England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARDIFF COUNTY COURT
HIS HONOUR JUDGE WYN WILLIAMS Q.C.
ZJ2-02554

		Royal Courts of Justice Strand, London, WC2A 2LL
		03/02/2005

LORD JUSTICE DYSON :

This is the judgment of the court.

1. The claimant is the widow and administratrix of the estate of Mr Malcolm Uphill. Between 4 June 1951 and 14 April 1956, Mr Uphill was employed as an apprentice by British Transport Commission or its predecessors in title. It is the claimant's case that during this period he was exposed to asbestos dust, as a result of which he died of mesothelioma on 15 August 1999. In these proceedings, the claimant claims damages for negligence under the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934. The defendant is a residuary body, which was created to deal with such claims brought against its predecessors in title. The limitation period expired on 14 August 2002.
2. The claimant consulted Messrs Hugh James, solicitors, in March 2002. The claim was handled by Mr Lysaght, assisted by Miss Evans. On 31 May 2002, they wrote to the defendant asking for confirmation that it was the correct party to sue. The reply dated 26 June came from Miller Fisher, a firm of loss adjusters. They did not explicitly state for whom they were acting or that the defendant was the correct party to the proposed litigation, but they asked for various information. A reminder was sent by the claimant's solicitors on 15 July, but this produced no reply.
3. On 29 July, Miss Evans telephoned Miller Fisher. She spoke to a Mr Crawford. She recorded the gist of the conversation in an attendance note as follows:

"MLE spoke to Mr Crawford at Miller Fisher. I told him we were issuing proceedings and I needed the correct name. He confirmed it was BRB Residuary Limited. I asked if it was his address and he said yes."

4. Mr Crawford says in his witness statement that he has no recollection of this conversation. The district judge held that the conversation recorded in the attendance note was insufficient to amount to a clear agreement that service on the defendant could be effected by serving the claim form on its loss adjusters. Accordingly, he held, the claim form should have been served either on the defendant itself or on its solicitors.
5. On 6 August, the claimant's solicitors sent the claim form to the court. It was issued by the court on 8 August. CPR 7.5(2) provides that the general rule is that the claim form "must be served within 4 months after the date of issue". It was not so served. The reasons for this are set out at paras 5-7 of the witness statement of Mr Lysaght. He considered that he did not have the material necessary to enable him to prepare a "meaningful" schedule of loss. Accordingly, he applied for an extension of time for service of the claim form. On 25 November 2002, Deputy District Judge Jones granted without notice an extension of time for service until 1 April 2003.
6. The claimant's solicitors purported to effect service by sending the claim form by first class post under cover of a letter dated 11 March 2003 to Mr Crawford at the address of Miller Fisher in Derby. He forwarded the document to the defendant's solicitor who received it on 17 March. On 18 March, the defendant acknowledged service of the proceedings by its solicitors. In the Acknowledgement of Service, the solicitors ticked a box indicating that the defendant intended to contest the whole of the claim, but they did not tick the box which indicated that it intended to contest jurisdiction. On the same day, they wrote to the claimant's solicitors seeking an extension of time for service of the defence. The claimant's solicitors acceded to this request. On 1 April 2003, the defendant's solicitors sought further information relevant to the merits of the claim.
7. On 10 April, the defendant applied for an order that "1. The "without notice" Order dated 25 November 2002 be set aside. 2. The purported service of the Claim Form be set aside. 3. The action be dismissed with the Claimant paying the Defendant's costs."
8. These applications were heard by District Judge Doel on 17 October 2003. The district judge refused to set aside the order of 25 November 2002. He said (para 15) that he would not himself have granted the extension of time for service, but would have ordered the claimant to serve the claim form without further delay. He explained at para 19 that, having regard to the overriding objective of dealing with cases justly, it would be wrong to set aside the order granting an extension of time. If he were to set aside the order, the claimant would be left without a remedy against the defendant. This would be unjust, not least because there was no evidence that the defendant had been prejudiced by the extension of time and the delayed service of the claim form.
9. As we have already said, the district judge held that service on the loss adjusters was not good service. But he went on to make an order under CPR 6.9 dispensing with service of the claim form on the grounds that the document had in fact been delivered to the defendant's solicitors within the extended time for service, so that "any arguments about irregularity are completely overridden."
10. Finally, although it was not necessary from him to do so, the district judge dealt with the claimant's argument that the defendant had waived the right to object to service of the claim form, and held that there had been no waiver.
11. Permission to appeal was given by His Honour Judge Graham Jones. The appeal was heard by his Honour Judge Wyn Williams QC on 7 May 2004. There were three issues:

i) should the district judge have set aside the order of 25 November 2002 extending time for service of the claim form until 1 April 2003? If not,

ii) was the claim form validly served 2 days after it was posted to Miller Fisher on 11 March, and if not, was the district judge right retrospectively to dispense with service of the claim form?

