Lynda Joseph v McFaddens LLP

1. MR JUSTICE RICHARDS: Some three months after I gave an oral judgment in this appeal, I have been asked to settle a transcript of that judgment. I have not been asked to settle a transcript of my ruling, at the beginning of the hearing, to refuse the Appellant permission to rely on new evidence in the appeal.

2. The Appellant, Ms Joseph, appeals with the permission of Joanna Smith J against the order of Deputy Master Raeburn (the Judge ) of 7 October 2024 following a judgment (the Judgment ) given on 1 October 2024. By that order, the Judge refused the Appellant’s application for a retrospective extension of time in which to serve her Particulars of Claim which had been served three days late. I am grateful indeed to Mr O’Donoghue, and I am sure the Appellant is as well, for acting pro bono in this matter.

3. The single ground of appeal on which the Appellant has permission to appeal is that the Judge should have concluded that the three-day delay in serving the Particulars of Claim was “minor and inconsequential” or neither “serious nor significant”.

4. The new evidence that I refused to admit consisted of rulings and correspondence with the Solicitors’ Disciplinary Tribunal in 1995 and then in 2019 involving solicitors involved in the Respondent’s practice. I concluded that material was of insufficient relevance to this appeal, given that single ground of appeal, to justify admitting it. Background

5. The Respondent is a firm of solicitors. On 18 August 2017, the Appellant borrowed money under a loan facility agreement (the Facility Agreement ) that was secured by a second legal charge over a property that she owned in London (the Property ). The Respondent acted for the Appellant in connection with the Facility Agreement. The Appellant defaulted on the Facility Agreement and the lender brought proceedings seeking both a money judgment and possession of the Property on enforcement of its security. On 20 June 2018, the lender obtained a money judgment and a possession order against the Appellant. The Appellant considers that the Respondent was professionally negligent in acting for her in relation to the negotiation and execution of the Facility Agreement.

6. While she was a litigant in person, the Appellant issued professional negligence proceedings against the Respondent on 24 June 2019. Those were struck out on 7 August 2019 on the basis that the Appellant had not shown reasonable grounds for bringing the claim.

7. In October 2019, the Appellant sought injunctive relief in the High Court precluding the Respondent from disbursing the proceeds of sale of the Property. That application was refused with costs on 25 October 2019 on the grounds that the disbursement had already taken place.

8. On 28 June 2023, the Appellant issued a further professional negligence claim against the Respondent. By then, the limitation clock was ticking. The Appellant considered that the applicable limitation period would expire on 18 August 2023, that is, six years after she entered into the Facility Agreement. As will be seen, that was the position she took in her witness statement in support of her application for an extension of time which was before the Judge. It was also the position that Ms Melenik Forde, the Respondent’s solicitor, took in her witness statement that was put before the Judge. No argument is advanced today to the effect that the limitation period expired any later than 18 August 2023.

9. The Appellant served that claim form on the Respondent on 18 October 2023. She accompanied it with a document which she invited the Respondent to treat as a letter before action (the LBA ), even though unlike a traditional letter before action it was served at the same time as the claim form rather than before it. The LBA explained the case against the Respondent in some detail. Mr O’Donoghue said in his submissions that the Respondent could not have asked for more in terms of a preview of what the case was. That is not quite right because the LBA did not deal with everything that was later set out in the Particulars of Claim although it certainly dealt with much of it. For example, the Particulars of Claim pleaded a claim for exemplary damages which was not contained in the LBA. The Particulars of Claim, unlike the LBA, pleaded that the Respondent failed to advise the Appellant of a defence to possession proceedings in relation to the Property. Unlike the Particulars of Claim, the LBA was not verified with a statement of truth.

10. The Appellant did not serve the Particulars of Claim with the claim form. Rather, the Particulars of Claim were posted by Royal Mail special delivery on Monday 30 October 2023 and received by the Respondent on 1 November 2023 ([13(ii)] of the Judgment).

11. The Appellant therefore fell into what Mr Broomfield described as the "bear trap" of CPR 7.4(2). The Appellant did not have 14 days following service of the claim form to serve her Particulars of Claim. Rather, the Particulars of Claim needed to be served by the latest time for serving the claim form. Before the Judge, there was some argument as to whether the Particulars of Claim were in fact served in time. However, the Judge’s conclusion, which is not challenged in this appeal, was that it was necessary to post the Particulars of Claim (and so take the “step required” by CPR 7.5(1)) by midnight on 28 October. However, the Appellant did not post the Particulars of Claim until 30 October 2023. Therefore, the Judge proceeded on the basis that the Particulars of Claim were served three days late. Mr O’Donoghue, while submitting that a case could perhaps be made for the proposition that the Particulars of Claim were served just one day late, did not seek to challenge the Judge’s conclusion that they were served three days late. Both parties therefore agree that the appeal should proceed on the basis that the Particulars of Claim were served three days late.

