Qatar Investment and Project Development Holding Company v Phoenix Ancient Art S.A.
| Jurisdiction | England & Wales |
| Judge | Lady Justice Whipple,Lord Justice Coulson,Lord Justice Peter Jackson |
| Judgment Date | 30 March 2022 |
| Neutral Citation | [2022] EWCA Civ 422 |
| Docket Number | Case No: CA-2021-000726 (previously A2/2021/1486) |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 422
Lord Justice Peter Jackson
Lord Justice Coulson
and
Lady Justice Whipple
Case No: CA-2021-000726 (previously A2/2021/1486)
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice William Davis
Royal Courts of Justice
Strand, London, WC2A 2LL
Roger Stewart QC and Luke Harris (instructed by Pinsent Masons LLP) for the Appellants
Gilead Cooper QC and Francesca Mitchell (instructed by Boyes Turner LLP) for the Respondent
Hearing date: 15 March 2022
Approved Judgment
Introduction
The Appellants are the Claimants in the underlying action. Their claim concerns an object known as the Head of Alexander the Great as Herakles (the “Head of Alexander”) which was purchased by the First Claimant, a Qatari company of which the Second Claimant is the CEO, from the Respondent, the Defendant to the underlying action, a Swiss dealer in art and antiques. The purchase price was US$3 million. The sale was completed on 24 January 2014. For ease I will continue to refer to the parties as Claimants and Defendant respectively.
The Claimants now allege that the Head of Alexander is a fake; it is not an artwork from ancient Greece, as they had understood it to be when they purchased it.
The six year limitation period for the Claimants to bring a claim against the Defendant for return of the purchase price and damages for associated losses expired on 24 January 2020. Just before expiry, on 22 January 2020, the Claimants issued a claim form. Pursuant to CPR 7.5, the Claimants had four months to serve the claim form within the jurisdiction and six months to serve out of the jurisdiction; if the latter course was taken, the period for service, unless extended, expired on 22 July 2020.
The Claimants did not serve the claim form within that time. Instead, on 26 June 2020, the Claimants, acting by their solicitors Pinsent Masons, applied for an extension of time for service of the claim form, pursuant to CPR 7.6(2). That application was made ex parte, although Pinsent Masons provided a copy to Boyes Turner, a firm of solicitors acting for the Defendant in related matters. In that first application, Pinsent Masons asked for the matter to be resolved at a hearing. That application went unanswered by the Court despite some chasing, so Pinsent Masons issued a second application, also ex parte, on 17 July 2020 asking the Master to deal with the matter urgently on the papers. That second application was granted by Master Gidden on 20 July 2020, with the order perfected on 22 July 2020. That order extended time by four months, to 22 November 2020.
On or about 23 June 2020, just before issuing the first application and as a result of enquiries set in train on 16 June 2020, Pinsent Masons had found out that the Foreign Process Section of the High Court (“the FPS”) was closed due to the pandemic. The FPS is the body responsible for serving proceedings outside the jurisdiction. As matters stood at the time of the two applications for an extension, the FPS was closed, it was unknown when it would reopen, there was a large backlog of cases awaiting service outside the jurisdiction, and the FPS was advising litigants who wanted to serve outside the jurisdiction to seek extensions of time for service.
It subsequently emerged that the FPS had been suspended since 16 April 2020. The FPS remained closed, in fact, until 28 July 2020.
The Claimants submitted their application for service out of the jurisdiction to the FPS on 11 August 2020 (although they suggest that the package of documents was ready by 29 June 2020 – nothing turns on the gap between those two dates). The FPS served the Defendant in Switzerland on 8 September 2020, 28 days later and around 7 weeks after the end of the six months permitted for service out of the jurisdiction absent an extension.
On 15 September 2020, the Defendant applied to set aside the order of 22 July 2020. That application succeeded before Master Gidden. His decision was upheld on appeal before William Davis J. The Claimants now appeal against the judgment of William Davis J. Permission to appeal to this Court was granted on the papers by Males LJ. It follows that unless the Claimants succeed in this appeal, they are out of time to issue a claim against the Defendant for their alleged losses in connection with the Head of Alexander.
The Claimants' case in this Court is based on the effects of the pandemic. It is said that the Master (and the Judge) should have made some or greater allowance for the disruption caused by the pandemic. They point in particular to the closure of the FPS from 16 April to 28 June 2020, but also to the general upheaval experienced by businesses at this time, as the pandemic first struck. They argue that the Master should have refused the application to set aside, alternatively the Judge should have upheld the appeal against the Master.
