- On 1 July 2018 there was a fire at Field House in Stroud. It caused substantial damage. For the purposes of this application I proceed on the basis that the fire was caused by a defective 16A miniature circuit breaker (“MCB”) supplied by the first Defendant between 1 May 2009 and 13 October 2009.
- The Claimant is one of two joint owners of the property, the other is Mr Gerald Deshais. They became registered proprietors in July 2016, long after the MCB had been fitted. Proceedings were issued on 21 June 2019. The first Defendant was substituted as a party on 24 September 2019. The second Defendant carried out an Electrical Installation Condition Report in January 2017 but failed to spot any issue with the MCB.
- This judgment deals with three applications; the first Defendant’s application seeking summary determination of some or all of the claims made against it and two applications made by the Claimant to regularise certain serious procedural difficulties in which she finds herself. The applications are set out in detail at paragraph 13 below.
- The second Defendant (which acts without legal representation) was in attendance at the remote hearing, in effect as an observer. It made no applications.
Procedural Background
- The Claimant was aware that a limitation period of 10 years (which I return to below) applied to part of the claim against the first Defendant. On the evidence as it now stands, limitation, calculated from the date on which the first Defendant supplied the MCB “to another”, expired on a date between 1 May 2019 and 13 October 2019. The Claim Form was issued on 21 June 2019 and named Siemens PLC as first Defendant. There is no suggestion within the present applications that limitation had expired by 21 June 2019 (although it remains a theoretical possibility).
- Having issued the Claim Form on a protective basis, the Claimant sent her letter of claim to Siemens PLC (not the first Defendant) on 23 July 2019. On 29 July loss adjusters appointed by the first Defendant, pointed out that Siemens had been wrongly named and that proceedings should have been issued against the first Defendant.
- On the same day the Claimant invited the Loss Adjusters to consent to the substitution of the first Defendant in place of Siemens. In fact the invitation was a mistake (see CPR 19.4(1)). Permission (and so consent) is not needed to substitute a party when the Claim Form has not been served. Nonetheless, the loss adjusters (who are of course not lawyers) confirmed on 31 July 2019 that consent would be given. On 5 September 2019 the Claimant sent a consent order and on 17 September 2019, the Loss Adjusters very sensibly referred the matter to the first Defendant’s solicitors. On 24 September 2019 they pointed out that consent was not needed.
- The Claim Form was amended on the same date. The amended Claim Form bears the court’s seal and is dated 24 September 2019. There was no suggestion that the claim against the first Defendant was “brought” at an earlier date as provided for at CPR PD 7A paragraph 5.1. Given the procedural chronology, that is not surprising.
- The claim was stayed, by agreement, from 1 October 2019. A consent order recording the stay was approved by the Court on 11 October 2019. The stay was extended by consent and expired on 1 May 2020.
- By CPR 7.5, and taking into account the stay, the last day for service of the Claim Form was 21 May 2020. The Claim Form (now amended) was served on 20 May 2020.
- By CPR 7.4 Particulars of Claim must be served on the Defendant no later than the latest time for serving the Claim Form. The Particulars of Claim should therefore have been served on or before 21 May 2020. In fact, they were served on 3 June 2019 some 13 days late.
The Claims
- The claims pleaded against the first Defendant in the (late) Particulars of Claim, fall under 3 headings:
i) Under section 2(1) in Part I of the Consumer Protection Act 1987. This imposes strict liability on certain persons (including, by section 2(2), the first Defendant) for (see section 5) damage to property, intended by the person suffering the loss or damage mainly for his own private use or occupation, if that damage was caused by a defect in a product (“the Part I Claim”)
ii) Under section 41 in part V of the 1987 Act for breach of statutory duty, namely breach of the Electrical Equipment (Safety) Regulations 1994 and 2016 (“the Part V Claim”)
iii) A claim in negligence.
The Applications and this Judgment
- This judgment deals with three applications. The format of the judgment is set out in the table which follows:
i) The first Defendant’s application issued on 30 June 2020:
a) to strike out the Claim Form insofar as it raises a claim against the first Defendant by reason of a failure to comply with CPR 7.4(2) and
b) to strike out the Claimant’s “statement of case” (the Particulars of Claim) insofar as it raises a claim against the first Defendant on the ground that it fails to disclose reasonable grounds for bringing the claim or
c) to strike out the Part I Claim and the Part V Claim against the first Defendant, or
d) for summary judgment in respect of the Part I Claim and the Part V Claim on the ground that those claims have no real prospect of success and there is no other compelling reasons why they should be disposed of at trial
ii) The Claimant’s application to add Mr Deshais as a second Claimant, issued on 8 July 2020, and
iii) The Claimant’s application to extend time for service of the Particulars of Claim and for relief from sanctions issued on 19 June 2020.
