ANOTHER CLAIM FORM CASE: ANOTHER CLAIMANT COMES TO GRIEF OVER SERVICE OF AN UNSEALED CLAIM FORM: DEFENDANT,HOWEVER, SAVED BY CPR 3.10.

In Pitalia & Anor v NHS Commissioning Board [2022] EWHC 1636_2 (QB) His Honour Judge Pearce dismissed a claimant’s appeal in a case where the claim form had not been validly served.  The defendant had made an error in that it did not dispute jurisdiction under CPR 11. However that error could be, and was, rectified under CPR 3.10.  The action remained struck out.  It is a case that highlights the importance of defendants knowing the rules and that applications in relation to the claim form should be made under CPR Part 11.

“Every litigation lawyer knows (or at least should know) the importance of timely service of originating process. It has been repeatedly spelt out by the court …”

THE CASE

The claimant served a claimed form that was unsealed. A sealed copy was served outside the four month period of validity.   The defendant took the point that service was not valid and informed the claimant it would apply to strike out the claim.

The parties then made a number of applications.

The defendant’s application was dated  24 January 2020, “seeking an order that the claim be struck out due to non-compliance with CPR 7.5 (“the Respondent’s First Application”)”.

The defendant did not, however, refer to CPR Part 11 in its application, nor was the application said to be under that rule.

The District Judge held that valid service of the claim form had not taken place.  She also held that the defendant’s application, although not under CPR 11, was an appropriate application to dispute service.  The claimant’s claim was struck out.

THE APPEAL

The claimant appealed against the District Judge’s decision on a number of grounds.  However by the time of the appeal it was clear that service of an unsealed claim form was not good service.  Permission to appeal was granted on one ground.

    “That the District Judge erred in law by not determining that the defendant had accepted jurisdiction and /or lost its right to challenge the validity of the claim form in all the circumstances, and, in particular in the circumstances that (a) the defendant had failed to use the procedure provided by CPR Part 11 and/or (b) the defendant’s solicitors had filed under cover of a letter dated 21.1.20, an a acknowledgement of service with the box indicating an intention to defend the claim ticked but the box indicating an intention to contest jurisdiction not ticked and notwithstanding the said letter stated that it was being filed ‘…without prejudice to our position that the claim form has not been served’…

THE FIRST ISSUE ON APPEAL: WAS HODDINOTT WRONG OR HAD IT BEEN OVERRULED

The defendant argued that the decision in Hoddinott v Persimmon Homes [2005] 1 WLR 806 that required an application by a defendant in relation to service  to be made under CPR Part 11 was wrong, or had been overruled by the subsequent Supreme Court decision in Barton v Wright Hassall [2018] UKSC 12.

The judge did not accept the defendant’s arguments on these points.

51. For these reasons, I conclude that the judgment of the Court of Appeal in Hoddinott is authority for the proposition that a defendant who files an Acknowledgment of Service, but does not apply under CPR 11.1 for an order declaring that the court has no jurisdiction or that the court should not exercise any jurisdiction which it may have, is to be treated as accepting that the court has jurisdiction to try the claim. On the face of it, this would appear to dispose of the issue of the proper construction and application of CPR 11 to the facts of this case, since the County Court is bound by a judgment of the Court of Appeal.

THE STEPS A DEFENDANT SHOULD TAKE: USE CPR 11

It is clear that the only safe way for a defendant to proceed in these circumstances is to use CPR Part 11.

58. If the judgment of Hoddinott on the effect of CPR 11 is looked at in this way, the position becomes clearer:

a.       Where the time for service of the Claim Form under CPR 7.5 has expired and the court has not granted an extension of time for service under CPR 7.6, the Claim Form is normally no longer valid and proceedings cannot be commenced in reliance upon late service of it unless the defendant has accepted the jurisdiction of the Court;

b.      However, if the defendant has lost the right to challenge the validity of the Claim Form by submitting to the jurisdiction of the court, it remains valid;

c.       If the Claim Form has been served and an Acknowledgment of Service is filed, the Defendant does not thereby lose any right to dispute the court’s jurisdiction;

d.      However, a Defendant who serves an Acknowledgment of Service but does not make an application under CPR 11 for an order declaring that the court has no jurisdiction or that the court should not exercise any jurisdiction which it may have is to be treated as accepting that the court has jurisdiction to try the claim and hence will not be able to dispute the continued validity of the Claim Form.