12. The Appellant’s case on appeal is, of course, that the Judge should have granted an extension of time for service of the Particulars of Claim. However, she does not challenge the Judge’s conclusion at [47] of the Judgment as to the consequences if no such extension was granted namely that the court would not have jurisdiction to try the claim because Particulars of Claim were not served during the period of validity of the claim form.

13. Given that unchallenged conclusion, it is common ground that, unless the Appellant obtained an extension of time either from the Judge or following this appeal, she would need to issue a new claim form. Given that both parties are proceeding on the basis that the limitation period expired on 18 August 2023 (see paragraph ‎8 above) any such new claim would have been statute-barred both at the time of the hearing before the Judge and now. The Judge’s decision

14. I do not need to deal with the Appellant’s arguments before the Judge that the Particulars of Claim were served in time since all parties agree that the appeal should proceed on the basis that they were served three days late. In this section, therefore, I deal with the Judge’s determination of the application for a retrospective extension of time. It is common ground that that application fell to be considered by reference to the three-stage analysis applied to relief from sanctions cases by Denton and others v White and others [2014] EWCA Civ 906 ( Denton ) (see the judgment of the Court of Appeal in Dinjan Hysaj v Secretary of State for the Home Department (and related appeals) [2014] EWCA Civ 1633).

15. The Judge first concluded that the breach of the rules, the three-day delay, was “serious and significant”. He had been asked to conclude by reference to the judgment of the High Court in Viridor Waste Management Ltd v Veolia ES Ltd [2015] EWHC 2321 ( Viridor ) that it was necessary to consider the seriousness and significance by reference to the purpose of service requirements so that there was “no harm and no foul” because ultimately the Particulars of Claim came to the Respondent’s attention in short order. The Judge declined that invitation and said at [41] of the Judgment: "In my judgment, the breach clearly is serious and significant: (i) the Particulars of Claim were only served toward the end of the period of validity; (ii) although the claim had been intimated by the Claimant, the Defendant was entitled to understand within the 4 month period set in the Civil Procedure Rules what that claim actually comprised of."

16. Having concluded that there was a serious and significant breach, the Judge went on to conclude that there was no good reason for the breach. He also decided that in all the circumstances of the case, an extension of time should not be granted, having made reference at [44] of the Judgment to the earlier proceedings and the Appellant’s knowledge of the impending deadlines.

17. The Appellant has permission only to challenge the Judge’s order on the grounds that he erred in finding that there was a serious and significant breach. Accordingly, the Appellant can only challenge the Judge’s analysis at the first Denton stage.

18. For its part, the Respondent has issued a Respondent’s Notice inviting the court to uphold the Judge’s order for the reasons given in the Judgment or on alternative or additional grounds to the effect that the claim form was issued very close to the expiry of the limitation period and the failure to serve Particulars of Claim in time has now resulted in the claim being statute-barred. Therefore, by the Respondent’s Notice, the Respondent invites the court to conclude that the breach was serious and significant for the purposes of the first limb of the Denton test because it has given rise to a limitation defence and relief from sanctions would deprive the Respondent of the right to raise that defence. The approach I take to this appeal

19. When giving permission to appeal, Joanna Smith J referred to the ‘uphill task’ that an Appellant faces in challenging case management decisions such as this. That is a well-established principle set out in cases such as Walbrook Trustee (Jersey) Ltd [2008] EWCA Civ 427, in which Lawrence Collins LJ said at [33] that, in relation to discretionary case management decisions, a superior court should not interfere if the judge has taken into account matters which should be taken into account and has left out of account matters which are irrelevant, unless the judge has reached a conclusion so plainly wrong as to take it outside the generous ambit of the available discretion.

20. In Al Saud v Apex Global Management Ltd and other [2014] UKSC 64 , Lord Neuberger approved Lewison LJ’s formulation in Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743 to the effect that an exercise of a case-management discretion is ‘plainly wrong’ if it is ‘outside the generous ambit where reasonable decision-makers may disagree’. The essence of the Appellant’s arguments

21. The Appellant argues that, in determining that her breach was serious and significant, the Judge took into account irrelevant factors: a. It simply did not matter that service was effected towards the back end of validity of the claim form. CPR, she says, provides no ‘sliding scale’ such that waiting towards the end of the period of validity of a claim form is behaviour that attracts criticism by contrast, for example, with provisions relating to judicial review proceedings which must always be brought promptly. Leaving service until the last moment of the four-month window cannot of itself make a short delay in service a serious and significant breach. b. The Judge took into account an irrelevant consideration when concluding that the Respondent was entitled to understand what the claim comprised of because the LBA had already put the Respondent on notice of the case against it.

