Woodward and Another v Phoenix Healthcare Distribution Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lady Justice Nicola Davies,Lord Justice Bean |
| Judgment Date | 12 June 2019 |
| Neutral Citation | [2019] EWCA Civ 985 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2018/2096 |
| Date | 12 June 2019 |
[2019] EWCA Civ 985
Lord Justice Bean
Lady Justice Asplin
and
Lady Justice Nicola Davies
Case No: A3/2018/2096
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BUSINESS AND PROPERTY COURTS,
Business List, (CHD)
His Honour Judge Hodge QC
(Sitting as a High Court Judge)
CH2018000086
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr David Berkley QC and Mr Christopher Snell (instructed by Lexlaw Solicitors and Advocates) for the Appellant
Mr Andrew Onslow QC and Ms Hannah Glover (instructed by Mills & Reeve LLP) for the Respondent
Hearing date: 16 th May 2019
Approved Judgment
The question on this appeal relates to the circumstances in which it is appropriate, on an application for retrospective validation of service pursuant to CPR r 6.15(1) and (2), to allow a potential defendant to take advantage of a mistake on the part of a would-be claimant giving rise to defective service where any new claim would be statute-barred.
The Appellants, Sally Woodward and Mark Addison, through their solicitors, Collyer Bristow LLP (“CB”), purported to serve the claim form and particulars of claim in these proceedings on the Respondent's solicitors, Mills & Reeve LLP (“M&R”), by letter and email, before the expiry of the issue of the claim form, without having confirmed that M&R was authorised to accept service. M&R was not authorised to do so. It is common ground that this was not good service. As a result, the claim form expired unserved the following day. By that point the limitation period had also expired. The question is whether the court should 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 the action. The neutral citation of his judgment, given ex tempore, is [2018] EWHC 2152 (Ch). This is an appeal from that decision.
The relevant background
I take the background facts from the careful judgment of Master Bowles. By the claim form issued on 19 June 2017, the Appellants sought to bring proceedings against the Respondent, Phoenix Healthcare Distribution Limited (“Phoenix”) as assignees of Trihealth Ltd and J E and NA Richardson (Chemists) Limited. The causes of action are in breach of contract and misrepresentation and are alleged to have a value in excess of £5 million. They arise out of a contract dated 20 June 2011 which was made between one of the companies and Phoenix for the purchase of a drug. It is alleged that the drug was still under patent and that Phoenix was in breach of contract in selling it when it had no right to do so. In the alternative, it is alleged that Phoenix negligently or fraudulently misrepresented when negotiating the contract that the drug was no longer under patent and was available for sale. It is said that as a consequence of the breach of contract and/or misrepresentations and the refusal to accept return of the drug and provide a refund or credit for the contract price, the companies suffered financial difficulties and the whole group went into administration and was sold out of administration at a much lower price than if the matters complained of had not occurred, leading to loss of profits which would otherwise have been made.
The alleged causes of action accrued at the date of the contract and, therefore, the claim was potentially time barred from 20 June 2017. The claim form was issued on 19 June 2017 and, pursuant to CPR r 7.5(1), should have been served by no later than 12.00 midnight on the calendar day four months after that date, being midnight on 19 October 2017.
The claim form, particulars of claim and various annexes to it and a response pack were sent by CB to M&R by first class post on 17 October 2017 by way of service and were received on 18 October 2017. The same documents were also sent by email to Mr Dawson-Gerrard, a partner of M&R at 10.37 a.m. on 17 October 2017. A “read receipt” was received by CB at 10.43 a.m. that day, acknowledging receipt of the email and confirming that it had been read. Having received the email, Mr Dawson-Gerrard satisfied himself that the purported service was ineffective, took the view that he was not obliged to notify the Appellants' solicitors, CB, of their mistake, met with representatives of Phoenix and took instructions from Phoenix not to inform CB of the mistake. The claim form expired at midnight on 19 October 2017.
