Personal Management Solutions Ltd & Ors v Gee 7 Group Ltd & Anor [2016] EWHC 891 (Ch)

Case No CH/2015/0470[2016] EWHC 891 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice,, 7 Rolls Building,, Fetter Lane,Date Wednesday, 6 th April 2016
London
EC4A 1NL
Before
MR JUSTICE ARNOLD
Between
PERSONAL MANAGEMENT SOLUTIONS LIMITED AND OTHERSClaimants/RespondentsGEE 7 GROUP LIMITED AND ANOTHERDefendants/Appellants
Digital Transcript of WordWave International Ltd trading as DTI8th Floor, 165 Fleet Street, London, EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424Web: www.DTIGLOBAL.com Email: TTP@dtiglobal.eu(Official Shorthand Writers to the Court)
MR Y KULKARNI (instructed by RPC) appeared for AppellantsMR CADDICK QC & MR T ST QUNTIN (instructed by McDaniel & Co) appeared for Respondents

JUDGMENT APPROVED

[1]MR JUSTICE ARNOLD: This is an appeal from an order of Deputy Master Cousins dated 21 September 2015 by which he held that the sending of an amended Claim Form and Particulars of Claim in these proceedings to the Appellants’ solicitors, RPC, by fax and by DX on Friday 3 July 2015 was good service. The appeal is brought by permission of Mann J.[2]The essential facts giving rise to the issue before the Deputy Master and the present appeal are as follows. On 5 March 2015 the First and Second Respondents, Personal Management Solutions Ltd and Personal Group Benefits Ltd, issued a Claim Form commencing proceedings against the Appellants, Gee 7 Group Ltd and Gee 7 Wealth Management Ltd, who I will collectively refer to as “G7”, for infringement of copyright. By a subsequent amendment, the Third and Fourth Respondents, Personal Assurance plc and Personal Assurance Services Ltd, were joined to the claim as additional claimants. I will refer to all four Respondents collectively as “PG”.[3]It is common ground that the time for service of the Claim Form expired four months later on Sunday 5 July 2015. On the afternoon of Friday 3 July 2015 – that is to say, the last working day before expiry of the time for service of the Claim Form – PG’s solicitors, McDaniel & Co, sent the amended Claim Form, Particulars of Claim and response pack to RPC by fax and DX. RPC has no record of having received the fax, but no issue arises in that regard for present purposes.[4]It is common ground that there had been no explicit statement prior to that point by either G7 or RPC in writing that RPC was authorised to accept service of the Claim Form. Moreover, it is G7’s unchallenged evidence that in fact RPC was not authorised to accept service of the Claim Form.[5]On 10 July 2015 RPC wrote to McDaniels informing them that RPC was not instructed to accept service of proceedings on behalf of G7, and that accordingly the purported service on 3 July 2015 was ineffective. On 31 July 2015 RPC filed an acknowledgement of service on behalf of G7 indicating an intention to contest jurisdiction. That led to the application which came before the Deputy Master, resulting in the order under appeal.[6]Before the Deputy Master, and again before me, it is PG’s case that, in correspondence between the parties’ respective solicitors prior to the purported service of the Claim Form, RPC made statements which, on their proper construction, amounted to a statement that RPC were authorised to accept service of the Claim Form on behalf of G7.[7]As is common ground, the key provision of the Civil Procedure Rules for present purposes is rule 6.7(1), which states as follows:
“Solicitor within the jurisdiction: Subject to rule 6.5(1), where – (a) the defendant has given in writing the business address within the jurisdiction of a solicitor as an address at which the defendant may be served with the claim form; or (b) a solicitor acting for the defendant has notified the claimant in writing that the solicitor is instructed by the defendant to accept service of the claim form on behalf of the defendant at a business address within the jurisdiction, the claim form must be served at the business address of that solicitor.” (a) the defendant has given in writing the business address within the jurisdiction of a solicitor as an address at which the defendant may be served with the claim form; or (b) a solicitor acting for the defendant has notified the claimant in writing that the solicitor is instructed by the defendant to accept service of the claim form on behalf of the defendant at a business address within the jurisdiction, the claim form must be served at the business address of that solicitor.”
