SERVICE OF THE CLAIM FORM ISSUES: CLAIMANT FAILS TO COMPLY WITH MANDATORY REQUIREMENTS: HIGH COURT UPHOLDS THE EXTENSIONS OF TIME

The judgment of Mrs Justice Hill in  Graham v Fidelidade – Companhia De Seguros SA [2024] EWHC 2010 (KB) contains some salutary lessons for litigators. In particular the importance of complying the the rules for applying for extensions of time for the claim form.  In this case the claimant’s procedural omissions were waived and the extensions of time granted upheld. Other claimants may not be so fortunate.

“To the extent necessary, I waive the procedural requirements in the ways I am satisfied the Master did. I make clear I do so on the particular facts of this case, and without wishing to encourage others to adopt the methods used in this case to obtain the orders in question.”

MAKING APPLICATIONS TO THE COURT: A PRACTITIONER’S GUIDE: WEBINAR 10th SEPTEMBER 2024

This  case highlights the importance of making applications in their correct form.  This webinar looks in detail at the rules relating to making applications in civil cases. Booking details are available here.

It looks in detail at:

• The rules and practice directions relating to making applications
• The importance of compliance
• A checklist to make sure you comply
• The importance of time estimates
• The Schedule of Costs

It then looks at these principles relating to three key areas of practice.

• Applications to extend time
• Applications for interim payments
• Applications for interim costs.

THE CASE

The claimant is bringing proceedings following an accident that happened in Portugal in 2021. Following issue of the claim form the claimant made an application to serve abroad and then for two extensions of time for service.  Those applications for extensions of time were made, effectively, by email, without evidence in support. They were both granted.  The defendant made an application to set aside the extensions of time. Firstly on the grounds that they were invalid, because the claimant had never made the correct application. Secondly on the grounds that there were no good reasons for granting the extensions; thirdly that the claimant did not meet the test on jurisdictional requirements.

THE FIRST ISSUE

The difficulty here was that the claimant’s applications for extensions of time for service were made relatively informally, with no evidence in support.  The applications had been made by emails, as adjuncts to the applications in relation to service out of the jurisdiction.

1. 1. The Claimant’s application for service out of the jurisdiction was made by way of an application notice dated 16 June 2022. It was supported by evidence in the form of Beasley 1. Box 5 of the application notice indicated that a telephone hearing was sought for the determination of the application. The court duly listed a hearing for 7 October 2022. The Claimant’s solicitor, Mr Beasley, was informed of this via a notice of hearing dated 26 July 2022.

1. 1. On 22 August 2022, Mr Beasley emailed the allocated Master, Master McCloud, indicating that he understood that applications for permission to serve out of the jurisdiction were normally dealt with on the papers and may have erred in asking for a hearing. He invited the Master to determine the application without a hearing. On 26 August 2022, Master McCloud emailed indicating that she had approved the application and asked her clerk to seal the order.

1. 1. At 9.53 am on 31 August 2022, before he was provided with a copy of the order, Mr Beasley sent a further email to the Master. He indicated that the court’s Foreign Process Office (“FPO”) had informed him that it would take three months for service to be effected in Portugal; and that he had also not yet had all the documents translated. He then said:

“We will be cutting it fine unless the validity of the Claim Form for service is extended. In the circumstances would you consider the attached draft order? I will of course CE file it and pay the fee in the usual way but as time is of the essence, I hope you will not mind me making this direct approach to you”.

1. 1. At 11.59 am the Master emailed Mr Beasley back, indicating that she had approved the order and sent it for sealing. The order was sealed very promptly and sent to Mr Beasley. It extended time for service of the claim form until 6 March 2023.

1. 1. At 12.21 pm Mr Beasley emailed Master to acknowledge receipt of the order extending time for service of the claim form, but saying that he had not yet received the order granting permission to serve out of the jurisdiction. At 12.30 pm the Master agreed to chase it up.

1. 1. At 12.58 pm Mr Beasley emailed the Master again, apologising for the fact that the order had omitted to make provision for the timescale in which the Defendant had to serve an Acknowledgement of Service and Defence. At 1.07 pm he submitted a fresh draft order. This was sealed later that day, granting permission to serve out of the jurisdiction in Portugal pursuant to CPR 6.36 and 6BPD ground 9(a) and making provision for the Acknowledgement of Service and Defence.

