LATE SERVICE OF THE CLAIM FORM, RETROSPECTIVE EXTENSIONS AND OTHER CAUSES OF SLEEPLESS NIGHTS: A CASE TO POINT.

The recent case of Kaki –v- National Private Air Transport & National Air Service Ltd  (QBD (Comm) 23/5/2014 raises some interesting issues in relation to the retrospective validation of service of a claim form when that claim form was served late. (The following is based on the Lawtel summary)

THE RULES RELATING TO RETROSPECTIVE EXTENSION OF TIME FOR SERVICE OF THE CLAIM FORM

In most cases the claim form has to be served within four months (six months if it is to be served outside the jurisdiction).

CPR 7.6.3

This gives a very limited discretion to extend time retrospectively.

(3) If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if –

(a) the court has failed to serve the claim form; or

(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and

(c) in either case, the claimant has acted promptly in making the application.

(4) An application for an order extending the time for compliance with rule 7.5 –

(a) must be supported by evidence; and

(b) may be made without notice.

 CPR 3.9 DOES NOT APPLY TO RETROSPECTIVE APPLICATIONS TO SERVE THE CLAIM FORM

In Vinos –v- Marks & Spencer PLC [2001] 3 All E.R. 784 the Court of Appeal held that an application to retrospectively extend time can only be made under CPR 7.6(3). Lord Justice May stated:

“The meaning of rule 7.6(3) is plain. The court has power to extend the time for serving the claim form after the period for its service has run out “only if” the stipulated conditions are fulfilled.

“That means that the court does not have power to do so otherwise. The discretionary power in the rules to extend time periods – rule 3.1(2)(a) – does not apply because of the introductory words. The general words of Rule 3.10 cannot extend to enable the court to do what rule 7.6(3) specifically forbids, nor to extend time when the specific provision of the rules which enables extensions of time specifically does not extend to making this extension of time. What Mr Vinos in substance needs is an extension of time – calling it correcting an error does not change its substance. Interpretation to achieve the overriding objective does not enable the court to say that provisions which are quite plain mean what they do not mean, nor that the plain meaning should be ignored.”

CPR r.6.15

A claimant can be saved, however, if they have taken steps to serve. CPR 16.5.2 in particular allows the court to order that steps already taken represent good service.

6.15

(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place.

(2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service

It was this rule that saved the claimant in the Kaki case.

 THE FACTS  OF KAKI

Kaki was a contract dispute concerning the sale of an aircraft. The respondent was domiciled in Saudi Arabia and the applicant took a number of steps to bring the claim to his attention:

• He sent a letter before action and the claim form to respondent’s registered address in Saudi Arabia.
• He sent the same documents, by email, to the respondent’s legal department.
• He asked for details of an agent for service in England. No response was received.
• He obtained permission to serve the claim form out of the jurisdiction. This was then sent to the Foreign Process Section of the High Court for service.  An extension of time was obtained while awaiting service by the Saudi authorities.
• The applicant obtained an extension for service and an order for alternative service, so that the claim form could be served on a different address in Saudi Arabia.

However the claim form was delivered to the London solicitors one day after the time for service expired and to the Saudi address three days later.

THE APPLICATIONS BEFORE THE COURT

The claimant obtained summary judgment. The defendants then filed an  acknowledgement of service indicating that they intended to challenge jurisdiction and they applied to set aside the judgment on the basis that the claim form had been served out of time.

The claimant applied an order extending time for service of the claim form retrospectively  under 7.6  and an application under 6.5.(12) for an order that the steps taken to bring the claim form to the attention of the defendants prior to the expiry of time for service amounted to good service.

(The claimant also made applications  order 3.10 on the grounds that this a procedural error, alternatively for an order dispensing with service).

THE COURT REFUSED THE APPLICATION TO RETROSPECTIVELY EXTEND TIME FOR SERVICE

It is important to note that the provision of CPR 7.6(3) remain strict. The judge concluded that the court would not retrospectively extend time for service of the claim form under CPR 7.6 (3).

• They key question was whether the applicant had taken all reasonable steps to serve in time and whether the application for a retrospective extension had been made promptly.
• In the present case the applicant had failed to take all reasonable steps.
• There was no reason why the London solicitors could not have been served on time and the applicant should have known that service had been late.
• There had been delays in instructing agents in Saudi Arabia and delays by the agents.
• The application could not be said to be prompt.

THE COURT DID MAKE AN ORDER VALIDATING THE PRIOR ATTEMPTS TO SERVE

However the Judge found that he could retrospectively validate alternative service out of the jurisdiction.