- This judgment deals with the following matters:
|
Topic |
Paragraphs |
|
o An overview of limitation in respect of the Part I Claim |
15-22 |
|
o Evidence as to the date of supply (the date on which limitation started to run) |
23-25 |
|
o An overview of the Part V Claim |
26-30 |
|
o Procedural difficulties |
31 -32 |
|
o A preliminary point in respect of summary determination |
33-38 |
|
o Summary determination of the Part V Claim |
39-41 |
|
o The constitution of the claim (adding Mr Deshais): |
42-46 |
|
o Summary determination of the Part I Claim |
47-66 |
|
o The application for relief from sanctions
|
67-86 |
Limitation in respect of the Part I Claim - a brief overview
- Section 11A of the Limitation Act 1980 applies to an action for damages brought under Part I of the 1987 Act. It does not apply to the Part V Claim. Section 11A(3) reads as follows:
“An action to which this section applies shall not be brought after the expiration of the period of ten years from the relevant time, within the meaning of section 4 of the said Act of 1987; and this subsection shall operate to extinguish a right of action and shall do so whether or not that right of action had accrued, or time under the following provisions of this Act had begun to run, at the end of the said period of ten years.”
- The “relevant time” is defined at section 4(2)(a) of the 1987 Act as the time the first Defendant supplied the product “to another”.
- The editors of McGee on Limitation (8th ed.) note at para.7.021:
“Section 11A(3) provides that the expiry of the 10-year longstop shall operate to extinguish the claimant’s right of action. The effect of this appears to be to create an exception to the general principle (at least outside the area of real property) that the expiry of the limitation period bars the claimant’s remedy but does not extinguish his right. It is unfortunate that the statutory provision refers to extinguishing a right of action, a phrase which conflates the barring of a right of action with the extinguishing of the underlying right. Nevertheless, in view of the obvious legislative intention that upon the expiry of the longstop all claims should be finally at an end, it is submitted that the expiry of the longstop period does indeed extinguish the claimant’s rights. If this is correct, then it will be unnecessary for the defendant to plead the longstop. In addition, the methods of indirect enforcement which are otherwise available in respect of a time-barred claim will not be available where the action is precluded by the longstop. Once the longstop has expired, the court’s discretion under s.35 of the 1980 Act and CPR r.19.5 to add or substitute a party after the expiry of a relevant limitation period does not apply”
- The case of O’Byrne v Aventis Pasteur [2010] UKSC 23, giving effect to the decision of the ECJ in Aventis Pasteur v OB (C-358-08, EU:C:2009:744) on 2 December 2009 is cited as authority for the proposition set out in the final sentence.
- Although the application of section 35 of the 1980 Act and of CPR 19.5 is not always a straightforward matter, I need only at this stage point out that the power to add a party after the expiry of a limitation period is dependent on the fiction created by section 35 and CPR 19.5 that the relevant claim was commenced when the proceedings were brought, not when the addition took effect. If these provisions do not apply (as the editors of McGee say) then the added party’s claim could only commence for limitation purposes at the point at which the addition becomes effective.
- The O’Byrne case was concerned with the substitution of a Defendant to a Part V claim after the expiry of the 10-year limitation period. The question for the ECJ was this: did section 35 override section 11A or did section 11A override section 35? If section 35 prevailed, the amendment would be allowed. If section 11A prevailed the amendment would be disallowed.
- There is no dispute between the parties that the clear decision in O’Byrne was that section 11A prevailed. The dispute between the parties is about the application of the decision and in particular whether the principles set out in the case apply when the court is concerned with the joinder of a Claimant rather than the joinder of a Defendant.
- Paragraph 44 of the ECJ judgment of the Court set out the following:
“a rule of national law which allows the substitution of one defendant for another during proceedings cannot, under Directive 85/374, be applied in a way which permits such a producer to be sued, after the expiry of that period, as defendant in proceedings brought within that period against another person.”
The Date of Supply
- The first Defendant submits that on the evidence available to me for the purpose of the applications I have to determine, there is an overwhelming probability that the MCB was supplied before 24 September 2009. It follows that the claim against the first Defendant was brought after the expiry of the longstop and the claim was therefore (to use the language of section 11A) “extinguished” when brought.
