Brown & Ors v Innovatorone Plc & Ors [2009] EWHC 1376 (Comm)

[2009] EWHC 1376 (Comm)Case No 2008 FOLIO 1082
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 19/06/2009
Before
MR JUSTICE ANDREW SMITH
Between
ANDREW BROWN & OTHERSClaimantINNOVATORONE PLC & 7 OTHERSDefendant
Graham Chapman and Shail Patel(instructed by Addleshaw Goddard LLP) for ClaimantsAndrew Hunter (instructed by Byrne & Partners) for Mr. BaileyBen Hubble QC (instructed by Beachcroft LLP) for Collyer BristowHearing Hearing dates: 15 and 21 May 2009
Judgment

Mr. Justice Andrew Smith:

[1]These applications concern the service of the claim form in these proceedings on the seventh defendant, Mr. John Bailey, and the eighth defendants, Collyer Bristow. On 17 February 2009 it was sent by fax to Mr. Bailey’s solicitors, Byrne & Partners, and to Collyer Bristow’s solicitors, Beachcroft LLP (“Beachcrofts”), by the claimants’ solicitors, Addleshaw Goddard (“AG”). The claimants contend that this constituted valid service, but Mr. Bailey and Collyer Bristow deny it. In the alternative the claimants apply for orders that the intended service on 17 February 2009 should stand as good service by an alternative method.[2]The nature of the claim in these proceedings need be described only in outline. This action is part of major litigation brought in this court by investors in so-called “Innovator” schemes. The schemes were promoted during the 2002/03, 2003/04 and 2004/05 tax years, and were presented to investors as offering fiscally efficient investments in information technology and communications technology through either limited liability or ordinary partnerships; investors hoped to claim tax relief on sums invested by them (including leveraged amounts) for participation in the partnerships, and the partnerships would use the investment to buy and exploit technology. The claimants’ case is that the schemes were shams and a fraud upon those investing in them, and that conditions for them to become members of the partnerships and for their subscription money to be paid to the partnership vehicles were never fulfilled. Nine claim forms concerning these schemes have been issued to date, and I understand that more are likely to be issued. I am told that, in all, over 700 investors subscribed to 19 investment schemes: there are 54 claimants in this action.[3]The claimants contend that the schemes were promoted by the first defendant, Innovatorone Plc, “Innovator”, which is now in liquidation, or in some cases by Moneygrowth Financial Services Limited or Capital Planning UK Limited. The fourth defendant in this action, Mr. PaulCarter, is said to have been the managing director of Innovator, and the fifth defendant, Mr. BjornStiedl, is described by the claimants as “the controlling mind and driving force behind Innovator and the establishment, promotion and operation of the Innovator Schemes”. The second and third defendants, The YTC Medical Learning System Partnership LLP and The Agent Mole Technology Medical Partnership LLP, were, as the claimants were led to understand, to have been the vehicles for two of the schemes, described as the “YTC scheme” and the “Agent Mole” scheme, with which this action is concerned. Collyer Bristow, a firm of solicitors which is now dissolved, are said to have received from claimants money intended for investment in the schemes, which was misappropriated and lost. Mr. Bailey was an equity partner in Collyer Bristow and is said to have been a director of Innovator. The sixth defendant, Mr JonathanRoper, was a salaried partner in Collyer Bristow. I have not been given an assessment of the total amounts claimed in this litigation, but the claimants say that over £40 million was paid to Collyer Bristow and has been misappropriated.[4]Dishonesty is alleged against Mr. Carter, Mr. Steidl, Mr. Roper and Mr. Bailey. Collyer Bristow are said to be liable for the dishonest conduct of Mr. Bailey and Mr. Roper in assisting Innovator and Mr. Carter to act in breach of trust and fiduciary duties owed to the claimants, and also liable to account for subscription monies paid by claimants, as well as for claims in negligence, breach of contact and breach of fiduciary duty and for other relief.

Service (or purported service)

