EXTENSIONS OF TIME FOR SERVICE WERE PROPERLY GRANTED: APPLICATIONS TO SET ASIDE ARE A REHEARING NOT A REVIEW: HIGH COURT DECISION

Another week, another case about service of the claim form. This time the claimant was more successful. In DDM v Al-Zahra (PVT) Hospital & Ors [2018] EWHC 346 (QB). Mr Justice Foskett allowed an appeal against a Master’s decision setting aside an extension of time for service of the claim form.  It makes the important procedural point that an application to set aside an extension is not a review of the earlier decision but a rehearing of the issue.   There is also the important procedural point that the defendants’ total failure to respond to any pre-action correspondence could be, and as in this case, a significant factor in the exercise of any discretion.

“Nothing has been said to me in the hearing of this appeal to suggest that the Master was reminded of the nature of the hearing before him which was that of a rehearing, not merely a review of his earlier decisions … As I have indicated, he approached the task he set himself by simply reviewing the material presented to him when he made the two extension orders. Whilst that is undoubtedly a significant part of the exercise, it is not necessarily the sole part.”

THE CASE

The claimant (a minor) brought a clinical negligence action against a private hospital in the United Arab Emirates. There were delays in serving the claim form. Two extensions of time were obtained.  When the defendants were served they argued that the extensions should not have been granted.  The Master set aside the second extension.  The Master refused an application for an adjournment so that the claimant could put in additional evidence.

THE BACKGROUND

An unusual factor in this case was the defendants’ failure to respond to any pre-action correspondence from the claimant.  This was on legal advice.  Two extensions of time were obtained. Upon receipt of the claim form the defendants made an application to set aside service.  The defendants also made an application for relief from sanctions, on the grounds that the acknowledgements of service seeking to dispute jurisdiction may have been served late.

A CONSIDERATION OF THE RULES

The judge set out the relevant rules and principles in detail.

1. 1. The relevant rules are CPR Part 7.5(2) and 7.6, supported by Practice Direction 7A.

   2. 7.5 (2) provides as follows:

“Where the claim form is to be served out of the jurisdiction, the claim form must be served in accordance with Section IV of Part 6 within 6 months of the date of issue.”

1. 1. 7.6 provides as follows:

“(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.”

1. 1. The relevant part of Practice Direction 7A provides as follows:

“8.1 An application under rule 7.6 (for an extension of time for serving a claim form under rule 7.6(1)) must be made in accordance with Part 23 and supported by evidence.

8.2 The evidence should state:

(1) all the circumstances relied on,

(2) the date of issue of the claim,

(3) the expiry date of any rule 7.6 extension, and

(4) a full explanation as to why the claim has not been served.

(For information regarding (1) written evidence see Part 32 and Practice Direction 32 and (2) service of the claim form see Part 6 and Practice Directions 6A and 6B.)”

1. 1. On the issue of whether the Master had jurisdiction to hear the application to set aside the extension orders, CPR 11 is the governing rule. The relevant part is as follows:

“(1) A defendant who wishes to –

(a) dispute the court’s jurisdiction to try the claim; or

(b) argue that the court should not exercise its jurisdiction

may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have.

(2) A defendant who wishes to make such an application must first file an acknowledgment of service in accordance with Part 10.

(3) A defendant who files an acknowledgment of service does not, by doing so, lose any right that he may have to dispute the court’s jurisdiction.

(4) An application under this rule must –

(a) be made within 14 days after filing an acknowledgment of service; and

(b) be supported by evidence.”

1. 1. In Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806, the Court of Appeal confirmed the importance of the need for a defendant who wished to challenge an order granting an extension of time for serving the Claim Form (a) to file an acknowledgement of service and (b) to make an application, supported by evidence, to set aside the extension order within 14 days of filing the acknowledgment of service. A failure to do so would have the effect of the defendant being treated as having accepted that the court had jurisdiction to try the claim (in the sense of the “court’s power or authority to try a claim”: [23]).

   2. In relation to the factors justifying an order extending the time for service of the Claim Form to be justified, in Hashtroodi v Hancock [2004] 1 WLR 3206, the Court of Appeal held that “the discretion to grant an extension of time under CPR 7.6(2) should be exercised having regard to the overriding objective” ([23]) and that because the overriding objective requires the court to deal with cases justly, “it is not possible to deal with an application for an extension of time under CPR 7.6(2) justly without knowing why the claimant has failed to serve the claim form within the specified period” ([18]). The court offered this general guidance in [19]:

“Whereas under the previous law, a plaintiff who was unable to show a good reason for not serving in time failed at the threshold, under the CPR, a more calibrated approach is to be adopted. If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted. Thus, where the court has been unable to serve the claim form or the claimant has taken all reasonable steps to serve the claim form, but has been unable to do so (the CPR 7.6(3) conditions), the court will have no difficulty in deciding that there is a very good reason for the failure to serve. The weaker the reason, the more likely the court will be to refuse to grant the extension.”