1. 1. Pausing there, paragraph 4 of the order provided that the Defendant should pay the Claimant’s costs of the without notice application for permission to serve out of the jurisdiction. Such an order for costs on a without notice application is “hardly ever” appropriate: Mackay v Ashwood Enterprises Ltd [2013] EWCA Civ 959; [2013] Costs LR 816 at [60]). It is hard to see how it could have been appropriate here, where the Defendant was not only not served with or aware of the application, but was a foreign Defendant outside the jurisdiction who had not yet been served with proceedings. The Claimant accepts that this element of the 31 August 2022 order should be set aside in any event and I make that order.

1. 1. Resuming the chronology, service of the claim form was attempted via agent to agent service in accordance with advice received from the FPO. However, the local agent in Portugal refused to accept instructions to effect service in this fashion and the claim form was marked for return.

1. On 7 December 2022, Mr Beasley emailed the Master seeking a further extension of time for service of the claim form. He said that they had “lost 3 months as a result of going down the wrong road in respect of service” and explained the difficulties his firm had had with the agent in Portugal. Again he undertook to pay the court fee. On 9 December 2022 the Master approved the draft order, extending time for service of the claim form until 6 June 2023.

HAD THE CLAIMANT COMPLIED WITH THE RULES?

1. 1. It is clear that the combined effect of CPR 7.6(4)(a) and CPR PD 7A, paragraph 11 is that an application for an order extending time for compliance with rule 7.5 must be made in accordance with CPR Part 23; and must be supported by evidence which should address each of the matters set out in CPR PD 7A, paragraph 11.2: see [22]-[23] above.

1. 1. It is also clear that the Claimant obtained two orders for extensions of time for service of the claim form in this case in breach of several of the procedural requirements. The emails did not address all the matters set out in CPR PD 7A, paragraph 11.2, CPR 23.6 and CPR PD 23A, paragraph 2.1. In addition:

(i) No valid application notices were filed, in breach of CPR 23.3. No standard N244 application notice forms were filed. While it could, perhaps, be said that Mr Beasley’s emails constituted application notices (because CPR 23.1 defines such notices simply as “document[s] in which the applicant states their intention to seek a court order”), they did not comply with CPR PD 23A, paragraph 2.1 as they were not signed; and

(ii) The emails were not supported by evidence verified by a statement of truth either within the body of the application notice or in a witness statement as required by CPR 22.1(1)(b) and (3).

1. 1. The key issue between the parties was whether these procedural defects rendered the orders obtained invalid, such that they had to be set aside. This, in turn, generated three sub-issues.

(i): Did the Claimant actually make applications to extend time?

1. 1. The Defendant contended that the procedural defects meant that the Claimant had not, in fact, made any applications at all.

1. 1. I cannot accept that submission. Although Mr Beasley’s conduct was, as Ms Wyles KC for the Defendant described it, “highly irregular”, he did set out in his emails (i) what order he was seeking; and (ii) briefly, why he sought the order. To that extent he complied with the basic requirements for the content of an application notice set out in CPR 23.6. He also attached draft orders. Although he did not provide evidence verified by a statement of truth, he did set out in the substance of the emails the grounds on which he sought the order. These included, for the purposes of CPR PD 7A, paragraph 11.2, the circumstances relied on and the explanations on both occasions for why the claim form had not been served. I accept the submission from Ms Crowther KC for the Claimant that had Mr Beasley provided witness statements, the content would have been the same as that set out in his emails. Finally, Mr Beasley had indicated that he would pay the court fee for each of the applications.

1. 1. I therefore conclude that the Claimant did, on two occasions, apply for extensions of time for service of the claim form.

(ii): Were any such applications invalid?

1. 1. The Defendant submitted that even if the Claimant had made the applications, they were invalid because the court had not waived the various procedural requirements.

1. 1. Again, I disagree.

1. 1. Ms Crowther KC accepted that the two principal procedural defects were (i) the failure to file application notices; and (ii) the failure to support the applications with evidence verified by a statement of truth.

