In the recent case of Manoli v Hellenic Bank (Finance) Limited, Civil Appeal 413/11, issued on 3 February 2017, the Supreme Court was offered the opportunity to decide an interesting issue in relation to defective service of legal proceedings. The matter raised before the Supreme Court was whether, in cases where there is a bad service of the writ of summons leading to a right of the defendant to apply for setting aside the judgment, that right may, under certain circumstances, be waived or be subject to an estoppel as a result of the defendant’s conduct after service.
In the said case, the appellant/defendant was a guarantor in a loan. The respondent/claimant bank issued proceedings against him, however the writ of summons was improperly served, such service been made to his father, with whom the appellant/defendant did not share the same residence at the time. The father never informed the appellant/defendant about the service and judgment was issued in default. The appellant/defendant applied to set aside the judgment and argued that he was entitled to the set aside as of right (ex debito justitiae) because of the improper service. The respondent/claimant bank opposed the application, on the ground that the appellant/defendant had become aware of the judgment several years ago and that he, in fact, defended enforcement measures against him, such conduct amounting to a waiver or estoppel in relation to any request to set aside the default judgment.
Although it was common ground before the first instance Court that service was irregular, the first instance Court denied the application, considering that this case could be distinguished from traditional case law, given that the subsequent behaviour of the appellant/defendant (he had appointed an attorney to appear on his behalf in subsequent enforcement proceedings and had contested enforcement measures) indicated that he had accepted the judgment debt, This conduct, according to the Court of first instance, showed bad faith and constituted an abuse of process of the Court, in a manner that precluded the appellant/defendant to apply for setting aside the default judgment. The Supreme Court disagreed with the first instance Court and allowed the appeal, thus ruling that the set aside application should succeed. Citing both Cypriot and English case law, the Supreme Court held that certain procedural irregularities lead to defects in the proceedings that render them an absolute nullity from the very beginning. Defective service constitutes an irregularity of this kind.
In the premises, the service was defective and this constituted a fundamental issue that could not be remedied. Therefore, the appellant/defendant was entitled to the set aside of the judgment as of right. The above precedent highlights the importance of proper service of proceedings. A default judgment given pursuant to improper service of proceedings is null and void and cannot be otherwise remedied, either on grounds related to the subsequent behaviour of the appellant or otherwise.