Before us, as before William Davis J, the Claimants were represented by Roger Stewart QC and Luke Harris, and the Defendant was represented by Gilead Cooper QC and Francesca Mitchell. We are grateful to all counsel for their skilled and concise written and oral arguments.
The Law
Civil Procedure Rules
CPR 7.6 is headed “Extension of Time for Serving a Claim Form”. CPR 7.6(2) is in issue in this case; it provides as follows:
“(2) The general rule is that an application to extend the time for compliance with rule 7.5 must be made –
(a) within the period specified by rule 7.5; or
(b) where an order has been made under this rule, within the period for service specified by that order.”
CPR 7.6(3) applies where applications for extension of time are made retrospectively, after the time for service of the claim form has expired. That is not this case. Accordingly, the specific rules set out in CPR 7.6(3) which govern this category of case – including a requirement to show that “all reasonable steps” were taken by the applicant – are not applicable here.
CPR 7.6(4) provides as follows:
“(4) An application for an order extending the time for compliance with rule 7.5 –
(a) must be supported by evidence; and
(b) may be made without notice.”
Paragraph 8 of Practice Direction 7A is headed “Extension of Time” and provides:
“8.1 An application under rule 7.6 (for an extension of time for serving a claim form under rule 7.6(1)) must be made in accordance with Part 23 and supported by evidence.
8.2 The evidence should state:
(1) all the circumstances relied on,
(2) the date of issue of the claim,
(3) the expiry date of any rule 7.6 extension, and
(4) a full explanation as to why the claim has not been served.”
PD51ZA was in force from 2 April 2020 until 20 October 2020. Paragraph 4 provides:
“In so far as compatible with the proper administration of justice, the court will take into account the impact of the COVID-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.”
Case Law on CPR 7.6(2)
CPR 7.6(2) has been examined in a number of cases. Many of them are helpfully summarised by Haddon-Cave LJ in Al-Zahra (PVT) Hospital and Others v DDM [2019] EWCA Civ 1103 at [48] to [54].
There is no dispute between the parties to this appeal on the approach that is to be adopted. It is sufficient to identify the key points which are relevant in this case:
i) First, the Court's power to extend time is to be exercised in accordance with the overriding objective ( Hashtroodi v Hancock [2004] 1 WLR 3206 at [18]; Al Zahra at [49(2)]).
ii) Second, it is not possible to deal with an application for an extension of time under CPR 7.6(2) “justly” without knowing why the claimant has failed to serve the claim form within the specified period ( Hashtroodi at [18]; Al-Zahra at [49(3)]). Thus, the reason for the failure to serve is a highly material factor ( Hashtroodi at [22]; Al-Zahra at [49(8)]). Where there is no good reason for the failure to serve the claim form within the time permitted under the rules, the court still retains a discretion to extend time but is unlikely to do so ( Hashtroodi at [40]; Al-Zahra at [49(1)].
iii) Thirdly, a “calibrated approach” is to be adopted, so that where a very good reason is shown for the failure to serve within the specified period, an extension will usually be granted; but generally, the weaker the reason, the more likely the court will refuse to grant the extension ( Hashtroodi at [19]; Al-Zahra at [49(4)]). Weak reasons include: a claimant who has overlooked the matter ( Hashtroodi at [20]; Al-Zahra at [49(5)]), and an applicant who has merely left service too late ( Hashtroodi at [18], citing from Professor Zuckerman on Civil Procedure at p 180; Al-Zahra at [50]).
iv) Fourthly, whether the limitation period has expired is of considerable importance ( Al-Zahra at [50] and [51(3)]; Hoddinott v Persimmon Homes (Wessex) Ltd at [52]). Where an application is made before the expiry of the period permitted under the rules for service, but a limitation defence of the defendant will or may be prejudiced, the claimant should have to show at the very least that he has taken ‘reasonable steps’ ( Cecil v Bayat [2011] EWCA Civ 135 at [48]; Al-Zahra at [52(1)]); a claimant's limitation defence should not be circumvented save in ‘exceptional circumstances’ ( Cecil v Bayat at [55]; Al-Zahra at [52(3)]).
The Claimants rely on certain passages in Cecil v Bayat, where the Court of Appeal allowed an appeal by the Defendants against the Judge's refusal to set aside orders...
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