iii) (by a respondent's notice) was the district judge right to hold that the defendant had not waived the right to challenge the validity of the service of the claim form?

12. The judge held:

i) the order of 25 November 2002 should not be set aside;

ii) the claim form was not validly served but there were exceptional circumstances justifying the retrospective dispensing with service; and

iii) the defendant had waived its right to challenge the validity of service.

13. On behalf of the defendant, it is submitted that the judge erred in each of these conclusions. Dyson LJ adjourned the application for permission to appeal, because it seemed to him that the application raised important questions as to the meaning and scope of CPR 52.13(2) which provides that the Court of Appeal will not give permission to appeal on a second appeal unless it considers that "(a) the appeal would raise an important point of principle or practice; or (b) there is some other compelling reason for the Court of Appeal to hear it."
14. The principles applicable to the grant of an extension of time for service of a claim form under CPR 7.6 have been identified by this court in Hashtroodi v Hancock [2004] EWCA Civ 652, [2004] 1 WLR 3206. The principles applicable to the making of an order dispensing with service under CPR 6.9 have been identified by this court in a number of decisions, including Anderton v Clwyd County Council [2002] EWCA Civ 933, [2002] 1 WLR 3174 and Cranfield v Bridgegrove [2003] EWCA Civ 656, [2003] 1 WLR 2441.
15. The broad questions that arise on the current application are (i) whether, and if so in what circumstances, permission to appeal should be given under CPR 52.13(2)(a) where the ground of appeal is that there has been a failure to apply correctly a point of practice or principle which has already been established by a court of higher authority, and (ii) the scope and meaning of the phrase "other compelling reason" in CPR 52.13(2)(b).
16. The Practice Direction (Citation of Authorities) [2001] 1 WLR 1001 provides at para 6.1 that judgments on applications for permission to appeal may not be cited before any court "unless it clearly indicates that it purports to establish a new principle or to extend the present law". This judgment is intended to provide guidance as to the true meaning and effect of CPR 52.13(2)(a) and (b) and may be cited in future cases.
17. In considering these questions, it is important to have in mind what Brooke LJ said in Tanfern Limited v Cameron-MacDonald [2000] 1 WLR 1311 at paras 41-46. It is only in an "exceptional" case that a second appeal may be sanctioned. The general rule is that the decision of the appeal court on the first appeal will be the final decision. It is no longer possible to pursue a second appeal merely because the appeal is properly arguable or has a real prospect of success. The principle embodied in CPR 52.13(2) reflects the need for certainty, reasonable expense and proportionality.

"Important point of principle or practice"

18. In our judgment, it is clear that the reference in CPR 52.13(2)(a) to "an important point of principle or practice" is to an important point of principle or practice that has not yet been established. The distinction must be maintained between (a) establishing and (b) applying an established principle or practice correctly. Where an appeal raises an important point of principle or practice that has not yet been determined, then it satisfies CPR 52.13(2)(a). But where the issue sought to be raised on the proposed appeal concerns the correct application of a principle or practice whose meaning and scope has already been determined by a higher court, then it does not satisfy CPR 52.13(2)(a). We cannot accept the submission of Mr James that the question whether an established point of principle or practice has been properly applied in an individual case itself raises an important point of principle or practice. Were the position to be otherwise, the door would be open to second appeals in all cases which concern the application of an important principle or practice. That is clearly not what was intended.

