Summary

CPR r.7.5 and CPR r.6.14 drew a clear distinction between the date when service was effected, and the date upon which it was deemed to have taken place. Service was effected when the step required by r.7.5 was completed, and it was the completion of that step which constituted actual service.

Facts

The court was required to determine two preliminary issues in proceedings brought by the claimant (C) against the defendant (D) for breach of contract.

The action arose out of a share and business sale agreement under which C was the purchaser and D the seller. C claimed that D was in breach of the agreement in three respects. Two of its claims were warranty claims, one was a futures claim. Under cl.11.2 of the agreement, all claims had to be notified to D, and the notice had to specify "in reasonable detail" the factual basis of the claim and the evidence relied upon. Under cl.10.1, notice of warranty claim had to be given within 18 months of closing. Finally, under cl.11.3, claims notified under cl.11.2 would be deemed to have been withdrawn if proceedings had not been "issued and served" within 12 months of the notice. Clause 11.2 applied to all three of C's claims, though the cl.10.1 time limit applied only to its warranty claims. On March 30, 2012, within time, C gave written notice of its claims. On March 26, 2013, D's solicitors confirmed that they were instructed to accept service of proceedings. On March 27, the Wednesday before Easter, C hand-delivered a sealed claim form and particulars of claim to D's solicitors. The issues were (i) whether C's claims had been "issued and served" within 12 months of the notice within the meaning of cl.11.3; (ii) what the consequences for C's futures claim would be if it was determined at trial that the notice was defective in that it did not specify the basis of the claim as required by cl.11.2.

Held

(1) The phrase "issued and served" in cl.11.3 meant issued and served in accordance with the CPR, Ageas (UK) Ltd v Kwik-Fit (GB) Ltd [2013] EWHC 3261 (QB) not applied. The word "issued" in cl.11.3 had to mean "issued and sealed by the court in accordance with CPR r.7.2. It could not have some ordinary, non-legal meaning, and it would be very odd if the word "served" could. In that context, the natural meaning of the word "served" was "served in accordance with the procedural rules in force in England at the relevant time". Had the parties intended it to mean some sort of delivery falling short of service under the CPR, they would have used words such as "the buyer has delivered" or "the seller has received notice". The agreement envisaged two separate regimes: one for the giving and receiving of contractual notices, the other for the issue and service of proceedings. The parties had thus been aware that the service of legal process was something distinct from the giving or receipt of a contractual notice. They had intended that the service of legal process should operate under different rules from those applying to contractual notices. A unitary exercise of construction in accordance with Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 W.L.R. 2900, favoured that interpretation, Rainy Sky considered (see paras 14-19, 25-26 of judgment). CPR r.7.5 and CPR r.6.14 drew a clear distinction between the date when service was actually effected, and the date upon which it was deemed to have taken place. Service was effected on the day when the step required by r.7.5 was completed. The date on which it was deemed to have taken place was two business days later. Rule 7.5 was looking at when actual service took place, and r.6.14 was looking at when service would be deemed to have taken place for the purpose of other steps in the proceedings. It was the completion of the requisite step under r.7.5 that constituted actual service. In the instant case, that step was the delivery of the claim form to D's solicitors. Thus, service had been effected on March 27, 2013, Ener-G Holdings Plc v Hormell [2012] EWCA Civ 1059, [2013] 1 All E.R. (Comm) 1162 considered. There was no justification for reading the word "served" in cl.11.3 as referring to deemed service under r.6.14 rather than actual service under r.7.5. C's claims had therefore been issued and served in time within the meaning of cl.11.3 (paras 31-43). (2) D accepted that the futures claim was not caught by the time limit in cl.10.1. Even if the notice was found to contain insufficient information to comply with cl.11.2, C could simply serve a fresh, compliant notice in respect of the futures claim and then serve fresh proceedings within the cl.11.3 time limit. The purpose of cl.11.3 was to bring the existence of a claim to D's attention within 12 months of the notice, and there was nothing which required that the notice should be fully compliant with cl.11.2 before the time limit in cl.11.3 could operate. Accordingly, the futures claim had validly been included in the proceedings. Even if that analysis were wrong, the particulars of claim remedied any defect in the notice. To require C to give a fresh notice would be useless and unnecessary; D knew that it was facing a futures claim and had full details of it (paras 45-50).

Preliminary issues determined in favour of claimant