[5]This action, 2008 folio 1082, was originally brought on 17 October 2008 against eight defendants. The claim form has been served upon the first six defendants: Innovator, The YTC Medical Learning Partnership LLP, The Agent Mole Technology Medical Partnership LLP, Mr. Carter, Mr. Stiedl and Mr. Roper. On 17 February 2009, before AG served or purported to serve the claim form on Mr. Bailey and Collyer Bristow, it was amended to add two further defendants, Ellsburgh Technology Limited, a company incorporated in the British Virgin Islands, and HBI Software Private Limited, a company incorporated in India. They are said to have sold information and communications technology to the second and third defendants as part of the YTC scheme and the Agent Mole scheme.[6]On 23 December 2008 AG wrote to Beachcrofts as Collyer Bristow’s solicitors, advising them that it was intended to bring proceedings in respect of the 19 Innovator schemes. They enclosed copies of the (then unamended) claim form in this action and of the claim form in action 2008 folio 1282 that concerns two other schemes, but stated that “we do not at this stage serve these documents on you. They are for information only and to illustrate the bases or some of the bases of our clients’ claims”. AG said that they needed to issue claim forms in respect of the other 15 Innovator schemes “in due course”, explaining that the two claim forms had been issued “To forestall any limitation arguments”. (The claimants do not accept that the defendants would in fact have had a defence of limitation.) They proposed a procedure based on pre-action protocols, suggesting: “We will serve the 2 Claim Forms issued to date upon the defendants thereto (or their respective professional advisers if so elected). We will do this within the 4 months validity period of the Claim Forms. These proceedings are then stayed pending the protocol process” that they set out.[7]At the request of Beachcrofts, AG sent a similar letter and the enclosures to Byrne & Partners: they understood from Beachcrofts that Mr Bailey was to be separately represented by them. Other defendants were also sent the letter.[8]On 12 January 2009 Beachcrofts wrote to AG confirming that they acted “for Collyer Bristow and their professional insurers”, but stating that Mr. Bailey and Mr. Roper were “separately represented”, Mr. Bailey by Byrne & Partners. On 26 January 2009 Byrne & Partners wrote to AG that they had been formally instructed by Mr. Bailey on 2 January 2009. They asked that correspondence be sent to them, but they did not say that they had been authorised to accept service of proceedings on his behalf, and indeed they had not been so instructed. On 12 February 2009 Byrne & Partners wrote to AG a short letter in relation to case management. Before February 2009 both Byrne & Partners and Beachcrofts had written to AG on writing paper that set out their respective fax numbers.[9]On 17 February 2009 AG sent the amended claim form in these proceedings by fax to Beachcrofts at 21.48hrs and to Byrne & Partners at 21.53hrs, about two hours before the end of the period of four months from being issued within which it had to be served under rule 7.5(1) of the Civil Procedure Rules (“CPR”). It is not in dispute that the transmission of both faxes was completed before midnight on 17 February 2009. When it was sent, Byrne & Partners had not been instructed to accept service for Mr Bailey. Beachcrofts had in fact been so instructed by Collyer Bristow. Neither Byrne & Partners nor Beachcrofts nor their respective clients had been asked by AG whether the solicitors were instructed to accept service, and AG had not been advised (either in writing or otherwise) by either Mr. Bailey or Collyer Bristow or by their solicitors that the solicitors were instructed to accept service. Neither Byrne & Partners nor Beachcrofts, as I conclude, forwarded the faxed claim form to their client on 17 February 2009, and neither Mr. Bailey nor any of the other partners of Collyer Bristow saw on 17 February 2009 the amended claim form that AG purported to serve.[10]On 20 February 2009 Beachcrofts sent AG a letter questioning why the claim form had been sent to them rather than served on their clients. On 25 February 2009 AG wrote that Beachcrofts had confirmed to them that they were instructed to act on behalf of Collyer Bristow.[11]On 24 February 2009 Byrne & Partners wrote to AG that AG had neither sought nor obtained their confirmation that they were instructed to accept service on Mr Bailey’s behalf, and said that the claim form had not been effectively served on Mr Bailey. On 12 March 2009 AG replied that they had served the claim form on Byrne & Partners because they had confirmed that they were instructed to act for Mr Bailey, and contended that the service upon them was valid service upon Mr Bailey, and that alternatively they would rely upon rule 6.15 of the CPR.

Mr. Bailey and Collyer Bristow

[12]Before coming to the applications that are before me, I should say something about the fact that the named defendants to these proceedings include both Collyer Bristow, a firm, and Mr. Bailey, who was at all potentially relevant times a partner of the firm of Collyer Bristow. This might be said to constitute an irregularity in that Mr. Bailey is, effectively, twice included as a defendant in the action. None of the parties takes any point upon this or suggests that it affects the questions that I have to decide. In particular the claimants accept that Beachcroft were not acting for Mr. Bailey and that AG were well aware of that, and do not contend that if the claim form was validly served on Beachcroft acting for Collyer Bristow, that would be valid service on Mr. Bailey.

