SERVICE OF PROCEEDINGS AND MISSING DOCUMENTS: WHY IT IS DANGEROUS FOR A DEFENDANT TO ATTEMPT TO STAND ON ITS RIGHTS

When proceedings are served and key documents are missing it is tempting for a defendant to attempt to stand on its rights and not reply at all to the claim. However the case of Rushworth -v- Harvey [2016] EWHC 1386 (QB) shows that this is a dangerous practice. A claim form served without the accompanying documents is still served and a judgment entered in default is still valid. This case illustrates the fact that there are sometimes important differences in procedure in cases that are subject to the specialist lists.  It is wise to be aware of them.

KEY POINTS

  • In a case proceeding in the Mercantile Court the fact that particulars of claim and a response pack were not served did not absolve the defendant of the obligation to serve an acknowledgment of service.
  • A judgment entered in these circumstances remained a regular judgment.

THE CASE

Proceedings were issued.  Upon service the defendant took two procedural points:-

  • The claim form was not accompanied by a response pack;
  • The claim form did not contain, nor was it accompanied by the particulars of claim.

Whilst discussions went on in relation to service of the claim form the claimant took the view that, since the defendant had not filed an acknowledgement of service, he was entitled to summary judgment.  Judgment was consequently entered in default.

THE DEFENDANT’S ARGUMENT: THIS IS AN IRREGULAR JUDGMENT

The defendant argued that the judgment was irregular. The documents had not been filed by the claimant.

THE JUDGE’S DECISION: JUDGMENT WAS REGULAR

  1. To assess the merits of that submission, it is necessary to look at the special rules concerning the commencement of proceedings in the Mercantile Court, which are contained in CPR rule 59. As there set out, the requirements in the Mercantile Court differ in certain respects from the general requirements which apply in other courts covered by the Civil Procedure Rules. In particular, rule 59.4 states:
“(1) If particulars of claim are not contained in or served with the claim form –

(a) the claim form must state that, if an acknowledgement of service is filed which indicates an intention to defend the claim, particulars of claim will follow;

(b) when the claim form is served, it must be accompanied by the documents specified in rule 7.8(1)…”

Those documents, I interpose, are the documents commonly referred to as the “response pack”.
  1. Rule 59.5 states:
“(1) A defendant must file an acknowledgement of service in every case.
(2) Unless paragraph (3) applies, the period for filing an acknowledgement of service is 14 days after service of the claim form…”
Paragraph (3) then refers to a situation in which the claim form is served out of the jurisdiction which is not applicable in this case.
  1. Rule 59.7 states that Part 12 (the part of the CPR dealing with default judgment) applies to mercantile claims with certain modifications. One of those modifications, provided for at 59.7(2) is:
“If, in any Part 7 claim –

(a) the claim form has been served but no particulars of claim have been served; and

(b) the defendant has failed to file an acknowledgement of service,

the claimant must make an application if he wishes to obtain a default judgment.
(3) The application may be made without notice, but the court may direct it to be served on the defendant.”
  1. Mr Clerk submitted on behalf of the defendant that service of the claim form was invalid because there had been non-compliance with rule 59.4(1)(a) and (b). That is because, in a situation where particulars of claim were not contained in or served with the claim form, the claim form had failed to state that, if an acknowledgement of service was filed, particulars of claim would follow; and there was also a breach of 59.4(1)(b) because the claim form was not accompanied by a response pack.
  2. I accept that there was a failure to comply with those provisions of the rules. It is clear from the documents before the court that the particulars of claim were not contained in or served with the claim form. It is also apparent that the claim form did not contain a statement that, if an acknowledgement of service was filed which indicated an intention to defend the claim, particulars of claim would follow. There is a dispute about whether a response pack was served with the particulars of claim on the first occasion when it was served on 8 October 2014. The defendant’s solicitors asserted in their immediate letter of response to the claim that no response pack had been provided. Although the claimant asserted the contrary, there is no documentary evidence to support that assertion and I find that he has failed to prove that a response pack was served at the same time as the claim form.
  3. However, although there were those failures to comply with rule 59.4, neither of them, as I interpret rule 59, absolved the defendant from the requirement to file an acknowledgement of service. Rule 59.5(1) states unequivocally “a defendant must file an acknowledgement of service in every case”. Furthermore, the time for doing so is stated to be 14 days after service of the claim form. Nothing in rule 59.5(2) says that time will only begin to run when a response pack is served. It is clear that a claim form had been served in this case and I see no reason to imply into the rules, in circumstances where they contain no statement to this effect, a requirement that service of the claim form will be deemed not to have taken place if rule 59.4 has not been complied with.
  4. As I see it, therefore, what the defendant’s solicitors should have done – as well as, if they wished to, taking the procedural objections that they did – was to file an acknowledgement of service to the claim form. However, they chose not to do that. In those circumstances, the condition for entering judgment in default set out in rule 12.3(1) was satisfied because, at the time when judgment in default was entered, no acknowledgement of service had been filed and the relevant time for doing so had long ago expired.
  5. The second point taken by Mr Clerk was that there was no application to enter judgment in default and that the claimant should have issued an application notice under Part 23.
  6. I accept that it is correct that the rules require an application for judgment in default to be made by a notice filed under Part 23. However, I consider that in substance the claimant did make such an application. The fact that the form that he filled out was a form requesting judgment in default rather than the form prescribed under Part 23 is a pure technicality which does not affect the substance of the matter – which is that an application was made to the court. There was no requirement to give notice of that application to the defendant. What is important is that it was considered by a judge and not merely dealt with administratively in the court office. That did in fact happen in this case and I am satisfied that in those circumstances, although there was a minor procedural irregularity, it does not nullify the judgment in default or provide a ground on which the court should set it aside.
  7. I therefore reject the first ground of the defendant’s application, which is that the defendant is entitled to have the default judgment set aside as a matter of right.”

(However the judge set the judgment aside on the merits).

DIFFERENCES IN THE MERCANTILE COURT AND GENERAL RULES

There are some differences between the Mercantile Court rules and the general rules. For instance CPR 10.3 makes it clear that (generally) the period for filing an acknowledgment of service does not start until the particulars of claim are served.

“The period for filing an acknowledgment of service
10.3
(1) The general rule is that the period for filing an acknowledgment of service is –
(a) where the defendant is served with a claim form which states that particulars of claim are to follow, 14 days after service of the particulars of claim; and
(b) in any other case, 14 days after service of the claim form.”

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