EXTENSIONS OF TIME TO SERVE THE CLAIM FORM SET ASIDE: YOU CANNOT HOLD ON: CARGO CLAIM COMES TO GRIEF

I clearly called time too early when I wrote, in  a post on December 5, that we  may the considering last claim form post of the year.  We have another example of a claimant coming to grief in Doliaa SAS & Anor v Mediterranean Shipping Company SA [2023] EWHC 3165 (Comm).  Mr Justice Bright set aside earlier orders extending time for service of the claim form.  The case highlights two things. Firstly the dangers of delay when proceedings have to be served abroad. Secondly the hazards involved in obtaining an extension of time for service of the claim form.  The defendant can always apply to set aside an extension and was successful in doing so in this case.

“Having applied on 2 October 2022 for, and obtained, an extension that would just, but only barely, allow the claim form to be served before its expiry, I find it incomprehensible that they thereafter did nothing in respect of service until February 2023.”

WEBINAR ON SERVICE OF THE CLAIM FORM: 5th FEBRUARY 2024

This case is one of many cases being looked at in detail in a  webinar on the 5th February. The webinar looks at the key cases relating to the claim form since October 2022. There are a large number of cases where claimants have fallen foul of the rules and failed to serve properly, usually with dire consequences. It also highlights those cases where claimants have been unsuccessful.  It looks at the practical consequences of the decisions and the steps that lawyers can take to avoid being involved in claim form issues. Booking details are available here.

TOPICS TO BE COVERED

Failing to serve at the right place

• Motorola Solutions, Inc & Anor v Hytera Communications Corporation Ltd & Ors [2022] EWHC 2887 (Comm) – Had solicitors stated that they would accept service of proceedings?
• Boettcher v (Xio (UK) LLP & Ors [2023] EWHC 801 (Comm) – Service at last known address, had claimant used reasonable diligence?
• London Fluid System Technologies Ltd & Ors, R (On the Application Of) v HM Revenue and Customs [2023] – Claimants granted order under CPR 6.15 because of ambiguity in defendant’s communications
• Telford And Wrekin Council v Secretary of State for Levelling Up, Housing and Communities & Anor [2023] EWHC 2439 (Admin) –  Period for service ran from date of decision, no extension when proceedings served late
• Jagger (& others) -v- Axa Insurance Plc – service on defendant’s old registered office is not good service.
• Simon Bain Building Services Ltd v Cardone & Anor [2023] EWHC 2916 (Ch). Failure to serve at address of nominated solicitors (new solicitors had been instructed). Defendant’s application to issue prompt application under CPR Part 11, and submitting to the jurisdiction.

Failing to serve in time

• Waldie -v- Manchester Airport (21st April 2022) – Failing to serve in time, CPR 3.9 was not the correct test
• Halton Borough Council v Secretary of State for Levelling Up, Housing And Communities [2023] EWHC 293 (Admin) – Failing to serve in time, application for extension refused.
• Walton -v- Pickerings Solicitors and F Brophy [2023] EWCA Civ 602 – Claimant successful in argument about serving in time.
• Simon Bain Building Services Ltd v Cardone & Anor [2023] EWHC 2916 (Ch).  Failing to serve on nominated solicitors (even though new solicitors instructed). Defendant failing to make prompt application under CPR 11.

• Doliaa SAS & Anor v Mediterranean Shipping Company SA [2023] EWHC 3165 (Comm). (Court setting aside extension of time for service of the claim form).

No seal, no joy!

Pitalia & Anor v NHS England [2023] EWCA Civ 657 – Failure to serve a sealed claim form

Clewer v Higgs & Sons (a firm) [2023] EWHC 1556 – Sealed claim form must be served in response to a specific court order

Costs

Johnson v Devon And Cornwall Police & Ors [2023] EWHC 690 (Ch) – Defendant could not recover costs of an application in relation to claim form, it should have known the claim form was not properly served.

THE CASE

The claimant brought an action against the defendant alleging damage to a cargo.  The defendant is registered in Geneva.  The defendant declined requests to nominate a solicitor in England and Wales to accept service.  Copies of the claim form were sent to the defendant but it stated that it was under no obligation to appoint English solicitors until it had been properly served with the claim form.

ISSUE OF THE CLAIM FORM

The claim form was issued on the 9th May 2022, the date before the timebar for issue expired.   Service should have taken place by the 9th November 2022. The claimant did not immediately effect service on the defendant but sent copies of the claim form and requested that English solicitors be nominated.

THE CLAIMANT’S APPLICATIONS FOR AN EXTENSION OF TIME FOR SERVICE OF THE CLAIM FORM

The claimant made two prospective applications for an extension of time to serve the claim form.

The first application was made on the 5th October 2022 when the claimant requested a five month extension. An extension was granted to the 9th March 2023.

The claimant did not submit documents for service with the FPS until 6th February 2023.  Upon chasing the FPS the claimants were told that service could take up to two months.

The claimant, therefore, made a second application seeking a further extension of three months.

OMISSIONS FROM THE SECOND APPLICATION

The judge observed that key information was not present in the second application.

