Intellectual Property Enterprise Court

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY ENTERPRISE COURT

		Rolls Building 7 Rolls Buildings London EC4A 1NL
		16/12/2013

HHJ Hacon :

1. This is an application by the Defendant to set aside the Order of District Judge Lambert dated 15 August 2013 by which the Claimant was granted an extension of time to 30 September 2013 in which to serve his claim form. The Defendant also applies for the claim to be struck out. At the hearing the Defendant was represented by Ms Victoria Jones and the Claimant by Mr Tom Alkin, both of counsel.
2. The Claimant is a professional photographer. He alleges that the Defendant, a former client of his, has infringed his copyright in certain photographs. The Defendant is a retailer with a number of stores that sell beds and bedroom furniture.
3. The Claimant was commissioned by the Defendant to take photographs at shoots which took place on various dates between 6 December 2005 and 4 April 2007. The Claimant's case is that in line with the parties' conduct in previous such commissions the Defendant was granted a non-exclusive licence under the Claimant's copyright in the photographs to use the photographs in the Defendant's in-store album and in its next catalogue. The Claimant alleges that the Defendant used the photographs for purposes outside the licence and thus infringed the Claimant's copyright.
4. No Defence has yet been pleaded due to this application but I was informed that the Defendant denies the Claimant's allegations in their entirety.
5. The Claimant raised his complaint in a letter dated 24 February 2009 in a letter written by him to Andy Hills of the Defendant. The complaint was rejected by the Defendant but it was renewed in a letter dated 6 May 2011 to Mr Hills from the solicitors then acting for the Claimant. There followed further correspondence in which the Defendant continued to reject the claim.
6. The claim form was issued on 29 April 2013. The brief details of the claim are:

"Claim for artistic copyright, copyright infringement in photographs and/or breach of contract, injunction preventing further infringing activity, delivery up or destruction of infringing articles, damages or an account of profits, costs and interest."

7. In about April 2013 the Claimant instructed new solicitors who wrote to the Defendant's solicitors on 30 April 2013 informing them that a claim form had been issued against the Defendant in the Patents County Court "in order to protect our client's position" but a copy of it was not provided. Further correspondence followed.
8. Under CPR 7.5(1) the time for serving the claim form expired on 29 August 2013. On 6 August 2013 the Claimant applied without notice for an extension of time for service until 30 September 2013.
9. Under CPR 7.6(4)(a) the Claimant was obliged to supply evidence supporting the application when applying for the extension of time. That evidence, and thus the reasons advanced for requiring the extension of time, appeared in the Application Notice. Those reasons were:

• the Defendant had been informed that the claim form had been issued;

• no substantive reply to the Claimant's letter of complaint had been received until 17 July 2013 and the Claimant had not been able to progress its claim until receipt of that letter;

• the Claimant's counsel was abroad for the whole of August and would not be in a position (or would be in a very rushed position) to draft pleadings by 12 September 2013;

• the Claimant wished to have a further conference with counsel in the light of the letter dated 17 July 2013^[1].

10. District Judge Lambert made an Order granting the extension of time on 15 August 2013. No reasons for making the order were given.
11. The claim form and particulars of claim were served on 30 September 2013. On 11 October 2013 the Defendant acknowledged service, indicating both an intention to defend the claim and to contest jurisdiction.
12. By an Application Notice dated 24 October 2013 the Defendant applied to set aside the order of 15 August 2013 and to strike out the claim. The application is made under CPR rule 11 or alternatively under CPR rule 23.10. In relation to the latter the Defendant seeks an order extending the time for making the application which has expired under CPR 23.10(2).
13. Before me the Claimant took no point as to whether rule 11 or rule 23 was the correct rule under which to make this application, nor was the request for an extension of time in relation to rule 23 resisted, should it be needed. Accordingly since the Defendant is entitled to make this application by one or other route, there is no need for me to explore which of them is appropriate.

