Sally Woodward v Phoenix Healthcare Distribution Ltd
| Jurisdiction | England & Wales |
| Judge | Master Bowles |
| Judgment Date | 16 March 2018 |
| Neutral Citation | [2018] EWHC 334 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2017-001794 |
| Date | 16 March 2018 |
[2018] EWHC 334 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURT
BUSINESS LIST (ChD)
Royal Courts of Justice
Rolls Building, Fetter Lane
London EC4A 1NL
Master Bowles
Case No: HC-2017-001794
Tim Penny QC and Narinder Jhittay (instructed by Collyer Bristow LLP) for the Claimants
Andrew Onslow QC and Hannah Glover (instructed by Mills & Reeve LLP) for the Defendant
Hearing date: 16 th November 2017
Judgment Approved
By a Claim Form issued on 19 th June 2017, the Claimants, Sally Woodward and Mark Addison, bring proceedings against the Defendant, Phoenix Healthcare Distribution Limited (Phoenix), as assignees of two companies, Trihealth Ltd and J E & N A Richardson (Chemists) Ltd. The causes of action assigned are said to be causes of action in breach of contract and misrepresentation and the Claim is said to have a value in excess of £5M.
The events giving rise to the Claim and to the alleged causes of action arise out of a contract entered into, on 20 th June 2011, between one, or other, of the two companies and Phoenix, for the purchase of a drug called atorvastatin, at a price of £448,707.00 exclusive of VAT. The core allegation is that, by reason of the fact that the drug was still under patent to Pfizer and was, nonetheless, sold by Phoenix as a generic drug in breach of that patent, Phoenix was in breach of contract in selling the drug when it had no entitlement to do so. The alternative allegation is that Phoenix negligently, or fraudulently, misrepresented, when negotiating the contract, that the generic drug was no longer under patent and, therefore, available for sale.
The consequences, it is said, of Phoenix's breach of contract and/or misrepresentation, coupled with its refusal to accept a return of the drugs in question and to refund, or credit, the contract price, is that the relevant companies suffered severe cash flow difficulties leading, ultimately, to the entire group of companies, of which they formed a part, entering into administration and being sold out of administration at a price, whether for the individual companies, or for the group, very much lower than would have been the case had the matters complained of not occurred and leading, further, to the companies losing profits which would otherwise have been made.
It is apparent from the foregoing that both the alleged causes of action accrued at the date of the contract and, therefore, that the Claim was, potentially time barred as from 20 th June 2017. As set out above, the Claim was issued on 19 th June 2017. Accordingly, pursuant to CPR 7.5(1) the Claim Form should have been served by no later than 12.00 midnight on the calendar day four months after that date. Depending upon the mode of service selected, that service should have been effected by the Claimant taking, as appropriate, one, or other, of the steps set out in CPR 7.5(1). The available methods of service are set out in CPR 6.3 and the appropriate place of service, in any particular instance, is to be found in CPR 6.7 to CPR 6.13.
Relevantly to this case, where the defendant is a company, service could have been effected, pursuant to the provisions of section 1139 of the Companies Act 2006 and CPR 6.9, at either the registered office of the company, or at its principal office, or at any other place of business of the company within the jurisdiction having a real connection with the Claim. The exception to the foregoing is that, if Phoenix had given in writing to the Claimants the business address of its solicitor as an address at which it might be served, or, if Mills & Reeve LLP (Mills & Reeve), the solicitor acting for Phoenix, had notified the Claimants that it was instructed to accept service on behalf of Phoenix, then, pursuant to CPR 6.7(1), service would have had to be effected upon Mills & Reeve.
Additionally, to the foregoing, the CPR contains a number of what I might call saving provisions designed to deal, on a discretionary basis, with problems, or difficulties arising in respect of service, including, where appropriate, defects, or failures, in respect of service.
In regard to the time available for the service of a Claim Form, CPR 7.6(1) allows a claimant to apply for an extension of time for service. CPR 7.6(2), however, provides that, as a general rule, such an application must be made either prior to the expiry of the original validity of the Claim Form (i.e. the four month period for service provided by CPR 7.5(1)), or within any extension of the period for service permitted by the court pursuant to an application under CPR 7.6(1). If that is not the case and if extension is sought, therefore, after the expiry of the period specified in CPR 7.5(1), or any extension of that period, then the application will only be granted if either there has been a failure of service by the court, or the court can be satisfied that the claimant has taken all reasonable steps to serve but yet been unable to do so, provided, in each case, that the claimant has acted promptly in making the application.
In regard to the mode, or method, of service, CPR 6.16 allows the court, but only in exceptional circumstances, to dispense with service altogether. CPR 6.15(1) allows the court, where there is ‘good reason’ so to do, to authorise service by a method, or at a place, not otherwise authorised under the rules and, by CPR 6.15(2), to order that steps already taken to bring the claim to the attention of a defendant, by an alternative method, or at an alternative place, will constitute good service. The effect of CPR 6.15(1) and (2), taken together, is, in an appropriate case and where good reason is shown, to validate a mode of service, or a place of service, which would not otherwise constitute good service and to do so retrospectively. As appears later in this judgment, a central question in this case is whether there is good reason, on the facts of this case, to validate, retrospectively, pursuant to CPR 6.15, the steps which the Claimants, in this case, by their solicitor, Collyer Bristow LLP (Collyer Bristow), took to bring the Claim Form, in this case, to the attention of Phoenix.