It was not until the following day, 20 October 2017, that M&R wrote to CB stating that service had been defective. The claim form had not been served on Phoenix, M&R were not instructed to accept service and neither M&R nor Phoenix had ever confirmed in writing to CB that MR had been authorised by Phoenix to accept service. M&R contended therefore that the claim form had expired and with it, the proceedings. M&R put CB on notice that it would apply, on behalf of Phoenix, for a declaration that as a result of the expiry of the claim form the court had no jurisdiction to hear the claim. Steps were taken immediately by CB to seek to serve Phoenix by courier, first class post and email at its trading address in Runcorn and the documentation, including the claim form and particulars of claim, was delivered just after 11a.m. on 20 October 2017.
An application was issued on the Appellants' behalf on 23 October 2017 seeking an order that the steps taken on 17 October had been good service; alternatively, that, in the light of those steps, service be dispensed with; and in the further alternative, that the court should validate the purported service on Phoenix on 20 October by granting an appropriate extension of time. An application was also issued on behalf of Phoenix, dated 27 October 2017, pursuant to CPR r 11, for an order that the claim form be set aside and a declaration that the court was without jurisdiction to hear the claim on the grounds that the claim form had not been served within the time allowed by CPR r 7.5(1).
Following a number of concessions, Master Bowles was required to determine: whether on a true construction of the correspondence CB had been given written notification that M&R was instructed to accept service of the proceedings; even if there was no such notification, whether M&R and therefore, Phoenix was estopped from denying that it was so instructed so that service on M&R should be regarded as good service; and lastly, in the absence of written notification, or estoppel, whether the purported service upon M&R should be retrospectively validated pursuant to CPR r 6.15(1) and (2).
The Master decided that there was nothing in the various exchanges of correspondence which amounted to written notification that M&R was instructed to accept service, whether expressly or implicitly. He also held that on the facts, M&R and their client, Phoenix, were not estopped from denying that the purported service of the claim form upon M&R on 17 October 2017 constituted good service. His decision in relation to those matters was not appealed. Having decided at para 68 of his judgment that M&R was not under a duty, as between the parties, to speak out in respect of CB's mistake, the Master went on to deal with the question of whether the purported service upon M&R on 17 October 2017 should be validated retrospectively at paras 69 – 120 and in the Addendum to his judgment, and made a declaration that it constituted good service. It was his order in that respect which was appealed to HHJ Hodge QC.
The Master did not have the benefit of the Supreme Court's decision in Barton v Wright Hassall LLP [2018] 1 WLR when the matter was before him, nor when he was writing his judgment. The Barton decision was handed down on 21 February 2018 after the Master had sent his draft judgment to the parties and while arrangements were being made for handing down that judgment. The Master was asked to reconsider his judgment in light of the Supreme Court's decision having particular regard to the fact that he had referred in his judgment to the Court of Appeal's decision, the neutral citation of which is [2016] EWCA Civ 177.
Having done so, the Master decided that there was “good reason” to validate service of the claim form retrospectively under CPR r 6.15. His central reasoning is at paras 4 – 9 of the Addendum to his judgment as follows:
“4. In my judgment, I characterised the Court of Appeal decision in Barton as being one of a number of cases where validation under CPR 6.15 had been refused upon the primary basis that, although de facto service had been effected, there was nothing other than de facto service to constitute good reason for validation. The majority decision in the Supreme Court seems to me to bear this out. The fact that the claimant in Barton was a litigant in person did not, in the view of the majority, provide a sufficient additional factor such as to give rise to a good reason for validation. Likewise, on the facts and on the very limited arguments deployed (see paragraph 22 of the Supreme Court judgment in Barton) the conduct of the defendant's solicitors, in that case, did not amount to the playing of technical games.
5. It is true that Lord Sumption, giving the majority judgment, took the view that the solicitors in Barton were not, even had they had the time to do so, under any duty to advise the claimant of his mistake as to service. The Supreme Court, however, was not asked to consider and did not consider, as I have been asked to, any developed argument, as to the impact and effect of the duty to further the overriding objective, as giving rise to a duty to the court to warn an opposing party of his, or her, mistakes. I do not...
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