1. 1. The Claimants therefore made a further application dated 3 March 2023, seeking a further extension of three months, i.e., to 9 June 2023. It was supported by a witness statement made by Elizabeth Anne Elliott of Hill Dickinson LLP. Ms Elliott’s statement explained (among other things) that documents had first been submitted to the FPS on 6 February 2023 but had been lost, resulting in a second submission on 27 February 2023. She also stated that the FPS had said on 1 March 2023 that they were presently processing applications dated 4 January 2023. She also said:

“7. To expedite service, the Claimants invited the Defendant to provide details of a nominated English solicitor upon whom to effect service. The Defendant has consistently refused to do so, despite England being the Defendant’s elected contractual jurisdiction.”

1. 1. Pausing for a second time:

i) Ms Elliott did not say that the claim had been time-barred since 10 May 2022, although she did quote the text from the earlier application, set out in paragraph 6 above.

ii) Ms Elliott did not say that the Claimants had known since early October 2022 that there was a backlog at the FPS and that it was taking a long time for documents to be processed. Unless read very carefully, her witness statement might have given the impression that this was only discovered on 1 March 2023.

iii) She said that the Claimants had initially been advised that service might take up to five months, but she did not say when. Nor did she highlight that, when received, this information made it logically necessary for the Claimants to lodge documents with the FPS immediately, i.e., in early October 2022; but that the Claimants had not acted as the information required.

iv) Paragraph 7 of Miss Elliott’s statement (particularly the word “consistently”) implied that there had been a continuing series of invitations to the Defendant to appoint solicitors to accept service in England, all of which had been declined. This was not the case.

1. It was on this basis that the Second Order was made, granting an extension to 9 June 2023.

SERVICE OF THE CLAIM FORM

Service was effected on 2 May 2023.

THE DEFENDANT’S SUCCESSFL APPLICATION TO SET ASIDE THE EXTENSIONS OF TIME

The defendants applied to set aside the extensions of time. That application was successful.  There may have been a good reason for applying for the first extension. However there was no excuse at all for the delay after that extension was granted. The claimant knew, at the time of the first application,  that there were delays at the FPS, yet it was not until February 2023 that the claim form was sent to FPS for service.

1. 1. It was open to the Claimants to defer issuing proceedings until the last day before expiry of the limitation period. However, this left very little slack for the Claimants to play with thereafter.

1. 1. Despite this, it was reasonable for the Claimants not to seek to effect service immediately, but to explore both whether the Defendant might appoint solicitors to accept service in England and whether it might be possible to resolve the claim amicably.

1. 1. However, following the exchanges of 20 July 2022, the Claimants had no reason to believe that the Defendant might appoint solicitors in England. From that point onwards, therefore, the Claimants’ state of mind must have been, and certainly should have been, that service would probably have to take place by service via the FPS, in Switzerland. When paragraph 7 of Ms Elliott’s witness statement is read with the knowledge that there had been no fresh invitation regarding service in England from 20 July 2022 until after 10 January 2023 (when the Defendant had made it clear that service should be in Switzerland), her evidence that the Defendant “consistently” refused to nominate English solicitors confirms that this was, in fact, the Claimants’ state of mind from 20 July 2022 onwards.

1. 1. Given that Hill Dickinson LLP’s message of 20 July 2022 implied that they would recommend to the Claimants to effect service after 2 August 2022, it is hard to understand why documents were not lodged with the FPS at about that time. I assume, in the Claimants’ favour, that they were not aware of the significant backlog at the FPS until about the beginning of October 2022, and that it was a surprise when they were told by the FPS, at that time, that service would take about five months.

1. 1. On this basis, an extension was obviously required. I agree with the Defendant that the application of 2 October 2022 ought to have brought more clearly to the Court’s attention that the claim was now time-barred. This was a serious lapse, although it is fair to say that many Commercial Court judges would know, without having to be reminded, that maritime cargo claims are likely to be subject to a one-year limitation period; and that the reference to a pending timebar gave some clue that the timebar might by now have come into effect.

1. 1. It is not necessary to dwell on this, however, because it is the Claimants’ dilatoriness after the First Order that, in my judgment, is decisive. The Claimants knew that the claim form would have to be served in Switzerland, and the evidence is that they had been told by the FPS that service could take approximately five months. Having applied on 2 October 2022 for, and obtained, an extension that would just, but only barely, allow the claim form to be served before its expiry, I find it incomprehensible that they thereafter did nothing in respect of service until February 2023.

1. 1. Even ignoring the time lost between 6 and 27 February 2023, which was not foreseeable and was not the Claimants’ fault, it must already have been obvious to the Claimants, for weeks if not months, that they had no realistic chance of effecting service by 9 March 2023. The fact that without prejudice negotiations were still going on is relevant, but cannot be a sufficient explanation, especially in circumstances where the claim had been time-barred since 10 May 2022.

1. 1. The Claimants’ failure to serve the claim form within the initial period was arguably justified (although I have reservations about this). However, the failure to serve the claim form by 9 March 2023 was wholly unjustified. The Claimants had no good reason to delay lodging documents with the FPS, after the beginning of October 2022. On the contrary, they knew perfectly well that it was imperative to act speedily.

1. Furthermore, when applying for the Second Order, they should have highlighted that their failure to lodge documents prior to February 2023 had occurred despite knowing full well that there was a backlog at the FPS, in respect of a claim that had long been time-barred.

2. I therefore will set aside the Second Order.