Claim form – Method of service – Authorisation – Respondent purporting to serve claim form by fax – Respondent obtaining order authorising alternative method of service – Appellant appealing – Whether deputy master erring in finding good reason for allowing alternative method of service – Appeal allowed
The respondent was a banking institution that lent money to organisations and individuals looking for investment for developments. The appellant was a construction management company which provided advice to banks on proposed lending opportunities and, in the event funding was provided, monitored any loans.
In December 2013, the respondent, apprehending that limitation issues were live, issued a claim form seeking damages against the appellant for breach of contract, breach of duty of care, misrepresentation and deceit plus interest, in respect of events which had taken place between June 2006 and December 2008. According to the claim form, the respondent expected to recover more than £300,000.
A consent order reflected an agreement with respect to an extension of time for service of the claim form. However, instead of serving the claim form on the agreed date, in accordance with the civil procedure rules (CPR), the respondent’s solicitors emailed a copy to the appellant’s solicitors. When the respondent sought an extension of time for service of the letter of claim, the appellant pointed out that the respondent had not complied with the consent order, that it was out of time for service of the claim form and so the request for an extension of time for service of the letter of claim was redundant.
The respondent then applied to the court for an extension of time to serve the claim form. A deputy master ordered that the service of the claim form by email be permitted as good service pursuant to CPR 6.15. The appellant was granted permission to appeal. If the appeal was successful, the time within which the claim form could be served had expired.
Held: The appeal was allowed.
(1) It was clear from the language of CPR 6.15 that an application for an order permitting service by an alternative method or place would only succeed if it appeared to the court that there was a good reason to authorise such alternative service and the court decided to exercise its discretion in favour of permitting such alternative service. The fact that the CPR expressly required that there be a good reason to exercise the power to permit service by an alternative method and did not simply confer a discretion to permit it emphasised that the power should not be exercised over-readily. It was necessary in the interests of certainty that the courts allowed a litigant to depart from the rules about service only where there was a sufficiently compelling case made out so to do. The court had to adopt a rigorous approach to an application by a claimant for indulgence and had to examine with some care why it had come about that it was being asked to make an order. The mere absence of prejudice to a defendant would not usually in itself be sufficient reason to make an order under CPR 6.15. Although exceptional circumstances were not required, there had to be a good reason. There was no proper basis for confining the circumstances in which there was a good reason for making an order to specific and limited categories of cases; the expression was a general one: Brown v Innovatorone plc [2009] EWHC 1376; [2009] PLSCS 205 and Power v Meloy Whittle Robinson [2014] EWCA Civ 898 considered.
(2) The most important purpose of service was to ensure that the contents of the document served, in this case the claim form, were communicated to the defendant. Service also served to notify the defendant that the claimant had embarked on the formal process of litigation and to inform him of the nature of the claim, to enable the defendant to participate in the process and have some say in the way the claim was prosecuted and to enable the court to control the litigation process. Another purpose of proper service was the certainty that it gave to the parties with respect to any of the civil procedure rules with which they had to comply or, for example, any limitation defences which might be available: Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203; [2008] 1 WLR 806 considered.
(3) In the present case, the master had fallen into error by failing properly to take into account or examine why he was being asked to make the order. Had he done so, he would immediately have appreciated that the claimant had provided no explanation for not serving the claim form properly. Without proper service, the formal process of litigation did not begin. Moreover, the relevant uncertainty in the present context was not whether the claim form had been issued but whether or not and when it had been served. Of particular importance in the context of a claim which might be defeated by limitation was whether service was within the four month period prescribed by the rules. In all the circumstances, the case fell far short of being sufficiently compelling for the court to permit the claimant to depart from the rules of service. The deputy master had been wrong to conclude that, on the facts, there was a good reason to make an order under CPR 6.15.
Lucy Colter (instructed by Plexus Law) appeared for the appellant; Daniel Margolin (instructed by Elborne Mitchell) appeared for the respondent.
Eileen O’Grady, barrister
Read a transcript of Dunbar Assets plc v BCP Premier Ltd here