The rules

[13]Part 6 of the CPR is headed “Service of Documents”. This Part and the Practice Directions supporting it were introduced in their present terms under the Civil Procedure (Amendment) Rules 2008, which came into effect on 1 October 2008, and they govern the questions that are before me.[14]Section II of Part 6 is about “Service of the Claim Form in the Jurisdiction”. Rule 6.3 is headed “Methods of service” and Rule 6.3(1) provides:
“A claim form may be served by any of the following methods – (a) personal service in accordance with rule 6.5; (b) first class post, document exchange or other service which provides for delivery on the next business day, in accordance with Practice Direction A supplementing this Part; (c) leaving it at a place specified in [other provisions of Part 6] (d) fax or other means of electronic communication in accordance with Practice Direction A supplementing this Part; or (e) any method authorised by the court under rule 6.15.”
[15]The provision of Practice Direction A that is relevant for present purposes is in paragraph 4. It is headed, “Service by fax or other electronic means” and provides as follows:
“4.1 Subject to the provisions of rule 6.23(5) and (6), where a document is to be served by fax or other electronic means – (1) the party who is to be served or the solicitor acting for that party must previously have indicated in writing to the party serving – (a) that the party to be served or the solicitor is willing to accept service by fax or other electronic means; and (b) the fax number, e-mail address or other electronic identification to which it must be sent; and (2) the following are to be taken as sufficient written indications for the purposes of paragraph 4.1(1) - (a) a fax number set out on the writing paper of the solicitor acting for party to be served; …” (a) that the party to be served or the solicitor is willing to accept service by fax or other electronic means; and (b) the fax number, e-mail address or other electronic identification to which it must be sent; and (a) a fax number set out on the writing paper of the solicitor acting for party to be served; …”
[16]I should set out other provisions of Part 6 of the CPR:
“Personal service 6.5-(1)Where required by another Part, any other enactment, a practice direction or a court order, a claim form must be served personally. (2) In other cases, a claim form may be served personally except – (a) where rule 6.7 applies; or (b) in any proceedings against the Crown. … . (3) A claim form is served personally on – (a) an individual by leaving it with that individual; (b) a company or other corporation by leaving it with a person holding a senior position within the company or corporation; or (c) a partnership (where partners are being sued in the name of their firm) by leaving it with – (i) a partner; or (ii) a person who, at the time of service, has the control or management of the partnership business at its principal place of business. … . Where to serve the claim form – general provisions 6.6-(1)The claim form must be served within the jurisdiction except …. (2) The claimant must include in the claim form an address at which the defendant may be served. …. . (3) Paragraph (2) does not apply where an order made by the court under rule 6.15 (service by an alternative method or at an alternative place) specifies the place or method of service of the claim form.”
Service of the claim form on a solicitor. 6.7-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. … Service of the claim form where the defendant gives an address at which the defendant may be served. 6.8-Subject to rules 6.5(1) and 6.7 – (a) the defendant may be served with the claim form at an address within the jurisdiction which the defendant has given for the purpose of being served with the proceedings; or … Service of the claim form where the defendant does not give an address at which the defendant may be served. 6.9-(1)This rule applies where – (a) rule 6.5(1) (personal service); (b) rule 6.7 (service of claim form on solicitor); and (c) rule 6.8 (defendant gives address at which the defendant may be served), do not apply and the claimant does not wish to effect personal service under rule 6.5(2). (2) Subject to paragraphs (3) to (6), the claim form must be served on the defendant at the place shown in the following table. Nature of defendant to be served Place of service 1. Individual Usual or last known residence 2. Individual being sued in the name of a business Usual or last known residence of the individual; or principal or last known place of business 3. Individual being sued in the business name of a partnership Usual or last known residence of the individual; or principal or last known place of business of the partnership. 4. Limited liability partnership Principal office of the partnership; or any place of business of the partnership within the jurisdiction which has a real connection with the claim. 5. Corporation (other than a company) incorporated in England and Wales Principal office of the corporation; or any place within the jurisdiction where the corporation carries on its activities and which has a real connection with the claim. 6. Company registered in England and Wales Principal office of the company; or any place of business of the company within the jurisdiction which has a real connection with the claim. 7. Any other company or corporation Any place within the jurisdiction where the corporation carries on its activities; or any place of business of the company within the jurisdiction. (3) Where a claimant has reason to believe that the address of the defendant referred to in entries 1, 2 or 3 in the table in paragraph (2) is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant’s current residence or place of business (‘current address’). (4) Where, having taken the reasonable steps required by paragraph (3), the claimant – (a) ascertains the defendant’s current address, the claim form must be served at that address; or (b) is unable to ascertain the defendant’s current address, the claimant must consider whether there is – (i) an alternative place where; or (ii) an alternative method by which, service may be effected. (5) If, under paragraph (4)(b), there is such a place where or a method by which service may be effected, the claimant must make an application under rule 6.15. (6) Where paragraph (3) applies, the claimant may serve on the defendant’s usual or last known address in accordance with the table in paragraph (2) where the claimant – (a) cannot ascertain the defendant’s current residence or place of business; and (b) cannot ascertain an alternative place or an alternative method under paragraph (4)(b)….. Service of the claim form by an alternative method or at an alternative place 6.15-(1)Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place. (2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service…. Power of court to dispense with service of the claim form 6.16-(1)The court may dispense with service of a claim form in exceptional circumstances. (2) An application for an order to dispense with service may be made at any time and – (a) must be supported by evidence; and (b) may be made without notice.” Where to serve the claim form – general provisions Service of the claim form by an alternative method or at an alternative place

Power of court to dispense with service of the claim form

[17]I have set out the headings to the rules as well as the rules themselves. It is not in dispute that reference may be made to the headings in interpreting the rules. The CPR are a kind of delegated legislation made under the authority conferred on the Civil Procedure Rule Committee by the Civil Procedure Act 1997. Just as headings may, and indeed should, be considered in interpreting primary legislation provided that due account is taken of that fact that the function of a heading is to provide a brief and therefore necessary inexact guide to the material to which it applies (see Bennion on Statutory Interpretation, Code SS 255 and 256), so too headings are relevant when interpreting delegated legislation. Indeed, while in the case of primary legislation it is relevant to keep in mind that headings are not included in a bill for debate but for ease of reference (see R v Montila, [2004] UKHL 50 at para 34), this consideration might not detract in the same way from the assistance available from the headings in the CPR: there would be no constraint upon the Rules Committee debating headings.

