England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		30 July 2003

Mr Justice Tugendhat :

1. On 24 April 1999 the Claimant, then aged twenty, suffered a very serious traumatic brain injury at Tamworth Leisure Centre. The Centre had a dry ski slope, and the Claimant alleges that he fell and suffered the injury there as a result of the breach of duty of the Respondents. The Claimant appeals from the order of Master Leslie made on 11 March 2003. The Claim Form had been issued on 23 April 2002, and time for service of it had been extended to 23 December 2002 by Master Leslie on 8 August 2002, by an order made on an application without notice. The Claim Form was served on 19 December 2002. The order of 11 March set aside the order of 8 August 2002, and the service of the Claim Form.
2. The order of 11 March 2003 was made on the Defendant's application in a Notice issued on 17 January 2003. The Defendant recognised that that application was out of time, and the Notice included an application for an extension of time for making it. The grounds of the Application were that there had been insufficient grounds for extending the time for service of the Claim Form, which should have been served within four months of issue (that is 23 August 2003) and that the effect of the order of 8 August 2002 was to deprive the Defendant of a limitation defence.
3. It is probably correct that the order of 8 August 2002 did deprive the Defendant of a limitation defence, but that requires some explanation. Although the Claim Form was issued the day before the third anniversary of the injury, it is common ground that that was not the day before the relevant limitation period expired. The reason for this is that by s.11(4) of the Limitation Act 1980 the period runs from the date on which the cause of action accrued, or, the date of knowledge, if later, of the person injured. This was specifically accepted in the Skeleton Argument of the Defendant before the Master, although the skeleton argument does also state, erroneously, that the limitation period expired on 24 April 2002. In fact, the evidence before the Master in August 2002 (a witness statement of Martine Pilling) had made clear that Claimant had been sedated and in intensive care for some weeks after the injury.
4. The medical report of Dr Charles Clarke, subsequently obtained on 31 October 2002 (which was to hand at the hearing on 11 March 2003), gives the estimated period of post traumatic amnesia as around eleven weeks. So while the precise date on which the limitation period started to run is not yet established or agreed, it is agreed that it was probably a number of weeks after the date on which the Claim Form was issued. I assume for the purposes of this judgment that the period after the injury, but before the date of knowledge, was less than the four months by which the Master extended the time for service. It is clear that a limitation defence would not have been available if the Claim Form had been served without an extension (23 August 2002), and would probably not have been available if a Claim Form had been issued in June and served without an extension of time in October. It is unlikely that, without an extension of time, a Claim Form could have been served on the date this one was served without there being a limitation defence available to the Defendant.
5. The solicitors for Claimant had been instructed on 22 April 2002. It was the following day that they issued the proceedings. By CPR Part 7.5 the Claim Form had to be served within 4 months. By CPR Part 7.4 Particulars of Claim had to be served within 14 days after the service of the claim form. By CPR Part 16.2(1)(d), 16.3 and para 4.1 of the Practice Direction supplemental to it, the Particulars of Claim were required to contain, or have attached to them, specified information and documents. These included a medical report and details of the amount claimed. In addition, the solicitors were mindful of the need to follow the spirit of the Pre-Action Protocol for Personal Injury Claims (see para 2.4). This need put them in a difficult position. When solicitors are instructed just before the third anniversary of an accident, there may be some tension between the need to make sure that the Claim Form is issued in time (even when the date of relevant knowledge clearly delays the start of the limitation period to some extent), and the need to act in the spirit of the Pre Action Protocol. There will be cases where the four month period for service of the Claim Form will appear unlikely to be sufficient for the taking of instructions, preparation of the Particulars of Claim, and the steps required to be followed by the Protocol. The solicitors appear to have thought that this was such a case. It appears to be that that explains their subsequent actions.
6. The Claimant is a young man, whose employment has been affected by the accident, and it may perhaps be inferred from the solicitors' reference to insurance that his means are limited. However, the evidence does not explain why the Claimant did not instruct solicitors before he did, nor why the solicitors had not made further progress than they had made at the time they made the application in August.
