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Published 11 April 2017
The solicitors in Brightside Group Ltd And Others V RSM UK Audit LLP and Others learn a lesson in the Commercial Court.
This article revolves around the tricky matter of service under CPR 6.14 and CPR 7.7. The crux of the matter involved whether or not the Defendants were entitled to deem the Claim Form served out of time. Although the Commercial Court found in favour of the Defendants on this issue it permitted the Claimants to continue with the claim.
Clyde & Co LLP, the Defendants’ solicitors, by letter dated 27 May 2016 to Rosling King LLP, the Claimants’ solicitors, gave notice under CPR 7.7 requiring the Claimants to serve or discontinue within 14 days. Clyde & Co had previously made Rosling King aware that they were authorised to accept service. Their letter stated that, “In the event that we are not served with the Claim Form or do not receive confirmation that your clients have discontinued the claim by 10 June 2016, we will apply to the Court for an Order to dismiss the claim”.
CPR 7.7 provides as follows:
(1) Where a claim form has been issued against a Defendant, but has not yet been served on him, the Defendant may serve a notice on the Claimant requiring him to serve the claim form or discontinue the claim within a period specified in the notice.
(2) The period specified in a notice served under paragraph (1) must be at least 14 days after service of the notice.
(3) If the Claimant fails to comply with the notice, the court may, on the application of the Defendant–
a. dismiss the claim; or
b. make any other order it thinks just.
Failure to serve (or discontinue) on or before 10 June 2016 would therefore entitle the Defendants to apply for the dismissal of the claim or such other order as the court might think just under CPR 7.7(3).
The Claimants intended to pursue the claim and so did not discontinue. However, they did nothing towards serving the Claim Form until the afternoon of 10 June 2016. Clyde & Co’s address for service by post or by hand (i.e. by “Delivering to or leaving the document at the relevant place”) is The St Botolph Building, 138 Houndsditch, London EC3A 7AR. Clyde & Co occupy the 10th-13th floors and their reception desk is on the 13th floor. The main ground floor reception desk inside the building is the landlord’s responsibility and is manned by staff employed by or contracted to the landlord.
At about 3.30 pm on 10 June 2016, a trainee solicitor at Rosling King, arrived at the ground floor reception desk inside The St Botolph Building with the intention of delivering the Claim Form, by hand, to Clyde & Co. The trainee did not gain access to Clyde & Co upstairs and, subsequently, left the service package with Mr Smalley, a messenger employed by Williams Lea, a company contracted by Clyde & Co to provide it with office services. Mr Smalley took the package from the trainee in the lower ground floor loading bay area of the building, accessed from St Botolph Street. He signed for the package purportedly on behalf of Clyde & Co.
On 25 November 2016, the Court heard and dismissed an application by the Defendants for the dismissal of the claim under CPR 7.7(3) on the ground that there had been neither service nor discontinuance by 10 June 2016 as called for by Clyde & Co’s CPR 7.7 notice, and for a declaration under CPR 11 that the court had no jurisdiction to try the Claimants’ claim on the ground that if the Defendants were correct about CPR 7.7, then service of the claim form had been invalid.
The Claim Form was deemed served on 14 June 2016. The Commercial Court held that, despite the fact that service was out of time, and the Claimants had failed to adhere to the CPR 7.7 notice deadline, it was clear from inter-party correspondence, during the life of the notice, that the Claimants were pursuing their claims. Also, the Court held that the Claimant's solicitors in good faith thought that completing the CPR 7.5(1) "step required" on 10 June 2016 would comply with the notice. Justice Baker concluded that: "the failure to comply strictly with the deadline set by the CPR 7.7 notice meant at most only that the Defendants received that confirmation, and those details, one or two working days later than they might otherwise have done. That has not caused and will not cause them any prejudice or difficulty whatever".
There are two key lessons here: (1) try not to leave service to the last possible moment if you cannot guarantee that it will be deemed served as per CPR.6.14; and (2) if you intend to serve a Claim Form by delivering or leaving it at the "relevant place", as per CPR 7.5(1), you should ensure that you will have access to your counterpart's official and main reception desk.
Wherever possible you should contact your opposite number to inform them of the approximate time of your arrival so that they organise for someone from their offices to take delivery of the Claim Form. If this sounds much like "personal service" under CPR 6.5(3) then you could perhaps consider making this form of service to avoid any dispute as to the nature and deemed date of service. In a belt and braces approach, you might consider the preparation of a short attendance note (with the time and date of service together with the name of the person you intend to personally serve) to take with you so that your counterpart can sign it. In this instance, the Claimants were fortunate that Justice Baker found that they had informed the Defendants of their intention to pursue the claim during the period of the CPR7.7 notice. Had they not done so it is unlikely that they would have been granted leniency by the Court.
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