- The evidence shows that 371,093 MCBs were supplied by the first Defendant between 1 May 2009 and 13 October 2009. Of those, some 256,720 had been supplied by the end of August 2009 and 85,303 were supplied in September. Assuming that the sales in September were the same every day, some 68,242 (or 24/30 of 85,303) MCBs were sold up to close of business on 24 September 2009. The number would be 65,399 to the close of business on 23 September 2019 (23/30 of 85,303). To close of business on 23 September 2019 it would be reasonable to proceed on the basis that 322,119 MCBs had been sold (256,720 + 65,399). This equates to 87% of the total sales in the relevant period (322,119/371,093). If the assumption that the same number of MCBs was sold every day in September is wrong, and instead it is assumed that all of the MCBs sold in September were sold after 24 September (that seems inherently unlikely and there is no evidence at all to suggest that it was the case) it is clear that by the end of August (and so on this hypothesis at close of business on 23 September), 69% (256,720/371,093) had been sold.
- The first Defendant therefore submits that I can be satisfied on the evidence before me that it is easily more likely than not that the MCB had been supplied (and so the “relevant date” occurred) before 24 September 2009. The statistical probability is probably between 69% and 87% and likely to be closer to the higher figure than the lower figure.
The Part V Claim - an overview
- In Wilson v Beko [2019] EWHC 3362, Julian Knowles J concluded that a claim for damages for breach of the regulations is not actionable under Part V of the 1987 Act if a claim can be brought under Part I of that Act.
- The Part I Claim applies (broadly, as explained above) only to loss suffered in a private capacity. The effect of the Wilson decision was therefore that any claim for losses suffered in a private capacity could only be brought as a Part I Claim.
- The nature of loss suffered by the Claimant has been the subject of discussion between the parties for some time. The history of those discussions is set out in a letter written by the first Defendant’s solicitor on 27 July 2020 to the Claimant. Briefly, on 3 March 2020 the Claimant invited the first Defendant to admit that the damaged property was intended for the Claimant’s “private use and occupation”. The Claimant noted that in the absence of an admission a notice to admit facts would be served. The admission was duly given in the letter of 27 July.
- There can be no doubt then that the admission as given is binding (see CPR 14.1(1) and (2)) and can only be withdrawn with the permission of the court (see CPR 14.5(5)).
- The effect of the admission appears to be (the Claimant does not accept this) that the Claimant has a potential claim under Part I of the 1987 Act, but no claim (following Wilson) under Part V of that Act. The Claimant also does not accept that I should apply Wilson. I will deal with these arguments below.
Procedural and Other Difficulties
- Mr Riley-Smith QC sets out an overview of what he submits is the Claimant’s position at paragraph 1 of his skeleton:
“The history of this claim is a litany of errors. It was issued by an improperly-constituted claimant against the wrong defendant. The First Defendant was subsequently substituted without permission when, for reasons explained below, it should not have been. Following two stays pursuant to court orders, the terms of which were not complied with, the Claimant waited until the penultimate day to serve the amended claim form - and then failed to serve particulars of claim within time prescribed by CPR 7.4(2). And it is clear that the two principal causes of action under the Consumer Protection Act 1987 are bound to fail: one because it had been extinguished pursuant to the decisions of the ECJ and the Supreme Court in O’Byrne v Aventis Pasteur; the other because it was not actionable for the reasons given by Julian Knowles J in Wilson v Beko”
- This summary of submissions might be unpacked as follows (albeit in a different order):
i) The claim against the first Defendant commenced on 24 September 2019 when the first Defendant was substituted. The available evidence strongly suggests (see above) that the relevant date for limitation purposes had by then passed. The Claimant cannot rely on section 35 following O’Byrne and so the Part I claim is “extinguished” by operation of section 11A.
ii) The Part V Claim cannot be pursued because the loss suffered is a loss covered by Part I of the 1987 Act and so, following Wilson, the Part V Claim must fail.
iii) By CPR 19.3 all persons jointly entitled to a remedy “must be parties” to an action unless the court orders otherwise. The Claimant and Mr Deshais are persons jointly entitled to the relevant remedy (damages) and so Mr Deshais “must be a party” unless the court otherwise orders. Although the Claimant says it is not necessary, she applies to join Mr Deshais as a Claimant. The first Defendant resists:
a) on the ground that the Part I claim is now extinguished so that it is too late to add Mr Deshais. In the alternative:
b) the first Defendant submits (if section 35 applies) that the section does not assist because the claim against the first Defendant, even if deemed to commence on 24 September 2019 is in any event extinguished (see (i) above).
iv) Absent relief from sanctions, because of late service, there are no Particulars of Claim and so the Claim must be dismissed. The first Defendant submits that this is not a case for relief to be granted. The Claimant disagrees. The Claimant either accepts or does not resist the conclusion that the failure to serve the Particulars in time (and the service being late by 13 days) is a serious breach for which there is no reasonable explanation.
