Joe Macari Servicing Ltd v Chequered Flag International Inc.
| Jurisdiction | England & Wales |
| Judge | Master Dagnall |
| Judgment Date | 25 November 2021 |
| Neutral Citation | [2021] EWHC 3175 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB-2019-004037 |
[2021] EWHC 3175 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Master Dagnall
Case No: QB-2019-004037
Peter Webster (instructed by Wilmott & Co) for the Claimant
Nicholas Bard (instructed by Goodman Derrick LLP) for the Defendant
Hearing dates: 13 April 2021
Introduction
This is my Judgment in relation to three related applications brought by the parties. The Defendant seeks to have the court declare that it does not have jurisdiction to hear the Claim on the basis that the Claim Form was not served in time. However, the Defendant itself requires and so applies for the court to grant it relief from sanctions in order for the Defendant's application to be made. Assuming that that relief from sanctions application is granted, the Claimant seeks an extension of the time for service of the Claim Form, such application having itself been made out of time. In the alternative, the Claimant applies for the court to exercise its discretion to treat certain steps taken by the Claimant to serve the Claim Form as amounting to good service even though they were taken after the ordinary time provided for in the Civil Procedure Rules (“the CPR”).
The problems with service in this case have themselves been exacerbated by the effects of the COVID pandemic and resulting restrictions in both this country and the USA as well as a temporary closure of the Foreign Process Section (“the FPS”) of the Queen's Bench Division of this High Court. Thus the facts of this case are likely to be unique although the legal questions which arise are, unfortunately, more common.
The underlying dispute between the parties is of limited relevance to what I have to decide. It relates to a motor-car which was sold on or about 15 November 2013 and where the Claimant, a company incorporated in this jurisdiction, asserts that it has claims against the Defendant, a corporate entity based in and operating out of the State of California in the United States of America, but alleging using an agent based in this country, in contract and in misrepresentation. It is common-ground that the limitation period under sections 2 and 5 of the Limitation Act 1980 is, at least arguably, six years for such claims and which period would, again arguably, have expired in mid-November 2019. I have received no submissions as to the strengths or weaknesses of the claims themselves, and they do not seem material to the questions which I have to decide.
I heard oral submissions in this case on 13 April 2021 but then adjourned for further written submissions in relation to matters of Californian law and then further recently decided case-law. After having prepared a substantial element of this judgment, a further potentially important decision at High Court Judge level was published and the need to seek further submissions as to it and the Long Vacation then intervened. Unfortunately, owing to computer problems, I have had to rewrite that substantial element. This has all resulted in delays although I do not think that they have affected my recollection or reasoning process adversely in any way, and I have fully revisited the documents and my notes of submissions.
The Procedural History
The Claim Form was issued on 12 November 2019, being, or close to, the last day of the limitation period, although this seems to have followed some process of correspondence between the parties regarding the underlying claim. Under Civil Procedure Rule (“ CPR 7.5”) the relevant step for service of a Claim Form in this jurisdiction must be taken within four months of issue ( CPR7.5(1)), or, alternatively, the Claimant has six months from issue to serve out of this jurisdiction (where, here, the Claimant required judicial permission for such service out) ( CPR7.5(2)).
The Claimant's solicitors wrote on 27 November 2019 to Californian lawyers who had been communicating on behalf of the Defendant enclosing a copy of the Claim Form. They asked whether the Defendant would agree to accept service either in this jurisdiction (by service on the previous agent or on nominated solicitors) or at any particular address in California, and threatened to seek permission to serve out in California if no agreement was reached as to method of service. Those lawyers did not reply.
