Woodward & Anor v Phoenix Healthcare Distribution Ltd

Under CPR 6.15, retrospective validation of defective service requires good reason. The inquiry is fact-sensitive and holistic. Receipt of the claim form and knowledge of its contents during its period of validity is a critical factor, but is not automatically sufficient.

The court may also consider whether the defendant or its solicitors took inappropriate technical advantage of an honest procedural mistake. Parties’ duties under the overriding objective may require them to avoid satellite litigation and, in an appropriate case, to draw an opponent’s mistake to its attention. Where defective service achieved the purpose of service and the defendant’s solicitors deliberately failed to correct an error despite ample time for valid service, those matters may together constitute good reason for retrospective validation, even where limitation is engaged.

The claimants brought assigned claims in contract and misrepresentation arising from the purchase of atorvastatin from the defendant. The claim form was issued within the limitation period but was sent by email and first-class post to the defendant’s solicitors, who were instructed in the dispute but had not been notified as authorised to accept service.

The solicitors and defendant received the claim form and its contents within the claim form’s period of validity, but did not identify the defect until after that period had expired. The claimants applied for the purported service to be treated as good service under CPR 6.15(1) and (2). The defendant applied under CPR 11 for the claim form to be set aside and for a declaration that the court had no jurisdiction.

The issues were whether the solicitors had been notified as authorised to accept service, whether an estoppel arose from their silence, and whether there was good reason retrospectively to validate the service.

1. The defendant’s application was dismissed. The steps taken by the claimants on 17 October 2017 to bring the claim form to the defendant’s attention through its solicitors constituted good service under CPR 6.15(1) and (2).
2. The correspondence did not amount to written notification that the defendant’s solicitors were instructed to accept service. Being instructed to deal with a claim, and notifying the opposing solicitors of that instruction, did not confer or communicate authority to accept service. The court followed the reasoning in Personal Management Solutions Ltd v Gee 7 Group Ltd [2016] EWHC 891 (Ch).
3. No estoppel arose from the solicitors’ silence. An estoppel based on inaction requires knowledge or suspicion of the other party’s mistake and a duty to speak. The letters of 27 July and 17 October did not call for a response. The solicitors were not required, merely because they knew of the mistake, to correct an opponent’s error which they had not caused and which did not require a response.
4. CPR 6.15(1) and (2) require good reason, not exceptional circumstances. The question is fact-sensitive and must be determined by evaluating all factors. The defendant’s receipt of the claim form and knowledge of its contents during the period of validity was a critical factor. The purpose of service is to inform the defendant of the claim and its contents, rather than to permit technical games.
5. The claimants’ solicitors had made an honest mistake, but the defendant’s solicitors knew that the purported service was intended to commence the procedural process and deliberately failed to identify the defect while there was ample time for valid service. That conduct amounted to playing a technical game. Under CPR 1.3 and the overriding objective, parties must co-operate and avoid unnecessary satellite litigation. The defendant’s conduct, together with the effective de facto service and its impact on limitation, supplied good reason for validation.
6. The later Supreme Court decision in Barton v Wright Hassall LLP [2018] UKSC 12 did not alter the result. It had not considered the developed argument concerning the overriding objective and a duty to warn an opponent of a procedural mistake. Permission to appeal was given.

This was a first-instance decision on competing applications concerning service of the claim form. The judgment records that permission to appeal was granted because of the conflict of authority and the importance of the practice point.