1. 1. As to (i), CPR 23.3(b) gives the court the express power to dispense with the requirement to file an application notice. Although Mr Beasley’s emails did not specifically invite the Master to exercise this power and although she did not make explicit in the recitals to either order that she was doing so (both of which would have been preferable), she must have done so. Were it otherwise, this very experienced Master would have responded to Mr Beasley’s emails by telling him he needed to file an application notice so that it could be processed and allocated in the usual way. She might also have reminded him of the urgent short applications list, by which a Master is available daily to deal with applications where “time is of the essence” (see the Kings Bench Guide 2024 at paragraphs 9.19-9.27).

1. 1. As to (ii), I accept Ms Crowther KC’s submission that the Master must also have waived the requirement to provide evidence verified by a statement of truth, by exercising one of the court’s general case management powers under CPR Part 3. The potential powers were those to “extend or shorten the time for compliance with any rule, practice direction or court order” or to “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective” under CPR 3.1(2)(a) and (m). There was also the possibility of the Master using the power to make an order to remedy “an error of procedure such as a failure to comply with a rule or practice direction” under CPR 3.10. Again, in my judgment, the Master must have exercised one of these powers or she would have declined to make the orders sought.

(iii): If the Master waived the procedural requirements, did she have power to do so?

1. 1. The Defendant argued that even if the Master in fact waived the procedural requirements, she had no power to do so. These were mandatory requirements which were not capable of being dispensed with.

1. 1. The Master plainly had the specific power to waive the requirement to file an application notice, that being set out in CPR 23.3(b).

1. 1. As to the Master’s use of the CPR Part 3 powers to waive the procedural requirement to provide evidence verified by a statement of truth, Ms Wyles KC drew support from Vinos v Marks & Spencer Plc [2001] 3 All ER 784. The Claimant had been injured at work. The claim form was not served until nine days after the four month period for service of it had expired. The District Judge refused the Claimant’s application to extend time for service of the claim form. The decision was upheld on appeal by the Circuit Judge and the Court of Appeal. The Court of Appeal held that:

(i) The court’s power in CPR 7.6(3) to extend time for service of the claim form after the period for its service has run out can be exercised “only if” the conditions stipulated in the rule are fulfilled;

(ii) The general discretionary power to extend time in CPR 3.1(2)(a) does not apply owing to the introductory words of the rule (“Except where these Rules provide otherwise”) and cannot override the specific wording of CPR 7.6; and

(iii) The general words of CPR 3.10 cannot extend to enable the court to do what CPR 7.6(3) specifically forbids, nor to extend time when the specific provision of the rules which enables extensions of time specifically does not extend to making this extension of time.

1. 1. Ms Crowther KC contended that Vinos was not relevant because CPR 7.6(3) was not in issue in this case: rather CPR 7.6(2) was applicable. The power to extend time under CPR 7.6(3) is of a different nature to that under CPR 7.6(2) because it can only be exercised when the specific conditions in CPR 7.6(3) are satisfied. By contrast, the discretion to extend time under CPR 7.6(2) is not so limited. She also drew support from Steele v Mooney and others [2005] EWCA Civ 96; [2005] 1 WLR 2819, which I consider below.

1. 1. Ms Wyles KC contended that Vinos was authority for the proposition that CPR 7.6 was a specific “sub-code” governing applications to extend time, quoting the description of the rule given by Peter Gibson LJ at [27]. In Vinos, the Court of Appeal construed CPR 7.6(3) in such a way that its requirements could not be circumvented by CPR 3.1 or 3.10. The same should apply to applications made under CPR 7.6(2). She relied on Ideal Shopping Direct Ltd v Mastercard Inc and others [2022] EWCA Civ 14; [2022] 1 WLR 1541, to which I refer below.

1. 1. In my judgment Vinos did not prevent the Master using the CPR Part 3 powers to waive the procedural requirement to provide evidence verified by a statement of truth. I say this for the following reasons.

1. 1. First, this was a case involving CPR 7.6(2) and not CPR 7.6(3). That the ratio of Vinos is limited to CPR 7.6(3) situations is indicated by Steele at [15], where Dyson LJ described the case as holding that “rule 3.10 cannot be invoked to obtain an extension of time for service of a claim form after the end of the period specified by rule 7.5(2) in circumstances where an extension of time is prohibited by rule 7.6(3)” [my emphasis].

