Hart Investments Ltd v Fidler
| Jurisdiction | England & Wales |
| Judge | JUDGE PETER COULSON QC |
| Judgment Date | 03 November 2006 |
| Neutral Citation | [2006] EWHC 2857 (TCC) |
| Docket Number | Claim No.HT-06204 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 03 November 2006 |
[2006] EWHC 2857 (TCC)
His Honour Judge Peter Coulson Qc
Claim No.HT-06204
IN THE HIGH COURT OF JUSTICE
TECHNOLOGY AND CONSTRUCTION COURT
QUEEN'S BENCH DIVISION
Royal Courts of Justice
MR. A. BUTLER (instructed by Hunt & Hunt, Romford) appeared on behalf of the Claimant.
MR. B. QUINEY (instructed by Arif Anwar, Liquidator) appeared on behalf of the Second Defendant.
Hearing Dates: 27 th October, 3 rd November 06
(As approved by the Judge)
INTRODUCTION :
In November 2002 the Claimant ("Hart") engaged the Second Defendant in the main action ("Larchpark") to carry out extensive building works at a property known as Queen's Lodge, 53-55 Queen's Avenue, Muswell Hill in North London. The First Defendant ("Fidler") provided engineering services in respect of the works, although there is an important issue as to which of the parties he was actually working for at the relevant time. On 5 th February 2004 a large part of the flank wall of the property collapsed.
The collapse has directly and indirectly given rise to three separate sets of proceedings which have now been transferred to this court and have been assigned to me. They are:
(a)An action originally commenced in the Romford County Court and later transferred to Central London County Court in which Hart alleged trespass on the part of Larchpark in wrongfully remaining at the property until February 2005. In those proceedings Larchpark counterclaim the sum of £145,192.52 arising out of an adjudicator's decision in their favour dated 18 th April 2005;
(b)An action, again started in the Romford County Court and transferred to Central London County Court, in which Hart seek a restraining order against Fidler in respect of his house, as a result of his potential liability to Hart and a threat to dissipate his assets;
(c)The main action, issued in the TCC on 13 th July 2006, in which Hart claims damages estimated to amount to at least £700,000 against both Fidler and Larchpark arising out of the collapse itself.
In the main action Hart obtained judgment in default against Larchpark on 31 st July 2006. Larchpark seek to set aside that judgment. That is the first application before me now. In addition, Larchpark seek summary judgment on their counterclaim. Essentially, that second application amounts to an application to enforce the adjudicator's decision of 18 th April 2005. Both applications are resisted by Hart.
There was a wide variety of issues canvassed before me on these two applications and the bundles for the hearing were not all that they might have been. I am therefore particularly grateful to both counsel for the clarity of their written and oral submissions.
APPLICATION 1: SETTING ASIDE THE JUDGMENT IN THE MAIN ACTION:
On Thursday, 13 th July 2006 Hart issued a claim form in the main action in the TCC. The following day, Friday, 14 th July, their solicitors sent a fax to the liquidator of Larchpark purporting to serve a claim form and particulars of claim in the main action. The response pack was said to be coming in the post. It is agreed that this fax was received by the liquidator before 4 pm on Friday, 14 th July. At the same time, Hart's solicitors faxed a second letter to the liquidator seeking his consent to transfer the two sets of proceedings in the county court, including all outstanding interlocutory applications, to the TCC.
The claim form, particulars of claim and response pack were also served by post on Friday, 14 th July. They were actually received by the liquidator on Monday, 17 th July. Larchpark's acknowledgement of service was sent by fax to the court on 1 st August 2006, which was a Tuesday. The defence was served on 13 th August. It was only after the defence had been served that the liquidator discovered that judgment in default had been entered against Larchpark on 31 st July 2006. The default was specified as the failure to file an acknowledgement of service within 14 days of the date of service which, according to Hart's certificate of service, was said to have occurred on 14 th July 2006.
It seems to me that the following provisions within the CPR are relevant to this application:
(a) Service by Post:
CPR 6 PD3.1(1) provides that if service by fax is to be validly effected, a party or his legal representative "must previously have expressly indicated in writing to the party serving... that he is willing to accept service by electronic means." Paragraph 3.1(2) goes on to say:
"The following shall be taken as sufficient written indication for the purposes for para.3.1(1) -
"(a)a fax number set out on the writing paper of the legal representative of the party who is to be served; or
(b)a fax number, email address or electronic identification set out on the statement of case or a response to a claim filed with the court."
