England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM SOUTHPORT COUNTY COURT
District Judge Bellamy
4DC01767

		Royal Courts of Justice Strand, London, WC2A 2LL
		19th October 2006

Lord Justice Neuberger :

Introduction

1. This is an appeal from a decision of District Judge Bellamy given in the Southport County Court on 21 November 2005. It raises yet further points in relation to the provisions of the CPR regarding service of a claim form. There being no authority on these points, the appeal was transferred to the Court of appeal under CPR 52.14. The notice of appeal raises the following questions:

i) Can the parties agree an extension of time for service of a claim form outside the period specified in r. 7.5?

ii) If so, must the agreement be written, and if so in what form?

iii) If a written agreement is required by the CPR, can a claimant nonetheless invoke estoppel in order to rely upon an oral agreement?

iv) What are the consequences of the answers to the above questions in this case?

2. Rule 7.5 provides as follows:

"7.5 (1) After a claim form has been issued, it must be served on the defendant.

(2) The general rule is that a claim form must be served within 4 months after the date of issue.

(3) The period for service is 6 months where the claim form is to be served out of the jurisdiction."

3. Rule 7.6 is headed "Extension of time for serving a claim form". It provides as follows:

"7.6 (1) The claimant may apply for an order extending the period within which the claim form may be served.

(2) The general rule is that an application to extend the time for service must be made –

(a) within the period for serving the claim form 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 service of the claim form 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 –

(a) the court has been unable to serve the claim form; or

(b) the claimant has taken all reasonable steps to serve the claim form but has been unable to do so; and

(c) in either case, the claimant has acted promptly in making the application.

(4) An application for an order extending the time for service –

(a) must be supported by evidence; and

(b) may be made without notice."

4. The only other provision of the CPR to which reference should be made at this stage is r. 2.11, which provides as follows:

"2.11 Unless these Rules or a practice direction provide otherwise or the court orders otherwise, the time specified by a rule or by the court for a person to do any act may be varied by the written agreement of the parties.

(Rules 3.8 (sanctions have effect unless defaulting party obtains relief), 28.4 (variation of case management timetable – fast track) and 29.5 (variation of case management timetable – multi-track), provide for time limits that cannot be varied by agreement between the parties)"

The facts of this case

5. The claimant, Mr Ian Thomas, suffered an accident at HM Prison Liverpool, where he worked as a prison officer. In January 2003, the liability of the defendant, the Home Office, was agreed on the basis of the claimant having been 20% contributorily negligent. On 1 October 2004, the claimant's solicitors, Paul Watson & Co. issued a claim form out of the Southport County Court seeking damages from the defendant for personal injury. The claim form should have been served by 1 February 2005, pursuant to the provisions of r. 7.5(2). However, it was not in fact served until 23 June 2005.
6. After (and indeed before) the issue of proceedings, the claimant's solicitors had been in touch with the Treasury Solicitor, who was acting on behalf of the defendant, partly with a view to discussing the proceedings, and partly with a view to trying to settle the claim. On 21 January 2005, Ms Perks, on behalf of the Treasury Solicitor, agreed on the telephone with Ms Horn of the claimant's solicitors, to an extension of one month for the service of the claim form. Ms Perks recorded this agreement in a file note. On 24 February 2005, in another telephone conversation, Ms Rattee, on behalf of the Treasury Solicitor, agreed a further extension of one month with Ms Horn. Each solicitor recorded this agreement in a file note stating that it expired on 1 April 2005. On the same day, 24 February 2005, the claimant's solicitors wrote to the Treasury Solicitor referring to the fact that the Treasury Solicitor had "agreed a further extension for service until 1 April 2005".
7. Meanwhile, the solicitors continued negotiating, particularly in connection with the medical evidence. On 21 March 2005, the Treasury Solicitor wrote to the claimant's solicitors in connection with the evidence of one of the medical experts, enclosing a letter of the same date which the Treasury Solicitor had sent to the expert. That enclosed letter referred to the fact that the Treasury Solicitor had "allowed the claimant's solicitors a further one month extension to serve proceedings in this matter which expires 1 April 2005."
8. On 30 March 2005, Ms Perks had another telephone conversation with Ms Horn, in which they agreed a further month's extension. They each minuted this agreement in a file note, Ms Perks's note recording this further month as expiring on 6 May 2005 and that of Ms Horn recording it as 1 May 2005.
9. On 29 April 2005, Ms Furnari of the Treasury Solicitor agreed a short further extension of seven days with Ms Horn on the telephone, which was recorded by Ms Horn in a file note on the same day. On 4 May 2005, in a letter to the claimant's solicitor, Ms Perks stated that she was prepared to accord the claimant "an extension of time to serve particulars 21 days from today's date". That extension was recorded as "a further 21 days" extension in a file note prepared by Ms Horn on 6 May 2005.
10. On 19 May 2005, Ms Perks and Ms Horn agreed another extension of one month. In a file note she prepared on the same day, Ms Perks recorded this as being "ONE FINAL MONTH to settle, thereafter they would have to issue proceedings." In a file note dated 23 May 2005, Ms Horn recorded the Treasury Solicitor as "granting one further 1 month extension for service".
11. The claimant's solicitors sent the claim form to the Treasury Solicitor on 21 June 2005, and accordingly it is common ground that it was deemed to have been served on the defendant on 23 June 2005.
12. The defendant applied to strike out the claim on the basis that the claim form had been served out of time. Initially, the defendant's case was based on the proposition that the final extension of time it had granted to the claimant expired on 19 June 2005, and accordingly the claim form had been served four days late. However, subsequently the defendant raised an additional, anterior, point, namely that there had been no valid extension of time for the service of the claim form beyond that stipulated by r. 7.5, and accordingly the claim form had been served nearly five months late.