The Arguments on the Applications
The first Defendant’s application for summary determination on the claims
A preliminary point
- At the outset I should note that the Claimant did not accept that the application for summary determination could properly include matters that arise out of substitution of the first Defendant on 24 September 2019. The basis for that submission was that CPR 24.4(3) requires that the Respondent (the Claimant) has 14-days’ notice of “the issues which it is proposed the court will decide at the hearing”.
- On a fair reading of the evidence, the Claimant is right to say that there is no suggestion that the court will be asked to determine if the Part I Claim had been extinguished by 24 September 2019. It seems clear (see in particular paragraph 89 of Mr Colman’s witness statement in support of the application) that the first Defendant was advancing the application on three bases:
i) first, that the claim should be struck out because the Particulars of Claim were served late. If relief from sanction and an extension of time were granted, then the Claimant went on argue
ii) secondly, that the claim was incorrectly constituted (only one of two persons jointly entitled to a remedy having brought the claim) and that it was now too late to add Mr Deshais because the Part I claim was extinguished and
iii) thirdly, that the Part V claim should be struck out because of the proper application of Wilson v Beko.
- Notice of the arguments first came when Mr Riley-Smith QC’s skeleton argument was exchanged on or about 27 July 2020 (Monday, when the hearing was on Thursday). The point is not dealt with in Moody QC’s skeleton. As the point had not been foreshadowed in the application or evidence that is not surprising.
- I am therefore satisfied that the requirements of CPR 24.4(3)(b) have not been complied with in respect of this issue. What is the effect of that conclusion? There is nothing in the rule, and it was not suggested, that I was bound to dismiss this part of the application. I was not invited to adjourn it to give the Claimant time to deal with the point. Indeed, Mr Moody QC, was able to deal with the merits of the application by reference to points of principle. There was no suggestion that the Claimant was unable to deal with the point or that it would be unjust for me to deal with it.
- I am satisfied that it is appropriate for me to deal with the issue even though there was a technical breach (technical in the sense that it caused no prejudice) of CPR 24.4(3).
- I will deal with the extension of time and relief from sanction points below. That therefore leaves 3 aspects of the first Defendant’s application to deal with in the following order:
i) the Part V Claim should be determined in reliance of Wilson v Beko
ii) the entire claim was incorrectly constituted, it is too late to add Mr Deshais as a Claimant and so the claim should be summarily determined
iii) the Part I Claim against the first Defendant had been extinguished by 24 September 2019 when it was substituted and section 35 cannot be used to deem the claim to have been issued on 21 June 2019.
The Part V Claim
- Mr Moody QC (who was first instructed for these applications) submitted that the issue of whether the loss was a “private” loss (and so potentially recoverable under a Part I claim) or a non-private loss (and so potentially recoverable under a Part V claim) was a matter of evidence. I cannot accept that submission. On 27 July 2020 the first Defendant made an admission (at the invitation of the Claimant) that the loss was “private”. An admission has the same effect as if the issue were decided by the court. The effect of an admission is to make it unnecessary for the court to decide the issue (see paragraph 40 of Baxendale-Walker v APL Management [2018] EWHC 543 and the reference to CPR 14.5 at paragraph 24 above).
- Mr Moody QC suggested that I should not follow Wilson but did not submit that the decision was wrong. The modern practice is expressed by the editors of Halsbury in this way: “a judge of first instance will as a matter of judicial comity usually follow the decision of another judge of first instance unless he is convinced that that judgment was wrong.” I have no hesitation therefore in following Wilson. The decision is subject to appeal, permission having been granted by the first instance Judge, Julian Knowles J. I do not think that makes any difference. If, as Mr Moody QC also suggested, the law was in a state of flux, I might have taken the view that there was “some other reason” why the issue should proceed to trial. I do not however take that view. Wilson represents the law until a higher court decides otherwise. I was referred to no conflicting High Court decision.
- In my judgment it follows from the above, and from the clear impact of Wilson that the Part V Claim cannot succeed. I can see no reason why the claim should proceed to trial and I therefore strike it out.
Incorrect Constitution
- I accept that the claim is incorrectly constituted and that unless that is cured the claim should be summarily determined. It is clear from CPR 19.3 that Mr Deshais “must be [a party]” or that I should “order otherwise”.