"Some other compelling reason"

19. We turn to CPR 52.13(2)(b) and "some other compelling reason". What is contemplated here is an appeal which does not raise an important point of principle or practice. "Compelling" is a very strong word. It emphasises the truly exceptional nature of the jurisdiction. This is because the philosophy which underlies CPR 52.13(2) is, as explained by Brooke LJ in Tanfern, that second appeals are exceptional. We also refer to what Brooke LJ said in Iftakar Ahmed v Stanley A Coleman and Hill [2002] EWCA Civ 935 at para 2:

"The restriction on second appeals is important because Parliament has made it clear that it wishes pretrial disputes in civil litigation to be dealt with, on the whole, at a level lower than this court. It may be that judges in the courts below may make orders which judges in this court would not have made, but the philosophy of the Civil Procedure Rules is to confirm and bolster the authority of the judges in the lower courts."

20. CPR 52.13(2)(b) gives the court the residual power in cases which do not raise an important point of principle or practice (and which, therefore, are of little or no general interest) to give permission to appeal where there is a compelling reason to do so. It is tempting to say that the word "compelling" is an ordinary English word which does not require explanation or amplification. But, despite the strictures contained in para 6.1 of the Practice Direction (Citation of Authorities), our attention has been drawn to a number of decisions where permission for a second appeal has been given, which indicate that there may be differences of view as to how stringent a test is imposed by the words "other compelling reason".
21. The editors of the Civil Court Service 2004 Reissue (the "Brown Book") suggest that CPR 52.13(2)(b):

"was inserted to provide an ultimate safety valve. It would allow the Court of Appeal to entertain an appeal notwithstanding that the point was a "one-off" of no general import, if, for example, the decision sought to be appealed was so grossly erroneous or unfair that it would be an affront to justice to allow it to stand."

22. Mr O'Leary submits that unless a decision crosses this threshold of error and/or unfairness, there cannot be a compelling reason for giving permission to appeal. Mr James submits that there will always be a compelling reason to give permission to appeal where it is necessary to do so in order to correct a plain injustice. He refers to what Ward LJ said in Brown & Brown v Fenwick [2001] EWCA Civ 1481 at para 24:

"Quite how securely the door to the Court of Appeal should be shut by narrowly confining CPR 52.13(2)(a) to new points or principle, and precisely what the interrelationship is between (2)(a) and (2)(b), are matters which may need to be subject to further and fuller argument if this Court is to be able to correct plain injustices."

23. We are, of course, mindful of the need to interpret CPR 52.13(2) so as to give effect to the overriding objective of enabling the court to deal with cases justly: CPR 1.2. But we doubt whether it is appropriate to substitute a different form of wording (such as "where it is necessary to in order to correct a plain injustice") for "other compelling reason". Nevertheless, in view of the apparent uncertainty as to the stringency of the test, it may be helpful if we attempt to elucidate the phrase. What follows (which is not intended to be exhaustive) has been approved by the Master of the Rolls and the Vice-President of the Court of Appeal (Civil Division).
24. (1) A good starting point will almost always be a consideration of the prospects of success. It is unlikely that the court will find that there is a compelling reason to give permission for a second appeal unless it forms the view that the prospects of success are very high. That will usually be a necessary requirement, although as we shall explain, it may not be sufficient to justify the grant of permission to appeal. This necessary condition will be satisfied where it is clear that the judge on the first appeal made a decision which is perverse or otherwise plainly wrong. It may be clear that the decision is wrong because it is inconsistent with authority of a higher court which demonstrates that the decision was plainly wrong. Subject to what we say at (3) below, anything less than very good prospects of success on an appeal will rarely suffice. In view of the exceptional nature of the jurisdiction conferred by CPR 52.13(2), it is important not to assimilate the criteria for giving permission for a first appeal with those which apply in relation to second appeals.

(2) Although the necessary condition which we have mentioned at (1) is satisfied, the fact that the prospects of success are very high will not necessarily be sufficient to provide a compelling reason for giving permission to appeal. An examination of all the circumstances of the case may lead the court to conclude that, despite the existence of very good prospects of success, there is no compelling reason for giving permission to appeal. For example, if it is the appellant's fault that the first appeal was dismissed, because he failed to refer to the authority of a higher court which demonstrates that the decision on the first appeal was wrong, the court may conclude that justice does not require this court to give the appellant the opportunity to have a second appeal. There is a reason for giving permission to appeal, but it is not compelling, because the appellant contributed to the court's mistake. On the other hand, if the authority of a higher court which shows that the decision on the first appeal was wrong post-dated that decision, then there might well be a compelling reason for giving permission for a second appeal.

