England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
(MR JUSTICE GRAY)

		Royal Courts of Justice Strand London, WC2
		Tuesday, 22 October 2002

1. LORD JUSTICE SIMON BROWN: This is yet another in the series of appeals to this court concerning the proper application of CPR Parts 6 and 7 to the service of claim forms.
2. Godwin v Swindon Borough Council [2002] 1 WLR 997, a decision of this court on 10 October 2001, decided, first, that the deemed day of service of a document as derived from the table in rule 6.7(1) is not rebuttable by evidence proving that the claim form had actually been received by the defendant on some earlier day; and, secondly, that the court cannot dispense with service under rule 6.1(b) or rule 6.9 where such a dispensation would constitute a retrospective extension of time for service, which is specifically forbidden by rule 7.6(3).
3. Anderton v Clwyd County Council and other appeals [2002] 3 All ER 813, a decision of this court on 3 July 2002, decided that the court can, however, dispense with service in cases where the claimant has sought to serve the claim form by a permitted method of service and the form has in fact been received by the defendant before the end of the period for service. These are conveniently called "category 2" cases, a category not previously recognised by the authorities. The Court of Appeal's ratio for distinguishing category 2 cases from category 1 cases was (page 830b-c):

"[The claimant's] case is not that he needs to obtain permission to serve the defendant out of time in accordance with the rules, but rather that he should be excused altogether from the need to prove the service of the claim form in accordance with the rules."

The present is a category 2 case, and this court is now being asked, pursuant to a limited permission to appeal which I myself gave on 31 July 2002, to exercise its own discretion under rule 6.9 to dispense with service in accordance with the rules.

4. The appeal is from Gray J's order on 5 December 2001, allowing the respondent's appeal against the district judge's order on 9 August 2001 dismissing their application to set aside service of the claim form on the ground that it was deemed to have been served out of time, and in the result dismissing the action.
5. Since Gray J heard the case after Godwin and before Anderton, it was not then recognised that an exception from the Godwin ruling arose in category 2 cases. Gray J therefore was not invited to, and did not, exercise what Anderton subsequently established to be a rule 6.9 discretion in the case. His judgment, therefore, cannot be faulted. It is not now suggested, however, that the exercise of discretion in this case should be remitted to the judge below; rather it is agreed that we ourselves should exercise it.
6. With that brief introduction, let me now sketch in the most directly relevant facts of the case. The appellants' claim is for damages for libel and malicious falsehood arising out of a radio broadcast on 2 November 1999 in which the respondents were highly critical of the appellants' product, a self-adhesive plastic coating applied to CDs to protect them from scratches and spillages. The product was invented by the first appellant, and its patent and registered trademark were owned by the second appellant. The broadcast suggested that the sound quality of the CD was adversely affected by the coating and ended with the words "It doesn't work. What a con!"
7. The next day, following complaint by the appellants' solicitors, the respondents broadcast a qualified apology stating:

"We are happy to accept that this [the suggested effect of the coating upon the sound quality] is not the case on normal domestic hi-fi equipment."