Was the claim form validly served?

[18]Mr. Bailey and Collyer Bristow applied on 19 and 27 March 2009 respectively for declarations that the claim form was not validly and effectively served upon them. The claimants say that they were validly served by fax on 17 February 2009, and on 27 April 2009 they applied for an order to that effect. They rely upon CPR rule 6.3(1)(d) and Practice Direction A paragraph 4.1, which provides that a claimant may serve a claim form by fax on a defendant or his solicitor if the defendant or his solicitor has indicated in writing to the claimant that he is willing to accept service by fax of Practice Direction A. In the case of a solicitor who is acting for a defendant, a fax number set out on the solicitor’s writing paper is to be taken to be a sufficient indication that he is willing to accept service by fax. Accordingly, it is submitted that when, as here, a claimant’s solicitor has received correspondence from a solicitor acting for a defendant on writing paper setting out the solicitor’s fax number, a claim form may be validly served by transmitting it to the fax number. The claimants argue that this interpretation of the Rules and the Practice Direction gives the provisions their true and natural meaning: there is, they say, no need or justification for restricting the circumstances in which there can be valid service by fax upon a solicitor acting for a defendant. In particular they say that there is no justification in the wording of the CPR and the Practice Direction and no other proper reason to restrict the application of the Practice Direction to cases in which the claim form is to be served upon the solicitor under rule 6.7.[19]On the face of it, this interpretation of the rules has surprising consequences: in particular, it means that in the case of service on a solicitor by fax it is not relevant whether the defendant has instructed his solicitor to accept service. This would be the more surprising because this would be so only where service is by fax and not if the claim form is purportedly served in any other way. There is no apparent reason for such a difference. I acknowledge that, as Mr. Graham Chapman,who represented the claimants, pointed out, on any view it could come about that a defendant is validly served with a claim form if it is sent to a solicitor whom he has not instructed to accept service: the application of CPR rule 6.7(b) depends not upon the solicitor in fact being instructed by the defendant to accept service but upon the solicitor (rightly or wrongly) notifying the claimant that he has been so instructed. However, the scope for apparently anomalous results is the greater if the claimants’ interpretation of the rules is correct.[20]The claimants’ construction would lead, as it seems to me, to another surprising consequence: that a claimant could validly serve a claim form by sending it by fax to a solicitor acting for a defendant even though he had specifically been told that the solicitor is not authorised to accept service. Mr. Chapman seeks to answer this by submitting that the Practice Direction is not to be understood to provide an absolute rule that the claim form can be validly served upon a solicitor in the specified circumstances but only provides for a rebuttable presumption to this effect. I cannot accept that: it is not what the Practice Direction says.[21]Mr Bailey and Collyer Bristow submit that the claimants’ interpretation of the CPR distorts the regime for service of the claim form; and that the claimants’ submission about the meaning of the relevant provisions involves wrenching them from their context and ignoring the structure of the rules in Part 6. They say that a claim form may not be served on a solicitor unless CPR rule 6.7 requires that it be so served: that is to say, in a case such as this, unless either the defendant had given in writing the business address within the jurisdiction of a solicitor as an address at which he may be served with the claim form, or a solicitor acting for him had notified the claimant in writing that he was instructed to accept service of the claim form on behalf of the defendant at a business address within the jurisdiction. It is not suggested that either of these conditions applied here, and therefore the claim form could have been validly served upon Mr. Bailey and Collyer Bristow themselves either under the new rules or indeed under the old rules.[22]The defendants’ contention is that CPR rule 6.3 and the provision of the Practice Direction on which the claimants rely are concerned with the method of service, as the heading to rule 6.3 states. They are not about on whom there may be valid service or, more specifically, when there may be valid service on a defendant’s solicitor. CPR rule 6.7 is one of a series of rules between rule 6.5 and rule 6.13 that are concerned with where and upon whom service is to be made. The distinction between method and place of service is reflected, for example, in both the heading (“Service of the claim form by an alternative method or at an alternative place”) and the wording (“… service by a method or at a place...”; “… by an alternative method or at an alternative place…”) of rule 6.15. Thus, it is rule 6.7, and not rule 6.3 or the Practice Direction, that is concerned with when a solicitor may be served on behalf of a client.