Can the parties agree an extension of time for the service of a claim form?

13. On behalf of the defendant, it was contended that r. 2.11 does not apply to the time limit laid down by r. 7.5. Thus, it was said that it is not open to the parties validly to agree an extension of time for the service of a claim form.
14. In my judgment, Mr Tim Grover, who appeared for the claimant, was right in his contention that it is open to parties to agree an extension of time for the service of a claim form; in other words, the operation of r. 2.11 is not excluded in relation to the time limits laid down in r. 7.5.
15. First, there is no express provision in r. 7.5, or indeed in r. 7.6, which can fairly be said to exclude the applicability of r. 2.11 to the time limit in r. 7.5. I accept that it would be possible for the operation of r. 2.11 to be excluded by implication, rather than expressly, from a particular time limit within the CPR. However, it seems to me that the court should be at least as slow to imply a term, particularly one of this nature, into the CPR as it is in relation to a contract. In my opinion, one should only imply the exclusion of r. 2.11 from a time limit in the CPR if it is necessary to do so in order to enable the rules to be efficacious in the relevant connection, or if it is obvious that r. 2.11 was not intended to be applicable.
16. I am unpersuaded by the District Judge's view that it cannot have been intended that the parties should be able to extend the time limit in r. 7.5 because that would be inconsistent with the provisions of r. 7.6. It does not seem to me in any way contrary to logic or principle that the parties should be able to extend time, if they wish to do so, in circumstances in which the court could not do so.
17. Further, as consideration of the three rules referred to in the second sentence of r. 2.11 demonstrates, the draftsman of the CPR was quite aware of the need to exclude the possibility of the parties agreeing an extension of time where he wished to do so, and knew how to make that intention clear. Indeed, the fact that any reference to r. 7.5 is conspicuously absent from the second sentence of r. 2.11 is a pointer in favour of the claimant's case on the present point (although I readily accept the submission of Mr Ashley Serr for the defendant that that this cannot be a decisive point).
18. To my mind, Mr Serr's most powerful point is that, if r. 2.11 applies to the time limit in r. 7.5, it would be possible for the parties to extend time virtually indefinitely for the service of the claim form, without the court being given the opportunity at any time to intervene, and that such a construction is inconsistent with an underlying principle of the CPR. That underlying principle is that parties should proceed expeditiously with proceedings, and that the court should be in a position to ensure that proceedings do not stagnate and that, if they appear to be proceeding slowly or not at all, should obtain a satisfactory explanation from the parties as to what is going on.
19. In my view, however, there are two answers to this point. The first is that the terms of rr. 2.11, 7.5 and 7.6, particularly when read in the context of the other rules referred to in the second sentence of r. 2.11, are too clear to justify implying an exclusion of r. 2.11 from the ambit of r. 7.5 simply on the basis that it is rather surprising that parties can extend time, in theory indefinitely, for the service of a claim form, without the court at any time becoming involved.
20. Secondly, as Lloyd LJ pointed out during the argument, there is a substantial difference between the time limit for the service of the claim form in r. 7.5 and the time limits in respect of which the operation of r. 2.11 is expressly excluded. Rule 3.8 is concerned with sanctions where "a party has failed to comply with a rule, practice direction or court order", and it is scarcely surprising that there should be a principle that parties should not be completely free to agree that a party should, as it were, be released from that sanction. Similarly, if the parties could agree the variation of a case management timetable, it would risk interfering with milestones, and, indeed, with a hearing date which had been fixed by the court or by agreement with the parties and lodged with the court. The courts, and indeed other court users, obviously have an interest in those dates being adhered to, so, again, it is readily understandable that the parties to a case should not be completely free to agree a variation of such a timetable without the involvement of the court.
21. Although one could well see why it might be desirable for the court to be involved in any agreement to extend time for the service of a claim form, it does not seem to me that it is by any means obvious that the court should necessarily be involved. Furthermore, it may have been presumed by the draftsman of the CPR that it was unlikely that a defendant would agree a very prolonged deferral of the service of the claim form once it had been issued.