1. 1. Simply overlooking the need for service will usually be a strong reason for not extending time ([20]), and the expiration of the limitation period is a relevant factor of some considerable importance. In Hoddinott, it was said that –

“Where there is doubt as to whether a claim has become time-barred since the date on which the claim form was issued, it is not appropriate to seek to resolve the issue on an application to extend the time for service or an application to set aside an extension of time for service. In such a case, the approach of the court should be to regard the fact that an extension of time might “disturb a defendant who is by now entitled to assume that his rights can no longer be disputed” as a matter of “considerable importance” when deciding whether or not to grant an extension of time for service: see Hashtroodi para 18.”

1. 1. In Hoddinott, the court emphasised the requirements of r.7.6(3) and the relevance or otherwise of the expiry of the limitation period in the following way at [55]:

“If an application for an extension of time is made after the end of the 4 months’ period, the application must be dismissed unless the 3 conditions specified in CPR 7.6(3) are satisfied. In such a case, the fact that the claim is clearly not yet time-barred is irrelevant. It would be strange if, where an application is made before the end of the 4 months’ period, the fact that the claim is clearly not time-barred means that the court must grant the extension of time. In our view, the better view is that, where the application is made before the end of the 4 months’ period, the fact that the claim is clearly not yet time-barred is a relevant consideration.”

AN APPLICATION TO SET ASIDE AN EXTENSION

An important point here is that when a defendant seeks to set aside an order extending time this is not a review of the order it is a rehearing of the issue.

“It follows that, to the extent that it is relevant and material, the hearing before Master Cook on 12 July 2017 was a rehearing of the issue whether to grant the extensions of time, not a review of his earlier decisions, and the appeal to me is (unusually) itself a rehearing of the application considered by Master Cook on 12 July 2017, albeit giving Master Cook’s decision due weight (see paragraph 64 below).”

SUCCESSFUL APPEAL AGAINST THE MASTER’S DECISION SETTING ASIDE THE EXTENSION OF TIME

Conclusions

1. 1. Nothing has been said to me in the hearing of this appeal to suggest that the Master was reminded of the nature of the hearing before him which was that of a rehearing, not merely a review of his earlier decisions: see paragraphs 62-65 above. As I have indicated, he approached the task he set himself by simply reviewing the material presented to him when he made the two extension orders. Whilst that is undoubtedly a significant part of the exercise, it is not necessarily the sole part. Whilst I differ from an experienced Master on a matter of this nature with considerable diffidence, I respectfully consider that the decision to refuse an adjournment to enable further evidence to be proffered on behalf of the Claimant to have been an error. I do not think it can simply be characterised as a case management decision with which, in the normal course of events, a Judge on appeal would not interfere: it was something that went to the heart of the exercise he was called on to perform and the decision not to permit further evidence to be given does suggest that the focus of the hearing, with the encouragement of the 1-6 Defendants, became too narrow.

   2. It was, of course, entirely right to say that the information given in the second Application Notice (see paragraph 36 above) was “sparse”. That of itself might have suggested that more could indeed have been said. Undoubtedly, more should have been said as Practice Direction 7A requires (see paragraph 55 above), but the word used in the Practice Direction is “should”, not “must“. This suggests a marginally less strict requirement than the word “must” would convey (c.f. Practice Direction 2D). But irrespective of that consideration, a request for an opportunity to make good any omissions in the material, particularly where the interests of a seriously disabled child were engaged, ought, in my view, to have been granted. It is, of course, quite right to say the rules are in place to encourage disciplined practice so that the efficient despatch of court business can be achieved; but, if on examination, the reality is that there were truly good grounds for having granted the second extension order, it offends the primary requirement to deal with cases “justly” to ignore the reality. If the Master had been reminded of the nature of the hearing, I think it likely that he would have taken the step of adjourning to permit the reception of further evidence on behalf of the Claimant.

   3. The one thing that he was told in the application notice of 4 October 2016, albeit to justify the “without notice” nature of the application, was that none of the Defendants had responded to any communications sent to them. Whilst he did not say so in the judgment, that fact may have influenced his attitude to their conduct when he was considering that application on the papers. Had he been invited to marry up that information with the material in the Court file concerning the first application, he may well have sensed the complete lack of cooperation from the Defendants’ side that, in reality, occurred. All that ought, I respectfully think, to have alerted him to the possibility that there was more information to be given about what had happened (or not happened) since the last extension order and that an opportunity to spell that out should be given.