[23]The defendants acknowledge that CPR rule 6.7 is expressed in mandatory terms, stating when valid service must be upon the defendant’s solicitor. However, they argue that the structure of Part 6 of the CPR is that rule 6.7 provides for an exhaustive regime for service upon solicitors: it states not only when valid service mustbe upon a solicitor but also when service upon a solicitor is permissible. If rule 6.7 does not apply, then rule 6.9 specifies upon whom service is to be affected, by way of a “default provision” as it was put by Mr. Ben Hubble QC, who represented Collyer Bristow: it specifies a regime that applies whenever there is no specific provision about where or on whom the claim form should be served. Rule 6.3, unlike rule 6.7 (and indeed rules 6.5 and 6.8), does not provide a route out of the “default regime” of rule 6.9.[24]In my judgment the argument advanced on behalf of Mr. Bailey and Collyer Bristow gives CPR Part 6 a coherent and sensible structure. Specifically, there is no apparent reason that the fact that a defendant’s solicitor has a fax number on his writing paper should mean that the solicitor can be validly served, but it makes perfect sense for this to mean that, if the claimant has been told that the solicitor may be served, then service upon him may be by fax.[25]I emphasise in accepting this submission about the general structure of CPR Part 6 that I do not consider there to be a clear, consistent and rigid line of demarcation to be found in the amended CPR Part 6 between the method of service and place (where and on whom) service is made. Any such inflexible distinction would be artificial, and after all, CPR rule 6.3(c) concerns the place of service, cross-referring to rules 6.7, 6.8, 6.9 and 6.10. I mention this because it is of considerable importance to the court’s jurisdiction about service by an alternative method out of the jurisdiction. The amended CPR rule 6.15, expressed to be about alternative method and place of service, applies only to service within the jurisdiction. Under the old rules the court exercised the power conferred by the CPR rule 6.8 to make orders for service about on whom or where a claim form might be served outside the jurisdiction (see, for example, Marconi Communications International Limited v PT Pan Indonesia Bank TBK, [2004] EWCA 129 (Comm), [2004] 1 Lloyd’s Rep 594 at para 39 et seq). The change is observed in the notes in Civil Procedure 2009 Ed., Vol 1 at p.178, para 6.15.7. However, in the amended CPR rule 6.37 there is a provision that “Where the court gives permission to service a claim form out of the jurisdiction … (b) it may (i) give directions about the method of service”. Although the amended CPR rule 6.37 refers to “method” of service, I do not interpret it as conferring a more restricted power than the court was generally recognised to have under the old rules, and consider that so to interpret it would not respect the overriding objective and the principle of interpretation stipulated in CPR rule 1.2.[26]I return from that digression to the case before me. I do not consider that the claimants’ construction of these provisions is justified by their ordinary and natural meaning. On the contrary, the wording of Practice Direction 6A makes it clear that para 4 applies as far as service on a solicitor is concerned only where the solicitor is “acting for” the party to be served. The claimants initially argued that no qualification of or gloss on the expression “acting for” is required or justified: that the expression simply requires that the solicitor has been instructed by the defendant. However, the paragraph would surely not apply if a solicitor were acting for a defendant in relation to an entirely different matter, and Mr. Chapman was driven to accept that the paragraph is to be understood as applying only where the solicitor had been instructed in relation to the matter to which the claim form relates, and therefore driven to accept that the literal wording of the paragraph must be qualified to some extent. But it does not seem to me that this qualification goes far enough: it would mean, for example, that the paragraph would still apply if a specialist solicitor who did not undertake litigation were instructed to advise about only the fiscal implications of what gave rise to the litigation. Given that the expression “acting for the party to be served” must be glossed, it must, in my judgment, have more limited application.