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Are you being served?

T&L Sugars Limited v Tate & Lyle Industries Limited
High Court
10/4/14

The term ‘served’ has a panoply of meanings. As all practitioners are aware, the courts now demand stricter compliance with rules and court orders, and understanding what the term means in different contexts is vital to ensure that one a party is not left having to apply for relief from sanctions.

In the recent case of T&L Sugars Limited v Tate & Lyle Industries Limited [2014] EWHC 1066 (Comm), Flaux J considered the meaning of the term served in its different contexts, drawing a conclusion that has potentially significant consequences.

Background

Green J summed up succinctly the difficulties that arise out of the expression ‘served’ in his judgment in the case of Ageas (UK) Limited v Kwik-Fit (GB) Limited [2013] EWHC 3261 (QB):

 “The expression is one which can bear a number of different and conflicting meanings covering points in time before, on, and after receipt”

 Is a requirement to “serve” a document by a certain deadline met simply by carrying out the active step required to serve it (posting, personal delivery etc.) by the deadline, or must the document be deemed served by that time to have complied?

That was the fundamental question which Flaux J had to answer in T&L Sugars Limited v Tate & Lyle Industries Limited [2014] EWHC 1066.

The facts

The parties entered into an agreement that included provisions for the resolution of disputes.  This included time limits on the instigation of court proceedings in order to resolve a dispute: intimated claims were deemed withdrawn 12 months after initial notice of them was given “unless at such time legal proceedings…[had] been commenced by being both issued and served” (clause 11.3 of the agreement).

The Claimant was minded to start proceedings against the Defendant, having notified its intention to do so on 30 March 2012. On 27 March 2013 a claim form was issued and sealed by the court and hand-delivered to the Defendant the same day, together with the particulars of claim.

The question for the court, therefore, was whether the requirement for the proceedings to be “both issued and served” by the expiry of the 12 months had been met.

The Defendant argued that the Claimant had not complied because “served” for the purpose of clause 11.3 of the agreement meant “deemed served” and deemed service did not take place until 2 April 2013 (the 27 March 2014 having been a Friday).

The Claimant argued that by hand delivering the claim form and particulars on 27 March 2013, the requirement for proceedings to be “served” by 30 March 2013 was met.

The decision

There was argument before the court about the approach that should be taken to the interpretation of the phrase “issued and served”. Flaux J took the view that the phrase should be interpreted and applied in accordance with its meaning under the Civil Procedure Rules.

The next, and for our purposes more significant, question for the court was whether the proceedings had been issued and served in time.

Two rules govern the service of claim forms within the UK: CPR r.6.14 and CPR r.7.5;

  • Rule 6.14 states that a claim form is deemed served on the second business day after completion of the relevant step under rule 7.5.

  • Rule 7.5 states that a claimant must “complete the step required” to serve the claim form by midnight on the day four months after issue. The rule contains a table specifying the “step required” in relation to the different methods of service. For example, when service is by hand delivery, the step required is: “Delivering to or leaving the document at the relevant place”. Deemed service then takes place two business days later.

The question for the judge, then, was whether ‘served’ within the agreement meant simply taking the “step required” under rule 7.5 (as argued by the Claimant) or whether it meant ‘deemed served’ under rule 6.14 (as argued by Defendant).

 At paragraph 31, Flaux J states:

“In my judgment these two rules…taken together draw a clear distinction between the date when service is actually effected, which is when the relevant step under 7.5 has been completed and the date two business days later when service is deemed to take place under CPR 6.14.”

After backing up this conclusion with reference to several items of commentary, the judge concludes:

“Given that the effect of the relevant rules under the CPR is that actual service was effected under CPR 7.5 when the claim for was delivered…on 27 March 2013, in my judgment there is absolutely no justification for reading the word “served” in clause 11.3 as referring to “deemed service” under CPR 6.14 rather than actual service under CPR 7.5.”

 The Claimant’s interpretation was right. The judge’s reasoning was as follows:

 “If one asks oneself why that distinction is there, it is not…because service does not actually occur until the deemed day, but because, whereas CPR r.7.5 is looking at when actual service takes place, so that a claimant who takes the requisite step, depending upon which method of service he employs, can be sure that he has served within the four months of validity of the claim form…CPR r.6.14 is looking at when service will be deemed to have taken place for the purpose of other steps in the proceedings thereafter…”

In other words, the concept of deemed service is a construction intended not to give the parties certainty about when service takes place for the purpose of complying with deadlines for service, but to give certainty about the date by which future steps must be taken. Service actually takes place when the document is hand delivered, posted, etc., but deemed service takes place later.

Wider implications?

Interesting as the judgment is, the real question is whether it has wider implications.

  • While T&L Sugars concerned the provisions in relation to the service of claim forms, and the CPR has separate rules in relation to the service of other documents, there does not to me seem to be a principled reason why the conclusions of Flaux J could not apply to the concept of service more generally.

  • A single rule governs the service of other documents: CPR r.6.26. It states that a document other than a claim form is deemed served on the day shown in the table contained in the rule, depending on the method of service. While the phrase “step required” from CPR r.7.5 is not used in rule 6.26, the rule clearly contains the same distinction between taking the step required to serve (what in T&L Sugars is called ‘actual service’) and the deemed date of service.

  • The broader question that arises is whether, in circumstances where a party to proceedings is required to serve a document (other than a claim form) by a certain date, all that they are required to do by that date is to take whatever step is necessary to effect service under their chosen method.

    • For example, an unless order requires a defendant to “file and serve its witness evidence by 4pm on 1 September”. What is it that the defendant’s solicitors must do by that deadline? Must they ensure that deemed service has taken place, or only that they have taken the step necessary to serve (e.g. by posting) by that time?

  • Many practitioners will be used to treating a deadline for service as the date by which a document must be deemed served, and calculating how far in advance of that date they actually have to take the step required under their chosen method of service in order for the document to be deemed served by the deadline.

  • We certainly would not suggest that as a result of T&L Sugars that approach is wrong, and practitioners would be well-advised to continue that practice to avoid any negative repercussions. It should also be borne in mind that T&L Sugars is a High Court case and therefore cannot be relied upon as a binding authority.

  • Given the uncertainty that this decision potentially creates it may well be that the Court of Appeal provide guidance on this topic.

  • In the meantime parties should err on the side of caution, but we can see scope for parties to place reliance on T&L Sugars where, for whatever reason, a party’s compliance with a deadline for service of any document is being challenged.

Contact

For further information contact Nick Thornsby on 01772 554 219 or at nick.thornsby@dwf.co.uk

By Nick Thornsby

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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