EXTENSION OF TIME FOR SERVICE SET ASIDE: THE DANGERS OF SEEKING TO EXTEND THE LIFE OF A CLAIM FORM ON A WITHOUT NOTICE BASIS – EXEMPLIFIED

In Al-Zahra (PVT) Hospital & Ors v DDM [2019] EWCA Civ 1103 the Court of Appeal allowed an appeal by defendants who objected to an extension of time being granted for service of the claim form.  It is an object lesson in the dangers of (i) seeking extensions of time without notice; (ii) the need to provide evidence and an explanation to the court when seeking extensions; (iii) the need to pursue matters expeditiously if an application is granted.

“… no practitioner should now be unaware of the dangers of seeking to extend the life of a claim form on a without notice basis in circumstances where a limitation period is fast approaching.”

THE CASE

The claimant was born in Dubai in 1975.  In 2013 she instructed solicitors to bring an action relating to her ante-natal care.    A claim form was issued on the 8th July 2015.  The claimant sought an extension of time for service of the claim form and for service out of the jurisdiction.   This was granted in a paper extension was granted.

In October 2016 the claimant obtained a second extension.   This was sought without any additional evidence being adduced. It was allowed. Proceedings were eventually served on some of the defendants in 2017.

THE DEFENDANTS’ APPLICATIONS

The defendants applied to the Master. He found that the first application had been properly granted but the second had not.  He set the action aside.

THE APPEAL TO THE HIGH COURT JUDGE

The claimant was successful in an application to the High Court. Foskett J found that both extensions of time had been properly granted. In making that decision he allowed the claimant to adduce additional evidence that was not before the Master.

THE DEFENDANTS’ SUCCESSFUL APPEAL TO THE COURT OF APPEAL

The Court of Appeal held that it was within the discretion of the appellate judge, on the facts of that case, to admit the further evidence.    However the Court of Appeal overturned the substantive decision in relation to the second extension of time. That second extension should not have been granted.