22. The Appellant also argues that the Judge came to a conclusion that was outside the range of reasonable opinions in the sense set out in paragraph ‎20 above. She revives her argument, based on Viridor , about the purpose of the service rules arguing that just three days’ delay in serving the Particulars of Claim cannot amount to a serious and significant breach when after those three days, the matter came to the attention of the Respondent. She also submits that the Judge was not entitled to conclude that the three-day delay was serious and significant when no hearing date was imperilled. More generally, the Appellant argues that the Judge was working backwards: he had reached his conclusions to the effect that he would not grant an extension of time and was impermissibly seeking to justify that conclusion at the first stage by deciding that there was a serious and significant breach. Discussion What is a ‘serious and significant’ breach?

23. It matters greatly whether the Judge was entitled to categorise the breach as ‘serious and significant’. That is because if, at the first Denton stage, there is no serious and significant breach, then as was said in Denton itself, relief from sanctions will usually be granted so it will usually be unnecessary to spend much time on the second and third stages. It is appropriate, therefore, to start by considering what a ‘serious and significant’ breach is as a matter of law.

24. The first point to note is that determining what is ‘serious and significant’ necessarily involves an evaluative conclusion. Reasonable decision-makers can, therefore, disagree as to whether a particular breach is serious and significant.

25. Seriousness and significance are not simply to be determined by reference to the length of a delay in a case like this. In Diriye v Bojaj & Anor [2020] EWCA Civ 1400, Coulson LJ said at [56] of his judgment: ‘56…More generally, seriousness and significance can never be a simple function of the period of default. It would be wrong in principle to suggest a sort of sliding scale that automatically allowed defaults of, say, 2 or 3 days, but not defaults of, say, a month. The period of default is a factor to be considered when assessing seriousness and significance, but it is no more than that.’

26. In a similar vein, as [26] to [28] of Denton make clear, ‘triviality’ is not part of the test, even though it may be a useful concept in considering seriousness and significance. The same paragraphs emphasise that a default can be serious or significant even if like, for example, non-payment of court fees, it has no effect on the efficient running of the litigation between the parties. Paragraph 58 of Coulson LJ’s judgment in Diriye emphasises that seriousness and significance cannot be gauged simply by asking whether a hearing date is imperilled. He stated that ‘…the effect of the breach on litigation generally is just one way in which significance can be measured: it is not the only way.’

27. That said, Denton notes that seriousness and significance should not be considered at least initially by reference to other unrelated failures that may have occurred in the past. At the first Denton stage it is necessary to concentrate on an assessment of the seriousness and significance of the very breach in respect of which relief from sanctions is sought. The court might well wish to consider the defaulter’s previous conduct in litigation (for example, if this is the latest in a series of failures to comply) but that is best done at the third Denton stage rather than the first. Analysis

28. The Appellant argues that the three-day delay is simply incapable of being serious and significant. She says that the Judge’s conclusion to the contrary was outside the range of reasonable views that he could come to. I do not agree with that. As the extracts from the judgments of Diriye and Denton to which I have referred explain, seriousness and significance cannot be gauged only by reference to the length of the delay in serving the Particulars of Claim.

29. Nor do I accept the Appellant’s submission that the delay was incapable of being serious and significant because no hearing date was imperilled. That submission is at odds with the judgment of the Court of Appeal in Diriye .

30. The Appellant says that the Judge erred in applying a ‘sliding scale’ at [42] of the Judgment, by criticising the Appellant for waiting until the end of the period of validity of the claim form before serving Particulars of Claim. However, I agree with the Respondent that this point was not irrelevant. The Appellant’s own witness evidence showed that she was aware of the deadline, knew that it was coming up and knew that she needed to serve Particulars of Claim by the appropriate deadline in order to avoid a limitation problem. An analysis of the Appellant’s conduct in serving towards the end of the period is not irrelevant and indeed it was considered by the Supreme Court in Barton v Wright Hassall [2018] UKSC 12. In that case, it was said that: ‘A person who courts disaster [by serving at the last minute] can have only a very limited claim on the court’s indulgence in an application under CPR rule 6.15(2).’

31. Now, that of course was not a relief from sanction case or an extension of time case. However, it does demonstrate that consideration of the Appellant’s conduct, including the conduct in serving at an end of the window of validity of the claim form, was not irrelevant. One can debate the weight that can be placed on that factor but it is not an irrelevant factor.