- Mr Moody QC relied on Youlton v Charles Russell [2010] EWHC 1032 to support the proposition that CPR 19.3 is essentially a procedural rule and that a failure to comply with it does not render the proceedings a nullity. I am unable to accept that submission. The Claimant relies on paragraph 249 of the decision of Warren J:
“Under CPR 19.3(1), all persons jointly entitled to a remedy must be made parties and if a person does not agree to be a claimant he must be made a defendant as required by CPR 19.3(2); each of these requirements is subject to the rubric “unless the court orders otherwise”. These are essentially procedural requirements. If a person jointly entitled to a remedy were to sue without joining those jointly entitled with him, that would not make the proceedings a nullity. The defendant might be able to obtain a stay pending compliance with CPR 19.3 but he would not be entitled to strike out the action, at least not without the claimant being given the opportunity to comply. If the joinder of other persons is necessary for the determination of the action, as it would be in the case of co-trustees, it is permissible (although this is for the discretion of the court) to join the co-trustees, even after the expiry of a limitation period, under section 35(5)(b) and CPR 19.5(2)(b) and (3)(b).”
- In my judgment Warren J was there making a different point. He emphasised that a failure to comply with CPR 19.3 did not render the proceedings a “nullity”, that is having no effect from inception. The rule foreshadows that the failure might be dealt with in one of 3 ways (a) by joining the relevant party as a Claimant if that party consents (b) in the absence of consent joining that party as a Defendant and (c) by a different court order. Any application to strike out a claim for want of compliance with CPR 19.3 might well be met (as it was here) with an application to join the missing party or an application to the court for a rectifying order. There is nothing in the passage that might suggest that the proceedings can continue in the absence of the failure being dealt with.
- Each of the three solutions foreshadowed in the rule is equally valid. Thus, an inability to join Mr Deshais does not mean that the failure cannot be corrected. It seems to me that an order which requires Mr Deshais to be bound by the outcome of the present claim and which requires that all judgments and orders made in the claim should be served on him would be sufficient to deal with the failure. I propose to make such an order and will invite counsel to agree a suitable form.
- The claim should not then be struck out on the basis that it is improperly constituted. That failure has now been remedied. I need not deal with the other points raised against the application to join Mr Deshais. It was not submitted that I ought not to adopt this suggested solution.
Summary Determination: Was the Part I Claim extinguished on 24 September 2019?
- To determine if the claim should be summarily dismissed on the ground that it had been extinguished when the first Defendant was substituted I need to deal with the following questions:
i) As a matter of fact, was the claim extinguished on 24 September 2019?
ii) If the claim was extinguished on 24 September 2019 does section 35 apply?
- This question, which requires that I resolve an issue of fact, needs to be dealt with under CPR 24. The following principles of approach to an application for summary judgment (set out at paragraph 42 of Mr Riley-Smith’s skeleton argument) are not in dispute:
i) The burden rests on the applicant to establish that there are grounds to believe that the respondent has no real prospect of success and that there is no other reason for a trial: para.2(3) of PD 24.
ii) If the applicant adduces credible evidence, then the respondent becomes subject to an evidential burden of proving some real prospect of success or some other reason for a trial. As to this:
a) In order to defeat the application for summary judgment, it is sufficient for the respondent to show some real "prospect" (i.e. some chance) of success. "Real" means not fanciful. The respondent's case must therefore carry some degree of conviction.
b) The court should consider the evidence that could reasonably be expected to be available at trial. But the judge should not conduct a mini-trial: Swain v Hillman [2001] 1 All ER 91.
c) The court should not allow a case to go forward to trial simply because there is a possibility of some further evidence arising. As Moore-Bick LJ said in ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725 at paragraph 12: “if the applicant’s case is bad in law, the sooner that is determined, the better”.
- The evidence relied upon as sufficient to allow me to come a final conclusion about the date (or approximate date) of supply arose in this way.
- In his evidence in support of the application for summary judgment, Mr Colman noted that if the relevant supply had taken place before 24 September 2009 the claim against the first Defendant would have been extinguished before the first Defendant was joined. He did not suggest at that stage that the issue could be resolved without a trial, rather he pointed out (at paragraph 85) that:
“If the action proceeds, further time and resources will be required in an effort to obtain evidence on the date of supply some 11 years after the event. The evidence on this issue can only come from the Claimant. The starting point for this line of enquiry will be the installation certificate which, significantly, the Claimant has so far failed to disclose.”
- In response, the Defendant’s solicitors replied (see paragraph 42 of Mr Mak’s statement of 8 July 2020):
“I do not agree that the evidence of the date of supply can only come from the Claimant. I have made efforts to try and contact the previous owner with a view to obtaining information on the original installer; however there are other ways that the date of supply can be narrowed down for the purposes of a balance of probability test. For example, the First Defendant will have data regarding the quantity of 16A MCBs supplied per month and may have data regarding the location of supply. The fact the First Defendant is so adamant that the date of supply could not be after October 2009 (see AMC(84)) suggests that such data must be available.”