What is required by rule 2.11?

22. It is accepted on behalf of the claimant that the requirement of r. 2.11 that there be "a written agreement between the parties" means that there must be some written document. However, there was a sharp division between the parties as to what type of document or documents would satisfy that requirement.
23. Before deciding that point, it is, however, necessary to consider an anterior point made on behalf of the claimant, namely that once there has been one variation which is a "written agreement", any subsequent variation will be valid even if made orally. This argument, as reformulated by Lloyd LJ in argument, is that r. 2.11 is concerned with stipulating that a variation to the time limit in r. 7.5 must be in writing, but that any subsequent variation, being a variation to the time limit agreed in the written variation, is not a variation of the time limit "specified by a rule".
24. Ingenious though that argument is, it must be rejected, in my view. First, as a matter of principle, it seems to me little short of ridiculous to conclude that r. 2.11 requires the first variation to be in a "written agreement", but permits any further variation to be oral, or even to arise implicitly in some way. Secondly, ignoring r. 7.6 for the moment, it seems to me that where a claim form is served outside the time limit specified in r. 7.5, the court could only hold that the claim form had been validly served if satisfied that there had been a variation (or series of variations) of the time limit, and such variation or variations would all have to satisfy r. 2.11. Thirdly, as pointed out by Jacob LJ, the logic of the claimant's argument in this connection is that, once there has been one written variation, there could be no further variations, because there would, on this argument, be no express right to vary the initial variation, and the natural effect of the rules I have been discussing is that the only variations (whether by the court or by the parties) to the time limits contained in r. 7.5 are those permitted expressly in the CPR.
25. That brings me, then, to the question of what constitutes a "written agreement of the parties". Clearly, it would encompass a single document signed by both parties. However, contrary to Mr Serr's submissions, I see no grounds, either in principle or as a matter of language, for limiting it to a single document. I can see no reason why an exchange of letters between the two solicitors concerned, in which the extension of time is agreed, would not constitute a "written agreement".
26. An oral agreement which is then confirmed in writing by both sides appears to me also to be within the concept of a "written agreement". The oral agreement itself would not, of course, be capable of being a written agreement. However, it seems to me that where, following the oral agreement, the two solicitors exchange letters confirming what they have agreed, the exchange of letters amounts to an agreement in writing that they have agreed (albeit orally) an extension of time: to my mind, it would, at best, be no more than a quibble to contend that an agreement in writing that the parties have agreed something orally does not constitute a "written agreement of the parties". If the oral agreement, because of the very fact that it was oral, could not validly effect a variation, then it seems to me that there is no reason why it cannot be said that the time limit has been "varied by the written agreement of the parties" even though that written agreement was an agreement between the parties that they had orally agreed the variation.
27. I think things get more difficult where the parties, having orally agreed a variation, each subsequently refer to what has been agreed in correspondence passing between them. An example, albeit of a slightly unusual nature, may be found in the facts of the present case. The claimant's solicitors effectively confirmed the extension to the 1 April in their letter of 24 February 2005 (and if the defendant's had replied in a letter confirming this extension, then there would, for the reasons I have just given, have been a written agreement in my view). However, what happened is that, almost four weeks later, the defendant's solicitor wrote to the claimant's solicitors in connection with a different matter, namely the expert evidence, and enclosed a letter to the expert in which the solicitor stated that an extension to 1 April 2005 had been agreed.
28. With some hesitation, I have reached the conclusion that this was simply insufficient to amount to a "written agreement" as contemplated by r. 2.11. First, it seems to me to involve an impermissible stretching of the expression to cover the contents of a letter, whose purpose had nothing whatsoever to do with agreeing, but was merely communicating to a third party what had been orally agreed. Secondly, it appears to me undesirable that the question of whether or not there has been a valid agreement should turn on what a solicitor happens to write in subsequent correspondence which was not intended to bear on the question of agreement at all. To my mind, the concept of a "written agreement between the parties", particularly in the context of the CPR, involves a document or exchange of documents which is intended to constitute the agreement or to confirm or record the agreement. Because one cannot envisage every possibility which might eventuate, I would not want this to be seen as being entirely prescriptive.
29. Having said that, it seems to me clear that an oral agreement between two solicitors, subsequently recorded in a letter sent by one solicitor to the other but not replied to by the other, cannot possibly be said to constitute a "written agreement of the parties". Similarly, an oral agreement between two solicitors, evidenced by an internal confirmatory note by one solicitor, or even by each of the solicitors, cannot constitute a written agreement, unless, of course, the internal notes are exchanged (or, for instance, one solicitor sends its internal note to the other, and the other in some way confirms in writing its relevant contents).

