A SOLICITOR WHO FILES AN ACKNOWLEDGMENT OF SERVICE STAYS ON THE RECORD UNTIL A NOTICE OF CHANGE OR THEY MAKE AN APPLICATION TO BE REMOVED

In Ashley & Anor v Jimenez [2019] EWHC 1806 (Ch) Chief Master Marsh rejected an argument that service on a solicitor who given their address for service in the acknowledgement of service was not good service of an application. For the solicitor’s address to cease to be effective there had to be a notice of change or the solicitor had to apply to come off the record.

“It seems to me that properly construed the position is that if a solicitor becomes the address for service of its client for the purposes of disputing jurisdiction, the solicitor must do more than merely notify the other party that they are no longer acting. If they are to cease to be the address for service of their client, they must apply to the court for an order declaring that they have ceased to act, or notice of change must be given. Unless and until one of those two steps occurs, the solicitor remains on the record and the proper address for service of the defendant.”

THE CASE

The claimant issued proceedings against the defendant. The defendant initially instructed solicitors who contested jurisdiction and filed an acknowledgement of service to that effect. The defendant lost the applicaiton in relation to jurisdiction and, thereafter, took no further part in the proceedings.  The claimant’s application for judgment was served by way of the solicitors who had filed the acknowledgment of service. There was an issue as to whether this was proper service.

THE JUDGMENT ON THIS ISSUE

    1. I now turn to deal with the service issue. As will be apparent from what has gone before, I am satisfied that the claimant’s application has been properly served. It is, however, necessary to explain that conclusion in some detail. Furthermore, I am requested and I consider it appropriate to make an alternative order in case I am wrong on the primary ground and also to make provision for future service.
    2. The starting point is, as I indicated earlier, that pursuant to CPR 11.7(a) the acknowledgment of service filed by Herbert Smith Freehills ceased to have effect on the making of the order on 6 February 2019. Herbert Smith Freehills have expressed the view that this has the consequence that they are no longer required to receive documents on behalf of Mr Jimenez, and that they have ceased to be his address for service. I consider that the conclusion they have reached is incorrect.
    3. The two provisions in particular that are relevant are CPR 6.23 and in passing 6.24 and CPR 42. CPR 6.23 requires a party to proceedings to give an address for service. The remaining provisions of that rule make provision about where that address should be. It is to my mind quite clear that Mr Jimenez remains a party to these proceedings. He is required to provide an address for service. CPR 6.24 provides that where the address for service of a party changes, that party must give notice in writing of the change as soon as it has taken place to the court and to every other party. The court has not received notification from Mr Jimenez or from Herbert Smith Freehills that his address for service has changed.
    4. That provision can helpfully be considered in light of CPR 42. This is an important rule, because where a solicitor has, to use the usual expression “gone on the court record” the other party to the claim knows that it may, whilst the solicitor remains on the record, always have a means by which documents can be served throughout the course of the proceedings. This enables litigation to be conducted efficiently and it minimises disputes about service of documents, be they formal steps under the CPR or routine correspondence.
    5. Under CPR 42.2, a solicitor is under a duty to give notice of change. I do not read into this judgment the provisions in detail, but it is I think notable that it mirrors CPR 6.24, and it is I think of significance that there is a duty on the solicitor to give such notice. The core provision is contained in CPR 42.1, which provides that:

“Where the address for service of a party is the business address of that party’s solicitor, the solicitor will be considered to be acting for that party until the provisions of this Part have been complied with.”

