Are you being served? (Again)
The recent decision of the High Court in Dunbar Assets v BCP Premier Ltd  EWHC 10 (Ch) once again highlights the need to ensure that proceedings are served in accordance with the Civil Procedure Rules (“CPR”).
The Claimant was a banking institution providing lending to organisations and individuals looking for investment for developments. The Defendant was a construction management company which provided advice on proposed lending opportunities.
The Claimant issued a Claim Form on 18 December 2013 seeking damages in excess of £300,000 for breach of contract and other claims and on 3 March 2014 sent a copy of the sealed Claim Form by fax to the Defendant.
On 18 March 2014 the Claimant’s solicitors notified the Defendant’s solicitors that the Particulars of Claim would be served on 17 April 2014 (which was the last date on which the Claim Form issued on 18 December 2013 could, in ordinary course, be served). In response, the Defendant’s solicitors observed that the Claim Form appeared to have been served by fax on 3 March 2014 which would mean that the Particulars of Claim should be served prior to 17 April 2014. The Claimant’s solicitors responded saying that the fax on 3 March 2014 was for ‘information purposes only’ and that the Claim Form had not in fact yet been served.
The Claimant’s solicitors then sought an extension of time for service of the Claim Form and the Particulars of Claim and the Defendant’s solicitors agreed an extension of time for service of the Particulars but refused an extension of time for service of the Claim Form. In order to formalise this and other matters the parties agreed to a Court Order (“Consent Order”) which provided that the Claimant serve its Claim Form by 4pm on 3 April 2014.
Instead of serving the Claim Form on 3 April 2014 in accordance with the CPR, the Claimant’s solicitors emailed a copy of it to the Defendant’s solicitors. The Defendant’s solicitors subsequently responded pointing out that the Claimant had not complied with the Consent Order and that it was out of time for service of the Claim Form.
On 24 April 2014 the Claimant made an application for an extension of time to serve the Claim Form and/or relief from sanctions and/or that service by email should be permitted as good service pursuant to CPR Rule 6.15 (which makes provision for service by alternative means). The application came before a Deputy Master on 2 May 2014 and an Order was made that the emailing of the Claim Form should be permitted as good service. The Defendant appealed the Deputy Master’s decision and the matter came before the Court in December 2014.
The Court held that there had been no good reason for ordering that the Claimant’s emailing a copy of the Claim Form to the Defendant should be permitted as good service.
It was common ground that service by email was not good service and it was evident from the language of Rule 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 it. This was a case where the Claimant had provided no explanation whatsoever for not serving the Claim Form properly. The Claimant had agreed that this is what it would do and had consented to an order requiring it to do it and there had been ample opportunity for it to do it. The Deputy Master had also referred to an absence of prejudice to the Defendant, a matter which he accepted was not enough on its own. However, there was arguably enormous prejudice to the Defendant if the order was made, because it would render a limitation defence unavailable. Accordingly, the Deputy Master had been wrong to conclude that on the facts of the case there was a good reason to make an order under Rule 6.15. The Court would not therefore exercise its discretion in favour of granting the order as the Claimant had not explained why the Claim Form was not served properly in accordance with the CPR and it would prejudice the Defendant by denying it a limitation defence.
The important point to note from this case is that it is vital to ensure that the procedural rules in relation to time limits and methods of service are adhered to when starting a claim. A failure to comply strictly with these rules may mean that a claim has not been properly served and, where there are limitation issues at play, may mean that the opportunity to bring a claim could be missed entirely.
MH Dispute Resolution