   4. In his judgment, he mentioned the case of Foran (see paragraph 70 above), a case relied upon by Mr Davis before me. Before examining briefly the issues in that case, I would caution against too much reliance being placed on individual decisions in this context unless they establish a clear issue of principle. Every case depends on its own facts and the way in which a discretionary exercise is concluded in any case may not necessarily be of assistance in carrying out a similar exercise in another. Plainly, a degree of consistency is desirable, but no court will wish to be placed in a straitjacket in such a situation. Cox J made exactly the same point at [40] of her judgment.

   5. In Foran, another clinical negligence claim, the claimant (who was an adult bringing her own claim and was not a “protected party”) issued proceedings against a UK-based company and also against three defendants resident in Poland. The alleged negligence occurred in Poland on 9 May 2012 and proceedings were issued on 6 May 2015. A detailed pre-action protocol letter was sent (in English) to all defendants in March 2015. Having initially considered serving the Polish defendants personally, the claimant’s solicitors were advised by the FPS that only a Polish court could serve proceedings in Poland and, accordingly, “service through the FPS” was considered the most appropriate course of action. The advice given by the FPS was that the process of service in Poland “would take in excess of three months”. Since the claimant’s solicitors did not envisage that service could be achieved by 6 November 2015 (the end of the 6-month period provided for under r.7.5(2)) they sought (on a without notice basis) an extension of time for service of the claim form and associated documentation. This was granted by the Master “on the papers” on 9 November 2015, the extension of time being to 11 January 2016 “or further order”. The Master directed that a hearing should take place before him on 11 January 2016. What happened, in short, was that the hearing did take place on that day and was treated as an application by the claimant to extend further the time for service. The Master extended the period further.

   6. The issue on the appeal from the Master’s decision was whether he had been right to grant the first and second extensions of time. Cox J referred to many of the authorities to which I have referred above and, in summary, concluded that the evidence put before the Master on both occasions was insufficient to justify the extension granted. The following extracts from her judgment indicate some of the reasons that led Cox J to this conclusion:

“[The] statement [relied upon] was brief and no relevant correspondence or other documentary evidence was exhibited to it. The timetable of events was set out but insufficient explanation was provided as to how that timetable demonstrated a good reason for the delays that are manifest on an analysis of its contents. The matters described by the Master … as amounting to valid reasons for an extension of time, merely recite the timetable without further analysis or evaluation of what seem to me to be some obvious omissions. It is no answer to say … that the case was unusual and complex due to the foreign element and associated factors, because it was those same factors that necessitated a more urgent approach to addressing the likely problems with service out of the jurisdiction than is evidenced in [the] statement.

…

In this case the Claimant’s solicitors were already perilously close to the expiry of the limitation period when they sent the detailed Letter before Claim, in English, to all the Polish Defendants, one of whom (the insurance company) was incorrectly identified. They knew from 6 May … that there was a need to serve the claim form out of the jurisdiction by 6 November at the latest. Problems of the kind that arose could have been anticipated at a much earlier stage. The brief account provided by [the Claimant’s solicitor] indicates a somewhat leisurely approach to the likely problems and, if more was done than is there set out, it should have been deposed to.

There is no evidence, for example, as to what enquiries were made, if any, with the Claimant’s Polish lawyer as to the process for service in Poland. The first time that enquiries were made with the Foreign Process Section appears to be on 21 September, more than four months after the protective proceedings were issued. There is no evidence as to what, if any, discussions were held with the Foreign Process Section or the Polish agents as to whether or how matters could be expedited because of the need urgently to serve the claim form. There is no account of what, if anything, was done to speed up the translation process or indeed the process for service.”

1. This does appear to be the only reported case where the cause of the difficulties in relation to actual service advanced before the court was the process of service through what, for this purpose, I will call the “FPS process”. Cases such as Hashtroodi and Hoddinott are, as Ms Gumbel says, “domestic” cases without the foreign element. Understandably, Cox J said that the guidance given by the Court of Appeal was of “general application”, but I respectfully question whether the 6-month period allowed for service outside the jurisdiction does cater in all circumstances for the difficulties of effecting service through the FPS process. Cox J expressed the view that the 6-month period was a “generous provision”. I think that if she was aware of some of the periods that apparently need to be allowed for service (see, e.g., Master Cook’s observations on service on the UAE at paragraph 68 above), I am not sure, with respect, whether she would have expressed that view in quite such positive terms.