[27]It is sufficient for Mr Bailey’s argument to confine the application of Practice Direction 6A para 4 to cases where the solicitor has authority to accept service, but Collyer Bristow submit that the reasoning should be taken a step further, and that the expression “acting for the party to be served” refers to when the solicitor is to be served under CPR rule 6.7. This contention is assisted by the observation that I have already made that a solicitor upon whom service is required by CPR rule 6.7 might not in fact have been authorised to accept it. In support of this argument Mr. Hubble cites the judgment of the Court of Appeal delivered by Dyson LJ in Maggs v Marshall, which was heard together with Collier v Williams and other cases, [2006] EWCA 20. That judgment was concerned with the meaning and effect of CPR Part 6 and CPR rule 7.6 before the amendments to the CPR were introduced in October 2008: the Court considered the meaning of the phrase “no solicitor acting” in rule 6.5(6) of the version of the CPR then in force, which provided that, “Where(a) no solicitor is acting for the party to be served; and(b) the party has not given an address for service, the document must be sent or transmitted to, or left at, the place shown” in a table set out. The court (loc cit at para 19) interpreted the expression “no solicitor acting” as meaning “no solicitor acting so that he can be served”. They explained, “We put it that way because, unless the claimant has been made aware by the defendant or his solicitor that the solicitor is authorised to accept service, the claimant would be ill-advised to serve on the solicitor”. They said later in the judgment (at para 59): “Because the claimants had not been told by [the defendant’s solicitors] that they were acting on behalf of the defendant and were authorised to accept service, there was no solicitor “acting” for the defendant within the meaning of CPR rule 6.5(6): there was no solicitor acting so that he or she could be served”.[28]The claimants emphasised that the new provisions of CPR Part 6 introduced in October 2008 represent a marked change in the law about service and submit that authorities about the meaning and effect of the previous version of the CPR provide little guidance about them. Undeniably the amendments to CPR Part 6 were intended to introduce important changes to the rules about serving claim forms and other documents, but I cannot regard it as insignificant that the new Practice Direction 6A adopted an expressions so similar to that recently interpreted by the Court of Appeal. I consider that the judgment in Maggs v Marshall provides authoritative support for Collyer Bristow’s argument.[29]The claimants themselves cited authorities about the meaning of the old rules about service by fax upon a party who has not indicated a willingness so to accept service: Molins plc v GD Spa, [2000] 1 WLR 1741 at paras 24 and 25 per Aldous LJ and Hart Investments v Fidler, [2006] EWHC 2857 (TCC), [2007] BLR 30, 34 at paras 11-13 per HHJ Coulson QC. Mr. Chapman submitted that the implication of these judgments is that, had the relevant letters with the fax number on the writing paper been sent by the defendants’ solicitors (and not by the defendants themselves), that would have been sufficient to make service on the solicitors valid. I am unable so to interpret the judgments: they were not concerned with when a solicitor could effectively be served. But even if the judgments do contain the implication that the claimants suggest, they cannot prevail in face of the decision in Maggs v Marshall (cit sup).[30]The claimants advance a further argument which I should mention: they refer to the 7th Edition of the Commercial Court Guide, which was published after the judgment in Maggs v Marshall but before the amendments to the CPR, and which was in force at the relevant time. It stated that it is “desirable” to obtain confirmation from the legal representative of a defendant that he has instructions to accept service, and did not, as previous editions had done, state that it is necessary for valid service that the legal representative has confirmed in writing that he is so instructed. I cannot regard this as significant: I would understand the 7th Edition of the Guide to be adopting terminology designed to be neutral between the claimants’ contentions and those of Mr. Bailey and Collyer Bristow. In any case, the Guide has no formal status: it provides only guidance – seeThe Secretary of State for Communities and Local Governmentv Bovale Limited, [2009] EWCA Civ 171.[31]Thus, the claimants’ argument that the claim was validly served on Mr. Bailey and Collyer Bristow amounts to a contention that the amendments to CPR Part 6 and the new Practice Direction A introduced a radical change allowing service of the solicitor by fax when the claimant had been given no reason to think that the defendant had authorised this. I reject that argument.[32]I add that in their written argument before the hearing the claimants maintained that Beachcrofts had notified them in writing before 17 February 2009 that they had been instructed by their clients to accept service of the claim form on Collyer Bristow’s behalf. That argument is not pursued: it could not have succeeded.[33]I therefore conclude that the claim form was not validly or effectively served upon either Mr Bailey or Collyer Bristow on 17 February 2009 or within the four months’ time limit, and indeed that it has not been served upon them at all.