7. By 7^th August 2002, the date of Martine Pilling's witness statement, the solicitors had obtained an expert report from a consultant on winter sports which was the basis of the case on liability subsequently advanced. He had been instructed on 7 May and reported on 25 June. They had also obtained some advice from counsel. They had not obtained the medical report, nor had they obtained a report from an employment consultant who might assist in the preparation of a claim for loss of earnings. In addition, they had not yet contacted the witness who accompanied the Claimant at the time of the injury, who was described in the witness statement as not hostile, but difficult to contact. The final concern expressed in the witness statement was that the evidence be available for underwriters to assess the strength of the case with a view to the Claimant obtaining after the event insurance.
8. It was upon evidence to the foregoing effect that the extension of time of four months was sought in August 2002. It was a prospective application, pursuant to CPR Part 7.6(1) and (2). Importantly, the witness statement had attached to it the draft of a letter of claim in the form of Annex A to the Pre-Action Protocol for Personal Injury Claims. The witness statement stated that, upon the extension being granted, the solicitors would send such a letter to the Defendant, which would allow them 90 days in which to investigate liability. That appears to be a reference to the three month timescale for a defendant to investigate a claim, which is set down in the Pre Action Protocol para 3.7. CPR Part 7.6(2), unlike 7.6(3), lays down no conditions for the making of the order, and there is little guidance in the case law apart from Jones v Wrekin District Council (ureported) 9 July 1999. I am indebted to counsel for the extensive research which they have made to establish this fact.
9. In his judgment of 11 March 2003 the Master stated that the Claimant should not have adopted the course of applying for an extension of time for serving the Claim Form. What he should have done, said the Master, was to serve the Claim Form and apply to the Court on notice to the Defendant for an extension of time for service of the Particulars of Claim, or of the medical report, or of the other material required by the Rules, if these could not be obtained by the end of the primary period of validity of the Claim Form. In saying this the Master was clearly right. In Jones v Wrekin, Lord Woolf MR said that the failure to get your full medical evidence in order cannot be a justification for not serving proceedings, so far as the CPR are concerned. However, as that case also shows, a party who mistakenly adopts the course adopted by the Claimant will not necessarily have the service of proceedings set aside if the Court does grant an extension for which there are not proper grounds.
10. The reason why the Master gave an extension of time to the Defendant to apply to set aside service of the Claim Form is that he considered that the delay was either two or three and a half weeks, and that this was, in his view, a technicality 'when the claimant himself has been so late', and because the overriding objective required him to 'look at the real merits of the case rather than decide whether the fine print of the rules have been complied with fully or at all'. The soundness of the Master's decision to grant an extension of time to the Defendant is therefore to be judged in the light of his view as to the lateness of the claimant himself. The two are linked.
11. The uncertainty as to whether the Defendant's delay was two, or three and a half, weeks arose because it was unclear under which provision of the CPR the Defendant's application fell to be considered. The application might be considered under CPR Part 23.10, which applies to setting aside orders made without notice. For this the time limit is seven days after the date on which the order was served on the person making the application. Alternatively, the Defendant's application might be considered under CPR Part 11 which sets out the procedure for disputing the court's jurisdiction. By CPR Part 11(4) an application under that rule must be made within 14 days after the filing of an acknowledgement of service. In my view the application should be dealt with under Part 11, but it makes no difference on the facts of the case. In BUA International Ltd v Hai Hing Shipping Co Ltd (The 'Hai Hing') [2000] 1 Lloyd's Rep 300 at p 305 Rix J said: 'Therefore it remains equally the case under the CPR, as it was under the RSC, that an application to discharge without notice orders granting permission to serve out of the jurisdiction or to extend the time for service must in the context of a challenge to the jurisdiction follow the timetable laid down for such challenges and not the general rule in CPR 23.10' (emphasis added).
