Woodward & Anor v Phoenix Healthcare Distribution Ltd

The court decided a procedural dispute about service and limitation. The Claimants issued a claim within the limitation period but purported to serve the Defendant's solicitors, Mills & Reeve, without having first obtained written confirmation that they were authorised to accept service. The court held that there was no written notification that Mills & Reeve were authorised to accept service and that estoppel by silence did not arise because no duty to speak had been established. Applying the test in Abela v Baadarani for retrospective validation under CPR 6.15(1) and (2), the court found good reason to validate the defective service: the Defendant and its solicitors had, within the period of validity, become aware of the claim form and, in the judge's view, engaged in 'technical games' by not drawing the mistake to the Claimants' attention, contrary to the overriding objective. The court therefore ordered that the steps taken on 17 October 2017 constituted good service and dismissed the Defendant's application to set aside the claim.

Background and parties:

The Claimants, Sally Woodward and Mark Addison, brought assigned claims for breach of contract and misrepresentation arising from the sale of atorvastatin by Phoenix Healthcare Distribution Limited. The causes of action accrued on the date of the contract (20 June 2011). A Claim Form was issued on 19 June 2017 and the four month period for service ran to 19/20 October 2017.

Nature of the procedural application:

• The central dispute was whether service of the Claim Form within the four month period had been valid. The Claimants' solicitors, Collyer Bristow, sent the Claim Form and particulars by email (with a read receipt) and first class post to Phoenix's solicitors, Mills & Reeve, on 17 October 2017, stating that the documents were sent "by way of service" to protect limitation. Mills & Reeve replied on 20 October that they had not been authorised to accept service. Collyer Bristow couriered/process-served Phoenix on 20 October once the lack of authority was asserted.
• The Claimants applied for an order validating the steps taken on 17 October as good service under CPR 6.15(1) and (2), or alternatively that service be dispensed with or time extended. Mills & Reeve applied to set aside the Claim Form for failure of timely service.

Issues framed:

1. Whether the correspondence before purported service constituted written notification that Mills & Reeve were authorised to accept service.
2. Whether Mills & Reeve were estopped from denying authority by reason of silence or inaction.
3. Whether the court should exercise its discretion under CPR 6.15(1) and (2) to validate retrospectively the service on Mills & Reeve.

Court's reasoning:

• On construction, the pre-17 October correspondence did not amount to written notification that Mills & Reeve were authorised to accept service. Mere instruction to act for the client does not imply authority to accept service.
• Estoppel by silence required that Mills & Reeve knew or at least suspected the Claimants were labouring under a relevant mistake and were under a duty to speak. The court found no such knowledge or duty in relation to the July 2017 letter and, although the 17 October email made the mistake apparent, the court held there was not a clear inter partes duty to speak such as would create estoppel. Authorities on estoppel by silence and the requirement of a duty to speak (e.g. Hendrik Sif / Taylor Fashions / Stolt Loyalty) guided that conclusion.
• On CPR 6.15(1) and (2) the judge applied Abela and subsequent authorities. The critical factors were (i) the Defendant and its solicitors received the claim form and its contents within the period for service, and (ii) the conduct of Mills & Reeve in not warning the Claimants of their lack of authority amounted to playing a technical game and frustrated the overriding objective. Taking the matters holistically the judge found good reason to validate the defective service, particularly because validation was necessary to avoid a defendant obtaining a windfall limitation defence by reason of the defendant's conduct.

Result and procedural consequence:

The Defendant's application was dismissed and the court ordered under CPR 6.15(1) and (2) that the steps taken on 17 October 2017 constituted good service. The judge granted permission to appeal.

The court dismissed the Defendant’s application and ordered that the Claimants’ steps of 17 October 2017 (email with attachments and first class post to Mills & Reeve) constitute good service under CPR 6.15(1) and (2). The court reasoned that there was no written confirmation that Mills & Reeve were authorised to accept service and no estoppel by silence, but that retrospective validation was justified because the Defendant and its solicitors had become aware of the claim within the period for service and their conduct in not correcting the Claimants’ mistake amounted to playing a technical game contrary to the overriding objective; accordingly there was good reason to validate the defective service.