COURT OF APPEAL UPHOLDS DECISION SETTING ASIDE AN EXTENSION OF TIME FOR SERVICE OF THE CLAIM FORM: CASE ON HEAD OF ALEXANDER THE GREAT GOES BUST

In  Qatar Investment and Project Development Holding Company & Anor v Phoenix Ancient Art SA (Rev1) [2022] EWCA Civ 422 the Court of Appeal upheld a decision setting aside an order granting an extension of time for service of the claim form.  The judgment shows the importance of addressing issues relating to service early. This judgment shows that the courts have scant (if any) sympathy with claimants who leave matters relating to service late in the day.  It also shows that if matters relating to the pandemic are to be relied on in relation to extensions of time then specific evidence is needed.

” Evidence is required to support an extension of time… In my judgment, that is true of pandemic-related reasons just as much as other sorts of reasons…. The Court must be given sufficient detail of the effects of the pandemic in the particular case, in order to make the necessary findings of fact and evaluate the merits of the application. I therefore reject Mr Stewart’s submission that the Court should have taken or can now take judicial notice of pandemic-related disruption as a reason for the extension application. The Court cannot make assumptions about the nature and extent of business disruption, and specifically, the effect that any such disruption had on the conduct of a particular case.”

WEBINAR ON SERVICE OF THE CLAIM FORM

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THE CASE

The claimants brought a case alleging that they had purchased a fake Head of Alexander the Great.  The claimant obtained an ex parte order extending time for service of the claim form. The order was obtained on 22 July 2020, service took place on the 8th September 2020. The defendant applied for an order setting aside the aside of extension of time.  The Master granted the defendant’s application.   The claimant appealed against that decision. The first instance decision on appeal was considered in detail in an earlier post.

The High Court judge refused the claimants’ appeal and they appealed to the Court of Appeal.

THE NOT SO GREAT RESULT FOR THE CLAIMANTS ON APPEAL

The claimants appeal was rejected by the Court of Appeal. The Court upheld the decision of the Master and the High Court judge, William Davis J.

THE COURT OF APPEAL JUDGMENT ON THE CLAIMANTS’ SUBMISSIONS

The Court of Appeal rejected the claimants’ arguments that the delay in the case could be explained due to problems with the pandemic. Firstly there was no (admissible) evidence to support this.  Further the evidence that the claimants attempted to rely upon was far too vague as to be useful in this context.

1. 1. The Claimants focus on two particular aspects of the pandemic, the closure of the FPS and the disruption to business. I shall consider those two aspects separately, although of course they are both aspects of the same pandemic and they are connected.

Closure of FPS

1. 1. The Master found that the FPS’s closure was not a reason for the Claimants’ application for an extension, because the Claimants required the extension of time for other reasons, unconnected with that closure. The Master held that the reason or reasons for the Claimants’ not having served the claim form in time (and thus seeking an extension of time) was the Claimants’ failure to grasp the nettle and get on with preparing for service earlier than they in fact did; he noted that they did not even know the FPS was closed until late June 2020, by which time they were already up against the deadline for service of the claim form and already in need of an extension.

1. 1. Those are the facts as found. It is difficult to see how the Claimants can get around them.

1. 1. But in any event, I believe there is a fundamental flaw in the Claimants’ argument. The Claimants say that the Court should have taken account of, indeed found to be determinative, the fact that service would not have been possible by 22 July 2020 in any event given the closure of the FPS. But the Court’s task when faced with an application for extension of time under CPR 7.6(2) is to determine the reasons for the application for extension. That is a fact-finding exercise rooted in the evidence provided to the Court. Once the facts are found, the Court evaluates the reasons as good (i.e., are they sufficiently good to justify extension?) or not so good. The Claimants are wrong to suggest that the Court should investigate what the position would or might have been “in any event”. That is a different exercise altogether.

1. 1. It is possible to envisage a case where the closure of the FPS might have been a good reason for the extension application. Mr Cooper gave the example of two claimants who issue on the same day against foreign defendants: the first makes sensible preparations for service and submits the papers to the FPS, only to find that the FPS is closed for the remainder of the period for service; the second does nothing towards service and then finds out that the FPS has in fact been suspended and that service could not have been effected anyway; both are in the same position so far as the outcome is concerned, because the FPS is closed; both make applications for extensions of time for service. Mr Cooper submits that the Court’s sympathy might very well be with the first claimant, who can show that the FPS’ closure was a reason for seeking an extension, but not with the second claimant who (like these Claimants, he argues) did nothing until it was too late and then relied on the fact of closure opportunistically. I agree that the closure of the FPS would be a reason (arguably, a good reason) for the first claimant seeking an extension of time, but it would not be a reason for the second having to do so. I agree that this example illustrates the flaw in the Claimants’ argument.

1. 1. In this case, the closure of the FPS was not a reason, let alone the reason, for the Claimants needing to seek an extension of time; they needed an extension anyway. The closure of the FPS, once Pinsent Masons found out about it, simply added to the existing problems.

