Freddie Freed & Anor v Saffron Management Limited & Ors

Time limits for serving a claim form are strict. After the relevant period has expired, an extension is unavailable unless the conditions in CPR rule 7.6(3) are met. Mere delay, even where serious, does not automatically amount to abuse of process or justify striking out. The court should assess the reasons for the delay and then consider whether striking out is proportionate.

In trust proceedings, beneficiaries or putative beneficiaries are ordinarily proper parties but are not necessary parties where the trustee can defend the impugned decision and their interests are protected by CPR rules 19.10 and 64.4. A settlor holding a power to appoint trustees is different. Relief that directly cuts across that power may require the settlor’s participation. Case management conditions and discontinuance may provide a proportionate solution.

The claimants alleged that the trustee of the Fennel Trust had wrongfully removed them as beneficiaries and accepted the nomination of replacement beneficiaries. They sought declarations, relief setting aside the relevant decisions and removal of the trustee.

The claimants had obtained interim injunctions but failed to serve the amended claim form on the second to sixth defendants within the six-month period for service out of the jurisdiction. They later filed a notice discontinuing against those defendants and sought permission to serve it out of the jurisdiction. The trustee applied to strike out the claim under CPR rule 3.4(2)(c).

The issues were whether the claim could continue against the trustee without the other defendants, whether the delay constituted abuse of process, and whether the notice of discontinuance could be served out of the jurisdiction.

1. Service and extension of time. The claimants could no longer serve the amended claim form on the second to sixth defendants. CPR rules 7.5 and 7.6 imposed a strict regime, and none of the exceptions in rule 7.6(3) applied. An extension was therefore unavailable.
2. Necessary parties. The question whether a party is necessary is holistic. The court must consider whether it would be impossible, improper or unjust for the claim to proceed without that person, having regard to the directness of any prejudice and to other mechanisms for protecting affected interests.
3. The replacement beneficiaries were not necessary parties. CPR rules 19.10 and 64.4 supported the conclusion that the trustee was the proper party to defend challenges to its own exercise of trust powers. The replacement beneficiaries were, however, proper parties because their interests or putative interests might be affected.
4. Monika, the settlor, was not a necessary party to the challenge to the trustee’s acceptance of her nomination of beneficiaries. She was a necessary party to a claim seeking removal and replacement of the trustee because that relief cut across her power to appoint trustees under the trust deed.
5. Abuse of process. The delay was not warehousing or abuse of process warranting strike-out. The claimants’ conduct was unsatisfactory, particularly given the interim injunctions, but their participation in related proceedings and settlement negotiations demonstrated a genuine intention to pursue the claim. Even if abuse had been established, strike-out would have been disproportionate. A lesser case-management intervention was appropriate.
6. Discontinuance and case management. Subject to permission to amend the claim form so that the relief did not improperly challenge the settlor’s trustee-appointment power, the claimants could discontinue against the second to sixth defendants and serve the notice out of the jurisdiction. The claim could continue against the trustee on that condition. The replacement beneficiaries were to be told of their right to apply to rejoin, and the claimants were ordered to meet specified costs. Consequential matters, including final directions and costs, were left for a further hearing.

Not stated in the judgment.