Ndole Assets Ltd v Designer M&E Services UK Ltd (Defendant/Applicant)
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 18 May 2017 |
| Neutral Citation | [2017] EWHC 1148 (TCC) |
| Docket Number | Case No: HT-2016-000273 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 18 May 2017 |
[2017] EWHC 1148 (TCC)
The Hon Mr Justice Coulson
Case No: HT-2016-000273
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Ms Fiona Sinclair QC (instructed under Licensed Access Scheme) for the Claimant/Respondent
Mr Paul Darling QC (instructed by Clarke Willmott LLP) for the Defendant/Applicant
Hearing date: 3 May 2017
INTRODUCTION
By an application dated 1 March 2017, the defendant ("Designer") seeks a declaration that the Claim Form and the Particulars of Claim were not properly served, alternatively that the claim should be struck out because of invalid or ineffectual service. Further, Designer seeks summary judgment against the claimant ("Ndole") because the claim is brought by Ndole as assignees, and it is said that the circumstances of the assignments mean that the claim should be dismissed on grounds of maintenance/champerty.
Thus, although the two main issues between the parties are unconnected, I only need to decide the second issue if I am against Designer on the first. That first issue, which is concerned with whether or not the Claim Form and the Particulars of Claim were validly served, involves a consideration of Ndole's position as a litigant in person, and the assistance provided to them by Mr Alexander Dain and his company, CSD Legal Limited ("CSD"). It is common ground that, as an unregistered barrister, Mr Dain is not permitted to carry out reserved legal activities under the Legal Services Act 2007 ("the 2007 Act"). It is Designer's case that the service of the Claim Form and the Particulars of Claim amounted to such an activity, so that the service of those documents by Mr Dain was unlawful and therefore invalid. This matters because, if fresh proceedings were started now, Ndole's claim may well be statute-barred. I address this first issue in Section 2 of this Judgment.
If I conclude that service was validly effected then it is necessary for me to go on and consider the second issue, which is concerned with whether or not Designer is entitled to summary judgment against Ndole, on the basis that Ndole had and has no legitimate commercial interest in these proceedings, such that their claim against Designer is bound to fail for reasons of maintenance/champerty. This in turn requires a careful consideration of the evidence and the bewildering array of loan agreements and assignments which, when the music stopped, left Ndole as the party with the purported claim against Designer. I deal with this second issue in Section 3 below.
In addition, for reasons which will become apparent, I go on and address in Section 4 below my preliminary views (all subject to further submissions from counsel) as to the best way forward in these proceedings.
ISSUE 1: WAS SERVICE UNLAWFUL?
The Facts
On 17 October 2016, Ndole wrote on headed notepaper to the TCC Registry enclosing three signed copies of the Claim Form and asking the court to issue the claim and return two sealed Claim Forms to them for service. Although Ndole's letterhead gave their address in Tortola, British Virgin Islands, I was told that, after the claim was issued, the documents were returned to an address in Great Portland Street, the address of unidentified agents acting for Ndole.
It is common ground that, in these proceedings, Ndole is a litigant in person. It also appears to be common ground that, save for the letter of 17 October 2016, CSD has done everything else in these proceedings on behalf of Ndole. Thus, on 22 December 2016, it was CSD who provided copies of the draft Particulars of Claim to Designer. That letter began: "We act for Ndole Assets Limited…" There is nothing on the face of the letter to suggest that this was anything other than a solicitor's letter. But in fact it could not have been, because CSD Legal and/or Mr Dain, the relevant Director, had no entitlement to carry on a reserved legal activity and could not conduct the proceedings on behalf of Ndole.
In January 2017, there was correspondence between CSD and Clarke Willmott, Designer's solicitors. On 27 January 2017, CSD wrote to the TCC Registry with a query about the filing of the voluminous appendices to the Particulars of Claim. That letter said that CSD "are assisting the claimant in this matter". Again, the obvious inference, in the absence of any express indication to the contrary, was that CSD Legal were solicitors.
On 31 January 2017, Mr Dain of CSD served the Claim Form, the Particulars of Claim and the seven appendices on Designer at their offices in Watford. The covering letter identified those documents as being "enclosed by way of service on you". Again, that covering letter looks to be the sort of letter that might be expected from a claimant's solicitor, serving the relevant documents.
The following day, 1 February 2017, Mr Dain completed a Certificate of Service identifying that he had personally served the documents the previous day. He signed the Certificate. There are four pre-printed alternatives as to the role of the person signing the Certificate: 'claimant'; 'defendant'; 'solicitor'; and 'litigation friend'. Mr Dain deleted all but the first, namely 'claimant'. Strictly speaking, that was incorrect: he was the claimant's agent. As to his position/office held, he typed in 'consultant', which was correct.