59. These conclusions are not inconsistent with the judgment of the majority of the Supreme Court in Barton v Wright Hassall so as to cause the court to conclude that Hodinott has been impliedly overruled. I reject that proposition.

FAILURE TO TICK THE BOX DISPUTING JURISDICTION IN THE ACKNOWLEDGEMENT OF SERVICE IS NOT FATAL

The judge held that a failure to tick the box disputing jurisdiction was not fatal to a defendant’s subsequent application.

60. I should add, since it is relevant to some of the argument advanced in this case, that it is clear that the failure to tick the box in a Claim Form indicating an intention to contest the court’s jurisdiction is neither a necessary nor a sufficient basis to do so. It is not necessary because an application under CPR 11(1) is not predicated on the defendant having done so; it is not sufficient because, once the Acknowledgment of Service is served, CPR 11(1) sets out a different procedure that must be adopted in order to contest the court’s jurisdiction. However, the court will not doubt be alert in the appropriate case to the possibility that, by failing to tick the relevant box, the defendant may in fact be taken to have accepted that the court has jurisdiction to hear the case. That matter will be fact specific. It would certainly not apply here where the Acknowledgment of Service was accompanied by a letter specifically raising that issue.

HAS THE DEFENDANT SUBMITTED TO THE JURISDICTION?

61. It will be noted that the consequence of this is that failing to comply with CPR 11(1) is a discrete way of submission to the jurisdiction that arises by virtue of CPR 11(5). A party may make application under CPR 11(1) but be treated as submitting to the jurisdiction by reason of other factors (though given the need for such submission to be unequivocal, this may be rare). But equally a party who has unequivocally not submitted to the jurisdiction may be treated as having done so by virtue of the failure to comply with CPR 11(1). The court needs to be astute not to confuse the two, though matters that are relevant to the determination of whether the defendant has submitted to the jurisdiction on one of the grounds may equally be relevant to submission on the other.

SUBMISSION TO THE JURISDICTION IN THE CURRENT CASE

62. I turn to the second issue here which is whether, on the material before, the District Judge came to the correct conclusion on whether the Respondent had submitted to the jurisdiction. The first point to make is that, by reference to anything other than the terms of CPR Part 11, the Judge was undoubtedly entitled to find that there was no submission to the jurisdiction. The Respondent repeatedly made clear its intention to argue that it disputed the Appellants’ right to rely on the Claim Form on the grounds that its validity had expired; indeed, it applied to strike the claim out on this basis. Disregarding for the moment the effect of Part 11, the District Judge was clearly entitled to come to the conclusion that “there had been no waiver, express or implied, of its right to challenge the jurisdiction.”

63. But, the Appellants say, regard must be had to the procedural provision of CPR 11 in the light of Hoddinott. The simple fact is that an Acknowledgment of Service was filed but no application was made under CPR 11 and, in light of CPR 11(5), the court is bound to treat it as having accepted that it has jurisdiction to try the claim.

64. In my judgment this is correct. The Court below was bound by the decision in Hoddinott to find that the Respondent was to be treated as having accepted the jurisdiction of the court unless it had made the requisite application under CPR 11(1).