The argument that an estoppel can arise from an oral agreement

30. In the claimant's notice of appeal and in Mr Grover's skeleton argument in support, it was contended that, if the facts of the present case mean that there was no sufficient "written agreement" for an extension of time for service of the claim form into June 2005, then the defendant was nonetheless estopped from denying that there was such an agreement, or, to put it another way, the defendant was estopped from relying on the time limit contained in r. 7.5, on the basis that there had been an oral representation that the claimant need not serve the claim form, upon which the claimant had relied by not serving the claim form until June 2005.
31. Such an argument would face obvious difficulty on the basis that it would effectively render nugatory the express requirement of r. 2.11 that any agreement to extend time be "written". Furthermore, there would be obvious force in the argument that, by entering into an oral agreement to extend time, it could not clearly be said that, without more, the defendant was unequivocally indicating that it would not insist on the strict legal requirement that any such agreement, in order to be effective, be in writing.
32. In the event, when faced with the reasoning of the House of Lords in Actionstrength Ltd –v- International Glass Engineering IN. GL. EN SpA [2003] UKHL 17 (especially at paragraphs 9, 28, 35 and 52-3), on a not dissimilar estoppel argument in relation to section 4 of the Statute of Frauds 1677, Mr Grover abandoned the point.
33. In these circumstances, while it is only right to say that, as at present advised, it seems to me that Mr Grover was entirely realistic in abandoning the argument, it is inappropriate formally to rule on it.