32. The Appellant’s point based on Viridor was pressed before the Judge and was mentioned in Mr O’Donoghue’s skeleton argument. However, it was not really pressed in his oral submissions. I agree with Mr Broomfield’s submission that the aspect of Viridor on which the Appellant relied was dealing with questions touching on the method of service. The purpose of service is to bring documents to a recipient’s attention. Therefore, if someone uses the wrong method but the document still comes to the recipient’s attention, the court might well decide not to impose a sanction or to impose a limited sanction. However here the question is whether the failure to serve Particulars of Claim in time was serious and significant. The Judge was not bound by Viridor to conclude that it was neither serious nor significant simply because the Particulars of Claim came to the Respondent’s attention.

33. The Appellant criticises the Judge’s reference at [41] of the Judgment to the Defendant being ‘entitled to understand within the 4 month period [of validity of the claim form]… what the claim actually comprised of’.

34. I tend to agree that, on its own, this was a relatively slender consideration as the Respondent did have an indication of at very least a good part of the Appellant’s case in the LBA. However, I do not agree that this is a completely irrelevant consideration. As I explained earlier, the LBA is not said to have mentioned every point that was ultimately pleaded in the Particulars of Claim.

35. Ultimately the Judge alighted on two factors, at [41] of the Judgment, as demonstrating that the breach was serious and significant: (i) the fact that the Particulars of Claim were only served towards the end of the period of validity of the claim form and (ii) the Defendant’s entitlement to understand the claim against it earlier.

36. I am not sure that I would myself have singled out those two factors, but as I have explained they were not irrelevant considerations. Overall, I consider the Judge’s reasoning was a little compressed. He was entitled to conclude that CPR imposes a deadline by which a claim form and Particulars of Claim must be served. He was also entitled to observe that Particulars of Claim are a formal means of drawing a claim to a recipient’s attention which can be distinguished from other less formal means such as the LBA. The Judge’s point, which could have been spelt out more, was that failure to complete the formal process in time meant that proceedings had not been brought to the recipient’s attention in the kind of formal way necessary to engage the court’s jurisdiction.

37. I also consider that the Judge must have been aware of the wider background going beyond the two factors that he mentioned. At [14] of the Judgment, he referred to the witness statements of the Appellant and of Ms Forde (the Respondent’s solicitor). He should be taken to have read them and so as understanding that the Appellant’s claim was running up against the limitation period. The Appellant had said as much at [6] and [31] of her witness statement. Ms Forde’s witness statement positively averred (at [13.4]) that the expiration of the limitation period was a reason not to grant an extension of time.

38. The limitation issue was a highly relevant factor. Although the Particulars of Claim were served only three days late, the effect of that three-day delay was highly significant. The Appellant’s very breach of CPR meant that the claim had in all likelihood become statute barred (see paragraph ‎13 above). If the Judge had allowed the Appellant’s application for an extension of time, the Respondent would be deprived of a strong, and perhaps determinative, limitation defence.

39. In those circumstances, the Judge was quite entitled to conclude that the Appellant’s failure to bring the proceedings to the Respondent’s attention in the necessary formal way had a particular resonance that put it outside the ordinary run of three-day delays. The Judge was entitled to conclude that the breach was both serious and significant.

40. Moreover, the Judge was also aware of the fact that the Appellant had not served the Particulars of Claim for a long period after the claim form was issued. Her witness statement made clear that she was aware of the deadline for serving the Particulars of Claim and of the significance of the expiry of the limitation period. The Judge was entitled to consider that these matters also pointed to the breach being serious and significant. I do not accept the Appellant’s argument that this involved the Judge considering previous unrelated breaches at the first Denton stage (see paragraph ‎27 above). It was part of the assessment of whether the very breach for which relief from sanctions was sought was itself serious or significant.

41. The Judge should be taken to have all of these factors in mind. I do acknowledge that he did not raise limitation expressly in his reasoning at [41] of the Judgment. However, the limitation issue could only reinforce the Judge’s point as to the significance of the breach.

42. Even if the Judge did not, contrary to my view, have limitation in mind, that issue provides a further reason to support the Judge’s conclusion for the reasons that I have given in paragraph ‎38 above. I would, therefore, accept the arguments advanced in the Respondent’s Notice. That is not to say that a delay in service that results in the limitation period being exceeded is incapable of being the subject of a successful claim for an extension of time. Each case will turn on its facts. However, this appeal is brought on the limited basis that the Judge simply was not even entitled to conclude that such a breach in this case was serious and significant. I have reached the clear conclusion that this ground of appeal should fail.

43. I am going to dismiss the appeal for the reasons that I have given. I conclude by thanking Mr O’Donoghue again for his efforts. He has done the best that he could with the case he was given to argue. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: [email protected] This transcript has been approved by the Judge