64. In coming to this conclusion, I bear in mind the decision of Patten J in SMAY Investments Ltd v Sachdev [2003] EWHC 474. It was from this judgment that Judge Matharu took the passage at paragraph 33 of her judgment (wrongly attributed to Peter Smith J) as to the need for a submission to the jurisdiction to be unequivocal. In that case, the Defendant Sachdev was alleged to have submitted to the jurisdiction by several acts. Patten J held them not to be unequivocal acts of submission. But Patten J also held “Given the assertions by Mr Sachdev in his affidavit about a challenge to the jurisdiction and the subsequent affirmation of that position in the acknowledgment of service, the position, in my judgment, could only have become unequivocal either by his failure to issue an application challenging jurisdiction within the time limits prescribed by CPR Part 11(4) or by his indicating to the Court in clear and express terms that he had abandoned his intention to contest jurisdiction. Neither of these events occurred.” To assert that neither event occurred is seemingly to assert that Mr Sachdev did not either indicate that he abandoned his intention to contest the jurisdiction or, more significantly, did not fail to issue an application under CPR 11(4) – in other words that he did issue such an application. I confess to being somewhat unclear about this finding, because I cannot see any other mention in the judgment of such an application having been issued, even though it would have been of some considerable significance to the matters that the court was considering. But in any event, that judgment does not support the conclusion that, where CPR 11 is engaged, the court is only concerned with whether there has been an “unequivocal” submission; rather it supports the conclusion that the right to challenge the jurisdiction will be lost in a case where CPR 11 applies and an Acknowledgment of Service has been filed either if there is no application under CPR 11(1) or if there is an unequivocal submission to the jurisdiction. This is consistent with my interpretation of Hodinott as set out above.

65. I have also had regard to the Respondent’s arguments that cases such as Mann v Towarzystwo Ubezpieczen Inter Polska SA [2021] EWHC 2913 show that the court can permit challenges to jurisdiction other than by means of application under CPR 11.1. As a general proposition, I do not doubt that this is the case. For example, a defendant who for whatever reason did not serve an Acknowledgment of Service could not be held to the procedural obligation of CPR 11(1) – see for example the facts of and decision in Shiblaq v Sadikoglu [2003] EWHC 2128. Whether the decision of the Master at paragraph 14(cc) of the judgment in Mann flows from the passage in Hoddinott cited at paragraph 14(bb) is rather more questionable. The passage cited is in the context of the Court of Appeal saying that the particular circumstance of an application to set aside an order for extension of time for service being made before an Acknowledgement of Service is filed is not an exception to the rule that, following service of an Acknowledgment of Service the defendant must make the relevant application under CPR 11.1 if it seeks to challenge the court’s jurisdiction on the ground of expiry of validity of the Claim Form, whereas the Master appears to have taken it as support for the argument that an application under CPR 11.1 might not be necessary if the defendant had already applied to set aside the extension of time for service of the Claim Form even if it subsequently served an Acknowledgement of Service. That suggestion would be inconsistent with Hoddinott.

69. On my reading of his judgment, Dingemans J was persuaded on the facts Caine that, as a matter of their proper construction, the applications dated 7 November 2017 and 18 May 2018, were to be treated as being made under CPR Part 11. That conclusion was open to him because the second of the applications expressly referred to CPR Part 11. I do not consider that this route is open to the court on the facts of the present case because there never was any reference in the application to CPR Part 11. This is my understanding of Judge Matharu’s comment in paragraph 38 of her judgment to the effect that she did not consider the application to satisfy the provisions of CPR 11.4. I agree with that conclusion.

 COULD CPR 3.10 SAVE THE DAY (FOR THE DEFENDANT…)?

The judge then considered an issue not considered at first instance.  Could the court use CPR 3.10 to rectify the defendant’s error in failing to mention CPR Part 11 in its application?

70. However, the alternative argument, that the failure of the application expressly to refer to CPR 11(1) was an error of procedure capable of being rectified under CPR 3.10, was not considered by Judge Matharu. This is unsurprising since on her other findings it was not necessary for her to do so. But given my analysis on the other issues, this becomes an acute matter. Since the District Judge did not consider the exercise of this power, I do so not as a matter of review but as a new exercise of discretion.

71. The following matters support the argument that the error of procedure should be rectified under CPR 3.10:

a.       The Respondent in all documents other than the Acknowledgement of Service itself, always made clear that it disputed the court’s jurisdiction on the ground that the Claim Form was served out of time;

b.      The letter under cover of which the Acknowledgement of Service was served itself raised the issue of late service of the Claim Form and stated an intention to apply to strike out;

c.       The application to strike out was made within the 14 days prescribed for application under CPR 11(1);

d.      Had the application notice bore additional words to the effect that an application was being made for an order declaring that the court had not jurisdiction because of the late service of the claim form, it would have been compliant with CPR 11(1); yet it is clear from the witness statement of Mr Parker in support of the application that this was the very argument being advanced.

