SERVICE OF THE CLAIM FORM: THE IMPORTANCE OF SERVING AT THE RIGHT PLACE AND THE RIGHT TIME: ANOTHER CLAIMANT COMES TO GRIEF

This is the third case on service of the claim form reported on this blog in two days, which may be significant. The strict rules on service pre-dated Jackson/Mitchell by over a decade and yet practitioners regularly come to grief.  American Leisure Group Ltd –v- Garrard & Ors [2014] EWHC 2101 (Ch) is another example of the importance of serving within the correct time period, on the correct defendant, at the correct address.

THE FACTS

  • The claim form had been issued against 7 defendants on the 7th August 2013.
  • The claim form gave two addresses for the first defendant, one in Switzerland and one in London.
  • The claimant’s evidence was that it understood the Swiss address to be the first defendant’s residential address, and the London address to be his office address.
  • In January 2014 the first defendant received a copy of an order giving permission for service out of the jurisdiction of the claim form on three defendants. He instructed solicitors who wrote to the claimant’s solicitors, informing them that his residential address was London and that they had instructions to accept service.
  • The Claimant’s solicitors served the claim form on the defendant’s solicitors who objected to its late service, asserting that no steps had been taken to serve it within the four month period allowed by CPR r7.5(1).

THE DEFENDANT’S SUBMISSIONS

The first defendant applied for a declaration that the purported service of the claim form was not valid and for an order dismissing the proceedings against him on the following submissions:

  • The claim form could not have been served at the Switzerland address as the first defendant had not lived there for three years.
  • Service of the claim form was therefore governed by CPR r7.5(1).
  • The claim form was purported to be served on the first defendant’s solicitors within the jurisdiction outside the four month period allowed by r7.5(1)
  • The claim form was not therefore validly served.

THE CLAIMANT’S SUBMISSIONS

  • The case was governed by CPR 7.5(2) “service out of the jurisdiction” and therefore could be validly effected within 6 months of the date of issue.
  • This was duly achieved by serving it on the defendant’s solicitors.
  • Provided the claim form was one which was to be served out of the jurisdiction, the time for service was 6 months, whether within or out of the jurisdiction.

In the event that service of the claim form was not duly effected the claimant applied for either an extension of time for service under r.7.6(3) or for an order under r6.15(2) that the steps already taken to bring the claim form to the attention of the defendant were sufficient.

THE DECISION: THE CLAIMANT WAS OUT OF TIME AND OUT OF LUCK

The judge granted the defendant’s application and refused the claimant’s application for the following reasons:

“19. In my judgment, the claimant’s submission cannot be sustained. CPR 7.5(2) is not concerned with, and does not permit, service of a claim form within the jurisdiction. It requires service of the claim form in accordance with Section IV of Part 6 within 6 months of the date of issue. Section IV of Part 6 is concerned exclusively with service out of the jurisdiction. A claim form is served in accordance with Section IV only if it is served out of the jurisdiction. The scheme of CPR 7.5 is clear. Paragraph (1) is concerned with the service of a claim form within the jurisdiction and paragraph (2) is concerned with its service out of the jurisdiction. This is made clear not only by the words in 7.5(2) to which I have drawn attention but also by the opening words of 7.5(1), “[w]here the claim form is served within the jurisdiction…”.

The claimant’s attempt to rely on CPR 6.40(3)(c) which permits service “by any other method permitted by the law of the country in which it is to be served” was also rejected as CPR 6.40(1) provides that the rule “contains general provisions about the method of service of a claim form or other document on a party out of the jurisdiction” and that paragraph (3) begins “Where a party wishes to serve a claim form or other document on a party out of the United Kingdom it may be served…”and therefore does not apply to this case.

The claim form was not therefore served within the four month period allowed for service within the jurisdiction.

THE CLAIMANT’S APPLICATION FOR AN EXTENSION OF TIME FOR SERVICE

This application was also rejected.  The claimant could not bring the application within the strict terms of CPR 7.6.