The claimants’ application for service by an alternative method

[34]I come to the claimants’ application made on 27 April 2009 for permission to serve that claim form by sending it by fax to Byrne & Co and Beachcrofts as they had on 17 February 2009 and that what they did on 17 February 2009 should “stand as good service” of the claim form. (The claimants do not apply that they should be said to have served the claim form when they sent the unamended version of it to Byrne & Partners and Beachcrofts in December 2008.)[35]The claimants say that the purpose of the rules about service of claim forms is to ensure that proceedings come to the attention of defendants. They draw attention to a passage from Lord Woolf’s Access to Justice – Final Report (July 1996) Ch 12 para 25 cited in the notes to Civil Procedure, 2009 Ed, Vol 1 p.155 that observes that, before any procedural step that depends on the proper service of a document can take place, “the court would have to be satisfied that the method used either had put the recipient in a position to ascertain its contents or was reasonably likely to enable him to do so within any relevant time period”. I accept that in this case, as the claimants submit, Mr. Bailey and Collyer Bristow suffered no prejudice as a result of the proceedings being served on their solicitors rather than upon them personally. I infer that Mr. Bailey and the other partners in Collyer Bristow did not become aware of service of the proceedings within four months of them being issued but that they did so shortly thereafter: it in no way affected the course of events that it was their solicitors, and not they, who received the faxed claim form within the four months’ period.[36]The claimants’ application is made under CPR rule 6.15, and in particular CPR Rule 6.15(2). Rule 6.15 is headed “Service of the claim form by an alternative method or at an alternative place”. When this rule came into force on 1 October 2008, it replaced the old CPR rule 6.8: in particular the provision in sub-paragraph (2) of rule 6.15 is a new provision, and is said in the notes to Civil Procedure 2009 Ed, Vol 1 p.177 para 6.15.5 to be “designed to remedy what were thought to be defects in the previous law”. The old CPR rule 6.8(1) provided as follows:
“Where it appears to the court that there is good reason to authorise service by a method not permitted by these rules, the court may make an order permitting service by an alternative method”
. It had been established in Elmes v Hygrade Food Products plc, [2001] EWCA Civ 121 that this did not empower the court to order retrospectively that an invalid method of service should be allowed to stand as service by an alternative method permitted by the court.[37]Mr. Bailey and Collyer Bristow submit that the court does not have power to make the order under CPR rule 6.15 sought by the claimants because the steps that the claimants took were not steps “taken to bring the claim form to the attention of the defendant” within the meaning of CPR rule 6.15(2). They argue that in order to fall within the rule the steps must in fact have brought the claim form to the attention of the defendant within the four months’ period for its service. I am unable to accept that submission about the expression “steps already taken to bring the claim form to the attention of the defendant” for two reasons. First, I do not interpret it as referring to steps that in fact brought the claim form to the attention of the defendant but understand it to refer to steps taken for that purpose. Secondly, even if rule 6.15(2) is to be understood to refer to what the steps in fact achieved by way of bringing the claim form to the attention of the defendant and not the purpose of the steps, there is to my mind no justification for interpreting it as requiring that the steps brought the claim form to the defendant’s attention within the four months’ period allowed for its service.[38]Mr. Bailey and Collyer Bristow also say, however, that there is not sufficient reason to make an order under CPR rule 6.15 in the claimants’ favour. In Kuenyehia v International Hospitals Group Limited, [2006] EWCA Civ 21, the Court of Appeal reviewed the previous authorities about when the court should exercise its power under old CPR 6.9(1):
“The court may dispense with service of a document”
. In that case the Judge had characterised as a “comparatively minor departure” from the requirements of the CPR the steps taken by a claimant who had sent the claim form to the defendant’s solicitors by courier and to the defendant’s offices by fax on the last day for valid service, and made an order dispensing with service of the claim form. Neuberger LJ, delivering the judgment of the court, said this (at para 33):
“… we do not consider that the claimants can rely on the absence of prejudice to the defendant as a reason for letting the Judge’s decision to stand. In our view … the time limits in the CPR, especially with regard to service of the claim form where the limitation period may have expired, are to be strictly observed, and extensions and other dispensations are to be sparingly accorded, especially when applied for after time has expired. While there may be exceptional cases, we consider that prejudice is only relevant in this sort of case to assist a defendant, where the court would otherwise think it right to dispense with service. In other words, prejudice to the defendant is a reason for not dispensing with service, but the absence of prejudice cannot usually, if ever, be a reason for dispensing with service”
. He continued (at para 35):
“Service on the defendant’s solicitors was ineffective under the CPR, and it cannot be said to have been a “minor departure” from the permitted methods of service to serve on solicitors who had not been nominated by the defendant. In any event, for the reasons already given, this would not have been an exceptional case. Quite apart from any other point, it can fairly be said that it would have been only too easy for the claimants’ solicitors to ask the defendant, with whom they had been in fairly close contact, to nominate its solicitors’ address as its address for service in accordance with r.6.5(2), but they never did so.”
[39]Despite Mr. Hubble’s submission based upon this judgment, I am not persuaded that the court should exercise the power conferred by the new CPR rule 6.15 only “in exceptional circumstances”. In the amended rules at CPR rule 6.16 this is specifically stated as a condition for the court dispensing with service of a claim form. The Rules Committee did not stipulate it as the test in CPR rule 6.15: the requirement is that there is “a good reason” for making an order, the same requirement as that in the old version of CPR rule 6.8 before the court was given the power to make orders retrospectively. To my mind, it would not respect the wording of the amended rules to graft on to CPR rule 6.15 the more demanding requirement of CPR rule 6.16.