(3) There may be circumstances where there is a compelling reason to grant permission to appeal even where the prospects of success are not very high. The court may be satisfied that there are good grounds for believing that the hearing was tainted by some procedural irregularity so as to render the first appeal unfair. Suppose, for example, that the judge did not allow the appellant to present his or her case. In such a situation, the court might conclude that there was a compelling reason to give permission for a second appeal, even though the appellant had no more than a real, as opposed to fanciful, prospect of success. It would be plainly unjust to deny an appellant a second appeal in such a case, since to do so might, in effect, deny him a right of appeal altogether.

25. We have given these examples in an attempt to elucidate our understanding of the phrase "other compelling reason". In the present case, there is no suggestion that there was any procedural unfairness in the court below. But it is said in relation to the first ground of appeal at least, that Court of Appeal authority which was not cited to the judge shows that his decision was plainly wrong. We, therefore, turn to the grounds of appeal.

The first ground of appeal

26. Mr James submits that the decision of this court in Hashtroodi demonstrates that (a) Deputy District Judge Jones should not have extended the time for service of the claim form, (b) District Judge Doel should have acceded to the defendant's application to set aside the extension of time and (c) His Honour Judge Wyn Williams QC should have allowed the defendant's appeal against the refusal of District Judge Doel to set aside the extension. In Hashtroodi, this court gave guidance as to how the power to extend time for service of a claim form under CPR 7.6(2) should be exercised. It was held that there is no threshold requirement that a "good reason" need be shown for failure to serve a claim form within the specified period before the court can exercise its power to extend time under CPR 7.6(2). But since the power must be exercised in accordance with the overriding objective, it will always be relevant for the court to determine and evaluate the reason why the claim was not served within the specified 4 months' period. If there was a very good reason, an extension of time would usually be granted; the weaker the reason, the more likely the court would be to refuse the extension. If the claimant or his legal representative simply overlooked the requirement to effect service within the specified period, that would be a strong reason for refusing an extension of time: see judgment of Dyson LJ paras 17-20.
27. In the present case, the reason for not serving the claim form within the specified 4 months' period was that the claimant's legal representative believed that it was not possible to serve the claim form without a fully particularised schedule of loss. It is common ground that this belief was mistaken. There was no good reason for not serving the claim form within the specified period. This was acknowledged by District Judge Doel who said that he would not have granted the extension of time, but would have ordered the claimant to serve the claim form without more ado.
28. In our judgment, subject to any arguments about waiver, an appeal against the refusal to set aside the grant of an extension of time for service of the claim form has very strong prospects of success. The necessary condition to which we have referred at para 22(1) above is satisfied. We do not accept the submission of Mr O'Leary that, in effect, the judges below applied the Hashtroodi approach. They did not consider, still less evaluate, the reason why the claim form was not served within the specified period. The district judge simply said that it would be wrong to set aside the extension of time for service, since otherwise the claimant would be left without a remedy. This is a puzzling observation, since on the face of it, the claimant would have a right of action in negligence against her solicitors. Be that as it may, it is clear that there was no application of what Hashtroodi referred to as the "calibrated" approach.
29. Does it follow that there is a compelling reason to grant permission to appeal in this case? In deciding whether justice requires permission to be given, it is necessary to examine the timing of the publication of the judgment in Hashtroodi in relation to the appeal before the judge in the present case. The hearing before Judge Williams was completed on 7 May 2004. On 19 May, a copy of his draft judgment was sent to the parties by email. They were invited to submit corrections and agree the order. On 25 May, the judgments in Hashtroodi were handed down. The decision was very fully reported in the Times on 4 June. It was also reported in the Independent on 16 June. On 15 June, the parties' solicitors lodged an agreed order with the court, and the order was sealed by the court on 18 June.
30. Hashtroodi was obviously a case of great importance. There had previously been no decision of this court as to the proper approach to CPR 7.6(2). The defendant's legal advisers admit that they became aware of this decision in the first week of June. Mr James submits that, even so, it was not surprising that they did not appreciate its significance for the present case: the argument had been completed and a draft judgment already sent out to the parties. He submits that it would be harsh to criticise the defendant's legal advisers for not acting upon the decision in Hashtroodi before 18 June. It is not to be expected that lawyers should immediately act upon relevant decisions on procedural law.
31. We find it surprising that neither the solicitors not counsel acted upon this decision before 18 June. It was the first decision by the Court of Appeal on CPR 7.6(2). It was clearly an important decision It was well publicised. We would have expected them to have appreciated the significance of the decision for the present case. This was the authoritative decision which provided guidance which had been lacking as to the proper approach to CPR 7.6(2). In our view, it is plain that the defendant (as the unsuccessful party) should have drawn Hashtroodi to the attention of the judge, and asked for permission to make further submissions. It is the failure to take this course which leads us to conclude that there is no compelling reason in this case to give the defendant permission to appeal on this point. We do not consider that justice requires that the defendant be given a third bite at the cherry. In reaching this decision, we have not lost sight of the submission by Mr James that the vagaries of court listing have operated harshly against the defendant. He makes the point that the defendant's original application in the present case was issued on 10 April 2003 and its application to this court was considered on the papers on 18 October 2004 (18 months later); whereas in Hashtroodi, the defendant's original application was issued on 9 June 2003 and judgment was handed down in this court on 25 May 2004 (12 months later). The fact remains, however, that if the defendant had drawn the attention of the judge to Hashtroodi before 18 June 2004 and been given permission (as surely it would have been) to make further submissions, the judge would have been likely to set aside the extension of time for service of the claim form but for his finding that the defendant had waived its right to challenge this order. Since a draft of this judgment was circulated to the parties the latter point has led the defendant to submit that there would have been no point in making further submissions to the judge because there were no grounds for asking him to reconsider his decision on waiver which had been reached after hearing full argument. But if that is right, then the Hashtroodi point was not determinative of this case and there is no reason, let alone a compelling reason, for this court to hear it.
32. For these reasons, we refuse permission to advance the first ground of appeal.

