EXTENDING TIME FOR SERVICE OF PART 20 CLAIMS: WHAT IS THE RELEVANT TEST?
Applying to extend time for service of the claim form is a practice fraught with danger, even if done prospectively. In Haskew –v- Pannone LLP (and others) the Court of Appeal considered the relevant criteria for granting an extension when a Part 20 claim was being brought. In particular whether the expiry of the limitation period is relevant when the court considers exercising a discretion.
The facts
Haskew was a case where Pannone was suing for its fees and a counter-claim was brought by Haskew, the liquidator of the defendant company. Permission was given to the liquidator to bring Part 20 claims against another firm of solicitors and two barristers. The liquidator issued the Part 20 claims but did not serve them.
An order was made which extended time for service of the claim form until 14 days after a hearing, or 14 days after the lodging of a consent order dispensing with service of that hearing.
A consent order was filed on the 12th September 2012. Under the terms of the order, therefore, the Part 20 proceedings had to be served by the 26th September 2012. The liquidator’s solicitors waited until they had received a sealed copy of the order before serving. By this time the date for service had passed.
The hearings before the District Judge and Circuit Judge
The District Judge refused the liquidator’s application to extend time. This was overturned by the Circuit Judge.
The decision in the Court of Appeal
The Court of Appeal overturned the decision of the Circuit Judge and reinstated the order of the District Judge. The application to extend was, therefore, refused.
What is the appropriate test?
It was not wholly clear what criteria applied to an application to extend time in these circumstances. Should the court apply the strict provisions of Part 7 of the Civil Procedure Rules or the provisions of CPR 3.9?
The criteria to be applied
The Court of Appeal upheld the decision of the District Judge who had gone through the [pre-April] CPR 3.9 checklist. He found that the liquidator’s solicitors had taken the deliberate decision not to serve the Part 20 claim until a sealed order was received. There was no good explanation for this.
However allowing late service of the claim form would, potentially, deprive the Part 20 defendant of a limitation defence. The Court considered the judgment of Dyson L.J. in Hoddinott –v- Persimmon Holdings (Wessex) Ltd
“It is clear beyond doubt that the claim for breach of contract is not yet time-barred and will not be time-barred for several years. There is no basis for a contrary argument and the contrary does not seem to have been argued. 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 for an application to set aside an extension of 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 right can no longer be disputed’ as a matter of ‘considerable importance’ when deciding whether or not to grant an extension of time for service.”
There was some consideration of principles relating to limitation as a whole.
However McCombe L.J. considered that the limitation defence was important.
“In my judgment, in the Hoddinott case the court was recognising the fact that the claim was clearly not statute barred as a relevant consideration to be taken into account in favour of the claimant when the court decides whether to grant an extension of time, but it is not determinative. The court went on to ask: what was the point in refusing to extend such time in that sort of case. It is then that the features in paragraph 54 of the judgment come into play as potentially relevant factors. In this respect I accept Mr Pickering’s submission that paragraph 52 in Hoddinott is dealing with a case where a period of limitation has or may have expired, whereas paragraph 53 and 54 are dealing with circumstances where it is clear that a relevant limitation period has not expired.
33.The significance of the expiry of the relevant limitation period as a factor of considerable importance against a claimant seeking extension of time was taken up again by Longmore LJ (with whom Wilson and Toulson LLJ agreed), in the case of City & General (Holborn) Ltd v Royal & Sun Alliance Plc [2010] EWCA Civ 911 at paragraph 7 where one finds this statement by Longmore LJ:
“It is well-settled that when a debatable issue of limitation arise, it is inappropriate to attempt to decide them on an interlocutory application for an extension of time for service of the claim form. If the claimants’ argument that the claims are not time-barred is correct, they can always begin a fresh action in which, if a time-bar is asserted, it can be adjudicated upon. It is enough for a defendant to show that he might be deprived of a defence of limitation if time for service of a claim form is extended; if he can show that, an extension should not be granted or, if granted without notice, such extension should be set aside, see Hashtroodi v Hancock and Hoddinott v Persimmon Homes .”
34 .That passage perhaps puts the matter even more strongly than the passages which I have already taken from Hoddinott . However, for my part I do not see that Longmore LJ was wishing to apply a different test from that appearing in Hoddinott and Hashtroodi to which he had expressly referred in giving his summary of the law.”
The importance of limitation when considering an extension in Part 20 claims
The Court recognised that, in some circumstances, other factors can play a part. However the important matter was the loss of a potential limitation defence. It is a matter of considerable importance and the District Judge was correct in viewing it as such.
Lord Justice Lloyd observed:
“52 The District Judge, as my Lord has said, did not treat the limitation point as a “trump card”. Arguably, what Longmore LJ in City and General would have entitled him to do that. He treated it as a factor of considerable importance. That may have been generous to the Liquidator. Whether the significance of the limitation factor is even higher is a point that can await a case in which it needs to be decided, but the District Judge’s approach was in my judgment sufficient for the present case, and I agree with my Lord that, in the terms of his paragraph 35 and his paragraph 36, he did not misdirect himself. It follows that HHJ Mackie ought not to have overturned his order and I therefore agree that we should allow the appeal and restore the District Judge’s order.”
Extensions and Part 20 claims
Lloyd LJ’s judgment makes it clear that the loss of a limitation defence will probably be a determinative factor when considering whether to grant an application to extend.
Practical points
- Although extension of time for service of Part 20 claims are not subject to the same strictures as Part 7 and service of the Claim Form, the principles governing extension appear to be analogous.
- It is far from certain that the court will grant an extension to a Party seeking an extension.
- It is unlikely that an extension will be granted which could, potentially, deprive a part of a limitation defence.
- Remember a claimant serving a claim form will have virtually no chance of obtaining an order for the retrospective application of time. It is likely that similar principles will be imported into service of Part 20 proceedings, particularly given the introduction of the new CPR 3.9.
Linked posts
- If an application to extend time is made without notice it pays to remember the warnings given in relation to without notice applications at http://civillitigationbrief.wordpress.com/2013/09/03/the-dangers-of-without-notice-applications-the-whole-truth-is-the-only-option/
- Further guidance on service of the potential pitfalls in relation to service of the Claim Form can be found at
and
http://civillitigationbrief.wordpress.com/2013/07/01/service-faults-and-the-match-is-over/
Case law
The case is cited as Haskew (as liquidator of Aqua Design Ltd) –v- Pannone LLP, Wacks Caller, Michael Booth QC and David Casement QC [2013] EWCA Civb 30 [2013] All ER (D) 34 (May) ; and 2013 WL 618082. I cannot find a link on Bailli.
| The case of Hodinnott [2007] EWCA Civ 1203 is at |
Hashtroodi is at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2004/652.html&query=hashtroodi&method=boolean