12. The Master referred to the delay by the claimant in his judgment (of eighteen paragraphs) as follows. Clearly he attached great importance to it.para 2 – 'He consulted his solicitors on 22^nd April 2002, two days before the expiry of the limitation period …..…'para 10 – '… when the claimant himself has been so late ….'para 15 – 'The claimant, for whatever reason, left instructing his solicitors to almost the very last possible moment before the expiration of the limitation period …'para 17 – 'It seems to me that the CPR requires parties to get on with their case and if they cannot get on with the case then to apply to the court to directions to assist them. The claimant did not do that in the way he ought to have done in this case. Leaving it to the last moment, I am bound to say, it appears to me, that he was the author of his own misfortune in not giving his solicitors enough time to deal with it, but they ought to have advised him to have the claim form served and then to have applied for further time'.Para 18 – 'The law is clear: three years limitation period plus four months for service. It is a generous period of time, if claimants cannot meet it then they must, I am afraid, pay the price'.
13. For the reasons explained above, the Master was mistaken in his view that the claimant had left instructing his solicitors to the last minute. Mr Stevens, counsel for the Defendant, also appeared for the Defendant before the Master in March. He candidly told me that neither party had drawn to the attention of the Master that the claimant may not have had the requisite knowledge for the period of limitation to expire on 23 April 2002, as the Master had assumed that it did. Mr Stevens also told me, and I accept, that he had made no submissions to the Master along the lines of the passages cited above in relation to delay. It follows in my view that the Master approached the exercise of his discretion on a mistaken view of the facts. That applies both to the exercise of his discretion to give an extension of time to the Defendant, and to the exercise of his discretion to set aside the order he had made in August, because, as I have held, the two were linked.
14. On this basis it follows that this court conducting a review of the Master's decision is entitled to exercise the discretion afresh. I would add that in my view the Master also took a wrong view of the law. The sentiments expressed in paras 17-18 of his judgment echo those expressed by May LJ in Godwin v Swindon BC [2001] EWCA 1478, [2001] 4 All ER 641 [45]. However, in that case, and Vino's case [2001] 3 All ER 784, which he was citing, May LJ was speaking about CPR Part 7.6(3), and the fact that that sub-rule excluded the exercise of a discretion where a claimant had failed to serve the Claim Form within the prescribed period. Those remarks cannot be transposed without qualification to a case under Part 7.6(2), where there has been no failure at the time when the claimant is making a prospective application. As May LJ said at p655f: 'If there is a discretion, the merits can be deployed with the help of the overriding objective'.
15. CPR Part 52.11(1)(b) provides that every appeal will be limited to a review of the decision of the lower court unless the court considers that in the circumstances of an individual appeal it would be in the interests of justice to hold a re-hearing. If the only point in this appeal were that the Master approached the exercise of his discretion upon a mistaken view of the facts there would be no question of my going beyond a review of the decision.
16. However, Mr Lamb QC, who did not appear at the hearing in March, also submits that the Master's decision was flawed for two further reasons, both related to the overriding objective.
17. Mr Lamb QC submits that whether the reasons relied on by the solicitors in their application in August for an extension were good or bad, no prejudice has been caused to the Defendant and it would be unjust and disproportionate to set aside service. Further he submits that the Master's order of 11 March 2003 is unjust because the Defendant waived the right to apply to contest the jurisdiction. In fact that was his first point, but I prefer to deal with it last.
18. In making these submissions Mr Lamb QC referred to material that was not before the Master on 11 March 2003. The material before the Master on that date was the same witness statement of Martine Pilling that the solicitors had put before him in August 2002, together with the Particulars of Claim, with the medical report of Dr Clarke and, I infer, the Acknowledgement of Service. The new material is the witness statement of Caroline Wilkinson dated 24 March 2003 prepared for the Claimant, and a witness statement of Katherine Oldfield prepared for the Defendant. The former was admitted by permission of Gray J in an order dated 16 May 2003, by which he also gave permission to appeal. The Defendant applied to me for permission to admit the witness statement of Katherine Oldfield, which was unopposed, and which I give. Both these statements are by solicitors recounting the events relating to the progress of the action since the hearing in August 2002, and contain information which should have been before the Master on 11 March 2003.
19. In the circumstances of this appeal, with this new evidence now available, I consider that it would be in the interests of justice to hold a re-hearing. It would be unrealistic for me to consider how I would have exercised my discretion assuming that I had had only the material which was before the Master on 11 March 2003, when in fact both sides have referred at length to the new evidence.