The Law – general principles

14. In Hashtroodi v Hancock [2004] 1 WLR 3206 CA the Court of Appeal considered the principles that govern an extension of time for service of a claim form under CPR 7.6. Dyson LJ, who delivered the judgment of the court, said this at paragraph 20:

"One of the important aims of the Woolf reforms was to introduce more discipline into the conduct of civil litigation. One of the ways of achieving this is to insist that time limits be adhered to unless there is good reason for a departure. In the Biguzzi case [1999] 1 WLR 1926 Lord Woolf MR said, at p 1933: "If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous culture of regarding time limits as being unimportant." "

15. The strict approach to the time limit for serving a claim form was also emphasised by Rix LJ in Aktas v Adepta [2010] EWCA Civ 1170; [2011] QB 894:

"[91] The reason why failure to serve in time has always been dealt with strictly (even if CPR r 7.6(3) represents a still further tightening of the rules where a retrospective request for an extension is made out of time) is in my judgment bound up with the fact that in England, unlike (all or most) civil law jurisdictions, proceedings are commenced when issued and not when served. However, it is not until service that a defendant has been given proper notice of the proceedings in question. Therefore, the additional time between issue and service is, in a way, an extension of the limitation period. A claimant can issue proceedings on the last day of the limitation period and can still, whatever risks he takes in doing so, enjoy a further four-month period until service, and his proceedings will still be in time. In such a system, it is important therefore that the courts strictly regulate the period granted for service. If it were otherwise, the statutory limitation period could be made elastic at the whim or sloppiness of the claimant or his solicitors. For the same reason, the argument that if late service were not permitted, the claimant would lose his claim, because it would become time-barred, becomes a barren excuse. But even where the claimant is well within the limitation period despite his delay in serving, there is a clear public interest in the rules and the courts curtailing the efficacy of a claim form which, because it has not been served, is not very different from an unposted letter. Therefore, the strictness with which the time for service is supervised has entirely valid public interest underpinnings which are quite separate from the doctrine of abuse of process. It is sufficient for the rules to provide for service within a specified time and for the courts to require claimants to adhere strictly to that time limit or else timeously provide a good reason for some dispensation."

16. Notwithstanding the general need for strict compliance with the four month deadline, under CPR 7.6 the court clearly has a discretion to allow an extension of time. The reasons for the failure by the claimant to serve the claim form in good time are highly material to the exercise of that discretion but not determinative. In Hashtroodi the Court of Appeal declined to give any hard and fast guidelines:

"[22] In view of the importance of this appeal, we have considered whether we should try to give some guidance as to how the discretion should be exercised beyond merely saying that it should be exercised in accordance with the overriding objective, and that the reason for the failure to serve within the specified period is a highly material factor. We do not, however, think that it would be right to go further than this…"

17. In Euro-Asian Oil SA v Abilo (UK) Ltd & ors [2013] EWHC 485 (Comm) Burton J reviewed the cases in relation to CPR 7.6 and whether the claimant had provided good reason for his failure to serve in time:

"[15] It is clear from the authorities that good reason is not required as a threshold: see Dyson LJ in Hashtroodi at paragraph 17:

"Against the background of the case law on [RSC] O 6 r 8, and in view of the introduction of new and stringent conditions in rule 7.6(3), it cannot have been intended that rule 7.6(2) should be construed as being subject to a condition that a "good reason" must be shown for failure to serve within the specified period, or indeed subject to any implied condition."

But the approach has been dealt with in a number of differing, although analogous ways:

i) Per Dyson LJ in Hashtroodi at paragraph 19:

"Whereas under the previous law, a plaintiff who was unable to show a good reason for not serving in time failed at the threshold, under the CPR a more calibrated approach is to be adopted. If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted … The weaker the reason, the more likely the court will be to refuse to grant the extension."

This was expressly recited by Rix LJ in Cecil v Bayat [2011] 1 WLR 3086 at paragraph 90.

ii) In Collier [v Williams [2006] 1 WLR 1945] Dyson LJ said at paragraph 131:

"If, as in the present case, there is no reason to justify the failure to serve the claim form in time, it should normally not be necessary to go further."

