LATE SERVICE OF THE CLAIM FORM, EXTENSIONS OF TIME AND RESTORATION TO THE REGISTER: IT DOESN’T END WELL

The decision in Hyfield Estates Ltd -v- Eggar [2015] EWHC 3773 (QB) (His Honour Judge Peter Hughes QC sitting as a Judge of the High Court) provides another example of the dangers of late service of the claim form

“It is easy to see with the benefit of hindsight where things went wrong, but the dangers of leaving vital procedural steps to the last minute, especially in a complex case where proceedings have been commenced close to the end of the limitation period have been emphasised time and time again.”

KEY POINTS

  • A claimant who seeks an extension of time for service of the claim form after the date for service has to show they have taken all reasonable steps to serve the claim form and been unable to do so.
  • A delay in making an application to restore the defendant company to the register meant the claimant could not show they had taken “all reasonable steps”.

PRACTICE POINTS

  • This case highlights the need to act with speed in all matters relating to late service of the claim form.

THE CASE

The claimant issued proceedings against a number of parties. The third defendant (“CCF”) had been dissolved in October 2012.

  • The claim form was issued on the 26th November 2014.
  • In order for proceedings to be served the company needed to be restored to the register.
  • The application to restore was not made until 3rd March 2015.
  • Time for service expired on the 26th March 2015.
  • On the 21st April 2015 the claimant made an application for an extension of time for service.

THE RULES RELATING TO EXTENSIONS OF TIME FOR SERVICE OF THE CLAIM FORM

CPR 7.6.

 “(1) The claimant may apply for an order extending the period for compliance with rule 7.5.
(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.
(3) If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if – …
(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
(c) … the claimant has acted promptly in making the application.”

THE DECISION OF THE HIGH COURT MASTER

Master Kaye stated:
What I am concerned with, however, is whether the claimant had taken all reasonable steps to comply with 7.5. It had been unable to do so. It is perfectly clear that the claimant sought to serve on the third defendant’s old office, but they were unable to do so. Of course they were unable to do so because the third defendant no longer existed. That was obvious to them on 24 November. It was obvious to them on 24 November that the third defendant needed to be restored to the company registry. There is no explanation, save that the claimant is a small company and I understand Mr Sillett to be speaking for the claimant. There is no explanation for why it did not take proceedings or start proceedings to have that company restored to the register at an earlier stage. I am told that it was assumed that this matter would go through very simply and very easily. I am told that they often do. That is no guarantee that they will go through in a very straightforward manner. It may take longer. In my view the claimant has failed to demonstrate that it took all reasonable steps to comply with the rule when it failed to make an application for the company to be restored until three months it had issued the claim form… 
To put it another way, in order to succeed under this rule the claimant needed to demonstrate that it had taken early steps to restore the company to the registry as soon after the claim form was issued as was possible. If in those circumstances the company had not been restored in time I would have had some sympathy for them. In my view, given the fact that the whole claim form was issued only just within the limitation period and the fact that the claimant took no proper steps to restore the company in good time, they failed to comply with 7.6(3)(b).”
THE MASTER’S DECISION UPHELD BY THE HIGH COURT JUDGE
“...It is easy to see with the benefit of hindsight where things went wrong, but the dangers of leaving vital procedural steps to the last minute, especially in a complex case where proceedings have been commenced close to the end of the limitation period have been emphasised time and time again. Guidance on the application of CPR 7.6(3) was given by the Court of Appeal in the case of Drury v The British Broadcasting Corporation & Carnegie [2007] EWCA (Civ) 497. The main judgment was given by Smith LJ and quite apart from the particular facts of the case speaking in terms which are of general application she said this at paragraph 37:
“It seems to me that the right approach is to consider what steps were taken in the four month period and then to ask whether, in the circumstances, those steps were all that it was reasonable for the claimant to have taken. The test must, in my view, be objective; the test is not whether the claimant believed that what he had done was reasonable. Rather it is whether what the claimant had done was objectively reasonable, given the circumstances that prevailed.”
13. Here the appellant through its solicitors knew when the claim was issued that the third defendant could not be served unless and until it was restored to the register. The only possible justification for not making the application much earlier would be if you could be confident that the application could both be made and be processed within whatever time was still available, otherwise, it appears to me, that there can be no possible justification for leaving the making of the application to have the company restored to the register until within a month of the four month period running out.
14. I note that when the application was served on the Treasury Solicitor and the Registrar of Companies the appellant’s solicitors displayed no sense of urgency. They did not seek to inform either the Treasury Solicitor or the Registrar that the matter was urgent and that there was an imminent deadline. They did not make a precautionary application to extend time under rule 7.5 which is something they could have done. It was only on 19 March (with just seven days to go) that the solicitor sent a chasing letter to the Treasury Solicitor, but I note that that chasing letter itself does not refer to the deadline or the extreme urgency of the matter.
15. Their initial application made in March was only acknowledged by the Treasury Solicitor on the day that the time limit actually expired (26 March). The blunt fact is, in my judgment, that such an application would not have been necessary had they taken steps much earlier, as they should have, to have the company restored to the register. In my judgment the Master made in the circumstances and looking at the context of this litigation the only decision that he could in the particular circumstances of the case and for those reasons this appeal fails.”

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