- The evidence does not reveal the result of Mr Mak’s efforts to contact the previous owner or to get information about the installer. Mr Colman responded to Mr Mak’s evidence on 17 July 2020 by producing the first Defendant’s supply data. The source of the evidence is Mr James Currie the first Defendant’s Head of Operations. That data is the source of the evidence set out at paragraph 24 above.
- Mr Mak’s evidence is that the Claimant does not have the installation certificate and has no relevant documents in her possession (see paragraph 30 of his second witness statement).
- In deciding if, on a proper application of the authorities I have referred to above, I can proceed to deal with a summary judgment on the basis of a fact (the approximate date of supply) which has not been adjudicated upon or admitted, it seems to me that I should consider:
i) The nature and provenance of the evidence relied upon to establish the fact
ii) Whether the evidence is, on its face, credible
iii) How easily the evidence might be rebutted or cast into doubt
iv) The extent to which the Respondent has put the evidence in issue
- The relevant evidence here is provided by a named source, Mr James Currie, who holds a senior position (Head of Operations) with the first Defendant. The evidence he produces is an extract from sales records which relate to a recalled product. Such records are therefore of real importance to the first Defendant and it would be reasonable to expect that they are compiled with care. The evidence is, on its face credible.
- I am invited (see paragraph 23 above) to draw an inference about the time of supply from the evidence of the first Defendant’s sales records. Evidence as to the actual date of supply would clearly put the question beyond doubt and remove the need for any inference. That evidence (or at least a trail of inquiry) might be gathered following input from the installer. Evidence of the date the MCB was fitted might be useful; if the MCB was fitted before 24 September 2009 the supply must also have taken place before that date. If it was fitted after that date the supply may have (but not necessarily) taken place after that date.
- The Claimant has not been able to produce any evidence from the installer or from the former occupants of the house and has no documentary evidence that would help. There is no suggestion that the prospects of finding the installer, speaking to the former occupants or of finding any relevant documents will improve.
- Taking all of these points into account, I am satisfied that the first Defendant has produced credible evidence from which I can draw a strong and sensible inference that the supply took place before 24 September 2009. The Claimant has produced no evidence that would allow me to conclude that she has a real (that is, not fanciful) prospect of establishing that the supply took place on or after 24 September 2009. Whilst there is always a prospect that “something might turn up” the prospect of that happening is unsubstantiated and nothing more than a hope. Given the passage of time and the absence of evidence despite sensible searches, it seems to me that the Claimant has not discharged the evidential burden that falls on her.
- I am satisfied that it is proportionate and in accordance with the overriding objective that I conclude that the issue of when the supply was made is one that must be determined on a summary basis and that there is no other reason why the issue should proceed to trial.
Does section 35 apply?
- The natural and inescapable conclusion, given the date of supply, is that the Claimant’s right to proceed against the first Defendant was “extinguished” by the time the first Defendant was substituted as a party.
- The next question therefore is: does section 35 override section 11A of the Limitation Act and allow the Claimant to treat the claim as one issued when the proceedings were commenced on 21 June 2019.
- On the face of it, the Supreme Court decision in O’Byrne makes it plain that section 35 does not apply. Mr Moody QC submits (as I understand it) that the first Defendant is not entitled to rely on the non-application of section 35 or is not entitled to raise the limitation “defence”.
- He bases those submissions on two points: first, the first Defendant consented to being joined and secondly, the first Defendant had a means of overturning the joinder (see CPR 17.2) but failed to take advantage of it and so is now (in effect) without a means of remedy.
- The relevant parts of CPR 17 and CPR 19 provide as follows:
17.1
(1) A party may amend his statement of case at any time before it has been served on any other party.
…..
17.2
(1) If a party has amended his statement of case where permission of the court was not required, the court may disallow the amendment.
(2) A party may apply to the court for an order under paragraph (1) within 14 days of service of a copy of the amended statement of case on him.
….
19.4
(1) The court’s permission is required to remove, add or substitute a party, unless the claim form has not been served.
- I am satisfied that each of these arguments is clearly wrong. I reach that conclusion for a number of reasons: first, CPR 17.2 is a procedural rule limited to applications to disallow an amendment made without the need for consent. The rule is silent on summary judgment and strike out. It cannot be read in a way that limits a party’s right to seek summary determination of a claim. Secondly, even if the first Defendant did consent to the substitution, such consent was wholly immaterial and unnecessary. I am not clear what the legal basis is for the submission that consent somehow operated to prevent the first Defendant from asserting that section 35 does not apply or that the limitation “defence” could not be relied upon. Arguments about waiver and estoppel were not developed and in any event in my judgment are not available. Thirdly, section 11A does not create a limitation “defence”. McGee makes that clear. Section 11A extinguishes the right of action and the Defendant has no need to plead section 11A to rely on it. Fourthly, and in any event if Mr Moody QC was right, the Supreme Court’s decision in O’Byrne (itself applying a decision of the ECJ) would need to be ignored. Put in that way, it becomes immediately apparent that the arguments are wrong. Fifthly, once extinguished, the right of action cannot be revivified.