And at paragraph 133:

"…where there is no reason, or only a very weak reason, for not serving the claim form in time, the court is most unlikely to grant an extension of time."

Dyson LJ again gave the judgment of the court in Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806, when he said:

"The court is unlikely to grant an extension of time … if no good reason has been shown for the failure to serve." "

18. Thus, the poorer the reasons for the failure to serve the claim form in time, the less likely it will be that the court will grant an extension of time. The sort of reasons that are relevant will seldom if ever extend beyond reasons why the claimant had real difficulty in serving the claim form. In Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806 Dyson LJ (giving the judgment of the court) said

"[59] Nothing that we have said in this judgment should be interpreted as undermining the approach articulated in Hashtroodi's case [2004] 1 WLR 3206 and the later cases. In his judgment, the district judge said:

"In my experience, there are very few applications [without notice for an extension of time for service of the claim form] being made since the 2006 cases unless there are real difficulties in actual physical service. Even fewer are being granted." "

19. Among the reasons that will not qualify as good in this context, is the ground that a lack of substantive response by the defendant to the claimant's complaint made it difficult or wasteful in costs to draft Particulars of Claim. In such circumstances the claimant should serve the claim form within the 4 months and seek an extension of time to serve the Particulars of Claim – see Hoddinott at [38] and [41].
20. Immediately following the passage from paragraph 59 of Hoddinott quoted above, Dyson LJ said this in the same paragraph:

"But even where there is no good reason for failing to serve within the four months' period, the court will exceptionally exercise its discretion to grant an extension where CPR r 7.6(2) applies."

21. It follows that the grant of an extension of time may be appropriate, even in the complete absence of any good reason for failure to serve in time, provided there are exceptional circumstances.
22. What sort of circumstances qualify as relevant and exceptional? Significant among them are those which relate to the purposes for service of a claim form. Dyson LJ said this:

"[54] It is tempting to ask: what is the point in refusing to extend the time for service if the claimant can issue fresh proceedings? But service of the claim form serves three purposes. The first is to notify the defendant that the claimant has embarked on the formal process of litigation and to inform him of the nature of the claim. The second is to enable the defendant to participate in the process and have some say in the way in which the claim is prosecuted: until he has been served, the defendant may know that proceedings are likely to be issued, but he does not know for certain and he can do nothing to move things along. The third is to enable the court to control the litigation process. If extensions of time for serving pleadings or taking other steps are justified, they will be granted by the court. But until the claim form is served, the court has no part to play in the proceedings. A key element of the Woolf reforms was to entrust the court with far more control over proceedings than it had exercised under the previous regime. The rules must be applied so as to give effect to the overriding objective: this includes dealing with a case so as to ensure so far as is practicable that cases are dealt with expeditiously and fairly: CPR r 1.1(2)(d) . That is why the court is unlikely to grant an extension of time for service of the claim form under CPR r 7.6(2) if no good reason has been shown for the failure to serve within the four months' period."

23. In addition, a highly relevant factor (in a negative sense) is whether the claim would be time-barred if the claimant were to issue fresh proceedings. The court should not generally deprive the defendant of his expectation that the claim is no longer available to the claimant. It goes further: in Hoddinott Dyson LJ ruled (at [52]) that even if the matter is open to doubt, on an application to extend time for service of the claim form the court should not resolve the issue but make an assumption in the defendant's favour:

"Where there is doubt as to whether a claim has become time-barred since the date on which the claim form was issued, it is not appropriate to seek to resolve the issue on an application to extend the time for service or an application to set aside an extension of time for service. In such a case, the approach of the court should be to regard the fact that an extension of time might "disturb a defendant who is by now entitled to assume that his rights can no longer be disputed" as a matter of "considerable importance" when deciding whether or not to grant an extension of time for service: see Hashtroodi's case, para 18."