8. On 9 November 1999 the respondents asked the appellants to refrain from issuing proceedings for "a few weeks" to allow them to investigate the complaint, but on 1 February 2000 they made plain that any proceedings would be defended on the basis either of justification or of fair comment.
9. There can be no question but that the appellants were then guilty of considerable delay. Proceedings were not in the event issued until 31 October 2000, just two days before the expiry of the one-year limitation period applicable to both the pleaded causes of action, and they were not served until 28 February 2001, the very last day of the four-month period allowed for service of the claim form. At 2.00 pm on 28 February 2001 the claim form was hand-delivered by courier to the respondents' legal department, which had previously agreed to accept service.
10. As Godwin later established, service was irrebutably deemed to have been effected on 1 March 2001, a day out of time. On 23 March 2001 the respondents applied to have the service of the claim form set aside and the action dismissed. On 1 August 2001 the appellants, by cross-application, sought orders (1) that the claim form be treated as served on 28 February, that is, in time; alternatively, (2) that service be dispensed with under rule 6.1 and/or rule 6.9; alternatively, (3) that the limitation period be disapplied under the provisions of section 32A of the Limitation Act 1980 in respect of proposed further proceedings.
11. On 9 August 2001 District Judge North at Cardiff found for the appellants on the first limb of their application, holding that the delivery of the claim form on 28 February was good service that day: the deeming provisions of rule 6.7(1) were rebuttable and on the facts of this case were rebutted.
12. The respondents appealed against that decision, and whilst their appeal was outstanding Godwin was decided. Godwin, of course, wholly undermined the ground of the district judge's order and it appeared also to defeat the second limb of the appellants' application, namely to dispense with service under rule 6.9, an application which the district judge had not in fact dealt with since on his ruling such dispensation was unnecessary. On the respondents' appeal to Gray J, however, the appellants sought to uphold the district judge's order on the different ground that the method of service used satisfied the rule as to personal service. In addition they pursued the third limb of their original cross-application, namely for an order disapplying the limitation bar in respect of fresh proceedings.
13. In the course of hearings, respectively on 5 and 12 December 2001, Gray J rejected all the appellants' arguments and accordingly allowed the respondents' appeal against the district judge's order.
14. As already indicated, the present appeal, brought in the light of Anderton, is confined to the application under rule 6.9 for service to be dispensed with. There is no question now of the deeming provision being rebuttable; no question of personal service having been effected in time; no question of a fresh action being brought with the limitation period disapplied.
15. Rule 6.9 reads, so far as relevant:

"(1) The court may dispense with service of a document."

The most directly relevant passages in this court's judgment in Anderton are these:

"[56]  . . .  As a general rule applications made for retrospective orders to dispense with service will be caught by the reasoning in Godwin's case. There may, however, be exceptional cases in which it is appropriate to dispense with service without undermining the principle in Godwin's case that r 6.9 should not be used to circumvent the restrictions on granting extensions of time for service as laid down in r 7.6(3) and thereby validate late service of the claim form.

[56] In our judgment there is a sensible and relevant distinction, which was not analysed or recognised in Godwin's case, between two different kinds of case.

[57] First, an application by a claimant, who has not even attempted to serve a claim form in time by one of the methods permitted by r 6.2, for an order retrospectively dispensing with service under r 6.9. The claimant still needs to serve the claim form in order to comply with the rules and to bring it to the attention of the defendant. That case is clearly caught by Godwin's case as an attempt to circumvent the limitations in r 7.6(3) on the grant of extensions of time for service of the claim form.

[58] Second, an application by a claimant, who has in fact already made an ineffective attempt in time to serve a claim form by one of the methods allowed by r 6.2, for an order dispensing with service of the claim form. The ground of the application is that the defendant does not dispute that he or his legal adviser has in fact received, and had his attention drawn to, the claim form by a permitted method of service within the period of four months, or an extension thereof. In the circumstances of the second case the claimant does not need to serve the claim form on the defendant in order to bring it to his attention, but he has failed to comply with the rules for service of the claim form. His case is not that he needs to obtain permission to serve the defendant out of time in accordance with the rules, but rather that he should be excused altogether from the need to prove service of the claim form in accordance with the rules. The basis of his application to dispense with service is that there is no point in requiring him [to] go through the motions of a second attempt to complete in law what he has already achieved in fact. The defendant accepts that he has received the claim form before the end of the period for service of the claim form. Apart from losing the opportunity to take advantage of the point that service was not in time in accordance with the rules, the defendant will not usually suffer prejudice as a result of the court dispensing with the formality of service of a document, which has already come into his hands before the end of the period for service. The claimant, on the other hand, will be prejudiced by the refusal of an order dispensing with service as, if he is still required to serve the claim form, he will be unable to do so because he cannot obtain an extension of time for service under r 7.6(3).