- I am therefore satisfied that section 35 has no application in the present case and that the Claimant’s right of action against the first Defendant was extinguished by the time the first Defendant was joined as a party. I am satisfied, in the absence of a right of action that the claim against the first Defendant must be summarily dismissed.
Late service of the Particulars of Claim and the application for relief from sanctions
- I remind myself that the only aspect of the claim which now survives against the first Defendant is the negligence claim. That claim is not subject to a limitation argument at this stage.
- The outcome of this application will depend on a consideration of the three-stage test set out in Denton v TH White Limited [2014] 1 WLR 3926. The well-known guidance is summarised at paragraph 24 of the judgment:
“A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application including (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.”
- The application is supported by the evidence of Mr Ho-Shing Mak, the Claimant’s solicitor (who qualified to practise in October 2018). Dealing with stages 1 and 2, the Claimant maintains that the delay was neither serious nor significant and that there was a good reason for default namely that the solicitor (see paragraph 44.1):
“held a genuine belief that serving the Particulars of Claim by 3 June 2020 was in compliance with the CPR as a result of the issuing of the Amended Claim Form. I sought at all times to comply with the rules and believed that I was doing so.”
- The basis of Mr Mak’s belief that the Particulars of Claim were served on time is explained at paragraphs 18, 19 and 28 of his evidence:
“18. On 25 September 2019 I was notified by the court that [the filing of the amended Claim Form] had been accepted. I therefore downloaded a copy of the sealed document and after looking at it I concluded that the now amended Claim Form (the "Amended Claim Form") had been "issued" on 24 September 2019. I based this on two factors: First, the Original Claim Form and the Amended Claim Form were dated by the court in the same way with the same seal, except that the Original Claim Form seal had a date of 21 June 2019 and the Amended Claim Form had a seal with the date of 24 September 2019. Secondly, as detailed above (at paragraph 10) I knew that CPR 7.2(2) said that "a claim form is issued on the date entered on the form by the court." Therefore, as with the Original Claim Form, I followed the date the court had entered onto the Amended Claim Form via the seal and concluded that the Amended Claim Form had been issued on 24 September 2019.
19. Having reached this conclusion, my subsequent decision making was predicated on an assumption that I had two issued claim forms; the Original Claim Form issued on 21 June 2019 and the Amended Claim Form issued on 24 September 2019. I concluded that each constituted an issued Claim Form for the purposes of the CPR.”
…..
28. On 1 May 2020 the extended stay expired and as the period for the stay, over 2 concurrent periods, had been 1 October 2019 to 1 May 2020, I calculated that we had until 21 May 2020 to serve the Original Claim Form and 24 August 2020 to serve the Amended Claim Form. However, I was conservative and did not want to risk being out of time by a day. I therefore told the client and counsel that we would be working towards a deadline of 20 May 2020 for service of both Claim Forms and 3 June 2020 for service of the Particulars of Claim.”
- Particulars were, as planned, served on 3 June 2020 (it is now accepted that service was 13 days late). On 4 June the first Defendant acknowledged receipt and asked the Claimant to confirm that service by email would be accepted. That was confirmed on the same day. On 9 June 2020 the first Defendant wrote a detailed letter to the Claimant pointing out that the Particulars had been served late. Its first paragraph said this:
“We write regarding the timing of the service of the Particulars of Claim. For the reasons explained below, we consider that they have been served out of time. This letter includes requests for further information to enable us to consider this issue further. In particular, we would grateful to know whether you intend to apply retrospectively for an extension of time pursuant to CPR rule 3.1(2)(a).”
- The response came on 12 June 2020. The Claimant (through Mr Mak) asserted that the Particulars had been served on time but “to ensure that there is no procedural uncertainty” noted that there would be an application for relief from sanction.
- Dealing with the three-stage test, the Claimant, in the letter of 12 June 2020:
i) asserted that it was “plain that a 13-day delay in providing the [Particulars of Claim] is neither serious nor significant”
ii) the reasons for default was that the Claimant’s solicitor held a “genuine and reasonable belief that serving the [Particulars of Claim] by 3 June 2020 was in compliance with the CPR as a result of the issue of the Amended Claim Form”
iii) the Claimant invited the first Defendant to conclude that in all the circumstances of the case (which I will return to) relief should be granted.
