment was obtained by the insurer but Master Eyre refused to enforce the costs component of the Default Judgment, on the basis that the broker had not voluntarily submitted to the jurisdiction of the New York court. The insurer appealed that judgment.
Green J was therefore required to review the caselaw relating to "submission to the jurisdiction". The general rule is that the party must have taken some step which is only necessary if an objection to jurisdiction has been waived. That issue will be determined in accordance with English law. Of particular relevance to this case is the principle that submission to the jurisdiction will arise not only with regard to the original claim, but also to any other "related" claim. The English courts will also seek to establish who is the "real plaintiff" in proceedings.
In this case, the judge was satisfied that the Master had erred in finding that, on the facts, an argument that the broker was the "real plaintiff" in the Main Action was unsustainable. Although it did not follow inexorably that the broker had also submitted for the purpose of the Default Judgment proceedings, the judge found that it was arguable that there was a sufficient connection between the Main Action and the Default Judgment proceedings to enable submission to the former to constitute submission to the latter (although this issue would have to be determined at trial).
Accordingly, the appeal was allowed. However, Green J did also hold that the Master had not erred in finding that a letter sent by the broker in the context of the Default Judgment proceedings did not amount to a submission to the jurisdiction. In this letter, the broker had denied having deliberately avoided service of the proceedings and asked the court to order the insurer to effect proper service on him. The judge noted that the New York courts did not treat this letter as a submission to their jurisdiction. Had English procedural rules applied instead, the court would have treated this as an informal communication, rather than a formal procedural step. Furthermore, applying an objective test, it was clear that the letter did not reflect an intention by the broker to submit to the jurisdiction.