Hoddinott & Ors v Persimmon Homes (Wessex) Ltd

The Court of Appeal holds that CPR r 11(1) and r 11(5) are engaged where a defendant seeks to argue that the court should not exercise its jurisdiction because the claim form was served late, and that filing an acknowledgement of service and failing to make a CPR 11 application within 14 days treats the defendant as accepting that the court should exercise jurisdiction. The court also restates that extensions under CPR r 7.6(2) will be granted only where a good reason is shown, but that where the claim is clearly not time-barred and the defendant was put on notice before the expiry of the four months, the court may exceptionally allow an extension.

The claimants issued a claim form alleging damage to agricultural land. They applied without notice under CPR r 7.6(2) to extend the four-month period for service of the claim form. District Judge Rowe granted an extension to 22 November 2006. The defendant later applied to set that order aside; before that application was determined the defendant filed an acknowledgement of service but did not apply under CPR r 11(1) within 14 days to dispute jurisdiction. District Judge Daniel set aside the extension and struck out the claim. The claimants appealed. The principal issues were (i) whether CPR r 11 is engaged when a defendant seeks to challenge the court exercising jurisdiction because of late service, (ii) whether an earlier application to set aside an extension dispenses with the need for a CPR r 11 application after filing an acknowledgement, and (iii) whether the exercise of discretion under CPR r 7.6(1) was wrong. The Court of Appeal allowed the appeal, holding that CPR r 11 is engaged, that paragraph (5) operates to fix the defendant with acceptance where no CPR r 11 application is made within 14 days of acknowledgement of service, and that, on the facts (claim not time-barred and a copy of the claim form sent before expiry), the order extending time should not have been set aside.

Disposition: Appeal allowed; District Judge Daniel's order setting aside the extension of time was wrong for two reasons: (a) CPR r 11(5) operated to treat the defendant as having accepted that the court should exercise jurisdiction, and (b) on the merits the order extending time should not have been set aside given the combination of facts.

1. CPR r 11 engaged: The court held that CPR r 11 is engaged where a defendant argues that the court should not exercise its jurisdiction because a claim form has been served out of time. The word "jurisdiction" in CPR r 11(1) refers to the court's power or authority to try the claim and includes the question whether the court should exercise that power; therefore CPR r 11(1)(b) applies to challenges based on late service (paras 21–24).
2. Effect of filing an acknowledgement of service (CPR r 11(5)): The language of CPR r 11 is clear: a defendant who files an acknowledgement of service and does not make an application under r 11(1) within 14 days after that filing is to be treated as having accepted that the court should exercise jurisdiction to try the claim. An application to set aside an order extending time made before the filing of an acknowledgement is not an application under r 11(1) made within 14 days after filing, and does not displace paragraph (5). Accordingly, where the two conditions in r 11(5)(a) and (b) are satisfied the defendant is fixed with the consequences stated in paragraph (5), including abandonment of any earlier application to set aside the extension (paras 25–30).
3. Scope and application of CPR r 7.6 discretion: The court reaffirmed the approach in Hashtroodi and subsequent authorities that the court will scrutinise applications for extension of time to serve the claim form and will refuse extensions where there is no good reason for the failure to serve within four months; mere awaiting of expert reports or particulars is ordinarily not a sufficient reason (paras 36–41). The district judge was correct to find that the claimant's solicitor had made a serious error of judgment by not serving the claim form, and that the reason given (awaiting full particulars and costing) was not a good reason for failing to serve within four months (paras 41–42).
4. False sense of security point rejected: The court rejected the proposition that an order made without notice and relied upon by a claimant such that the claimant was lulled into a "false sense of security" is a relevant factor favouring continuation of such an order. Earlier observations in Jones v Wrekin and Mason were examined and it was held that the "false sense of security" argument should be put to rest and is not a legitimate ground for preserving an order obtained without proper basis (paras 42–50).
5. Relevant favourable considerations in this case: The court held that two matters materially weighed in the claimants' favour: (i) the claim (in particular the claim on the deed as an action upon a specialty) was clearly not time-barred; and (ii) a copy of the claim form was sent to the defendant before the expiry of the four-month period. The district judge had failed to take the latter into account, which was a material omission enabling the Court of Appeal to exercise the discretion afresh. Considering the unusual combination of those facts, the Court concluded the order setting aside the extension should be reversed (paras 51–59).
6. Practical guidance: (a) Applications for ex parte extensions of time are made at the applicant's peril; an order may later be set aside. (b) Where an application is made before the end of the four months the fact that the claim is clearly not time-barred is a relevant, though not determinative, factor in favour of an extension; where made after the four months the strict conditions of r 7.6(3) apply (paras 54–55).
7. Order: Appeal allowed. The respondent is treated as having accepted the court should exercise jurisdiction by virtue of CPR r 11(5), and the setting aside of the extension under CPR r 7.6 was not justified on the facts; thus the extension to 22 November 2006 should be preserved (paras 29, 60).

• Court of Appeal (Civil Division): Appeal from District Judge Daniel (Bristol District Registry, Queen's Bench Division). This court allowed the appeal and set aside the decision to set aside the extension of time for service.
• High Court (Queen's Bench Division - Bristol District Registry): District Judge Rowe made the original order (13 September 2006) extending time for service to 22 November 2006; this order was later set aside by District Judge Daniel (30 January 2007) and that decision was appealed to this court.