(b) Service of Response Pack:
CPR 7.8 (1) provides that where particulars of claim are served on a defendant:
"they must be accompanied by -
(a)a form for defending the claim;
(b)a form for admitting the claim; and
(c)a form for acknowledgement of service."
These are the documents which are commonly referred to as 'the response pack'.
(c) Service by Post:
CPR 6.7 provides that, where documents are served by post, the date on which service is deemed to have occurred is "the second day after it was posted." According to the notes in Volume 1 of Civil Procedure at para.6.7.2, there is conflicting Court of Appeal authority as to whether "day" includes or excludes Saturday or Sunday. That is a point with which I deal in greater detail below.
(d) Acknowledgement of Service:
CPR 10.3 (1) provides that an acknowledgement of service must be filed 14 days after service of the claim form.
(e) Entering Judgment in Default:
Judgment in default may be entered if an acknowledgement of service has not been filed by the end of the 14 day period referred to above ( CPR 12.3(1)(b)). This is an administrative exercise carried out in this court by the TCC Registry, which relies entirely upon a valid certificate of service and the accuracy of the date of service entered on that certificate ( CPR 12PD4.1( 1)). CPR 13.2(a) provides that a default judgment must be set aside if the relevant period for the filing of an acknowledgement of service had not, in fact, expired when the acknowledgment was filed.
(f) Setting aside a Default Judgment:
A judgment obtained in default may be set aside in two circumstances, one mandatory and one discretionary. CPR 13.2 provides that a default judgment must be set aside if the acknowledgement of service was filed within the period of 14 days from the service of the claim form. CPR 13.3.1(a) provides that a default judgment may be set aside as a matter of discretion if the defendant has a real prospect of successfully defending the claim. The test is analogous to that under CPR Part 24. The question is whether the defence raises "an unwinnable case where a continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides": see Harris v. Bolt Burden [2000] L.T.L. February 2 2000, cited by Potter L.J. in Partco Group Ltd. & Anor. v. Wragg & Anor [2002] 2 Ll.Rep, 343 (Court of Appeal). Further, CPR 13.3.1(b) provides that a default judgment may also be set aside as a matter of discretion if there is "some other good reason" for doing so.
Accordingly, it seems to me that I must first determine whether the judgment entered in default was invalid or irregular and therefore must be set aside pursuant to CPR 13.2(a). That in turn depends on when I conclude that service was properly effected. If the default judgment is not irregular and not a nullity I must then go on to decide whether, in the exercise of my discretion, I should set aside the default judgment anyway, either because Larchpark have a real prospect of successfully defending the claim, or because there is some other good reason for doing so.
On behalf of Hart, Mr Butler maintains that service by fax was properly effected on Friday, 14 th July, and that, therefore, certainly by Monday, 31 st July, the 14 days for the acknowledgement of service had expired and the claimant was entitled to judgment in default. Mr. Quiney on behalf of Larchpark maintains that service by fax was invalid and that therefore valid service in this case was by post. He maintains that the deemed date of service by post was Tuesday, 18 th July, and that accordingly the filing of the acknowledgement of service on Tuesday, 1 st August was within the required 14 days. Mr. Butler accepts that if, which he disputes, service was not validly effected until Tuesday, 18 th July, the acknowledgement of service was filed in time. However, he submits that if service was by post, then the deemed date of service was Sunday, 16 th July, which meant that the acknowledgement of service was still filed too late.
Mr. Quiney maintains that service by fax was not proper service because, contrary to CPR 6PD3.1 Larchpark's liquidator had not "previously ... expressly indicated in writing" to Hart that he was "willing to accept service by electronic means". He relied on the decision of the Court of Appeal in Molins Plc v. G.D. SpA [2000] 1 WLR, 1741, where at paras.24 and 25 of his judgment Aldous L.J. said:
"24 - The Civil Procedure Rules 1998 permitted for the first time service of proceedings by fax. Paragraph 3.1(1) sets out the requirements for service by fax upon a party such as the claimant. That must be read together with...
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