    1. Foskett J held that Master Cook was right to grant the first extension of time on 25th September 2015 and he would have come to the same conclusion as Master Cook as regards the first extension on the material before him [83].
    2. In my view, Foskett J was right to uphold Master Cook’s first extension of time on the basis of the material originally filed by the Claimant. The Claimant’s first application was adequately supported by Wainwright I, paragraphs 35 and 36 of which explained that there had been difficulties in quantifying the Claimant’s claim and the RCJ Process Section had advised that service in the UAE was likely to take more than 12 months (see above). In paragraph 15 of his judgment, Master Cook accepted Ms Wainwright’s explanation and observed that he would have expected service in the UAE to take 12 months. In this regard, Foskett J was right to conclude that Cox J’s analysis in Foran (supra) regarding the 6-month period allowed for service out of the jurisdiction was insufficient in the present case (paragraphs [76]-[80]). For these reasons, Foskett J was entitled to take the view that Master Cook’s decision on 12th July 2017 to maintain his original extension was justified.
Was Foskett J right to hold that the second extension had been properly granted (assuming the admission of Wainwright III)?
    1. In my view, Foskett J erred in principle or misdirected himself when concluding that the Claimant had justified the second extension by serving Wainwright III for the following reasons.
    2. First, Foskett J was wrong to place weight, let alone considerable weight, on the fact that the Defendants had not responded to the Claimant’s initial communications and to suggest that “all” the Claimant’s preparations had been hampered by the Defendants’ failure to respond to any of the correspondence from the Claimant’s solicitors (see paragraphs [80] and [82]). It is far from clear that it did. In any event, the co-operation of foreign defendants is not necessarily always to be expected as a matter of course. Indeed, the lack of response from a foreign defendant may make it all the more important for a claimant to consider obtaining early foreign law advice. Leigh Day did not take this precaution.
    3. In the present case, there was unchallenged evidence from Ms Rachel Moore of Kennedys Law LLP that the First Defendant had been expressly advised by their insurers, the Oman Insurance Company, not to respond to the Claimant’s initial letter of claim dated 23rd January 2014 but to pass it and any further correspondence to insurers unanswered for their attention. This the First Defendant duly did – and subsequently received legal advice from their corporate UAE lawyers, Al Jaziri & Associates, that they should not respond to the letter of claim because the Claimant’s solicitors had not provided a notarised and attested Power of Attorney showing their authority to act on behalf of the Claimant as generally required under UAE law. The First Defendant then duly passed this advice to their insurers. In the light of this advice, none of the First to Sixth Defendants responded substantively to the Claimant until, following service of the Claimant’s proceedings on 8th February 2017, the First Defendant subsequently instructed Kennedys Law LLP on 6th April 2017.
    4. Second, whilst he was right to hold that Master Cook was entitled to grant the first extension (see above), Foskett J failed to bear sufficiently in mind the fact that the Claimant delayed in issuing the proceedings until very shortly before the expiry of the limitation period in August 2015. As emphasised by May LJ in Vinos v Marks & Spencer plc, “…if you leave issuing proceedings to the last moment and then do not comply with this particular time requirement” you will be statute-barred” (ibid, paragraph 20).
    5. Third, as emphasised in Hoddinnott at paragraph [55] (supra), it is important that the claimant’s evidence in support of an extension is “scrutinised with care”. In my view, the Judge did not scrutinise or pay sufficient regard to the following facts and matters as they emerge from the evidence, including Wainwright III, as regards the delays that ensued after the expiry of the limitation period.
    6. The following points are pertinent: (i) Ms Wainwright admitted that, following the issue of proceedings in the present case (on 5th July 2015), she turned to other cases which she said required her urgent attention. (ii) She was unable to recall precisely when she first contacted the Foreign Process Service (“FPS”) regarding the procedure for service in the present case but said it was between 11th July and 21st September 2015, i.e. during a 2 ½ month period. (iii) This is, perhaps surprising given that the Claimant’s solicitors did not know at this stage how long service in UAE would take and had already had to lodge an application for an extension on 8th July 2016 which would mean that they would have to effect service out of time.
    7. This was followed by a series of further significant and unexplained delays on the part of the Claimant. (i) First, the Court documents were not taken to the FPS until December 2015, i.e. 5 months after issue of proceedings. (ii) Second, the further expert, Dr McHugo (whose views were said to be necessary in order to decide whether to proceed against “all Defendants”) was not instructed until April 2016, i.e. 9 months after issue of proceedings. Ms Wainwright admits that the delay in her instructing Dr McHugo was because of “urgent work that was necessary on other cases”. (iii) Third, the Court documents were not legalised at the UAE Embassy until July 2016, i.e. 12 months after issue of proceedings, (the Foreign & Commonwealth Office (“FCO”) had said in December 2015 that legalisation was necessary but subsequently said in August 2016 that this was not necessary). (iv) Fourth, there was then a series of further delays during August and September 2016 involving preparation of the packs of documents, payment of the FCO fees, and the lodging of the correct documents including N224 for each claim.
    8. It was in these circumstances that in October 2016, the Claimant sought a further extension, i.e. 14 months after issue of proceedings. Proceedings then did not begin to be served upon the Defendants until early February 2017, i.e. some 19 months after issue of proceedings.
    9. Thus, post-issue of proceedings, there were lengthy unexplained delays by the Claimant, amounting to some 12-14 months, notwithstanding that the limitation period had already expired and that they should have been progressing the claim as quickly as possible.
Acknowledgement of Service issue
    1. The Claimant contended that Master Cook erred in failing to deal with the Defendants’ application for an extension of time under CPR 11(1) to cure their late service of their Acknowledgments of Service prior to determining the Defendants’ application to set aside the Claimant’s second application for an extension.
    2. In my view, Foskett J was right, for the reasons he gave, to hold that relief from sanctions should have been granted and thus there was no jurisdictional bar to the Defendants’ application to set aside the Claimant’s second application for an extension.
Summary
    1. In my view, the overall position, on proper analysis, can be summarised as follows:
(1) First, the Judge placed undue emphasis on the fact that the Defendants had been unresponsive in circumstances where the Claimant’s solicitors had not taken the elementary precaution of taking expert advice as to UAE law.
(2) Second, the Judge failed sufficiently to take account of (a) the very significant periods of delay both pre-issue but particularly post-issue, (b) the lack of any or any satisfactory explanation for these periods of delay, and (c) the fact that the majority of the delays were attributable to the failures, inaction and general lack of urgency on the part of the Claimant’s solicitors (as is apparent from the Claimant’s own evidence, in particular Wainwright III).
(3) Third, the Judge also failed to pay sufficient regard to the expiry of limitation period and the fact that that the Claimant had chosen to issue the proceedings at the last moment.
Conclusion
  1. In my view, for the above reasons, this appeal should be allowed and service of the proceedings against the First to Sixth Defendants should be set aside.