That is a reference to both CPR 42.2 and CPR 42.3. Under the latter, “A solicitor may apply to the court for an order declaring that he has ceased to be the solicitor acting for the party.” That will usually be based on the termination of the retainer for one reason or another with the solicitor’s client. No such application has been made by Herbert Smith Freehills in this case.
  1. I am satisfied that there is no reason to construe the rules to which I have referred as leading to the conclusion that upon the effect described in CPR 11(7) taking place the solicitor automatically ceases to be the address for service of documents of their client. An acknowledgment of service is a formal step in the claim which involves much more than merely providing an address for service, although that is an important consideration as is explained in paragraph 3 of Practice Direction 10. It is not, however, the only matter that is dealt with in the acknowledgment of service. It seems to me that properly construed the position is that if a solicitor becomes the address for service of its client for the purposes of disputing jurisdiction, the solicitor must do more than merely notify the other party that they are no longer acting. If they are to cease to be the address for service of their client, they must apply to the court for an order declaring that they have ceased to act, or notice of change must be given. Unless and until one of those two steps occurs, the solicitor remains on the record and the proper address for service of the defendant.
  2. It is I think unnecessary for me to go through the correspondence that has taken place in this case. I have summarised the position adopted by Herbert Smith Freehills, and for the reasons I have given I am satisfied that they are not correct and that they remain the solicitors on the record. It follows that the provision of documents to them by Lawrence Stephens Solicitors, in particular the application I am now dealing with, provided proper service in accordance with the CPR.
  3. There is, however, a secondary application, and I am asked to make an order to the effect that, and this is in addition to the first order, leaving documents at the defendant’s address, Grosvenor House Apartments in Dubai, constitutes good service of documents on Mr Jimenez and that such documents are deemed served on Mr Jimenez on 28 April 2019. There can be no doubt that this is the appropriate address for Mr Jimenez. There are two reasons for reaching that conclusion. First, Herbert Smith Freehills in an email dated 26 March 2019 stated that was his address and requested that documents should be served on him there. Secondly, Lawrence Stephens have undertaken through local agents careful enquiries, and these are summarised in Mr Johns’ ninth statement. It is possible to be satisfied based on that evidence that the address is the current address for Mr Jimenez and that documents that are left at reception in that block will reach him.
  4. I am, therefore, asked to make an order applying the power in CPR 6.15, which gives the court a power if it appears there was a good reason to do so to permit service by an alternative method. Care is needed when making such orders for service of documents in another jurisdiction. There is an applicable service treaty as between Dubai and the United Kingdom, and caution is required to avoid the treaty obligations being run roughshod over by use of CPR 6.15 in an appropriate case. The evidence here is that if documents are served via the treaty route it would take some six months for the documents to reach Mr Jimenez.
  5. In the case of service of a claim, in general it will be inappropriate to direct service by alternative means merely because there will be a delay. However, it seems to me that the position here is somewhat different. The court is seized of this claim. Permission to serve out on Mr Jimenez was given in 2017, and the claim has proceeded for the last two years with solicitors on the record in London. It would be in my judgment quite wrong, and would defeat the interests of justice in this jurisdiction, if the court were to place the treaty obligation above that of the interests of justice by requiring service by the treaty.
  6. There is authority, if it is required, indicating that in other circumstances judges have adopted a similar course of action. Bill Kenwright Limited v Flash Entertainment FZ LLC [2016] EWHC 1951 (QB) is but one example of such a decision. I would add that according to Davidsons, who are the local solicitors Mr Ashley has retained in the UAE, the method of service involving leaving documents for a party at an address is not unknown in the United Arab Emirates and is not a method of service which would be regarded as being unlawful.
  7. It is appropriate to make this order as an alternative rather than an addition to the first order relating to service at Herbert Smith Freehills’s address. I will, therefore, grant declarations confirming that service has been properly effected of this application and of the application for a charging order by both of the methods that are set out in paragraphs 1 and 2 of the draft order.
  8. Furthermore, it is plainly right that the court should look at the matter prospectively, and I am satisfied that it is appropriate to make an order permitting the claimants to serve Mr Jimenez out of the jurisdiction with any documents that relate to this claim by leaving them at his address in Dubai or by posting them to him at that address. The two orders that I am making today should also be served on Mr Jimenez in accordance with that provision.
  9. As an addendum, I am satisfied as to two matters. First, it is appropriate that Mr Jimenez should pay the costs of the service application. The application became necessary because of what I have found to be a bad point taken by Herbert Smith Freehills on behalf of Mr Jimenez, and it was in any event appropriate for Mr Ashley to seek to have certainty about service of the application.
  10. The second point concerns the basis of the order for costs. The court has power to award costs on the indemnity basis where the circumstances are out of the norm. It seems to me that the circumstances here can certainly be regarded as falling within that class. Mr Jimenez having enthusiastically participated in these proceedings so far as jurisdiction is concerned has chosen not to participate subsequently and, furthermore, he has gone out of his way to create difficulty for Mr Ashley in relation to service. That, allied with the bad point taken by Herbert Smith Freehills, takes the case out of the norm and I consider in the exercise of my discretion it is appropriate to award costs of the service application on the indemnity basis.