20. The reason why the course of applying for an extension of time for service of the claim form is the wrong course to pursue is explained in Jones v Wrekin. Lord Woolf MR gives the first reason. He explained in that case that 'the object of serving proceedings is so that the defendants can take the appropriate action to contest them. If they are not served then they are deprived of that opportunity'. Robert Walker LJ gave the second reason. He points out that district judges, or Masters, who grant such extensions would not do so unless they have taken the view that the claimants appeared to have good reason for an extension, and that as a result solicitors may be lulled into a false sense of security. He adds: 'Although it is not for judges to give advice to litigants or their solicitors, it appears to me that a word of warning from a district judge would no doubt have led to the solicitors taking a different course'. Both members of the court agreed that 'the court must never lose sight of the fact that their primary concern is that justice must be done', which is a reference to the overriding objective CPR Part 1.1.
21. On the facts of this case, as they are now presented to the court, the reason given by Lord Woolf MR does not apply. As appears from the witness statement of Caroline Wilkinson, a letter of claim in the form of Annex A to the Pre-Action Protocol was in fact sent to the Defendant on 12 August 2002. It is accepted that in the form in which it was actually sent it differed from the form of the draft which was attached to the witness statement before the Master. The difference was a new paragraph as follows: 'We also enclose a sealed copy of an Order granted by the High Court on 8^th August 2002'. The letter included the substance of the case on liability, as subsequently pleaded in the Particulars of Claim. There were two points: first the surface material (artificial snow) was unsuitable and second there was no provision for the use of protective headgear.
22. In those circumstances, the mischief with which Lord Woolf MR was concerned did not occur in the present case. The Defendant were not deprived of any opportunity to contest the proceedings. It was clear from the copy of the order of 8 August 2002 that a Claim Form had been issued. Had they wished to do so, they could have served a notice under CPR 7.7 requiring the Claimant to serve the Claim Form or discontinue the claim, or they could have made an application to the court in default.
23. On the other hand, the mischief referred to by Robert Walker LJ remained. The Claimant was under a false sense of security, by reason of the order of August 2002. Being made without notice, that order was always liable to be set aside on an application made by the Defendant.
24. An adjunct of the point made by Robert Walker LJ is that the uncertainty created by the adoption of the wrong course has led to the proceedings in March, and today, which have involved considerable unnecessary expense and delay all of which would have been avoided if the Claim Form had been served.
25. The fact that in this case the Defendant have been deprived of nothing, and can point to no prejudice, points to the interests of justice in this case requiring that Defendant's application to set aside service be dismissed, not allowed. The fact that, through no fault of the Master, the making of the order in August lulled the Claimant into a false sense of security is also a point which suggests that the justice of the case favours the continuance of that order, not its setting aside. However, claimants' solicitors should not put Masters and District Judges in the position of making without notice orders which are bound to lull claimants into a sense of security, and where the Master or District Judge may feel that he ought to be advising that the order he or she is about to make is one which the claimant should not be applying for.
26. In my view, in the light of all the material now available, the result which the Master in fact reached clearly failed to fulfil the overriding objective of dealing with the case justly.
27. Finally, there is Mr Lamb QC's first point, namely that the Defendant waived its right to apply to set aside service. The case on waiver as advanced before the Master, and before me, was by reference to an obiter dictum in an unreported decision of Sir Donald Rattee Monrose Investments Ltd v Orion Nominees Ltd 19 July 2001, who had cited a dictum of Farquharson LJ in a pre CPR case Sage v Double A Hydraulics Ltd reported only in TLR April 2 1992. Farquharson LJ said: 'A useful test was whether a disinterested bystander with knowledge of the case would have regarded the acts of the defendant, or his solicitors, as inconsistent with the making and maintaining of his challenge…. [whether] objectively regarded, they had taken a step in the action inconsistent with their challenge and thus waived their right to object to the writ'.
28. This test seems to me to be consistent with, and to add nothing to, the CPR. CPR Part 1.1 requires the court to ensure that the parties are on an equal footing as part of the objective of the court dealing with cases justly. It should now be unnecessary to refer such cases: Godwin v Swindon Borough Council [2001] EWCA 1478, [2001] 4 All ER 641 [42].
29. Mr Lamb QC submits that the Master did not take into account (because he had not had drawn to his attention) a number important facts going to this issue, as follows.