[59] In the exercise of the dispensing discretion it may also be legitimate to take into account other relevant circumstances, such as the explanation for late service, whether any criticism could be made of the claimant or his advisers in the conduct of the proceedings and any possible prejudice to the defendant on dispensing with service of the claim form."

"[2]  . . .  Now that the disputed interpretations of the CPR have been resolved by Godwin's case and by this judgment, there will be very few (if any) acceptable excuses for future failures to observe the rules for service of a claim form. The courts will be entitled to adopt a strict approach, even though the consequences may sometimes appear to be harsh in individual cases."

The reason for citing paragraph [2] after the later paragraphs is, I hope, apparent.

16. There seems to me a question of some importance now raised upon this appeal: what generally should be the court's approach to the exercise of its dispensing discretion in these category 2 cases? Should the court ordinarily, or only exceptionally, dispense with service, and should this depend upon whether service of the proceedings in fact occurred before or after the Court of Appeal's judgment in Anderton?
17. The July 2002 issue of Civil Procedure Rules News, published by Sweet & Maxwell, commenting in detail on the decision in Anderton, points out at page 11 that in a category 2 case:

" . . .  the claimant was really seeking to be excused from the need to prove service under the rules rather than permission to serve out of time in accordance with the rules",

and suggests that the distinctions drawn by the court "accord with fairness and justice".

But it then adds:

"However, it remains to be seen whether the necessary distinctions can be easily and quickly drawn by procedural judges. It is to be feared a disproportionate amount of time and effort may have to be expended by procedural judges dealing with applications based on this aspect of the Anderton case."