The basic facts as to service, in this case, are not in dispute. The circumstances leading to the form of service effected will, however, require more detailed consideration.
By letter dated 17 th October 2017, Collyer Bristow sent to Mills & Reeve, by first class post, the Claim Form, the Particulars of Claim, various annexes to the Particulars of Claim and a Response Pack. It did so by way of purported service of the proceedings and it did so, as appears from the foregoing, within the four month period allowed for service of the Claim Form, but in circumstances where, if that service was defective, if that defective service was not validated, if no extension of the four month period was granted and if no further steps constituting good service were taken within the relevant four month period, the validity of the Claim Form would have expired at midnight on 19 th October 2017. In that event, as indicated earlier in this judgment, it is highly likely that any new Claim in respect of the matters raised against Phoenix in this Claim would have been time barred.
In addition to sending the Claim Form and the accompanying documents to Mills & Reeve, by post, by way of service, the same documents were emailed to Richard Dawson-Gerrard, a partner at Mills & Reeve at 10.37 a.m. on 17 th October 2017 and, at 10.43 a.m. the same day, a so-called Read Receipt was received by Collyer Bristow, acknowledging the receipt of the relevant email and that the email had been read. The letter, which accompanied the Claim Form and which, therefore, formed part of the tranche of documents emailed to Mills & Reeve on 17 th October 2017, stated, in terms, that ‘in order to protect our client's position on limitation, we enclose by way of service on you the following documents’. There was then listed the Claim Form, the Particulars of Claim and the other documents sent by way of service, which documents were themselves attached to Collyer Bristow's email.
It is, again, not in any dispute, both that the email, with its attachments, including, therefore, the letter making it clear that the Claim Form and other documents posted to Mills & Reeve were sent by way of service, was received and read as set out above, and that the hard copy letter enclosing the Claim Form and other documents was, itself, received by Mills & Reeve on 18 th October 2017. Other than the Read Receipt, however, Mills & Reeve did not respond to the email, or to the purported postal service, until 20 th October 2017, by which date the four month period for taking the necessary step to constitute good service had passed.
On 20 th October 2017, by way of an email letter of that date, Mills & Reeve wrote to Collyer Bristow to the effect that service of the Claim Form upon Mills & Reeve had constituted defective service, in that, in serving the Claim Form on Mills & Reeve, service had been on the wrong person. Mills & Reeve had never been instructed to accept service and neither Mills & Reeve, nor Phoenix, itself, had ever confirmed in writing to Collyer Bristow that Mills & Reeve had been authorised by Phoenix to accept service.
On that footing and since, on any view, the period for service had by now expired (Mills & Reeve put the expiry at midnight on the 18 th October), Mills & Reeve contended that the Claim Form and with it the proceedings had expired. In the absence of an acknowledgment of this position, or Collyer Bristow being able to demonstrate valid service, Mills & Reeve put Collyer Bristow on notice that it would apply, on behalf of Phoenix, for an order declaring that,...
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Woodward and Another v Phoenix Healthcare Distribution Ltd
...exercise its power retrospectively to validate service. Master Bowles did so in a written decision the neutral citation of which is [2018] EWHC 334 (Ch). However, HHJ Hodge QC, sitting as a Judge of the High Court, allowed an appeal from the Master, set aside the claim form and dismissed t......
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UK Construction briefing, January 2019
...EWHC 1985 (TCC) warned solicitors not to act as their client's witness of fact. In Woodward v. Phoenix Healthcare Distribution Ltd [2018] EWHC 334 (Ch), the court held that there are some circumstances in which there will be a duty to warn an opponent of a procedural mistake. (Read more
- Litigation and ADR procedure news for in-house lawyers: UK Construction Focus
...errors when the limitation deadline is near? Another limitation issue arose in Woodward v. Phoenix Healthcare Distribution Ltd [2018] EWHC 334 (Ch). In this case, there had been a defect in the claimant's service of the claim form but the defendant's solicitors had failed to flag up the iss......- Litigation And ADR Procedure News For In-House Lawyers: UK Construction Focus
...errors when the limitation deadline is near? Another limitation issue arose in Woodward v. Phoenix Healthcare Distribution Ltd [2018] EWHC 334 (Ch). In this case, there had been a defect in the claimant's service of the claim form but the defendant's solicitors had failed to flag up the iss......- Litigation and ADR procedure news for in-house lawyers: UK Construction Focus - November 2018
...some circumstances there will be a duty to warn an opponent of a procedural mistake In Woodward v. Phoenix Healthcare Distribution Ltd [2018] EWHC 334 (Ch), the judge had little sympathy for those who had taken advantage of a technical error in their opponent's service of proceedings. The c......Request a trial to view additional results - Litigation and ADR procedure news for in-house lawyers: UK Construction Focus