i) On 12 August 2002 the solicitors sent to the Defendant the letter referred to above, which made clear that a Claim Form had been issued, and an extension of time for service of it had been granted. On that date there was still over a week before the last date for service of the Claim Form, assuming there had been no extension of time, that is to say 23 August 2002.

ii) On 27 August 2002 insurers replied to the letter of 12 August 2002, preserving their position, but inviting the solicitors 'to advise the name and address of any witnesses to the accident and also full details of whom it was reported to at the ski centre'.

iii) On 6 September 2002 the solicitors gave the information requested and added that they intended instructing Dr Charles Clarke, consultant neurologist, in relation to medical evidence, and would let them know as soon as an appointment had been arranged. They also gave their client's National Insurance number and date of birth. This further information was plainly given in the spirit of the Pre Action Protocol, paras 2.11 and 3.14 and 3.15, which encourages joint selection of, and access to, experts, and prior notification of the name of any expert it is proposed to instruct. Instruction of a consultant neurologist involves significant expenditure, which the insurers were tacitly, but clearly, encouraging by their omission to raise any point about the lateness of the service of the Claim Form. Insurers did not indicate an objection, as hey would have done if they were acting in the spirit of para 3.16 of the Pre Action Protocol.

iv) On 6 December 2002 the solicitors wrote again to the insurers referring expressly to the three month timescale set down in the Pre Action Protocol (that is para 3.7) and asking to hear from them on liability.

v) Insurers instructed solicitors for the Defendant on 19 December 2002. In her witness statement dated 3 June 2003 Kathryn Oldfield, the solicitor for the Defendant, states that a copy of the proceedings was forwarded to herself and received in her firm's office on 20 December. On her instructions service was acknowledged on 24 December 2002.

vi) At the same time a request was made to the Claimant's solicitors to extend the time for service of a Defence until 1 February 2003. The request was agreed to.

vii) The Acknowledgement of Service was in Form 9, as it was required to be by CPR Part 4(1) and Part 10 Practice Direction para 2. The form has three boxes: "1. I intend to defend all of this claim, 2. I intend to defend part of this claim, 3. I intend to contest the jurisdiction." Only box 1 was ticked. The notes to the form say: 'If you need 28 days (rather than 14) from the date of service to prepare your defence, or wish to contest the jurisdiction complete the Acknowledgement of Service' (emphasis added).

30. The acts and omissions of the Defendant, from their receipt of the letter of 12 August to the agreement to their request for an extension of time for service of the Defence, cumulatively amount to a clear encouragement to the Claimant to incur expense on progressing the action in the expectation that there would be no challenge to the order made in August 2002. The Claimant clearly incurred significant expenditure on that basis. As I have already mentioned, the Defendant has been unable to point to any prejudice that it has suffered on the facts of this particular case by the extension that was granted for the time for service of the Claim Form.
31. In the light of these facts, it was unjust for the Defendant to be granted an extension of time to apply to set aside the order of 8 August 2002.
32. On this basis, I agree with Mr Lamb QC that it is not necessary to enquire whether, if the Defendant had made a timely application to set aside that order, their application ought to have succeeded.
33. However, in my view, if the Defendant's application to set aside had been made in time, justice would have required that it should fail. As in Jones v Wrekin, this is a case where there was some justification for the solicitors concerned believing that the course they followed was reasonable and appropriate (namely the desirability of following the spirit of the Pre Action Protocol), notwithstanding that I have held that this belief was mistaken. They were acting conscientiously, albeit mistakenly, and no harm has in fact been done. This is a substantial claim. The report of Dr Clarke concludes: 'There is no doubt that he suffered a severe traumatic brain injury and that there is residual cognitive impairment and some weakness of the right arm and legs. There is a substantial risk ratio of 17:1 ie his risk of epilepsy is much higher than the general risk in the population'. Setting aside service of the claim form would be disproportionate and unjust.
34. I allow the appeal.