[8]As can be seen from subparagraph (b) of the rule, what is required for present purposes is that the solicitor acting for the defendant has notified the claimant in writing that the solicitor is instructed by the defendant to accept service of the claim form.[9]There is no dispute that, in construing the relevant correspondence, the well-known principles of interpretation of contractual documents stated by the Supreme Court in Rainy Sky SA v Kookmin Bank [2011] UK SC 50, [2011] 1 WLR 2900 and Arnold vBritton [2015] UKSC36, [2015] AC 1619 are to be applied.[10]I turn then to consider the relevant background circumstances and documents. The background to the matter can be summarised as follows. PG’s main business is the supply of Employee Benefits Packages, or EBPs, to the employees of its clients. PG previously supplied EBPs to the employees of a company called Brakes Brothers Ltd (“Brakes”). In breach of confidence G7 obtained from Brakes sensitive commercial information about PG’s dealings with Brakes’ employees. PG brought proceedings for breach of confidence against Brakes, G7 and an individual called Mark Eaton. Those proceedings were compromised against Brakes and proceeded against the other defendants at a speedy trial in July 2014. Judgment was given in favour of PG on 24 October 2014.[11]It is PG’s case that, shortly before the trial, during the course of inspection of documents disclosed in those proceedings, it came to PG’s attention that G7 had accessed PG’s website with a view to taking material from it for the purposes of providing information on a website run by G7, and that G7 had arranged for two underwriters called Amlin and Catlin to underwrite policies of insurance in terms that exactly duplicated the terms of PG’s policies on PG’s website. PG contend that, to do so, Amlin and Catlin must have been provided with copies of PG’s policies. It is those discoveries and contentions which form the basis of PG’s claim for copyright infringement against G7.[12]As I understand it, at some point not too long after the judgment in the breach of confidence proceedings, PG’s solicitors, McDaniels, wrote a letter in the nature of a pre-action letter to the solicitors who had been acting on behalf of G7 in the breach of confidence proceedings, namely Wragge and Co (subsequently Wragge Lawrence Graham). That letter is not in evidence, but nothing turns upon that.[13]The first letter that is relied upon, and indeed the principal letter that is relied upon, by PG for present purposes is the first letter that was written by RPC. This is a letter dated 12 January 2015 to McDaniels in which they state:
“As you are aware, we have been instructed by Gee 7 to act on their behalf in relation to the above matter. Please note that we are currently awaiting documents from our clients from the solicitors Wragge & Co. Please ensure that any correspondence is sent to us rather than to our client direct. Please also note the above reference.”
[14]It is submitted on behalf of PG that the expression “any correspondence” is ambiguous and is capable of being read, and should be read, as including service of a claim form in respect of the proposed claim for copyright infringement that was under discussion. I do not accept that submission. In my judgment, “correspondence” means correspondence. It does not include a claim form unless there is something to indicate that it is intended to include a claim form. There is nothing in the letter of 12 January 2015 to suggest that, by the expression “any correspondence”, RPC intended to refer, or would have been reasonably understood to have intended to refer, to a claim form.[15]Furthermore, that interpretation is, in my view, confirmed by what happened subsequently. On 17 February 2015 McDaniels wrote to RPC referring to the letter of 12 January 2015 demanding a response to a request which appears to have been made previously to Wragge Lawrence Graham for pre-action disclosure. McDaniels went on to say that they enclosed a copy of a proposed application for pre-action disclosure, and they continued:
“If we do not hear from you within 14 days of the date of this letter then the application will be issued. Can you confirm that you will be instructed to accept service?”
[16]Although emphasis is placed by counsel for PG upon the word “confirm,” it seems to me that this letter demonstrates that it was not understood by McDaniels from the letter of 12 January 2015, absent such confirmation, that RPC were instructed to accept service of any form of originating process. Moreover, that interpretation is again confirmed by what happened subsequently.[17]No response to their letter of 17 February 2015 having been received by McDaniels, they wrote again on 10 March 2015 in the following terms:
“We wrote further to our correspondence of 17 February 2015 in which we requested that you confirm whether you had been instructed to access service. As you neglected to respond to this letter, we had no choice but to send our application for specific disclosure directly to your clients, Gee 7 Group Limited. Please find attached a copy of the application as sent as a mark of courtesy.”