EXTRACTS FROM THE JUDGMENT OF MASTER COOK

The Court of Appeal judgment cites extensively from the judgment of Master Cook. This judgment contains some significant observations.

“11. In short, no practitioner should now be unaware of the dangers of seeking to extend the life of a claim form on a without notice basis in circumstances where a limitation period is fast approaching. It seems to me that the cases have made very clear the potential danger involved. This must, in my judgment, highlight the need to comply with the requirements of the Practice Direction and to ensure that good reason is shown for any extension sought.”
    1. Master Cook said this when dismissing the Defendants’ challenge to the first extension:
“15. The starting point it seems to me is that the claimant is entitled to the period provided by the Rules. It seems to me that in this case it was always known that an application would have to be made to extend that six month period and the application was made in time. The difficulty here arose as a result of the enquiry made to the Foreign Process Unit at this court which indicated that the UAE in common with a number of other jurisdictions experiences particular delay in achieving service. The information related by Miss Wainwright is that she was told it may take up to 12 months for service to be achieved. Certainly in my experience as a Master of the Queen’s Bench Division, that is precisely what I would expect from this particular jurisdiction and it is no doubt for that reason that on the papers I was prepared to accept that it would take a period of 12 months to effect proper service in the UAE. Therefore, in my judgment this was a case where the claimant should have the benefit of an extended period of time beyond the six months provided in the Rules.”
    1. Master Cook said this when upholding the Defendants’ challenge to the second extension which he set aside:
“17. The application of the 4 October was, as I have indicated, made on the papers without a hearing and, on that basis, I would have expected a detailed witness statement in support of the application notice or at least a very full account of why it was that the claimant was in a position not to be able to complete service within the original extension granted. This is a requirement that is brought even more into focus by the fact that by now, on any view, the limitation period had expired so the claimant was not just seeking an extension of time for service but effectively an extension of the applicable limitation period.
18. The information given by Miss Wainwright at box 10 of the application notice is, in my judgment, sparse to say the least. That is a description which I think Mr Booth was forced to concede as accurate. The claimant’s solicitor failed, it seems to me, in the evidence to explain why there had been further delays in arranging for the service of the documents. There is no explanation of why it is that the papers were only now ready to be served by the Foreign Process Service. There is no explanation, in view of the fact that the information from the court seemed to indicate that it is now likely to take eight months, why service could not have been achieved within the preceding period which was in excess of eight months. In other words, it seems to me that there was a complete failure to comply with the requirements of Practice Direction 7.A and that there was not a full explanation why the claim had not been served.The period of time which had elapsed under the first order is simply not addressed and that, in my judgment, is fatal when it comes to a review of this application.
19. In the circumstances, I have concluded that the second order which was granted on the basis of the application notice alone, should be set aside on the basis the court was simply not provided with the required and/or sufficient information to enable it to understand why a further extension of time for service was being sought. This result seems to me to be supported by law which I have referred to and which makes crystal clear that such applications should be properly supported by evidence which complies with the Rules. I also bear in mind the comments made by Cox J in the case of [Foran v Secret Surgery [2016] EWHC 1029 (QB)] to the effect that it is not good practice to submit such an application on paper and in circumstances where time limits are running out, such applications should normally be dealt with by way of an urgent hearing or on the telephone and at which the appropriateness of granting relief should be carefully considered (see paragraph 21 of her judgment).
20. I have had full regard to the fact that this is a potentially large claim. That on the face of it the claimant may well have an arguable case and that the loss of this action may well give rise to either further satellite application or to applications under Section 33. However, it seems to me, on the basis of the authorities, such considerations are in these circumstances otiose. The protection that is offered to a defendant, particularly where limitation period is expired or expiring, is that the original application should be sufficiently supported by evidence and scrutinised and only in the clearest of cases, or where there is good reason or good reasons, should the extension be granted. For all of these reasons it seems to me that I must set aside the order of 17 October 2016. I decline to set aside the original order of 25 September.” (emphasis added) [The underlined parts were added by the Court of Appeal]