High Court: “wholly unrealistic” to expect claimants to issue form on Christmas Eve


RCJ

Roth J: “flagrant breach of the rules” by defendants

A High Court judge said it was “wholly unrealistic” for a law firm defending a breach of contract claim to expect solicitors to issue the claim form “just before or on Christmas Eve”.

Mr Justice Roth said the solicitors would have had to give “necessary consideration to the matter” and taken instructions from administrators before issuing the claim.

He went on: “And in any event, I understand that the offices in both the Rolls Building and the Royal Courts of Justice were closed on 24 December, so that it would have been difficult in practice for the solicitors to issue a second claim form even if they had acted with alacrity”.

Roth J said The Khan Partnership (TKP), a central London commercial law firm, appealed against an order of Chief Master Marsh, refusing to set aside an extension of time for service of the claim form.

The court heard in The Khan Partnership v Infinity Distribution [2016] EWHC 1390 that Infinity, a supplier of mobile phones, alleged breach of contract and/or fiduciary duty, misrepresentation and/or negligence against its former solicitors, TKP.

Roth J said Infinity went into administration in 2010, and claimed £43,200 from TKP in relation to success fees charged for its work in representing the company in dealings with HM Revenue & Customs (HMRC).

Infinity also sought a much larger amount of £337,500 which it claimed TKP took payment of “on the basis of an alleged agreement that it would receive 35% of the second payment received from HMRC on account of interest”.

Roth J said Infinity argued that “there was no such agreement and accordingly the money was taken without authority and/or in breach of contract and/or fiduciary duty”.

Infinity issued the claim form for its main claim on 14 July 2014, noting that the deadline for service was 14 November, but in September applied for a six-month extension under CPR 7.6, on the grounds that it was attempting to resolve the dispute through pre-action correspondence.

In early November Chief Master Marsh agreed to an extension up to 30 January 2015. TKP issued an application to set aside the order.

Roth J said that under CPR 23.7(1), the application should have been served on Infinity “as soon as practicable after it has been filed”, but “in breach of that rule, it was not served until four weeks later, on 23 December 2014, when it was sent by email around midday”.

Chief Master Marsh rejected the application, and TKP appealed.

Roth J said it was “a clear breach of the rules” not to serve the application on Infinity until 23 December 2014, the day before Christmas Eve, when the limitation period on Infinity’s main claim expired.

The judge said counsel for TKP “urged strongly that the Chief Master was wrong to find that this was a deliberate, tactical delay”.

He went on: “Given that TKP’s application and accompanying witness statement were filed with the court on 28 November, it was a simple and obvious step then to serve them by post on Infinity’s solicitors.”

By failing to serve the application, Roth J said TKP “effectively deprived Infinity of the opportunity to protect its position as regards its major claim by issuing a second claim form before the limitation period expired”.

He said this “flagrant breach of the rules” constituted “very exceptional circumstances” which meant that the extension of time for service should not be set aside.

Mr Justice Roth upheld the Chief Master’s order and dismissed TKP’s application.

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