On 2 February 2017, CSD wrote to the TCC Registry enclosing the Certificate of Service, the Particulars of Claim and the correspondence in relation to the filing of the appendices. Again the letter is in a form which one would expect to see from a solicitor.
The Argument
On behalf of Designer, Mr Darling submitted that the service of the Claim Form and the Particulars of Claim amounted to either the 'commencement' or the 'prosecution' of these proceedings, or the performance of an 'ancillary function' in relation to the proceedings, and was therefore a reserved legal activity pursuant to Section 12 of the 2007 Act. Since it is common ground that Mr Dain and/or CSD were not entitled to carry out such an activity, Designer say that service was unlawful and invalid, and as a result, the proceedings should be struck out.
Ndole contend that the service of the Claim Form and the Particulars of Claim was not the commencement or prosecution of the proceedings or an ancillary function and seek to rely on the Court of Appeal decision in Agassi v S Robinson (HM Inspector of Taxes) [2005] EWCA Civ. 1507 in support of their contention. They also say that the CPR does not limit the identity of those who can serve documents and they refer to the fact that claim forms and other formal documents are daily served across the country by process-servers who are not entitled to carry out reserved legal activities.
The Law
Section 12 of the 2007 Act provides as follows:
" Meaning of "reserved legal activity" and "legal activity"
(1) In this Act "reserved legal activity" means—
(a) the exercise of a right of audience;
(b) the conduct of litigation;
(c) reserved instrument activities;
(d) probate activities;
(e) notarial activities;
(f) the administration of oaths.
(2) Schedule 2 makes provision about what constitutes each of those activities."
Schedule 2 at paragraph 4 defines the "conduct of litigation" as:
"(a) the issuing of proceedings before any court in England and Wales,
(b) the commencement, prosecution and defence of such proceedings, and
(c) the performance of any ancillary functions in relation to such proceedings (such as entering appearances to actions)."
Section 13 of the 2007 Act deals with the entitlement to carry on a reserved legal activity:
" Entitlement to carry on a reserved legal activity
(1) The question whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with the provisions of this Act.
(2) A person is entitled to carry on an activity ("the relevant activity") which is a reserved legal activity where—
(a) the person is an authorised person in relation to the relevant activity, or
(b) the person is an exempt person in relation to that activity.
(3) Subsection (2) is subject to section 23 (transitional protection for non-commercial bodies).
(4) Nothing in this section or section 23 affects section 84 of the Immigration and Asylum Act 1999 (c. 33) (which prohibits the provision of immigration advice and immigration services except by certain persons)."
Section 14 of the Act stipulates that it is an offence for a person to carry on a reserved legal activity if that person is not entitled so to do.
In the TCC, it is not uncommon for there to be arguments about the costs recoverable by claims consultants in litigation, particularly following a disputed adjudication enforcement. The relevant principles have been recently restated by Jefford J in Octoesse LLP v Trak Special Projects Limited [2016] EWHC 3180 (TCC). However, the present case is a little different: as far as anyone can tell, it is the first time that an allegation of unlawful conduct has ever arisen against a claims consultant acting for a litigant in person in a construction case. Moreover, on the particular issue as to service which now arises, the authorities are less than clear.
The starting point is the decision of the Court of Appeal in Agassi, where the consultants, Tenon, were experts in tax law. The conclusion was that nothing which Tenon did in that case appeared to involve a breach of the predecessor terms of the Solicitors Act 1974 ("the 1974 Act") and the Courts and Legal Services Act 1990 ("the 1990 Act"): see paragraph 79. But since service of the Claim Form...
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...activities in paragraph 43 as not amounting to the conduct of litigation. The answer was given by Coulson J in Ndole at first instance, [2017] EWHC 1148; [2017] 1 WLR 4367, which answer was endorsed by the Court of Appeal. In Ndole, the issue was whether the service of a claim form and the......
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...Ltd [2014] HKCFI 1147 at [25]–[32], per Au J (airmed: [2014] HKCFI 2267). 192 See Ndole Assets Ltd v Designer M&E Services UK Ltd [2017] EWHC 1148 (TCC) at [61]–[70], per Coulson J. 193 Yeandle v Wynn Realisations Ltd (1995) 47 Con LR 1 at 9, per Hobhouse LJ (CA). See also Tackaberry, “Assi......