• The respondent had been well aware of the proceedings and this was a critical factor. T
• he applicant had made significant efforts, over a prolonged period and the claim form had been brought to the attention of the defendants. It was therefore right to retrospectively validate the steps that had been taken as good service under Rule 6.15 (2).
• The form had been sent and e-mailed to Saudi Arabia and there was no doubt that the defendants were fully apprised of the nature of the claim.
• It was not the claimant’s fault that earlier attempts to serve through diplomatic channels had been unsuccessful.
•  Requiring a new claim form to be served would simply waste further time and costs.
• The defendants’ objections were technical and the claim was not statute barred.
• Making the order was not tantamount to saying that a failure to take all reasonable steps was a good reason for retrospectively validating previous attempts at service.
• The fact that the defendants were aware of the proceedings was an important factor, although this was not itself a good reason.

THE COURT WOULD NOT HAVE RECTIFIED  THIS AS AN ERROR OF PROCEDURE UNDER CPR 3.10

The court did not determine the issue of whether it should dispense with service, but stated that, if it had not retrospectively validated service under CPR r.6.15(2) it would not have rectified the errors of procedure under CPR 3.10.

CONSIDERATION OF AUTHORISATION OF SERVICE & 6.5.(1)  BY THE SUPREME COURT: ABELA -v- BAADARANI

The issue of retrospective authorisation under CPR 6.5(2) was considered by the Supreme Court in Abela (v Baadarani [2013] UKSC 44  where the Supreme Court upheld the decision of the first instance judge making an order under 6.15.(2).

The Supreme Court held that 6.15(2) applied in relation to actions served abroad.

Lord Clarke stated:

9. As the judge noted at para 66, before him the question was raised whether rule 6.15(2) could be used, as it is used in respect of issues as to service in proceedings where the parties are within the jurisdiction, retrospectively to accept the parties’ actions as constituting good service where the defendant is outside the jurisdiction. It was conceded before this court that rule 6.15(2) can be so used.
10. For my part, I would accept that that concession was correctly made. The judge was to my mind correct to hold in para 71 that, just as the power under rule 6.15(1) prospectively to permit alternative service in a service out case is to be found in rule 6.37(5)(b)(i) or is to be implied generally into the rules governing service abroad (because that must have been the intention of the drafter of the 2008 amendments to CPR rule 6), so rule 6.37(5)(b)(i) is to be construed as conferring the power, via rule 6.15(2), retrospectively to validate alternative service in such a case, or such a power is to be implied generally into the rules governing service abroad. In any event, the contrary was not contended before this court.
11. In para 72 the judge, in my opinion correctly, added that the power retrospectively to validate alternative service in a service out case involves consideration of whether events in the foreign country in question were capable of constituting proper service of the proceedings “in the sense that the court can be satisfied that the proceedings have been properly brought to the attention of the defendant”. As I will explain, that is an important point in the context of this appeal.
12. The appellants’ argument is that the court had power under rule 6.15(2) to make an order that steps already taken to bring the claim form to the attention of the respondent by an alternative method constituted good service. The steps taken were the delivery of the claim form and other documents, including the particulars of claim, at Mr Azoury’s office in Beirut on 22 October 2009, which was within the initial six months’ validity of the claim form.
13. Orders under rule 6.15(1) and, by implication, also rule 6.15(2) can be made only if there is a “good reason” to do so. The question, therefore, is whether there was a good reason to order that the steps taken on 22 October 2009 in Beirut to bring the claim form to the attention of the respondent constituted good service of the claim form upon him. The judge held that there was. In doing so, he was not exercising a discretion but was reaching a value judgment based on the evaluation of a number of different factors. In such a case, the readiness of an appellate court to interfere with the evaluation of the judge will depend upon all the circumstances of the case. The greater the number of factors to be taken into account, the more reluctant an appellate court should be to interfere with the decision of the judge. As I see it, in such circumstances an appellate court should only interfere with that decision if satisfied that the judge erred in principle or was wrong in reaching the conclusion which he did.
14. It is important to note that rule 6.15 applies to authorise service “by a method or at a place not otherwise permitted” by CPR Part 6. The starting point is thus that the defendant has not been served by a method or at such a place otherwise so permitted. It therefore applies in cases (and only in cases) where none of the methods provided in rule 6.40(3), including “any other method permitted by the law of the country in which it is to be served” (see rule 6.40(3)(c)), has been successfully adopted. The only bar to the exercise of the discretion under rule 6.15(1) or (2), if otherwise appropriate, is that, by rule 6.40(4), nothing in a court order must authorise any person to do anything which is contrary to the law of the country where the claim form is to be served. So an order could not be made under rule 6.15(2) in this case if its effect would be contrary to the law of Lebanon. Although it was held that delivery of the claim form was not permitted service under Lebanese law, it was not suggested or held that delivery of the documents was contrary to Lebanese law or that an order of an English court that such delivery was good service under English law was itself contrary to Lebanese law.”