THE STRICT TERMS OF CPR 7.6

CPR 7.6 provides:

“(1) The claimant may apply for an order extending the period for compliance with rule 7.5.

(2) The general rule is that an application to extend the time for compliance with rule 7.5 must be made –

(a) within the period specified by rule 7.5; or

(b) where an order has been made under this rule, within the period for service specified by that order.

(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.”

THE CLAIMANT HAD NOT TAKEN ALL REASONABLE STEPS: NOR HAD IT ACTED PROMPTLY

As the application was made out of time for compliance with r7.5 then the extension could be granted only if the conditions at r7.5(3)(a) or (b) are satisfied and the application has been made promptly.

The court found that the claimant had not taken all reasonable steps to comply with the rule as he had not even attempted to serve the claim form at the London address within the time allowed or make enquiries as to which address service should be effected at.

“25. … In circumstances where the claimant has actually given an address within the jurisdiction on the claim form and where simple enquiries would elicit whether he was or was not currently resident within the jurisdiction, but no such steps have been taken, the claimant is in my judgment unable to establish that it has taken all reasonable steps to comply with CPR 7.5 as required by 7.6(3)(b).”

Further, the court observed that, even if the claimant planned to serve the claim form out of the jurisdiction, the time it would take to validly serve the claim form through the appropriate channels in Switzerland would have taken the service outside of the six month period allowed in any event.

THE FINDINGS OF THE JUDGE

  • The fact that under CPR 7.5 service is valid if made within 4 or 6 months does not mean that a claimant may with impunity leave service to a late stage in the relevant period.
  • If the claimant had taken reasonably prompt steps to effect service on the first defendant even in Switzerland following the issue of the claim form, it is likely that it would have become apparent that the first defendant no longer resided in Switzerland, and that he in fact resided in London.

It was noted that the decision not to contact the defendant earlier appeared to have been a tactical one.

A WINDFALL FOR THE DEFENDANT? SO WHAT?

The claimant submitted that success for the first defendant would produce a windfall for him and reward the playing of technical games.

It was held that the defendant had acted promptly in engaging with the proceedings. The present situation had occurred only because the claimant took no steps to effect service of the proceedings on the first defendant for over five months.

“There is nothing technical about a defendant insisting on service of a claim form within the period for its validity set down in the Rules and resisting an extension of that time when it is not justified on the facts. It is as well to bear in mind the observation of May LJ in Vinos v Marks & Spencer [2001] 3 All ER 784 at [20] that:

There is nothing unjust in a system which says that, if you leave issuing proceedings to the last moment and then do not comply with this particular time requirement and do not satisfy the conditions in r 7.6(3), your claim is lost and a new claim will be statute barred.

 WAS THE DEFENDANT’S APPLICATION IN THE CORRECT FORM?

One curious aspect of this case is that the defendant is reported  as having applied for a “declaration that the purported service of a claim form …. was not valid”. Ordinarily a defendant making an application to challenge service can only make an application to dispute jurisdiction under Part 11. See Hoddinott –v- Persimmon Holdings and the discussion by the Court of Appeal in Power v Meloy Whittle Robinson Solicitors [2014] EWCA Civ 898 discussed in the previous blog post.

On the face of it any other application would involve acceptance of the jurisdiction.  It is not clear what the facts were that justified a different application, or whether this argument was raised at the hearing.

 SUMMARY

  • The scheme of CPR r7.5 is clear. Rule 7.5(1) applies to service within the jurisdiction. Rule 7.5(2) does not apply to service within the jurisdiction, whether or not the claim form could have been served within or out of the jurisdiction.
  • In order to obtain an extension of time for service, the claimant must have taken all reasonable steps to attempt to serve the claim form.
  • Where the claim form contains two addresses for service for the defendant, “taking all reasonable steps” includes attempting to contact the defendant at both addresses.
  • I would feel more comfortable advising a party challenging service to make an application under Part 11.

 
USEFUL POSTS ON SERVICE OF THE CLAIM FORM