72. The following matters militate against the exercise of the power under CPR 3.10.

a.       Generally, the Respondent knew the case being advanced by the Appellants and received an unsealed claim form in time. It would be wrong to deprive the Appellants of the opportunity to advance this case by a procedural device that would leave the claim struck out.

b.      Specifically, the Appellants’ application for an extension of time for service of the Claim Form was unsuccessful because of a technical failure on their part to serve the sealed Claim Form in time; the Respondent should be held to the same standards of procedural rigour.

THE CLAIMANT’S DILATORY OR LAX APPROACH TO SERVICE

The judge held that the defendant’s failure to frame the application under CPR Part 11 was a matter that could be remedied under CPR 3.10 and that it was appropriate to do so on the facts of this case.

73. In her judgment, the District Judge spoke of the Appellants’ “dilatory or lax approach to good and proper service.” In the light of the procedural failings found in her judgment (which though initially the subject of an application for permission to appeal, were not pursued to an oral hearing of the application), it is impossible to find some kind of equivalence with the criticism that is to be made of the Respondent. The Respondent would not have fallen foul of CPR Part 11 if it had added one line to an Application Notice so as to set out expressly an argument that it was clearly seeking to make in any event, albeit by a different procedural route. In contrast, the District Judge found much to be critical of in the Claimant’s approach to service of originating process. Every litigation lawyer knows (or at least should know) the importance of timely service of originating process. It has been repeatedly spelt out by the court, for example by Lord Sumption in Barton v Wright Hassall. In those circumstances, the mere fact that a defendant may know in detail the case that the claimant wishes to advance is not a ground to refuse to exercise the power under CPR 3.10 to regularise the defendant’s attempt to strike the claim out, achieving the result that the claimant is permitted to pursue its claim notwithstanding late service of the Claim Form. Equally, there is no basis for concluding that to find for the Respondent on the issue in question would be to hold it to a different standard than the Appellants (and other litigants) are held to.

74. Once these arguments are dispensed with, the argument in favour of exercising the power to rectify the procedure error under CPR 3.10 by treating the Application Notice dated 24 January 2020 as including an application for a declaration that the court has no jurisdiction to hear the claim on the ground of the expiry of the validity of the Claim Form before service of it is overwhelming. The right to such a declaration was clearly inherent to the application that the Respondent was making; the application was made in time; it was supported by a witness statement making clear that the basis of the application was the failure to serve the Claim Form within the term of its validity; and compliance with CPR 11(1) would have been achieved by the addition of minimal additional wording which was implicit in the application that was being made in any event. The court should exercise its power to rectify the procedural failing so as to render this an application under CPR 11(1). Any other result would be a triumph of form over substance.

Conclusion

75. It follows from the above that:

a.       This court is bound by the decision of the Court of Appeal in Hoddinott as to the procedural requirement of a defendant who has served an Acknowledgment of Service to apply under CPR 11(1) for an order declaring that the court has no jurisdiction to try the claim, otherwise the defendant is to be treated as having accepted that the court has jurisdiction to try the claim;

b.      The District Judge was right to find that, other than in failing to make explicit reference to its application to strike out being made pursuant to CPR 11(1), the Respondent did not either expressly or impliedly waive its right to challenge the court’s jurisdiction;

c.       In all the circumstances, the Respondent’s application dated 24 January 2020 should be treated as an application made in compliance with the provision of CPR 11(1).

d.      Accordingly, it was open to the Respondent to challenge the jurisdiction of the court on the basis of late service of the Claim Form;

e.       On the District Judge’s other findings, and in particular on her refusing either to dispense with service or retrospectively to extend time for service, she was right to find that the claim must be struck out.

76. Accordingly, the appeal is dismissed.