24. On the facts of Hoddinott, a successful application for an extension of time was made to a first District Judge (Rowe), which was set aside by a second District Judge (Daniel). The Court of Appeal concluded that even though the claimant had not provided good reasons for its failure to serve the claim form in time and indeed the extension should not have been granted, by the time of the application to set aside a further event, namely the service of a copy of the claim form on the defendant, was sufficient in combination with the fact that the no limitation issues arose, to tilt the balance in favour of allowing the extension of time to stand:

"[58] There was no good reason for the failure to serve within the four months' period. But it is the unusual combination of the fact that (i) the claim is clearly not even now time-barred and (ii) a copy of the claim form was sent to the defendant within the four months' period that leads us to the conclusion that the district judge should not have set aside the order. By the time the application came before District Judge Daniel, not only did he know these two facts, but he also knew that the claim form (accompanied by full particulars of claim) had been served on 21 November. In these circumstances, despite the absence of a good reason for not serving within the four months' period, we would set aside the order of the district judge. This conclusion is consistent with our earlier statement, at para 51, that on the material available to her, District Judge Rowe should not have made the order, since that material did not, of course, include the fact that a copy of the claim form was sent to the defendant on 14 September."

25. Thus it is relevant to look at the facts as of the date of the application to set aside an order granting an extension of time to serve the claim form, rather than focussing on whether the extension should have been made in the first place.
26. There was a further factor in Hoddinott. The Defendant had filed an acknowledgement of service which did not challenge the court's jurisdiction and had not applied under CPR 11(1) to challenge jurisdiction within 14 days of filing the acknowledgement. Accordingly, pursuant to CPR 11(5), the Defendant was treated as having accepted that the court should deal with the claim even if the time for service of the claim form should not have been extended. This was considered separately, in that it was not stated to be one of the exceptional reasons for permitting an extension of time (see paragraph 58). But it was another reason for allowing the appeal (see paragraph 60).

The arguments

27. In the present case the Defendant argues that none of the reasons given by the Claimant for an extension of time in the application before District Judge Lambert qualified as good reasons. It is pointed out that the Claimant's Application Notice sought the extension under CPR 3.1(2)(a) and that therefore the District Judge was not even directed towards considering the relevant matters that arise under CPR 7.6.
28. The Defendant further says that there are no exceptional circumstances which overcome the strict application of the four month time limit for serving the claim form.
29. In particular, as is common ground, there is a limitation issue in the present case. The alleged acts of infringement of the Claimant's copyright are stated in the Particulars of Claim to have begun on 6 December 2005. Those carried out before 30 April 2007 are time-barred in any event. But in addition if the Claimant was to be obliged to reissue proceedings now, in December 2013, all alleged infringements from 30 April 2007 up to the relevant date in December 2007 would also be time-barred.
30. Further, the Defendant argues, a copy of the claim form was not sent to the Defendants within the 4 month period for service. The three reasons given in Hoddinott for service of a claim form were referred to. First, although Defendant was informed of the claim by correspondence, the way in which the Claimant's case was put altered in the course of that correspondence. Secondly, the Defendant was not able to have any say in how the claim was prosecuted during the extended period in which the claim form was not served. Similarly and thirdly, the court could not control the litigation process during that time.
31. The Claimant puts his case in alternative ways. First, he says, the District Judge was right to grant the extension of time on the material before her. She knew from the Application Notice that the Defendant had been informed of the issue of the claim form. She would have realised that the effect of the extension of time on the limitation defence open to the Defendant would have been minimal. Particularly in this court, the sensible and proportionate approach was to grant the extension.
32. Secondly, even if the District Judge was wrong to grant the extension of time, on the facts now before the court it is appropriate to allow the order to stand. If the position with regard to the limitation issues were not clear to the District Judge, they are plainly before the court now.
33. Thirdly, if the fact that the Defendant would lose its limitation defence in relation to some of the acts of infringement is to be treated as relevant, this could be neutralised by disbarring the Claimant from claiming damages in relation to alleged acts of infringement which occurred more than 6 years before the date on which this judgment is handed down.
34. In oral argument Mr Alkin largely placed reliance on this third way of putting the Claimant's case. He said that since the Claimant was prepared to abandon his claim to damages in relation to acts done more than 6 years previously, even on the assumption that the District Judge should not have granted an extension of time, this case was completely analogous with Hoddinott. The limitation issue would be 'carved out' by the partial abandonment of the claim for damages so that in effect there would be no limitation issue at all.
35. As for the consequences of delay in serving the claim form, there were none that made any difference. The Defendant had been fully informed of the claim by correspondence before the 4 month period for service of the claim form had expired, so providing a copy would have added nothing. It was not relevant that the Claimant had altered his approach as to how the claim was to be justified in law, the claim as it was stated in the claim form remained constant.
36. Regarding the desirability of the Defendant being able to participate in the process of the claim, Mr Alkin argued that it had every opportunity to do so. The Defendant had been notified by a letter dated 30 April 2013 that a claim form had been issued. If the Defendant had wanted to move things along then pursuant to CPR 7.7 it could have applied to the court to serve the claim form or discontinue the claim. Such an application would also have enabled the court to control the litigation process. In any event, the extension of time was modest, only four weeks.