The disposal of this appeal

34. I turn to the conclusions reached by the District Judge below, and my opinion about those conclusions. First, he decided that it was not open, as a matter of principle to a claimant to rely upon an agreement under r. 2.11 to extend time for the service of a claim form under r. 7.5. For the reasons given above, I do not agree: it seems to me that r. 2.11 can be invoked by a claimant, if the facts of the case warrant it, to justify the contention that the parties had agreed an extension of time for the service of a claim form.
35. The District Judge alternatively concluded that, if, as I think, r. 2.11 could be relied on by a claimant in such a case, at least some of the extensions of time in the present case constituted "written agreements" within r. 2.11, although, as I read his judgment, he did not think that all the extensions could be so characterised. In my judgment, again for the reasons discussed, none of the extensions of time which were orally agreed in the present case could fairly be characterised as falling within the ambit of r. 2.11.
36. The only extension which, in my view, even gets near satisfying r. 2.11 is that agreed in March 2005. As I have explained, the claimant is at least able to point to a letter emanating from each solicitor to the other which records the oral agreement. However, the letter of 21 March 2005 from the Treasury Solicitor to the claimant's solicitors enclosed a copy letter to a third party which merely referred to the orally agreed extension of time, almost incidentally. However, for the reasons already given, I do not think it can fairly be said that there was, even in relation to that extension, a "written agreement" sufficient to satisfy r. 2.11.
37. Even if there was a sufficient "written agreement" in relation to the extension of time to 1 April 2005, that could not assist the claimant, because there is, not on any view a written agreement in relation to any of the subsequent extensions of time, and in particular the extension into June 2005.
38. The District Judge expressed no view on the estoppel argument in relation to the present case, and, for the reasons given above, I propose to say no more about it either.
39. Finally, the District Judge had to decide whether, if the "final" extension of time granted by the Treasury Solicitor to the claimant's solicitors on 19 May 2005 could be relied on by the claimant, the claim form was or would have been served in time. The issue turned on whether the "one final month" referred to in Ms Perks's note of 19 May 2005 ran from the date of the oral agreement, and therefore expired on 19 June 2005, as the defendant contended, or whether as the claimant contended, the one month ran from the expiry of the previous extension (recorded as being "21 days from [4 May 2005]") i.e. to 25 June 2005. If the defendant's interpretation is correct, then, even if all the extensions of time which had been agreed were effectively agreed, the claim form was still served out of time.
40. This issue involves deciding what was agreed between Ms Perks of the Treasury Solicitor and Ms Horn of the claimant's solicitors on the telephone on 19 May 2005. The difficulty of deciding what two solicitors agreed some time ago in a telephone conversation relating to a matter that may not have seemed particularly important at the time highlights the wisdom of the requirement of r. 2.11 that any agreement for an extension of time be in writing, and provides a practical reason, in addition to any reason of principle, why it should not be permissible to rely on an oral arrangement whether in contract, estoppel or any other basis to establish an agreed extension of time.
41. What was written down by Ms Perks and Ms Horn in their respective internal notes appears to be capable of bearing either meaning. The bare reference to "one month" in Ms Perks's note seems to me, albeit very much on balance, to be more consistent with the one month running from the date of the discussion, whereas the reference in Ms Horn's note to one "further month" could be said to be, again albeit only on balance, somewhat more consistent with the month in question running from the expiry of the previous period. Little assistance could be gained from any previous communication between the two solicitors in relation to extensions, because, while the earlier subsequent extensions appeared to run from the expiry of the previous extension, the immediately preceding extension of 21 days plainly ran from the date on which it was granted.
42. As I have mentioned, there was no oral evidence before the District Judge from either Ms Perks or Ms Horn as to what had been agreed. However, exhibited to the witness statement in support of the defendant's case was an attendance note of a meeting with Ms Perks, who, on being shown her attendance note of 19 May and being told of the date of the service of the claim form, expressed the view that the claim form was served out of time. It cannot be said that that evidence was particularly powerful, because it is unclear to what extent, if any, her expression of opinion was based on actual recollection, and whether her opinion would have remained the same if she had been shown any other documents relating to the extensions of time granted in this case, or indeed had been cross-examined about the basis of her view. However, it was the only evidence of the view of either of the participants to the conversation of 19 May to what had transpired, and, in the context of an application where it was agreed (albeit perhaps only implicitly) that there would be no oral evidence, it was evidence which the District Judge was entitled to rely on, indeed obliged to take into account.
43. The District Judge's findings that the final extension of time orally granted on 19 May 2005 ran from the date of grant, and therefore expired on 19 June 2005, was ultimately a question of fact, namely as to what had been agreed in the telephone conversation of 19 May 2005. In those circumstances, the question for this court on appeal is not what we would have decided, but whether the District Judge reached a conclusion which he was entitled to reach. In all the circumstances I have described, it seems to me that he was plainly entitled to reach the conclusion that he did, and that we should not interfere with it.

Conclusion

44. In these circumstances, it therefore follows that, even if it was open to the claimant to rely upon the extensions of time granted by the defendant, the claim form was served out of time. I would therefore dismiss this appeal, both on the basis that there was no effective extension of time granted, and on the basis that even if effective extensions of time had been granted, the claim form was still served out of time.
45. Finally, it is right to mention that, notwithstanding that the limitation period for bringing fresh proceedings has long since expired, it may nonetheless be open to the claimant to issue such proceedings, notwithstanding that the present proceedings will have been struck out, in the light of the provisions of section 33 of the Limitation Act 1980 – see Horton v Sadler [2006] UKHL 27. We were invited to express a view, or at least to give guidelines, as to the attitude to be adopted by the court to the argument that it should exercise its jurisdiction under section 33(1), in the light of the fact that the reason for the claimant needing to invoke that section would be the failure to serve the claim form in these proceedings. It seems to me that we should not do so. The question is hypothetical, as it relates to an application which has not been made in proceedings which have not yet been issued. In any event, it would be wrong to express a view on the weight to be given to one point, in circumstances where there may be further evidence to be given in relation to it, and where there may well be many other points which are said to be relevant.
46. In all these circumstances, I would, for my part, simply order that the appeal should be dismissed.

Lord Justice Lloyd

47. I agree with Neuberger LJ's judgment, and with Jacob LJ's observations about good practice.

Lord Justice Jacob

48. I agree. I would only add two observations about good practice which, if it had been followed, would have avoided what happened here. First it is always desirable that agreements between solicitors be reduced to writing and – given the ease of communication by email – these days, hardly a burden. Second, when agreements (or court orders) about the date by which a thing is to be done are made, it is always better to specify that date precisely rather than by reference to a period such a week or a month. There is always room for misunderstandings or accidentally fixing a weekend or Bank Holiday if time periods are used. Old hands wisely use "On or before the [blank] day of [blank]."