WHAT IS THE DATE OF SERVICE? THE DIFFERENCE BETWEEN THE “DEEMED” DATE OF SERVICE AND THE “EFFECTED” DATE OF SERVICE

T & L SUGARS LTD V TATE & LYLE INDUSTRIES LTD [2014] EWHC 1066

Problems with service and the date of service continue to abound. They have always been subject to a much stricter regime.  In particular the date of service of proceedings can be crucial.In T & L Sugars –v- Tate & Lyle the court determined  preliminary issues  on the question of service. It was  held that there was a clear distinction between CPR 7.5 and 6.14; the date when service was effected, and the date on which service was deemed to have taken place.  There are cases in which the difference between these two dates can be crucial, T & L was such a case.

THE IMPORTANCE OF THE DATE OF ISSUE AND SERVICE

The claimant brought a claim alleging that the defendant had breached a Share and Business Sale Agreement between the two parties. The terms of the contract stipulated that all claims had to be notified to the defendant and that the claims would be deemed to have been withdrawn if proceedings had not been “issued and served” within 12 months of the notice.

NOTIFICATION AND SERVICE

The claimant notified the defendant of the claims on the 30^th March 2012. On March 27 2013 (the Wednesday before Good Friday and the Easter weekend) the claimant hand-delivered a sealed claim form and particulars of claim to the defendant’s solicitors.

 THE DEFENDANT’S ARGUMENTS

The defendant served a Defence and Counterclaim contending that all the claimant’s claims were contractually deemed to be irrevocably withdrawn as they were not issued and served in time within the meaning of the contract. At the hearing they advanced the following arguments:

The phrase issued and served in the contract meant issued and served in accordance with the Civil Procedure Rules.

• The phrase did not mean simply delivered and received in a non-legal sense.
• Whilst delivery of the Claim Form and Particulars of Claim took place on 27^th March 2013, so that the relevant step under CPR 7.5 was completed, due to CPR 6.14 the proceedings were not served until they were deemed to be served on the second business day after the completion of that relevant step which in the present case was the 2^nd April 2013 (due to the Easter bank holidays which did not count as business days).

THE CLAIMANT’S RESPONSE 

The claimant contended:

• That the word “served” in the contract should be given its natural commercial meaning of delivery to and receipt by the defendant’s solicitors, which occurred on the 27^th March 2013. It should not be given some strained meaning arising from the peculiarity of one part of the CPR.
• It would be completely un-commercial for the parties to have intended that CPR 6.14 should apply.
• The clause of the contract effectively introduces a cut-off on the claimant as to the time by which it must commence proceedings. It makes sense as a matter of logic or commercial reality that the cut-off point should be measured by reference to an act within the claimant’s control, rather than to a deeming provision that does not accord with factual reality.
• In any event the if the clause in the contract means served in accordance with the CPR that connotes actual service pursuant to CPR 7.5(1) not deemed service under CPR 6.14.

THE MEANING OF “ISSUED AND SERVED” IN THE CONTRACT

The judge found that the phrase “issued and served” in the contract, meant issued and served in accordance with the CPR. The judge then went on to consider when service of the claim form is effected under the CPR.

THE RELEVANT PROVISIONS OF THE CIVIL PROCEDURE RULES

CPR 7.5 is headed “Service of a claim form” and provides as follows :

“Where a claim form is served within the jurisdiction, the claimant must complete the step required by the following table in relation to the particular method of service chosen, before 12.00 midnight on the calendar day four months after the date of issue of the claim form.”

CPR 6.14 is headed “Deemed service” and provides as follows:

“A claim form served within the United Kingdom in accordance with this Part is deemed to be served on the second business day after completion of the relevant step under rule 7.5(1).”

THE DATE ON WHICH SERVICE IS EFFECTED

The Judge concluded that the date when service is actually effected is the date on which the relevant step under CPR 7.5 has been taken.

