Phoenix Healthcare Distribution Ltd (2018) v (1) Sally Woodward (2) Mark Addison
A master had been wrong to validate service of a claim form retrospectively under CPR r.6.15(2) where the defendant's solicitors had allowed the validity of the claim form to expire before alerting the claimant to the fact that service had been ineffective. A solicitor's professional duty did not require him to draw attention to mistakes made by the other party in circumstances where the mistake was not of his making and arose in a situation not calling for a response. The master had erred in principle in holding that the defendant's solicitors' conduct was in breach of a duty owed to the court under r.1.3 to give effect to the overriding objective and involved inappropriate "technical game playing".
The defendant appealed against a master's decision granting the claimants' application for an order retrospectively validating service of the claim form under CPR r.6.15(2).
The claimants' claim was for damages for breach of contract and misrepresentation. The alleged causes of action accrued on 20 June 2011. The claim form was issued on 19 June 2017, the day before the applicable six-year limitation period expired. On 17 October 2017, two days before expiry of the four-month period allowed for service of the claim form, the claimants' solicitors (CB) sent the claim form, particulars of claim and a response pack by first class post and email to the defendant's solicitors (MR) by way of purported service. Neither the defendant nor MR had notified the claimants that MR were authorised to accept service. Nor had CB asked MR whether they were so authorised. MR considered that service of the claim form could only be properly effected on the defendant at its business address. After taking instructions MR did not then inform the claimants that they were not authorised to accept service. On 20 October 2017, after the four-month period for serving the claim form had expired, MR informed CB that MR were not instructed to accept service of the claim form and that service on MR was ineffective. The claimants applied for retrospective validation of service under r.6.15 and the defendant applied for orders that the court had no jurisdiction to hear the claim and for the claim form to be set aside. The master considered the correspondence and concluded that MR had not notified CB that they were instructed to accept service of the proceedings, and that MR were not estopped from denying that they were so instructed. He further held that CB's purported service did not call for, or seek, a response and, as between the parties, MR were under no duty to speak out in respect of CB's misunderstanding and that their failure to speak out did not give rise to any representation that they had authority to accept service or any estoppel. However, he found that there was good reason to validate the de facto service under r.6.15(2) because if MR had informed CB, as they readily could, of their lack of authority to accept service, CB could and would have served the defendant in time; that was conduct impacting on service within the lifetime of the claim form and consequently on limitation; MR's entitlement to take advantage of CB's mistake was qualified by their obligation owed to the court under r.1.3 to give effect to the overriding objective and what they had done involved inappropriate "technical game playing". He accordingly validated service retrospectively.
The defendant submitted that the master had been wrong to find a breach of duty under r.1.3 and to characterise MR's conduct as "technical game playing". The claimants, by respondent's notice, contended that there was good reason to validate service, even if the master was wrong that MR had been in breach of duty under r.1.3.
The master had been right to recognise that a solicitor's professional duty did not require him to draw attention to mistakes made by the other party in circumstances where the mistake was not of his making and arose in a situation not calling for a response, Higgins v ERC Accountants and Business  EWHC 2190 (Ch) applied and OOO Abbott v Econowall UK Ltd  EWHC 660 (IPEC),  F.S.R. 1 considered. In the instant case no distinction was to be made between the conduct of MR and of the defendant, because there had been time for MR to take instructions. In the instant case there had been no refusal to cooperate in respect of procedural matters, merely a failure to point out an apparent error, Abbott and Abela v Baadarani  UKSC 44,  1 W.L.R. 2043 considered. The master had erred in treating the position in respect of service of the claim form as equivalent to that in respect of relief from sanctions generally, Denton v TH White Ltd  EWCA Civ 906,  1 W.L.R. 3926 considered. The rules governing service of a claim form imposed conditions for the jurisdiction of the court, rather than imposing duties giving rise to disciplinary considerations, Barton v Wright Hassall LLP  UKSC 12,  1 W.L.R. 1119 followed. Unlike Barton, there was in the instant case no inequality of arms. Both sides were represented. Although pointing out the error in respect of service would have saved the time and expense of the applications, the defendant had saved the expense of proceedings that were about to become statute-barred. It was not playing technical games, as that phrase was used in Abela, to allow the claim form to expire without responding to defective service, where that service did not call for a response. The master had not failed to take the limitation position into account, but he had erred in principle and reached a conclusion that was wrong in holding that MR's conduct had been a breach of a duty under r.1.3 and technical game playing. The key contention on the respondent's notice was that it had been reasonable to wait for the particulars of claim so that they could be served with the claim form. That contention was rejected. The claimants had courted disaster by leaving service until the last moment. They should have served the claim form and sought an extension of time by agreement or application to the court for serving the particulars of claim. The rules for obtaining such an extension were less stringent than those relating to service. It had been unreasonable to delay and run the risk of failing to serve within the period of validity of the claim form.