SERVICE AT THE LAST KNOWN ADDRESS, CPR 6.15 AND IS THE ISSUE OF A “SECOND ACTION” AN ABUSE OF PROCESS?

I am grateful to Anthony Okuma of Duncan Lewis solicitors  to for sending me a copy of the judgment of HHJ Richard Roberts in Sajid -v- Nuur (Central London County court 30/7/18).  This covers two separate issues. Firstly a claimant’s duty under CPR 6.9 to consider service by an alternative method before deciding to serve at the “last known address” . Secondly whether a “second action” – issued after a counterclaim has been struck out in an earlier action for non-payment of the court fee – is an abuse of process.  A full copy of the judgment is available here Nuur v Sajid (2018) CLCC on appeal to HHJ Robert

THE CASE

The tenant of a property issued proceedings against their landlord  following the collapse of a floor in premises rented from the defendant. The landlord counterclaimed for rent and stating that the claimant had damaged the property.  The tenant filed a defence to counterclaim admitting rent arrears but alleging set off.

THE COURT FEE AND STRIKING OUT OF THE LANDLORD’S COUNTERCLAIM

The landlord did not pay the correct court fee for the counterclaim (it paid £610 when the correct fee was £2,500).  The court sent out two letters.   However the landlord could not afford to pay the fee.

THE SUBSEQUENT ACTIONS

The landlord subsequently issued proceedings and obtained an order for possession of the property.

In the interim the landlord’s counterclaim was struck out on the grounds that the correct fee had not been paid.  The landlord’s defence in that action was subsequently struck out for failure to file directions questionnaire. The tenant obtained judgment for £8,000 plus costs of £23,000.

The landlord issued separate proceedings against the tenant claiming arrears of rent.  Proceedings were served at the property that the tenant rented from the landlord, by then the landlord knew that the tenant had left the property. The landlord obtained a default judgment for £37,000 arrears of rent and interest of £3,316.84.

THE TENANT’S APPLICATION TO SET JUDGMENT ASIDE

The tenant applied to have judgment set aside on the grounds that proper service had not taken place. That application was refused by the District Judge.  If the claimant cannot ascertain an address then they must consider whether there is an alternative place or method of service. It is only after the conclusion is reached that there is no alternative place or method that a claimant can serve on the last known address.

CPR 6.9

CPR 6.9 sets out the usual place of service of the claim form.  If the claimant cannot identify an address then there is a hierarchy of measures

“(3) Where a claimant has reason to believe that the address of the defendant referred to in entries 1, 2 or 3 in the table in paragraph (2) is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant’s current residence or place of business (‘current address’).

(4) Where, having taken the reasonable steps required by paragraph (3), the claimant –

(a) ascertains the defendant’s current address, the claim form must be served at that address; or

(b) is unable to ascertain the defendant’s current address, the claimant must consider whether there is –

(i) an alternative place where; or

(ii) an alternative method by which,

service may be effected.

(5) If, under paragraph (4)(b), there is such a place where or a method by which service may be effected, the claimant must make an application under rule 6.15.

(6) Where paragraph (3) applies, the claimant may serve on the defendant’s usual or last known address in accordance with the table in paragraph (2) where the claimant –

(a) cannot ascertain the defendant’s current residence or place of business; and

(b) cannot ascertain an alternative place or an alternative method under paragraph (4)(b)”

THE APPEAL

The District Judge had found that the claim form had been properly served.  The Circuit Judge held it had not: CPR 6.9 (4) applied and the claimant could have made an application to serve at an alternative address or by an alternative method.

• The landlord had reason to believe  (indeed knew) that the tenant no longer resided at her last-known address.
• The landlord had taken reasonable steps and was unable to ascertain the address of the tenant’s current residence.

Therefore, under the terms of CPR 5.15 it was mandatory for the landlord to consider whether there was an alternative place or method of service.

THE MERITS OF THE TENANT’S DEFENCE

Further there was a  possible defence on the merits in tenant’s defence that the rent due was not admitted and could be set off by the judgment that the tenant had against the landlord.

THIS SECOND CLAIM WAS NOT AN ABUSE OF PROCESS?

The tenant’s argument went further. It was argued that the claim itself was an abuse of process, given that a  counterclaim by the landlord in the previous action had already been struck out. This was the bringing of a virtually identical claim.

The judge carried out a detailed review of the arguments ant principles.