2. There was criticism of the Claimant’s solicitors in the Foran case for not pursuing matters with the FPS to see how service could be expedited (see paragraph 77 above). In view of what is said (at least now) on the website (see paragraph 26 above), such enquiries are obviously discouraged and, frankly, futile. Since there appears to be no other way in which service could be effected in Poland than by through the Polish court, it is not wholly clear what alternative steps could have been taken. The same applies in the UAE. Alternative means of service are ordinarily not possible where the domestic jurisdiction of the foreign country preserves for itself the right to effect service: see, generally, Cecil & others v Bayat [2011] EWCA Civ 135.

3. Returning to the present case, whilst Mr Davis has sought to draw parallels between it and Foran, he has not identified what the Claimant’s solicitors should have done to hasten service given that they had no alternative but to rely upon the FPS process, most particularly against the background of a total failure on the part of any of the Defendants to acknowledge the many communications sent by the Claimant’s solicitors and/or to co-operate with the perfectly reasonable requests for the records, scans and so on required to obtain the fullest information possible to be able to advance the case on behalf of the Claimant. I accept, of course, that by the time of the application for the second extension, the limitation period had expired, but, in my view, the complete failure of the Defendants to respond at all to these various communications ought to weigh heavily against the otherwise important consideration of the expiry of the limitation period (see paragraphs 59-60 above).

4. For the reasons I have given, I think the Master denied himself the opportunity to see further material that could have made a difference to the outcome of the hearing before him and thus fell into error.

5. That being so, I consider that I should now exercise the jurisdiction that he was being invited to exercise. I now have the material that the Master should have had and, whilst it might be possible to be critical of certain passages of time that were allowed to pass by the Claimant’s solicitors when trying to put together the Claimant’s case, the truth is that all the preparations had been hampered by the failure of the Defendants to respond to any of the correspondence from the Claimant’s solicitors. It is said that this position of failing to reply was adopted by the Defendants who had been “properly advised under UAE law not to do so” (as it was put in Mr Davis’s Skeleton Argument). I have three observations about that: (i) the evidence is that the requirement for a notarised and Attested Power of Attorney showing the authority of the Claimant’s solicitors to act was “generally” (not “invariably”) required under UAE law and no evidence that the requirement actually applied in this case has been advanced; (ii) the University of Sharjah did not take that line when contacted by the Claimant’s solicitors; (iii) it surely was not beyond the capacity of the insurers and/or lawyers in the UAE to write a polite letter to the Claimant’s solicitors indicating that such a requirement had to be complied with before it would be possible to enter into any form of correspondence. True it is that the Claimant’s solicitors did not obtain any advice about this, but it was not unreasonable, in my view, to have anticipated some kind of communication from the insurers and/or lawyers along the lines I have indicated. The insurers and/or lawyers only had to perform an Internet search and, had they not known it before, they would have realised that the Claimant’s solicitors were a well-known firm of English lawyers.

6. For my part, I consider that Master Cook was right to grant the two extensions he did grant. I would have said that, for the reasons he gave in the judgment under appeal, the material he had available prior to granting the first extension order was sufficient for him to do so. Were we both to be wrong about that, the further information given in Ms Wainwright’s witness statement of 1 August 2017 would have made good any deficiency. Her witness statement would certainly have made good any deficiency in the material put forward on 4 October 2016 because all the requirements of paragraph 8.2 of the 7A Practice Direction were met (see paragraph 55 above) and, to the extent that it may be relevant, the terms of r. 7.6(3) on the basis that all reasonable steps to serve were taken by relying upon the FPS process and that any delays were materially contributed to by the failure of the Defendants or their representatives to respond to communications sent by obviously reputable English lawyers.

7. I should say that, strictly speaking, I think that the Master should have dealt with the Acknowledgement of Service issue to which I referred in paragraphs 56-57 and 71 above. It did go to the jurisdiction of the court to entertain the application made by 1 – 6 Defendants to set aside the extension orders. He may have taken the view that he would certainly have granted relief from sanctions because, if there was any breach of the rule, the breach was minor and could not have caused any prejudice to the Claimant. If so, it might have been appropriate to mention it briefly in the ex tempore judgment, but the failure to do so may simply have been a function of taking a robust approach to the various applications before him, an approach that Masters are required to adopt on a daily basis. For my part, I would conclude that relief from sanctions should have been granted (and to the extent that it is necessary to do so, I grant that relief) and thus the application to set aside can now be treated as having been considered properly.

8. For all these reasons, the decision of the Master made on 12 July 2017 must be set aside and the appeal allowed.