Disruption to business

1. 1. Mr Stewart also emphasised the disruption caused by the pandemic. He argued that evidence of that generalised disruption was not necessary; but that in any event, there was sufficient evidence before the Court to demonstrate that disruption caused by the pandemic materially contributed to the Claimants’ delays in preparing to serve the claim form.

1. 1. Evidence is required to support an extension of time: see CPR 7.5(4) and PD7A paragraph 8, see above. In my judgment, that is true of pandemic-related reasons just as much as other sorts of reasons. I agree with Butcher J in STA v OFY. The pandemic had different effects on different businesses; some thrived while others struggled. The Court must be given sufficient detail of the effects of the pandemic in the particular case, in order to make the necessary findings of fact and evaluate the merits of the application. I therefore reject Mr Stewart’s submission that the Court should have taken or can now take judicial notice of pandemic-related disruption as a reason for the extension application. The Court cannot make assumptions about the nature and extent of business disruption, and specifically, the effect that any such disruption had on the conduct of a particular case.

1. 1. The problem for Mr Stewart is that there was no evidence before the Master that the pandemic had caused the delays in this case. Mr Pulford’s first witness statement did not suggest that the pandemic had anything to do with the request for an extension (Covid is not even mentioned in that statement save for a passing reference in the context of potential difficulties in serving outside the jurisdiction); the reasons he put forward in that statement related entirely to the protective nature of the claim form, the hopes of achieving settlement and the assumption that Boyes Turner would have accepted service. Mr Pulford’s second witness statement, prepared for the set aside hearing in February 2016, was to similar effect: he went through the background to the litigation and referred to failed attempts to agree a standstill agreement; he emphasised the hopes of settlement by negotiation in the early months of 2020; he said that counsel and experts needed to be instructed to settle particulars of claim before the claim form could be served; he repeated his firm’s assumption that Boyes Turner would accept service. In his second witness statement he did refer to the closure of the FPS, but not to suggest that this had caused his firm any specific difficulty or delay, but instead to make the point that service could not have been effected within time in any event (a point made on appeal and which I have addressed already at paragraphs 33-36 above). He did say in his second witness statement that the pandemic had “indisputably caused delays for solicitors” but he gave no details as to how that had affected the timeline in this case.

1. 1. My own reading of Mr Pulford’s first and second witness statements is in line with the Master’s view of the evidence and indeed the Judge’s view of it too. Pinsent Masons held back investigating service outside the jurisdiction for some months for a number of reasons, none of which was connected with the pandemic.

1. 1. Mr Stewart seeks to rely on Mr Pulford’s third witness statement. In reliance on paragraph 11 of that statement (see above at paragraph 26), when read with the rather muted references to the pandemic in the first and second witness statements, Mr Stewart submits that the whole timeline would, but for the pandemic, have shifted earlier in time; and that if it had been so, service within time might have been achieved before the FPS closed, or, alternatively and more likely, the closure of the FPS would have become the effective obstacle in the way of service by 22 July 2020 because the necessary preparations would have been completed before that date.

1. 1. Even if Mr Pulford’s third witness statement was properly before us (which it is not, because it was not before the Master), I would not be persuaded that it changes the position. Like William Davis J, I take the view that the third statement would not carry much weight: it is too vague, too speculative in content, too lacking in specifics. Even if Mr Pulford could not say with certainty how many days could have been saved but for the pandemic, he could surely explain the difficulties in his office which gave rise to the delays in this case and try to put some measure on the number of days lost due to the pandemic. Simply to say that he is confident that the letters of 7 and 15 May 2020 would have been sent earlier is insufficient.

Conclusion

1. 1. The Master considered the closure of the FPS due to Covid-19 but did not find that to be a reason for the delays in this case.

1. 1. The Master did not consider the general disruption to business due to the pandemic because he was not asked to, and because there was no evidence of that before him.

1. 1. Neither aspect of the pandemic relied on by the Claimants is capable of assisting them in this appeal. The pandemic cannot provide a basis for setting aside the Master’s judgment and restoring the extension order, or for exercising discretion in the Claimants’ favour.

1. 1. The Master adopted the correct approach and reached conclusions open to him on the evidence. I would dismiss this appeal.

Lord Justice Coulson :

1. 1. I agree that, for the reasons given by my Lady, Lady Justice Whipple, this appeal should be dismissed. On the face of it, Mr Stewart’s best point was that, unless the Claimants had effected service outside the jurisdiction by 15 April 2020 (the date that the FPS was suspended) it would always have required an extension of time. But that was not the reason for the delay which actually occurred: on the findings of the Master and William Davis J, the Claimants only woke up to the difficulties of service outside the jurisdiction over two months later, in late June 2020, and it was the delays up to that point, for which there was no good excuse, which made an application for an extension of time inevitable.

1. That can be tested the other way round. If in late April 2020, the Claimants had been ready to serve outside the jurisdiction, only to be told that the FPS was closed because of the pandemic, a prudent solicitor would have sought an immediate extension of time. It is highly likely that such an application would have been granted. That did not happen because, on the facts here, the Claimants had not even thought about using the FPS until about 23 June 2020, five months into the six month period. It was that delay which necessitated the application for an extension, and that was not a good reason to extend time for service.