• The failure by the landlord to pay the fee for the counterclaim in the first action was not intentional and contumelious. It was a “procedural misstep”.
• The breach in this case was a single failure to comply with the rules and did not involve breach of a peremptory order.
• The court should approach the situation considering the overall justice of the situatio

“I find that the correct test was whether, taking all the circumstances of case into account, the Respondent’s commencement of the second proceedings constituted a misuse of the court’s procedure which would be manifestly unfair to the Appellant or would otherwise bring the administration of justice into disrepute.”

• The failure to apply for relief from sanctions does not bar the commencement of a second action.
• The issue of proceedings in this case did not constitute an abuse of process.

A REPEAT OF EARLIER GUIDANCE

An earlier post has dealt with the requirements of CPR 6.4, see Service of the Claim Form: Defendant’s last known address: Claimant’s reason to believe; a few points to watch.

IN ESSENCE: JUST BE VERY CAREFUL

•  If the claimant has any suspicion at all that the defendant does not remain at the “last known address” it would be prudent to check this prior to issue.
• A prudent claimant should assume that lapse of time, or a failure to respond to correspondence, gives rise to a risk that the defendant has moved.

IF YOU FIND THE DEFENDANT AND/OR ANOTHER ADDRESS

Make an application under CPR 6.15 (which allows service of the claim form by an alternative method or at an alternative place).

IF YOU CANNOT FIND THE DEFENDANT

Then you can serve at the last known address. However a claimant remains vulnerable if they cannot show that they have taken “reasonable steps” to find the defendant or an alternative address for service.  The notes in the White Book describe this requirement (or perhaps the drafting) as “ugly” and note that the provisions could be harsh, emphasising the importance of taking the steps outlined in (4) and (5).

IT CANNOT BE THE “LAST KNOWN ADDRESS” IF THE DEFENDANT HAS NEVER LIVED THERE

the Court of Appeal held that:

1. The phrase “last known residence” could not be extended to an address at which the individual to be served has never resided.
2. When considering an address at which the individual to be served did actually live at some time the court is not concerned with “belief” but with knowledge:

“The draftsman of the rules deliberately chose the word “known”. In our view, knowledge, in this context refers to the serving party’s actual knowledge or what might be called his constructive knowledge, i.e. knowledge which he could have acquired exercising reasonable diligence.”

THE SITUATION PRIOR TO THE RULE CHANGE

The rule change was introduced to essentially, codify, the comments made in Smith –v- Hughes and the MIB the tranche of cases considered by the Court of Appeal and reported as Cranfield -v- Bridgegrove [2003] EWCA Civ 656.   The old rules allowed a claimant to serve on the “last known residence”, with none of the requirements to take reasonable steps that now exist in (4),(5) and (6) set out above.

In the Smith case:-

• The effective defendant was the Motor Insurers Bureau. Mr Smith was an uninsured driver.
• Prior to service of the Claim Form the claimant’s solicitors had been told by the MIB that Mr Smith had moved and they could not find a forwarding address. The MIB sent a copy of their enquiry agent’s report to the claimant’s solicitor.
• The claimant served on the address at which Mr Smith last lived (where it was known that the defendant did not in fact now live).
• The MIB, some time into the action, applied to set aside service.
• The claimant argued that this was Mr Smith’s  “last known residence”
• The judge at first instance held that the claim form had not been properly served on Mr. Smith.  However this decision was overturned by the Court of Appeal.

The Court of Appeal held that service at an address at which the claimant knew the defendant no longer lived could be service at the last known residence.  The significant factor here was that it was evidence from the MIB that demonstrated the last known address.  The Court observed

“If the MIB had disputed the claimant’s claim that this was Mr Hughes’ last known residence, then difficult questions might have arisen. In particular, is the rule concerned with the claimant’s actual knowledge, or is it directed at the knowledge which, exercising reasonable diligence, he or she could acquire? We incline to the latter view, but, as we have said, the point does not arise on this appeal.”

(I represented the claimant in that appeal and there was some interesting – at times philosophical – discussion about whether a place could be the “last known residence” if a claimant knew that the defendant did not, in fact, actually live there.)

 HOW WOULD SMITH BE DECIDED UNDER THE NEW RULES?

Smith was interesting because it was the (effective defendant) the MIB that employed the enquiry agent that could not Mr Smith.  The new rules put the burden on the claimant to take reasonable steps. Could the MIB now argue that failing to employ another enquiry agent was not a “reasonable step”? Even after its own investigations had failed to find an alternative address?