1. 1. Second, as May LJ in Vinos at [20] and Dyson LJ in Steele at [26] and [28] made clear, it is important to look at the “substance” of what is being applied for. Similarly, Sir Julian Flaux C, with whom Laing and Birss LJJ agreed, confirmed more recently in Ideal Shopping at [145] that it is important to “analyse correctly…the error of procedure which the claimants are asking the court to remedy”. Unlike Mr Vinos, what in substance this Claimant was seeking from the Master was an order under CPR Part 3 to waive the procedural requirement to provide evidence verified by a statement of truth in support of the applications. An “error of procedure” for the purposes of CPR 3.10 may take many forms, and should not be given an artificially restrictive meaning: Steele at [18]-[21]. The error in this case was an error of the kind specifically anticipated by CPR 3.10 in that it was “a failure to comply with a rule”, namely CPR 22.1(1)(b) and (3). It was therefore capable, in principle, of being cured by the use of CPR 3.10; and by analogy one of the other CPR 3.1 powers/

1. 1. Third, as explained in Steele at [24] the key principle to be derived from Vinos is that CPR 3.10, and by analogy the other CPR 3.1 powers, cannot be used to achieve something that is prohibited under another rule”. I was not taken to any part of the CPR which expressly prohibits the making of an application with evidence that is not verified by a statement of truth. I cannot see that CPR 22 makes any such provision: the stated consequences of a failure to provide a statement of truth are limited to (i) the inability of the party to rely on a statement of case that is not so verified under CPR 22.2(1)(b); (ii) the power of the court to strike out such a statement of case under CPR 22.2(2); and (iii) the power of the court to direct that a witness statement not so verified is inadmissible under CPR 22.3.

1. 1. Fourth, this case is analogous to Steele in that what was needed was an order to correct a drafting aspect of an application to extend time made within the time specified by CPR 7.5(2): it was not a case involving a failure to make an application at all (for the reasons given at [37]-[39] above), in which case the Vinos principle would have applied: see Steele at [28]. In Steele, it was held that the Claimant could rely on CPR 3.10.

1. 1. I therefore conclude that the Master did have the CPR Part 3 powers available to her and was entitled to use them to waive the procedural requirement to provide evidence verified by a statement of truth.

Conclusion on issue (1)(a)

1. For all these reasons I conclude that the Master’s orders extending time for service of the claim form should not be set aside on the basis that the court had no power to make them.

IF THE ORDERS HAD NOT BEEN VALID WOULD THE COURT HAVE CURED THE PROCEDURAL DEFECTS?

1. 1. In light of my conclusions on issue (a) above, it is not necessary for the Claimant to make the CPR 3.10 application at this stage such that neither of the elements of issue (b) arise.

1. Had it been necessary for me to consider issue (b)(i) above, I would have had considerable sympathy with the Defendant’s argument that the CPR 3.10 application was intimated far too late for it to be fair for the Claimant to be allowed to make it. The orders in question were made almost two years ago. The Defendant’s application was made over a year ago. There have been two directions orders to case manage the application to a hearing. The Claimant has served evidence and a skeleton argument. The Claimant had therefore had plenty of opportunity to indicate an intention to make such an application, and indeed to make it in writing, before the morning of the hearing.

THE ADMISSION OF NEW EVIDENCE ON THE HEARING

1. 1. Where an application is made to set aside an order which has been made without notice, the hearing is a rehearing of the original application. Whether or not further evidence is admissible at such a rehearing is a case management decision to be considered on its merits and in the light of the provisions of CPR PD 7A: Al-Zahra v DDM [2019] EWCA Civ 1103 at [67]-[68] and [70]-[73].

1. 1. On such a rehearing, the application falls to be determined as matters of fact stood at the time of the original order. This means that further evidence can be adduced which sheds light on the situation which existed at that time, even if it was not previously adduced, albeit that events which occurred after the application cannot be relied upon: Satfinance Investment Limited v Athena Art Finance Corp [2020] EWHC 3527 (Ch) at [41]-[43]. The Claimant contended that Beasley 2 should be admitted as it fell within the principle described in SAT Finance as it set out what the position was at the time the applications were made.