Discussion

37. The first point to consider is whether there were good reasons for the Claimant's failure to serve the claim form within the 4 month period. In my view there were none advanced before District Judge Lambert or before this court. The slowness by the Defendant in responding to the claim and the Claimant's counsel being away on holiday did not qualify.
38. Therefore in order to overcome the usual strict rule on compliance with the four month deadline for serving its claim form, the Claimant must point to exceptional circumstances. He points to two at the time of the application to District Judge Lambert, namely that the Defendant had been told the claim form had been issued and that most of the infringing acts complained of were not time-barred.
39. I will return below to the notification that the claim form had been issued. The fact that a limitation defence open to the Defendant was lost because the Claimant was allowed to extend the period of service of the claim form was by itself sufficient to exclude the Claimant from being entitled, exceptionally, to an extension of time. It seems to me that whether the limitation defence was in relation to large or small proportion of the total infringements alleged is not to the point. The discretion to give the Claimant further time to serve the claim form should not be exercised where there is any such loss to the Defendant which cannot be characterised as de minimis.
40. This brings me to the third way in which Claimant puts his case. There would be no loss to the Defendant because of time-barred claims if the Claimant were to be excluded from claiming damages in relation to alleged infringements which occurred more than 6 years before the date on which this judgment is handed down – taken to be the date on which the Claimant would re-issue the claim.
41. That is true, but I do not accept that this would put the present case on all fours with Hoddinott. First, there is a difference between receiving correspondence setting out allegations and seeing the content of a claim form. Allegations in correspondence may or may not coincide in nature and scope with what a claimant sets out in his claim form. Only the latter expresses the precise nature of the claim that is being raised in the litigation.
42. Secondly, in relation to the second and third purposes of the service of a claim form referred to by Dyson LJ in Hoddinott, I do not think it is an answer to say that the burden rests on the defendant to move things along, by means of CPR 7.7, if he wishes to have a say in the progress of the claim and thereby also giving some control to the court. Even where, as here, the defendant knows that the claim form has been issued he may be entitled to take the view that the claimant is unlikely to pursue the claim and therefore the simplest and cheapest approach is to let sleeping dogs lie. I was told by Ms Jones that in the present case the defendant thought that the claim had been abandoned. If that is so, I can see why no application under CPR 7.7 was made.
43. The approach that the Claimant could and should have taken was to serve the claim form within the four months and then to apply for an extension of time to serve the Particulars of Claim. The requirements for such an extension are necessarily less stringent and that extension of time, if appropriate, would have achieved what the Claimant wanted.
44. I will therefore set aside paragraph 1 of the Order of District Judge Lambert dated 15 August 2013. Counsel for the Claimant did not suggest that the claim should not be struck out if that Order was set aside and so I will also strike out the claim.
45. The parties should within 3 days after the handing down of this judgment file written arguments on the form of order, in particular with regard to costs, attaching a proposed draft.

Note 1   The Application Notice refers to ‘the Defendant’s letter of 16 July’, apparently in error    [Back]