 “GOOD REASONS” ARE REQUIRED AND NOT “EXCEPTIONAL CIRCUMSTANCES”

“33. The question is whether the judge was entitled to hold that there was a good reason to order that the delivery of the documents to Mr Azoury on 22 October 2009 was to be treated as good service. Whether there was good reason is essentially a matter of fact. I do not think that it is appropriate to add a gloss to the test by saying that there will only be a good reason in exceptional circumstances. Under CPR 6.16, the court can only dispense with service of the claim form “in exceptional circumstances”. CPR 6.15(1) and, by implication, also 6.15(2) require only a “good reason”. It seems to me that in the future, under rule 6.15(2), in a case not involving the Hague Service Convention or a bilateral service treaty, the court should simply ask whether, in all the circumstances, there is good reason to order that steps taken to bring the claim form to the attention of the defendant is good service.

34. This is not a case in which the Hague Service Convention applies or in which there is any bilateral service convention or treaty between the United Kingdom and Lebanon. In the courts below, the case was argued throughout on that basis and, although there was a hint in the argument before this court that that might not be the case, it was accepted that the appeal should be determined on that basis. It follows that an alternative service order does not run the risk of subverting the provisions of any such convention or treaty: cf the reasoning of the Court of Appeal in Knauf UK GmbH v British Gypsum Ltd [2002] 1 WLR 907, paras 46 to 59 and Cecil v Bayat [2011] EWCA Civ 135, [2011] 1 WLR 3086, paras 65 to 68 and 113. In particular, Rix LJ suggested at para 113 of the latter case that it may be that orders permitting alternative service are not unusual in the case of countries with which there are no bilateral treaties for service and where service can take very long periods of up to a year. I agree. I say nothing about the position where there is a relevant convention or treaty

35. As stated above, in a case of this kind the court should simply ask itself whether, in all the circumstances of the particular case, there is a good reason to make the order sought. It should not be necessary for the court to spend undue time analysing decisions of judges in previous cases which have depended upon their own facts.

36. The mere fact that the defendant learned of the existence and content of the claim form cannot, without more, constitute a good reason to make an order under rule 6.15(2). On the other hand, the wording of the rule shows that it is a critical factor. As the editors of the 2013 edition of the White Book note (vol 1, para 6.15.5), rule 6.15(2) was designed to remedy what were thought to be defects as matters stood before 1 October 2008. The Court of Appeal had held in Elmes v Hygrade Food Products plc [2001] EWCA Civ 121 that the court had no jurisdiction to order retrospectively that an erroneous method of service already adopted should be allowed to stand as service by an alternative method permitted by the court. The editors of the White Book add that the particular significance of rule 6.15(2) is that it may enable a claimant to escape the serious consequences that would normally ensue where there has been mis-service and, not only has the period for service of the claim form fixed by CPR 7.5 run, but also the relevant limitation period has expired.

37. Service has a number of purposes but the most important is to my mind to ensure that the contents of the document served, here the claim form, is communicated to the defendant. In Olafsson v Gissurarson (No 2)[2008] EWCA Civ 152, [2008] 1 WLR 2016, para 55 I said, in a not dissimilar context, that

“… the whole purpose of service is to inform the defendant of the contents of the claim form and the nature of the claimant’s case: see eg Barclays Bank of Swaziland Ltd v Hahn [1989] 1 WLR 506, 509 per Lord Brightman, and the definition of ‘service’ in the glossary to the CPR, which describes it as ‘steps required to bring documents used in court proceedings to a person’s attention…'”

I adhere to that view.

39. It is plain from paragraph 73 of his judgment quoted above that the judge took account of a series of factors. He said that, most importantly, it was clear that the respondent, through his advisers was fully apprised of the nature of the claim being brought. That was because, as the judge had made clear at para 60, the respondent must have been fully aware of the contents of the claim form as a result of it and the other documents having been delivered to his lawyers on 22 October in Beirut and communicated to his London solicitors and to him. As Lewison J said at para 4 of his judgment (quoted above):

“The purpose of service of proceedings, quite obviously, is to bring proceedings to the notice of a defendant. It is not about playing technical games. There is no doubt on the evidence that the defendant is fully aware of the proceedings which are sought to be brought against him, of the nature of the claims made against him and of the seriousness of the allegations.”

I agree.”

SUMMARY: STILL BE VERY CAREFUL IN SERVING CLAIM FORMS

These cases cannot be read as any kind of indication that  the rules in relation to service of the claim form have been relaxed. The central point is that substantial efforts had been made to serve the defendants prior to the date of expiry and the defendant knew of the action against them.   The Kaki case makes it clear that CPR 7.6 remains an extremely rigorous test.  It is unlikely that many errors relating to service of the claim form will be rectified under CPR 3.10.

 Failing to serve the claim form correctly is one of the quickest and easiest ways to end up being sued

 OTHER POSTS ON THIS BLOG ON SERVICE OF THE CLAIM FORM

– Service of the Claim Form: The time For service and the address for service.

– Delaying Service of the Claim Form: “Dicing with Procedural Death.”

– Service of the Claim Form: Another example of a claimant coming to grief.

– Service of the Claim Form : Mitchell: Relief from sanctions and a good reason.

– Service of the Claim Form: Further traps for the unwary.

– Service of Proceedings : Adding to the “essential checklist”