“31. In my judgment these two rules, CPR 7.5 and 6.14, taken together draw a clear distinction between the date when service is actually effected, which is when the relevant step under 7.5 has been completed and the date two business days later when service is deemed to take place under CPR 6.14. If one asks oneself why that distinction is there, it is not as Mr Nicholls QC suggests because service does not actually occur until the deemed day, but because, whereas CPR 7.5 is looking at when actual service takes place, so that a claimant who takes the requisite step, depending upon which method of service he employs, can be sure that he has served within the four months of validity of the claim form (thereby avoiding, if relevant, any limitation issues), CPR 6.14 is looking at when service will be deemed to have taken place for the purpose of other steps in the proceedings thereafter, beginning with the filing of an acknowledgment of service. In my judgment that construction of the rules is supported not only by the reasoning of Green J in the Ageas case at [63]-[80], with which on this point I entirely agree, but by the wording of the rules themselves and by the various commentaries on the CPR, not only Blackstone’s Civil Practice on which Mr Mill relied, but, on a proper analysis, the notes to the White Book” …..

 33. That the completion of the requisite step under CPR 7.5 will constitute actual service is borne out by the Glossary to the CPR which defines “service” as “Steps required by rules of court to bring documents used in court proceedings to a person’s attention” which, in the context of CPR 7.5, reflects the completion of the step required. It is also reflected by the notes in the White Book which at 7.5.1 state, inter alia, as follows:

 “This rule has been substantially changed with effect from October 1, 2008. The previous rule provided that a claim form had to be served within four months of issue or within six months if service was out of the jurisdiction. The thrust of the new rule is to require the claimant “to complete the step required” before 12 midnight on the calendar day four months after the date of issue of the claim form, rather than to achieve service in that time…It is important to note that compliance with r.7.5 is now determined by asking whether the required step was completed within the four month period not by asking whether the deemed day for service fell within that period (as was the case before October 1, 2008)”…..

 35. This construction of the rules is also borne out by the wording of CPR 6.14 itself and by the notes to that rule. The fact that the rule begins “A claim form served within [the jurisdiction]” and then goes on to discuss deemed service demonstrates that the rule is drawing a distinction between actual service and deemed service. The deeming provision only applies when actual service has taken place. The notes at 6.14.3 make precisely the point I have referred to in the previous paragraph (also quoted by Green J at [69] of his judgment): 

“It is important to notice that the question whether there has been compliance with a time limit fixed by r.7.5 for service of a claim form within the jurisdiction…is determined, not by inquiring as to whether the deemed day for service fell within the period, or whether personal service was effected within it (as was the case before October 1, 2008), but by asking whether the “step required” was “completed” within the period. Consequently, the problems encountered under the former rule, and dealt with by the Court of Appeal in cases such as Godwin v Swindon BC [2001] EWCA Civ 1478; [2002] 1 WLR 997, CA, and Anderton v Clwyd CC (No. 2) [2002] EWCA Civ 933; [2002] 1 WLR 3174, CA, are avoided.”

36. The distinction between the day when service was actually effected and the day on which service is deemed to have been effected under CPR 6.14 and the reason for the latter rule are explained in the notes at 6.14.1 in these terms:

 “In a given case, the day on which service was actually effected on the defendant may not be the same day as the day on which, by operation of this rule, service was deemed to have been effected. The deemed day is a construction. Such construction is justified by the need to provide certainty. In the interests of certainty, a deemed day is not rebuttable by evidence of actual receipt of the claim form by the defendant on a day before or after the deemed day. [Godwin and Anderton are then cited].

In any given proceedings, it is for various reasons important that there should be no room for doubt as to the day on which (and therefore the date on which) service of originating process is deemed effected. Within the CPR, the time limits for the taking of certain procedural steps are calculated by reference to the day on which service is deemed to have been effected (e.g. r. 10.3 (The period for filing an acknowledgment of service)).”

CONCLUSION

The claimant was held to have “issued and served” within the meaning of the contract on the 27^th March 2013 when it was delivered to the defendant’s solicitors. The claimant was not,  therefore barred from bringing the claim.

SUMMARY

• Service is effected once the relevant step is taken in CPR 7.5. This is the date which will be relevant for limitation purposes.
•  The date on which the proceedings are deemed to be served is relevant for all other steps in the proceedings i.e. this is the date on which time begins to run for the acknowledgement of service and defence.