Hills Contractors and Construction Ltd v Malcolm Struth and Another

Hearing date: 26 April 2013

Introduction

This is an application by the claimant to set aside an order dated 13 March 2013 by which Edwards-Stuart J struck out the claim on the basis that the claimant had failed to serve Particulars of Claim pursuant to CPR 7.4(1)(b).

The order stated that as it had been made without notice to the claimant, the claimant was entitled to apply to have the order varied or set aside pursuant to CPR 23.10.

On 22 March 2013 the claimant applied to have the order set aside, to have the claim reinstated and have time for service of Particulars of Claim extended to 15 May 2013.

Background

The claimant was employed by the defendants to carry out building works at a property in Colchester under a contract entered into in 2010 in the JCT Intermediate Form of Contract.

In June 2012 the claimant submitted a final account in relation to the works carried out under the contract. This led to a final certificate being issued on 20 December 2012 and being delivered to the claimant's offices immediately before the claimant's traditional construction industry Christmas holiday. The defendants contended that there were defects in the property and the final certificate reflected those defects by not requiring the claimant to make good defects but rather having the contract sum adjusted under Clause 2.30 of the contract.

This led to a balance of £21,970.96 due to the defendants from the claimant under the final certificate. Under the provisions of the Intermediate Form of Contract proceedings had to be commenced within 28 days of the final certificate in order to prevent the final certificate becoming conclusive in relation to matters in issue between the parties. As a result the claimant instructed its solicitors, Prettys, who on 16 January 2013 issued the claim form in these proceedings.

On 18 January 2013 a telephone call took place between Mr Blake of Prettys and Mr Rush of Birketts LLP, instructed on behalf of the defendants. In his witness statement in support of this application Mr Blake says that during the call he informed Mr Rush that a claim form had been issued and asked him if his clients would agree a stay of proceedings to allow the parties time to comply with the pre-action protocol. He says this protocol had not been observed due to the haste with which the claimant was obliged to issue the claim form in order to avoid the final certificate becoming conclusive.

On the following Wednesday, 23 January 2013, Mr Blake sent Mr Rush a letter enclosing a copy of the issued claim form and stating:

" We write further to our telephone conversation on Friday 18 January 2013.

Please find enclosed a copy of the issued Claim Form.

We look forward to hearing from you with regard to the proposal to stay proceedings to allow observance of the Pre-Action Protocol."

Nothing further happened until Birketts wrote a letter dated 20 February 2013 in the following terms

" We refer to your letter of 23 January 2013, enclosing a Claim Form (issued on 16 January 2013) and confirm we accept this as service of the said Claim Form.

As you will be aware your client is required to serve any Particulars of Claim within 14 days of service. However, 28 days has elapsed since service of the Claim Form. Not only has your client failed to serve its Particular of Claim it has failed, to the extent it was your client's intention to formerly [sic] follow the Protocol, to take any steps towards compliance.

As regards the principle of a stay for the Pre-Action Protocol, it is fair to say both parties know the position adopted by the other, as your client's position was made clear in its final account and our client's position was made clear in the Final Certificate and Certificate of Making Good Defects Certificate. We therefore see no benefit in slavishly complying with the Protocol in circumstances where the parties are fully aware of the other party's respective position. That said, the requirement/suggestion in the Protocol for the parties to attend a meeting has not yet been explored.

As such we are instructed that our client requires either service of your Particulars of Claim within 14 days (6 March 2013) or for your client to put forward proposals acceptable to our client in relation to a Protocol meeting. If we receive acceptable proposals in relation to a Protocol meeting within the next 7 days, our client is content to waive its requirement in relation to service of the Particulars of Claim and agree a suitable extension to any such service. However, in the absence of any such proposals acceptable to our client we are instructed to apply for your client's claim to be struck out if the Particulars are not served within the date specified above."

In response to that letter Prettys wrote to Birketts on 25 February 2013 in the following terms:

" Thank you for your faxed letter dated 20 February 2013.

The claim form has not been served yet. We sent you a photocopy.

Your comments with regard to protocol observance are noted. Our client is willing to meet as suggested. We will come back to you with some suggested dates during the course of this week."

It is not disputed that that letter was sent to Birketts but, for whatever reason, was not received by Birketts. Whilst that letter of 25 February 2013 suggested that there would be further communication about dates for a meeting that did not happen. Mr Blake says that, in the event, it was not possible to go back to Mr Rush with suggested dates for a meeting as Mr Witting of SCI Partnership in Ipswich, who had been instructed to review the final account in the light of the final certificate, unexpectedly fell ill and his availability became uncertain. It appears that Mr Witting's health has not improved and the claimant has now engaged the services of Mr Witting's business partner, Mr Andrew Cross, to provide consultancy services.

The next communication was from Birketts on 8 March 2013. They said they enclosed, by way of service, a copy of the application notice dated 8 March 2013 and supporting documentation relating to that application. In the witness statement from Mr Rush enclosed with the application no reference was made to Mr Blake's letter of 25 February 2013.

Prettys responded to Birketts on 11 March 2013 and said:

" We will be contacting you during the course of the week with regards to the proposed meeting. The delay has been caused by illness of our client's quantity surveyor, Mr Witting.

We also enclose a copy of our letter to the court. We note that you have not exhibited our letter dated 25 February 2013, a copy of which is enclosed."

In the letter to the Court, which was also enclosed with their letter to Birketts, Prettys said as follows:

" We request that the application be dealt with at a hearing.

The application is misconceived in that the claim form has not, as yet, been served.

The claim form enclosed with our letter dated 23 January 2013 addressed to Birketts exhibited as AGR1 was a photocopy. The sealed copy for service remains on our file. The time for service of the particulars of claim has therefore not begun to run.

This was confirmed in our letter to Birketts dated 25 February 2013, a copy of which is enclosed as it was not exhibited to Mr Rush's statement.

In the event that the application is not withdrawn we will prepare witness evidence but have refrained from doing so to date in order to save costs."

The order dated 13 March 2013 was in the form requested in the application dated 8 March 2013 but gave the claimant liberty to apply to vary or set aside the order pursuant to CPR 23.10. On that basis it appears that the court was not aware that the application had in fact been served on Prettys and there is no reference within the order to Prettys request for a hearing in their letter of 11 March 2013.

On 18 March 2013 Birketts sent Prettys the order dated 13 March 2013. On 19 March 2013 following a conversation between solicitors there was, it seems, a possibility of the order being varied by consent but failing that Prettys stated that they would make an application pursuant to CPR 23.10.

In response on 20 March 2013 Birketts stated they were not content to agree to the claimant's application to set aside the order and on 22 March 2013 Prettys issued the present application.

The application of 8 March 2013 was treated as being an application without notice and therefore the order of 13 March 2013 contained the required reference to the claimant's entitlement to apply to vary or set aside the order under CPR 23.10.

In fact, as can be seen, Birketts sent Prettys a copy of the application which arrived on the following Monday, 11 March 2013. Prettys then wrote a letter on 11 March 2013 to Birketts. They said they would be contacting Birketts about the proposed meeting and said delay had been caused by Mr Witting's illness. They referred to the fact that their letter of 25 February 2013 was not exhibited. Prettys also wrote to the Court on 11 March 2013 and stated that the claim form had not been served. They enclosed a copy of the letter of 25 February 2013, they requested that the application be dealt with at a hearing and they indicated that they would wish to serve witness evidence. This letter evidently did not come to the attention of the court and the application proceeded on the basis that it had not been...