The second ground of appeal

33. The second ground of appeal is that the judge was wrong to hold that the defendant had waived its right to challenge the validity of the claim form. The waiver argument is put by the claimant in two distinct ways. First, it is said that the defendant waived the right to challenge the extension of time for service of the writ. Secondly, it is said that it waived the right to challenge the service of the claim form on the defendant's loss adjusters. The first of these arguments is academic, since we have refused permission to appeal to challenge the extension of time for service of the claim form. We, therefore, propose to say no more about the first waiver argument. The second argument is not academic, since the defendant submits that the judges below were right to hold that the claim form was not validly served on the loss adjusters, and were wrong to dispense with service of the claim form.
34. Mr James submits that there is an important point of principle or practice as to the circumstances in which a defendant will be held to have waived the right to challenge the validity of service of the claim form. But during the course of argument, he accepted that the position is governed by CPR 11. This provides that a defendant who wishes to dispute the court's jurisdiction to try the claim may apply to the court for an order declaring that it has no such jurisdiction. CPR 11(4) provides that an application must be made within 14 days after filing an acknowledgement of service. CPR 11(5) provides that "if the defendant (a) files an acknowledgement of service; and (b) does not make such an application within the period specified in paragraph (4), he is to be treated as having accepted that the court has jurisdiction to try the claim". In our judgment, the issue of waiver is clearly resolved by CPR 11, and no important point of principle or practice is raised.
35. Nor do we consider that there is any other compelling reason for giving permission to appeal on the waiver point. Although the judge's reasoning on this issue is somewhat difficult to identify, there can be no doubt that, on the facts of the present case, the effect of CPR 11(5) is that the defendant is to be treated as having accepted that the court has jurisdiction to try the claim. This means that it is not open to the defendant to submit that service on the loss adjusters was invalid service (with the consequence that there was no service within the extended time for service of the claim form). The chronology is that the acknowledgement of service was filed on 18 March 2003 and the application seeking an order that the claim form had not been validly served was made on 10 April 2003 ie more than 14 days later. It is true that neither the district judge nor the judge made reference to CPR 11, although we were told that there was some reference to it in the course of argument. But the position is that the waiver point is fatal to the defendant's complaint that the claim form was not validly served. For these reasons, we do not give permission to appeal on the second ground of appeal.

The third ground of appeal

36. The third ground of appeal is that there were no grounds for dispensing with service of the claim form. But, as Mr James concedes, this issue becomes moot if it is not open to the defendant to challenge the service of the claim form on the loss adjusters. Since, for the reasons that we have given, such a challenge is not open to the defendant, no useful purpose would be served by giving permission to appeal on the third ground.

Conclusion

37. It follows that we refuse this application for permission to appeal.