1. 1. Beasley 2, dated 26 September 2023, makes some points about the jurisdiction issues, in response to the Defendant’s application dated 7 June 2023, at [28]-[31]. I do not understand the Defendant to object to these parts of the statement being admitted. I say this because the Defendant’s stated reason for objecting to the statement being admitted is that the application to set aside the Masters’ orders to extend time for service of the claim form cannot be treated as a rehearing of the original application, because there were no original applications and so there is nothing which can be reheard. That point does not apply to the original application for permission to serve out of the jurisdiction.

1. 1. In any event I have concluded that the Claimant did, in fact, make the applications for the reasons given at [37]-[39] above, such that the Defendant’s primary objection to Beasley 2, or the parts of it other than [28]-[31], falls away.

1. Although there is some force in Ms Wyles KC’s second point that Beasley 2 was effectively a “second bite of the cherry” as it included evidence which should have been provided in accordance with CPR PD 7A when the applications were first made, on balance I consider it should be admitted. It gives a little more context to Mr Beasley’s emails to the Master which were provided separately, although they largely speak for themselves. Accordingly bearing in mind the content of the statement and the provisions of CPR PD 7A I consider it appropriate to admit the statement as a case management step.

SHOULD THE EXTENSIONS OF TIME BE GRANTED?

(d): Should the orders extending time for service of the claim form be set aside on their merits?

The relevant legal principles

1. 1. In considering whether an extension of time for service of a claim form should be granted under CPR 7.6(2), the court should apply the principles recently summarised by Carr LJ (as she then was) in ST v BAI (t/a Brittany Ferries) [2022] EWCA Civ 1037 at [62], thus:

“i) The defendant has a right to be sued (if at all) by means of originating process issued within the statutory period of limitation and served within the period of its initial validity of service. It follows that a departure from this starting point needs to be justified;

ii) The reason for the inability to serve within time is a highly material factor. The better the reason, the more likely it is that an extension will be granted. Incompetence or oversight by the claimant or waiting some other development (such as funding) may not amount to a good reason. Further, what may be a sufficient reason for an extension of time for service of particulars of claim is not necessarily a sufficient reason for an extension for service of the claim form;

iii) Where there is no good reason for the need for an extension, the court still retains a discretion to grant an extension of time but is not likely to do so;

iv) Whether the limitation period has or may have expired since the commencement of proceedings is an important consideration. If a limitation defence will or may be prejudiced by the granting of an extension of time, the claimant should have to show at the very least that they have taken reasonable steps (but not all reasonable steps) to serve within time;

v) The discretionary power to extend time prospectively must be exercised in accordance with the overriding objective”.

Submissions in respect of both orders

1. 1. Ms Wyles KC emphasised that the Master had made two orders extending time for service of the claim form. The Claimant would have to show that both were justified. If either was not, then the claim form had not been served within its period of validity and there was no valid claim before the court. She submitted that there were no good reasons, or at best weak reasons, for the extensions of time and the orders doing so should be set aside.

1. 1. It is common ground that at the time both extensions were granted there was no issue with limitation: the Defendant accepts that as a matter of the applicable Portuguese law, the current limitation (or prescription) period will not expire until August 2027. This is because the relevant five year period was interrupted by the admission of liability on 30 March 2022 and by the interim payment in August 2022, re-starting the limitation period on each occasion.

1. 1. In respect of both the orders, Ms Crowther KC placed substantial reliance on this aspect of the case. She argued that in any case where limitation has not expired, there is little reason not to extend time for service of the claim form, because the claimant would be in a position to issue a fresh claim form in any event. The Defendant rightly referred to Hoddinott at [53], which makes clear that the fact that a limitation period has plenty of time to run is “not determinative”. It is, however, a “relevant consideration” in support of the Claimant because, as Dyson LJ explained, an extension of time which does not extend the time to a date when the claim has become time-barred “does not deprive the defendant of any limitation advantage”.

Specific submissions regarding the first extension of time, 31 August 2022

1. 1. Ms Wyles KC pointed to the fact that the claim form was issued on 6 June 2022 but the first application to extend time for service of it was not made until 31 August 2022, almost half-way through the six month period of its validity: see [1] and [27] above. Almost three months had been lost because of the delay in obtaining the order permitting service out of the jurisdiction, Mr Beasley’s error in first seeking a telephone hearing and in him then taking a month to ask for it to be dealt with on paper. Further he had only sought information from the FPO about the logistics of service the day before the application was made, which was leaving such enquiries late.