- The letter concluded with these words:
“In the event that our client is forced to make the application contemplated our client will represent your conduct as opportunistic, and ask for a costs order against your client on an indemnity basis and with other terms in keeping with the warning in Denton”
- Before dealing with the three stages of the Denton test, I return to the evidence in support. Dealing with stage 3 of the test, Mr Mak invites me to take account of the following factors (which I summarise):
i) The first Defendant’s solicitors (and the Claimant’s then counsel) knew what the Claimant’s plan was but raised no objection and the Claimant’s solicitor held an honest and reasonable belief that his view of the rules was correct.
ii) On 20 May 2019 he spoke to counsel (because his supervisor was on annual leave). The conversation “reinforced [his] belief that I should serve the Claim Forms that day but that I had until 3 June to serve the Particulars of Claim”
iii) Court resources are being wasted by the need to make the application and “the First Defendant, by refusing to consent to this application has demonstrated opportunistic behaviour, attempting to take advantage of a minor instance of procedural uncertainty so as to extinguish an otherwise valid claim.”
iv) The Defendants are not prejudiced by the delay; each has been involved in detailed discussion about merits, there has been a joint consideration of the consumer unit and detailed correspondence. The claim has been pursued diligently and has merit.
v) If relief is granted, the Defendants will not be prejudiced.
vi) If relief is refused Claimant will be significantly prejudiced and there is likely to be satellite litigation.
Stage 1
- It is in my view plain and obvious that the default was serious and significant. A delay of 13 days is, in context, a significant delay. Mr Moody QC conceded that point. In my view he was plainly right to do so.
Stage 2
- Mr Mak’s genuine belief that in acting as he did he was complying with the CPR in my judgment falls far short of a good reason for the default. Mr Moody QC accepted that the authorities supported that view. Mr Mak’s view of the rules was wrong, and in my judgment plainly so. The view he held was also clearly unreasonable. A solicitor, no matter how experienced or inexperienced, must be taken to know the Civil Procedure Rules.
Stage 3
- In my judgment, attempts to share or pass the blame to others who failed to point out the obvious mistake (as Mr Mak seeks to do) does nothing to assist the Claimant. The first Defendant’s failure to raise an immediate objection when told that the Particulars of Claim would follow and the short reference in evidence to Mr Mak’s conversation with counsel on 20 May 2020 carry no weight. The first Defendant’s solicitors were under no duty to point out the Claimant’s mistake (assuming they were aware of it) and would, in any event have needed the first Defendant’s instruction to do so (see Lord Sumption in Barton v Wright Hassall [2018] 1 WLR 1119 at para.22). The fact that others may also have made the same mistake would be relevant if the issue was whether Mr Mak was solely responsible for the default, but is not relevant in any broader sense.
- Generally speaking, where there is a clear and obvious error of the type that occurred here, the court is likely to expect an early full and frank admission of that error. Such an admission (whilst not determinative and perhaps not central to the outcome of the application) will provide comfort that the person who made the mistake is likely not to repeat it and to have learned from the experience. A single-minded drive to defend the indefensible and avoid any suggestion of error (when the error is clear) is in my judgment, unhelpful.
- I do not accept that the first Defendant has been opportunistic in its approach to this application. It seems to me that the first Defendant has behaved properly at all times, giving the Claimant an opportunity to explain its position and to issue an application for an extension of time and drawing the problem (which might well otherwise have gone unnoticed) to the Claimant’s attention.
- I accept that the delay in serving the Particulars of Claim caused no particular prejudice to the first Defendant and, importantly, I accept that the parties had engaged with each other meaningfully before issue so that issues between them were known and understood.
- The first Defendant was aware of the broad nature of the potential claim by September 2018 and by July 2019 the parties had explored the claim fully. The detailed letter of claim was sent on 23 July 2019. It included reference to the negligence claim.
- In dealing with the third stage of the Denton test, I bear in mind that the only part of the claim that is left against the first Defendant is the negligence claim. That claim is not subject to any limitation argument. If relief is granted the claim in negligence will carry on. If relief is refused, the Claimant will be able to issue a fresh claim. Whether relief is refused or allowed therefore the first Defendant will still need to deal with a claim.
Conclusion
- I have come to the view, despite the clear and obvious failings in the way the claim has been handled to date and the absence of a good reason for the serious default, that relief should be granted.
- I am satisfied that the overall justice of the case requires it. In particular the fact that the only surviving part of the claim could be the subject of a new claim and that the delay caused no prejudice are important factors. Refusing relief would in my judgment mark a return to an overly mechanistic, pre-Denton approach to CPR 3.9.
- I am grateful to both Leading Counsel for their helpful and focussed submissions.
