COURT REFUSES RELIEF FROM SANCTIONS WHEN PARTICULARS OF CLAIM ARE SERVED OUT OF TIME: THE DANGERS OF LIVING IN THE “TWILIGHT ZONE” (AND OF LEAVING SERVICE UNTIL THE LAST MINUTE)
In Croke & Anor v National Westminster Bank Plc & Ors  EWHC 1367 (Ch) Deputy Master Marsh refused the claimants’ application for relief from sanctions in a case where the Particulars of Claim were served one day late. It was held that the court had no jurisdiction to hear the claim once the application for relief from sanctions was refused.
“Unless an extension of time is granted, the claim will cease to have any validity and will be struck out. As I have said it currently has a twilight existence.”
The claimants brought proceedings against the defendant banks and named individuals. Earlier, similar, proceedings had been struck out in 2018 following failure to comply with a court order. The claim form in the current action was served at the end of the four month period. The Particulars of Claim needed to be served within the same period. The defendants did not accept service by email. The Particulars were sent by post and arrived one day late. The claimants applied for relief from sanctions.
THE PROCEDURAL HISTORY OF THE 2021 CLAIM (THE SECOND CLAIM)
The Deputy Master set out the procedural history in relation to late service of the Particulars of Claim.
The essential procedural background to the 2021 Claim is that:
(i) The claim form was issued on 27 May 2021. It had been preceded with a brief letter of claim sent on 21 May 2021 at a time when the claimants said they were concerned about the expiry of a limitation period. The claimants invited the defendants to undertake that they would not take any point about limitation which would allow the claimants to provide a more detailed letter of claim. The undertaking was not provided.
(ii) No step in the claim was then taken until the claim form was sent to the defendants by special delivery on 23 September 2021. It was therefore deemed served on 25 September 2021 just before the 4 month deadline was due to expire on 27 September 2021.
(iii) Pursuant to CPR rule 7.4(2) the deadline for service of particulars of claim was 27 September 2021.
(iv) On 24 and 27 September 2021 the claimants asked the defendants to accept service of the particulars of claim by email. Agreement to accept service by email was not provided.
(v) On 27 September 2021 the claimants sent the particulars of claim, without a signed statement of truth, to the defendants by emails timed at 16.36 and 16.39 respectively. At 22.17 the same day the claimants sent the defendants by email a further version of the particulars of claim with a signed statement of truth.
(vi) On 28 September 2021 the defendants received at their respective offices by hand delivery copies of the particulars of claim with a signed statement of truth.
The defendants’ case on service of the particulars of claim is straightforward. The last day for service was 27 September 2021. They had not agreed to accept service by email and, even if they had done so, the particulars of claim were sent after 4.30 on that date and would have been deemed served on 28 September 2021 by virtue of CPR rule 6.26. Service was effected by delivery of hard copies of the particulars of claim on that date which was one day out of time.
The question of whether service was out of time can be dealt with briefly without, for this purpose, considering Mr Croke’s evidence about the difficulties he had in finalising the particulars of claim. In his submissions he contended that the deeming provisions in CPR rule 6.26 do not apply. However, the rule is clear and it applies to all documents other than a claim form. The claimants were only entitled to serve by email if, in accordance with paragraph 4.1 of Practice Direction 6A, the recipients had given consent. No consent had been given in this case. In any event, the particulars of claim were sent (without a statement of truth) after 4.30pm and therefore were deemed served on the 28 September 2021. Service took place when the hard copies of the document were delivered on that date. Service was therefore one day late.
Mr Croke invited the court to apply CPR rule 6.15 albeit that the application notice does not make it clear that he was seeking to rely upon its provisions. That rule does not assist the claimants as it only relates to service of a claim form. In any event, there was no “good reason” why the rule should be applied. The claimants’ difficulties related to completing the particulars of claim, not service of it upon the defendants.
It follows that the claimants will be unable to proceed with the claim unless they obtain an order retrospectively extending time for service of the particulars of claim by one day. It is common ground that when the court is considering an application for a retrospective extension of time for service of particulars of claim it must apply the relief from sanctions framework under CPR rule 3.9 as it has been interpreted in Denton. 
THE JUDGMENT REFUSING RELIEF FROM SANCTIONS FOLLOWING LATE SERVICE OF THE PARTICULARS OF CLAIM
The Deputy Master refused the claimants’ application. The Denton criteria applied and it was inappropriate to grant relief from sanctions on the facts of this case.