[40]The claimants argue that the amendments to CPR Part 6 are a major innovation and the new powers that they confer should not be restricted by authorities decided under the old rules. I am unable to accept that the observations of the Court of Appeal about the respect that should be paid to the rules about service of claim forms are superseded by the amendments: to my mind, they justify Mr. Hubble’s contention that, even if exceptional circumstances are not required to justify a retrospective order under CPR rule 6.15, the court should adopt a rigorous approach to an application by a claimant for indulgence. After all, the rule does stipulate that an order should be made only where it appears that there is “a good reason” to do so, and, while it might be said that this requirement adds nothing because the court should never exercise a discretionary power other than for good reason, this stipulation in itself seems to me to underline that the court should examine with some care why it has come about that it is being asked to make an order. Furthermore, in my judgment the mere absence of prejudice to a defendant will not usually in itself be sufficient reason to make an order under CPR rule 6.15.[41]There is some authority about when the court considered that there was a good reason to permit service by an alternative method under the old rule 6.8 (which also requires that there appear to the court “a good reason” to make an order). It covered the position where there were practical difficulties in serving a document in the usual way and also when there would be very extensive delay in doing so: see Marconi Communications International Limited v PT Pan Indonesia Bank TBK, (loc cit) at para 45. Collyer Bristow and Mr. Bailey submit that the requirement in CPR rule 6.15(1) that it appears to the court that there is “a good reason” shows that the provision is directed to cases where the claimant has been attempting to effect service but come across some practical problem, or where the defendant has been evading service. I do not consider that there is any proper basis for confining the circumstances in which there is “a good reason” for making an order under CPR rule 6.15 to specific and limited categories of cases: the expression is a general one. If the intention had been to restrict more specifically when the power might be exercised, then the CPR themselves would have specified the circumstances, as CPR rule 7.6 specifies the circumstances in which the time for serving a claim form may be extended. However, these illustrations are sufficient to answer Mr. Chapman’s contention that, if the power was not exercised in a case of an inconsequential mistake such as this, it would never be exercised. The very fact that the CPR expressly require that there be a good reason for the court to exercise the power to permit service by an alternative method and do not simply confer a discretion to permit it, serves to emphasise that the power should not be exercised over-readily.[42]The claimants’ application is supported by a witness statement of Mr. Michael Green, a partner in AG. He does not explain the reason that AG went about seeking to serve the claim form on 17 February 2009 as they did. The obvious probability is that AG made a mistake of some kind. There is no evidence that AG had examined the amended CPR Part 6 and Practice Direction A and construed them (mis-construed them, as I would conclude) as providing that in the circumstances service upon Byrne & Partners and Beachcrofts by fax would be valid and effective service. The inference that I would draw is that, having corresponded with Beachcrofts as representatives of Collyer Bristow and, to a more limited extent, Byrne & Partners as representatives of Mr. Bailey, AG were drawn into thinking of them as acting for those defendants and did not turn their minds on 17 February 2009 to their authority to accept service of the claim form.[43]No reason is given by the claimants in their evidence for leaving their attempts to serve the claim form so very late. There is no suggestion that Mr. Bailey or Collyer Bristow or their solicitors created difficulties about the service of the claim form, or were at all responsible for it not being properly served. Nor is it suggested that the claimants could not have served the claim form in accordance with the rules, or that it would have been exceptionally difficult or would have caused inordinate delay to do so (although Mr. Chapman did observe, as far as Collyer Bristow are concerned, that they are a dissolved partnership and that service in accordance with the rules would have required either that each former partner be served individually or that there be service at the firm’s last known but now defunct business address). This was, in my judgment, simply a case of claimants’ solicitors leaving service of a claim form until very late and then not observing the rules for service.[44]I am unable to accept that this provides a proper basis for exercising the power in CPR rule 6.15 notwithstanding that no prejudice resulted from the failure to observe the rules for service and in that sense the complaint of Mr. Bailey and Collyer Bristow could be described as a technical one. There is not, to my mind, “a good reason” to do so, and, even if it were, I would not exercise my discretion under rule 6.15 to make an order in these circumstances. Although no doubt the objective of the rules about service is to enable the court to be satisfied that the method used either had put the recipient in a position to ascertain its contents or was reasonably likely to enable him to do so within any relevant time period, that does not mean that the court should indulge a claimant who has devised his own method outside the rules for achieving that purpose. The rules stipulate how this objective is to be achieved, and it is necessary in the interests of certainty that the courts allow a litigant to depart from them only where there is a sufficiently compelling case made out to do so. The reasons for this explained by Mummery LJ in Anderton v Clwyd County Council, [2002] EWHC Civ 933 apply no less to the amended rules in CPR part 6 than to the old rules. I shall restrict myself to citing two sentences from para 36 of the judgment:
“The objective is to minimise the unnecessary uncertainties, expense and delays in satellite litigation involving factual disputes and statutory discretion on purely procedural points…. Justice and proportionality require that there should be firm procedural rules which should be observed, not that general rules should be construed to create exceptions and excuses wherever those who could easily have complied with the rules, have slipped up and failed to do so”
. It is of course the case that CPR rule 6.15 is to be interpreted and the power given by it is to be exercised in accordance with and with a view to giving effect to the overriding objective of enabling the court to deal with cases justly, including achieving the purposes specifically stated in CPR rule 1.1(2), but that does not detract from, but rather supports, the importance of the considerations that Mummery LJ identified.[45]I do not overlook the nature of this action and its relationship with the litigation and prospective litigation about these Innovator schemes more generally. The claimants did not argue, and I see no good argument, that this provides a good reason to make an order under CPR rule 6.15 or significantly affects the exercise of my discretion.

Conclusion

[46]I therefore grant the applications of Mr. Bailey and Collyer Bristow and reject the applications of the claimants.

Cited in 16 later judgments

and 7 more of the most senior