1. 1. However, looking at the case in the round, I consider that the Claimant’s solicitors had acted relatively expeditiously with respect to the claim form. They had made the application for service out of the jurisdiction just ten days after the claim form was issued (in mid-June 2022); had then liaised with the court over the means by which the application would be determined, to ensure unnecessary time was not lost (in late August 2022); and as soon as they were aware of the likely three month period for service via the FPO had made the application.

1. 1. Further, the Claimant’s solicitor made the application to extend time at the same time as dealing with the order giving permission for service out of the jurisdiction on a protective basis, to avoid having to return to court for an extension of time closer to the date on which the validity of the claim form would lapse. This also had the benefit of ensuring that the case was still being considered by the Master.

1. 1. Overall I accept that these were good reasons for extend time. Applying the approach set out in ST, and bearing in mind the position in relation to limitation and the lack of prejudice to the Defendant set out at [67]-[68] above, I conclude that it was appropriate to extend time for service of the claim form on 31 August 2022. Master McCloud’s order to this effect therefore stands.

Specific submissions regarding the second extension of time, 9 December 2022

1. 1. Ms Wyles KC submitted that the reasons for the second extension were weak. The Claimant had “changed tack” on the method of service to be used twice: although the 31 August 2022 extension was obtained on the basis that the Claimant would serve through the FPO (as reflected in the recital to the order), the Claimant then departed from this and decided to undertake service through an agent in Portugal; and when this became difficult reverted to service through the FPO.

1. 1. However, as Ms Crowther KC pointed out, the Claimant’s solicitor was not so much “changing” tack as adopting a “twin track” approach to service by considering different approaches at the same time. A suitable method of service was selected, in the form of agent to agent service, but the local agents in Portugal had refused to effect service by that method. It is entirely unclear why the local agent felt that it was no longer possible to effect agent to agent service. The attempt at service was made in good time and the application was made promptly once the difficulty came to light.

1. 1. Ms Wyles KC argued that the Claimant’s solicitor relied on patently flawed foreign law advice. An email dated 22 November 2022 from Rita Pereira, his Portuguese contact, indicated that the difficulties in agent to agent service had been caused by certain EU service regulations. These did not apply to the United Kingdom after Brexit, and this should have been obvious to the Claimant’s solicitors: this was a matter of EU, not Portuguese, law and they are specialist solicitors regularly acting in cross-border cases.

1. 1. However the Claimant’s solicitor was being presented with advice from Portuguese lawyer, to the effect that agent to agent service was unacceptable, and whether this was correct or not, agents were in fact largely refusing to assist. In those circumstances it is understandable that the Claimant’s solicitor erred on the side of caution and relied on the advice from his Portuguese lawyer, rather than from the FPO. The Portuguese lawyer advised that given the difficulties, he should revert to effecting service through the FPO, which would obviously take time.

1. 1. Finally Ms Wyles KC pointed to the fact that in her email, Ms Pereira said that she had identified one agent who was prepared to carry out service, but the Claimant’s solicitor had chosen not to use this available method. However, Ms Pereira had given a caveat to the effect that “there is always a risk that the insurer will later argue that service is invalid”. Given the uncertainty over the legal position, again it is understandable that the Claimant’s solicitor did not want to take that risk.

1. 1. Overall, I consider that these were acceptable, if not good, reasons for the extension of time. On balance, taken together with the lack of an issue over limitation/prejudice, I consider that the second extension of time effected on 9 December 2022 order was appropriate.

Conclusion on issue (1)(d)

1. 1. For all these reasons I do not consider it appropriate to set aside either of the Master’s orders extending time on their merits.

Overall conclusion on issue (1)

1. I therefore dismiss the Defendant’s application to set aside Master McCloud’s orders extending time for service of the claim form. Both orders stand, such that the claim has been validly served. To the extent necessary, I waive the procedural requirements in the ways I am satisfied the Master did. I make clear I do so on the particular facts of this case, and without wishing to encourage others to adopt the methods used in this case to obtain the orders in question.