Denton three stage test
The first stage is to assess the serious or significance of the breach. Mr Croke suggested that the breach should be characterised as being insignificant because of his efforts to serve the particulars of claim and the fact that the particulars of claim were served just one day out of time. However, when looked at in the full context it would not be right to make light of the breach. The factors I have in mind are:
(i) The claim was issued at a time when the claimants considered a limitation period was fast approaching. A claim had been notified alleging serious breaches of duty.
(ii) The claim form was only served at the end of its period of validity.
(iii) The defendants were entitled to know within the four month period specified in the CPR whether a claim had been made against them and to be able to understand that claim.
(iv) Unless an extension of time is granted, the claim will cease to have any validity and will be struck out. As I have said it currently has a twilight existence.
The reasons why the default occurred are explained, or at least partially explained in Mr Croke’s witness statement dated 11 November 2021. He says he did not wish to issue the claim in May 2021 but felt constrained to do so because there was, he felt, a potential issue about limitation and the defendants had not agreed to waive their entitlement to rely upon limitation. He does not explain however what if anything he was doing between the date when his application for permission to appeal against the order striking out the 2015 Claim was struck out in early 2018 and May 2021.
Mr Croke’s witness statement explains that almost immediately after he issued the claim in May 2021 he was served with notice of eviction from his home under a suspended order for possession. It is clear that the steps he describes to try to prevent the order being enforced and putting his home in a suitable condition for sale were a major pre-occupation. Nevertheless, he accepts that from mid-July onwards he was able to spend some time on drafting the particulars of claim. The witness statement does not explain why he was unable to produce a draft setting out his claim in a concise way in accordance with the CPR well before the 4 month period was due to expire.
For completeness I should add that Mr Croke had difficulty with his printer in the week before the deadline expired and he misunderstood the CPR’s deemed service provisions. He thought he had until midnight on the final day to serve the particulars of claim. He says making an application for an extension of time for service of particulars of claim before the deadline did not occur to him because he thought he could complete the task within the deadline.
The court is then required to consider all the circumstances including the factors that are specified in CPR rule 3.9(1)(a) and (b). I have in mind in particular:
(i) The claimants have a history of failing to comply with court orders in the 2015 Claim (acknowledging that his appeal was struck out for an incorrect reason). They were given ample time to provide a compliant answer to the Request made under CPR rule 18. The 2015 Claim was conducted by Mr Croke in a manner that was far from efficient.
(ii) The claimants’ approach to dealing with the defendants’ application in this claim has also been unsatisfactory. No indication was given whether they intended to respond to Mr Unger’s statement and this led to an unless order being made on 3 May 2022 which the claimants failed to comply with.
(ii) Again, it is relevant to note that no explanation has been given for the lengthy period between the claimants’ application for permission to appeal being struck out in early 2018 and the 2021 Claim being issued.
(iii) The claim form was issued very close to the expiry of the 4 month deadline and his explanation for the difficulty he had in serving the particulars of claim is incomplete. It should have been possible for him to produce particulars of claim that complied with the CPR in time.
(iv) Instead, he has served particulars of claim which are seriously deficient and the court can have no confidence that he is capable of producing a statement of case that complies with the requirements of the CPR and Common law. He has had plenty of opportunity to do so.
(v) The 2021 Claim is at least in part a collateral attack on the order striking out the 2015 Claim.
(vi) As Mr Croke has acknowledged, there are limitation periods which are in play. The claim form was issued precisely six years after the Bank made demands under the Ickfield and The Caitlin Loans.
It is not appropriate in these circumstances to grant relief from sanctions in respect of a statement of case that is seriously deficient against the backdrop of the 2015 Claim. The claimants have had a fair opportunity to bring the claims they wished to make. A considerable amount of court resources has been devoted to both claims and substantial costs incurred by the defendants. Finality in litigation is an important principle and the balance comes down firmly in favour of the claimants’ application being dismissed.
I will make a declaration that the court has no jurisdiction in this claim in light of the failure to serve the particulars of claim within the period of validity of the claim form. It is not appropriate or necessary to make an order striking out the claim. I will consider what further orders should be made on the handing down of this judgment or on a later date.