[18]Accordingly, it is clear that at that stage McDaniels did not understand that RPC were instructed to accept service of any originating process, and had therefore they served the application for pre-action disclosure directly upon G7.[19]For completeness, I would add that on the same date McDaniels also wrote to G7 explaining that “although your legal representatives are yet to confirm that they have been instructed to accept service, a copy of the application has been provided to them”.[20]The application for pre-action disclosure and the Claim Form were issued on the same date, 5 March 2015. At that stage, however, although there was service of the application for pre-action disclosure in the way that I have described, there was neither service of the Claim Form, nor indeed any mention by McDaniels to RPC of the fact that the Claim Form had been issued.[21]There was then correspondence between the parties’ solicitors with respect to the application for pre-action disclosure which was pending. I do not believe it is necessary for present purposes to refer to the entirety of that correspondence, but I will note, because these documents are particularly relied upon by PG, that on 29 May 2015 RPC wrote to McDaniels enclosing by way of service a witness statement on which G7 intended to rely in respect of the application for pre-action disclosure.[22]The application for pre-action disclosure came before Deputy Master Cousins on 2 June 2015. Shortly before the hearing, PG’s representatives disclosed to G7’s representatives for the first time that the Claim Form had been issued. That led to G7 taking a jurisdictional point before the Deputy Master as to whether the court had jurisdiction to make an order for pre-action disclosure in circumstances where proceedings had in fact already been commenced. Deputy Master Cousins held, albeit with some regret, that that court had no jurisdiction to make an order for pre-action disclosure in those circumstances. That decision was subsequently upheld by Morgan J in a judgment of 10 December 2015 ([2015] EWHC 2859 (Ch)).[23]Following the hearing on 2 June 2015, McDaniels wrote to RPC on 11 June 2015 enclosing a copy of the sealed order. Reliance is placed by counsel for PG upon the fact that the order recites that the court has provided a sealed copy of the order to the serving party – that is to say McDaniels – and upon the fact that it was duly served by McDaniels upon RPC.[24]Finally, on 23 June 2015 McDaniels wrote to RPC enclosing by way of service a copy of their clients’ notice of appeal in respect of Deputy Master Cousins’ order of 2 June 2015. That was followed by a similar letter serving the sealed appellants’ notice.[25]In my judgment, the further letters passing between McDaniels and RPC to which I have referred do not assist PG. They are all clearly referable to the application for pre-action disclosure. As I have explained, the application for pre-action disclosure was served by McDaniels on behalf of PG directly upon G7, it was not served upon RPC. The reason why it was not served upon G7, as can be seen from the correspondence, is because there had been no confirmation by RPC that they were authorised to accept service.[26]To complete the story, it is only necessary to reiterate that it was against that background that on 3 July 2015 McDaniels purported to serve the amended Claim Form, the Particulars of Claim and response pack on RPC. As I said at the outset of this judgment, there is no dispute that at that point in time there had been no explicit statement by RPC that they were authorised to accept service. For the reasons that I have given, in my judgment no such statement was implicitly made on the true construction of any of the correspondence upon which PG relies.[27]In his judgment the Deputy Master reached the opposite conclusion. In doing so, he seems to have been influenced by the fact that, as he stated no less than three times in his judgment, he considered that the point being taken by G7 was “a highly technical point”. It may be that it is a technical point, but it is not simply a technical point, as counsel for G7 rightly submitted. The question of whether an originating process has been properly served is not simply a technical question; it goes to the root of the court’s jurisdiction. Moreover, it is also an important matter as between clients and solicitors because it is well established that, even a solicitor is acting for his client in all respects relating to intended claim, he does not have implied authority to accept service of originating process. Moreover, as I stated at the beginning of this judgment, in the present case there is uncontroverted evidence from RPC that they did not have authority to accept service of the claim form. Thus, I do not agree with the Master’s approach that, because the question is a technical one, therefore there is no merit in G7’s stance.[28]Moreover, when it comes to construction of the relevant documents, I have to say that I simply do not agree with the Master’s conclusion that, as he put it in paragraph 13 of his judgment by reference to the letter of 12 January 2015, “I appreciate of course that it does not actually state in terms that we are instructed to accept service, but the implicit assumption, if not explicitly when looking at the other correspondence in the round, demonstrates in my judgment that they were expecting service on behalf of their clients.” For the reasons I have given, it seems to me that the correct reading of the letter of 12 January 2015, as confirmed by the subsequent correspondence, is to the opposite effect.[29]For those reasons this appeal is allowed.

Cited in 7 later judgments