18. The solution I would propose to the problem is this. In category 2 cases which, like the present (and, as I am led to believe, like a number of other appeals now awaiting hearing in this court) involve deemed late service before this court's decision in Anderton, the rule 6.9 dispensing power should ordinarily be exercised in the claimant's favour unless the defendant can establish either that he would suffer prejudice (apart, obviously, from the loss of his Limitation Act defence) or some other good reason why the power should not be exercised. Merely to establish that the claimant has been guilty of avoidable delay in either the issue, or the service, of the claim form, or both, would not generally constitute such good reason. There will always have been some avoidable delay. Similarly, the fact that the claim looks unpromising would not generally be a good reason for refusing to exercise the dispensing power in a pre-Anderton category 2 case. In a post-Anderton case, however, the dispensing power should in my judgment ordinarily not be exercised in the claimant's favour. These cases, albeit within category 2 and therefore in one sense to be regarded as exceptional, to my mind fall foul of paragraph 2 of the court's judgment in Anderton. In these cases "a strict approach" should generally be adopted.
19. This approach, in my judgment, will not only provide a useful guide as to how the court may be expected to exercise its discretion in these cases, but it also follows such guidance on the point as the judgment in Anderton affords. It would mean that the court in post-Anderton cases, quite logically, would be the readier to reject the claimant's explanation for late service and to criticise his conduct of proceedings, both of these being identified in paragraph 59 of the judgment in Anderton as relevant considerations.
20. This approach also provides a complete answer to Mr Rushbrooke's superficially persuasive argument that to apply Anderton as the appellants submit is appropriate, namely as if it creates a presumption in favour of dispensing orders in all category 2 cases, would effectively destroy the deemed service rule, since virtually every case of service by physical delivery of the claim form on the last day of the permitted period would involve actual receipt in time, and thus the exercise of the dispensing power. If, as I would hold, the presumption arises only in pre-Anderton cases, the deemed service rule, and the highly desirable certainty which it provides, will continue to apply in all but the most exceptional post-Anderton cases.
21. Such being my approach, and recognising that procedural judges (including, alas, this court on the present appeal) ought not to expend what the Civil Procedure News article called "a disproportionate amount of time and effort" on these cases, I turn comparatively briefly to consider whether there are good reasons shown here for not exercising the dispensing power in the appellants' favour, this being a pre-Anderton case. In my judgment there are not. True, this is a libel claim and the case law is replete with judicial dicta stressing the need to progress libel proceedings for the speedy vindication of the claimant's reputation. Against that, however, it must be remembered that the limitation period for libel is in any event only one year and, in the particular circumstances of this case, the appellants' concern is less with their reputation (already to some extent vindicated by the respondents' earlier partial apology) than with their claim for special damages for losses they say they suffered as a direct result of the broadcast, losses estimated to exceed £300,000.
22. I recognise, too, that the circumstances of the present case do not so compellingly call for a favourable exercise of the rule 6.9 discretion as those, certainly, of Chambers and perhaps also of Dorgan, the two cases amongst the five before the court in Anderton in which a discretion under rule 6.9 had to be exercised, and in the event was exercised in favour of the claimants. That, however, is no sufficient reason not to grant relief in the present case also. Mr Rushbrooke pointed out that in Dorgan the judge below had already exercised a rule 6.9 discretion (before Godwin appeared to hold there was none) in the claimant's favour, so that the Court of Appeal was merely declining to interfere with his discretion. Here, by contrast, this court has to exercise its own discretion. There is, however, no reason to suppose that the Court of Appeal in Dorgan would itself have exercised the discretion any differently from the judge below.
23. Nor do I find in the least persuasive Mr Rushbrooke's reliance upon that part of Gray J's judgment of 9 December 2001, rejecting the appellants' application for an order disapplying the limitation period in respect of a proposed fresh action, in which he indicated that, even had he had a section 32A discretion in the matter (which, because of the House of Lords decision in Walkley v Precision Forgings [1979] 1 WLR 606, he did not) he would not have exercised it in favour of the appellants. That seems to me of little, if any, relevance in the present very different context. Certainly it seems to me no more persuasive than the district judge's earlier comment that the appellants here have a complaint that needs to be determined and they should not be denied justice by "arid squabbles about technicalities".
24. Mr Rushbrooke's final submission on the facts focused on the unsatisfactory nature of the special damage claim even when finally the proceedings came to be served. I accept that the schedules are not altogether easy to follow and that the claim is still substantially unquantified and somewhat opaque. These criticisms notwithstanding, I see no good reason why this claim should not be allowed to proceed.
25. In short, none of Mr Rushbrooke's detailed arguments on the facts, whether taken singly or cumulatively, persuade me that the approach which I earlier suggested was appropriate in respect of pre-Anderton category 2 cases should not be adopted here. The respondent suffered no prejudice by the deemed late service of this claim form, nor, in my judgment, is there shown to be any other good reason for declining to exercise the dispensing power.
26. Were the same facts to recur in future, that is to say were this a post-Anderton case, the claimants would no doubt fail. Here, however in my judgment, they succeed. I would allow this appeal.
27. LORD JUSTICE BUXTON: I agree.
28. LORD JUSTICE CARNWATH: I agree. It is now clear that, in the respects relevant to this case, the rules of service in the CPR constitute a strict regime, introduced in the interests of certainty. That was explained by May LJ in Godwin, in a passage quoted in Anderton by Mummery LJ at paragraph 22. Not surprisingly, it has taken a little time for the new culture to become bedded down. I am reminded of a similar transition period some years ago in relation to reduced time limits for appeal, reflected in Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942. However, the matter now having been exhaustively reviewed in three judgments of this court, the transition period must be taken to have come to an end. I agree with the approach proposed by my Lord in relation to the exercise of the discretion.

ORDER: Appeal allowed. No order for costs in respect of the hearing before the district judge; the appellants to pay the respondents' costs as assessed by Gray J in respect of the hearing before him; the respondents to pay the appellants' costs of this appeal in the summarily assessed sum of £7,000.

(Order does not form part of the approved judgment)