The Claimant then issued an Application Notice on 4 February 2020 seeking permission to serve out of the jurisdiction at 4128 Lincoln Blvd, Marina del Ray, California 90292 USA (“the California Address”) or elsewhere in the USA, and an order extending the six months' time period for such service. The draft Order attached to the Application Notice contained, within what was to be ordered, a paragraph reading: “[That the period in which the Claim Form and Particulars of Claim may be served shall be extended to [DATE TWO MONTHS AFTER THE DATE OF THE ORDER]]” On 7 February 2020 Master Eastman made such an order on paper and which was sealed on 10 February 2020 in precisely the form sought i.e. granting the permission to serve out and with the above paragraph as to the period for service, its square brackets and capitalised wording.
That wording could be read to provide that the time for service was truncated from the six months provided for by CPR7.5(2) i.e. until 12 May 2020, down to 2 months from the date of the Order being 7 (or perhaps 10) April 2020. However, the Defendant's counsel, Mr Bard, freely accepted (and indeed volunteered) that that effect could not have been intended by Master Eastman, it being contrary to the intention expressed in the Application Notice (being to give the Claimant more time rather than less) and lacking any rational justification. It seems to me that he was quite right to do so; and that this was a mere “accidental error” within the meaning of CPR40.12 and that I should and do correct it by adding the words “or what would otherwise be the period for service (whichever is the longer)”
The USA is a signatory to the Hague “Convention on the service abroad of Judicial and ExtraJudicial documents in Civil and Commercial matters” (“the Hague Convention”) as is this country. Under Articles 2 and 3, a Central Authority of one State will arrange for service of documents within its jurisdiction of documents sent to it by the Central Authority of another State. I note that Article 10 does not prevent service by post or certain other means where the State where the documents are to be served does not object (presumably by its law or, perhaps, otherwise). Article 19 provides that the Hague Convention does not prevent service by other means providing that the law of the State in which the documents are to be served permits such.
This jurisdiction's Central Authority is the Senior Master of the Queen's Bench Division who operates through the FPS. Parties seeking to use the Hague Convention to serve abroad complete a Form N244 with some sections of an accompanying form referring to steps for compliance with the Hague Convention (“the Hague Convention Form”), and having sought to make any necessary arrangements acceptable to the Central Authority of the receiving State (here the USA). The Claimant did make such arrangements ascertaining that the USA Central Authority nominated process servers (an entity called “ABC Legal” and whom I will term “ABC”) who would effect service in the USA provided that a specific fee was paid, and on the basis that such service would be expedited if a higher level fee was paid (“the Higher Fee”). The system is that FPS should then post the documents to the process servers in the USA who would then effect service and then, having done so, complete further sections of the Hague Convention Form to explain how service had been effected, and post it back to FPS, and who would then pass it to the Claimant. Thus the system is, in effect, that communications with the USA Central Authority, and its process servers, as to the actual service itself, are carried out by FPS and not by the Claimant.
The Claimant's solicitors first sent a version of the requisite N244 Form and Hague Convention Form on about 18 February 2020 (this being following receipt of the Order of Master Eastman which they must have received a few days earlier) and stating that they were dealing with the payment of the US$95 Higher Fee which they then confirmed that they had paid (and which I find that they did around then). There was then a series of emails over the next three days regarding queries raised by FPS on precise wordings, including whether one word in the service address was to be spelt “Rey” or “Ray”, and with the Claimant's solicitors stating that they were concerned as to delay where their reading of the order of Master Eastman was that they only had two months from its date in which to effect service; and they in fact completed the forms stating that that was in fact the position. By email of 25 February 2020 the Claimant's solicitors requested that there be expedited service to take place within seven days.
On 4 March 2020 FPS raised various further queries as to the completion of the forms with which the Claimant's solicitors complied and so that they sent the corrected forms back to FPS on 5 March 2020. This was with a covering email in which the Claimant's solicitors again referred to Master Eastman's earlier order, and said (presumably on reading its actual words, and although I am now correcting them as set out above) that, in view of the fact that nearly one month had passed since that order had been made and it only provided for a two month period, they asked when they would be likely to be sent and whether that would result in service within the 2 month ordered period.
On 9 March 2020 there was an email exchange in which...
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