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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Planetree Nominees Ltd & Anor v Howard Kennedy LLP [2016] EWHC 2302 (Ch) (06 September 2016) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2016/2302.html Cite as: [2016] EWHC 2302 (Ch) |
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CHANCERY DIVISION
B e f o r e :
____________________
(1) PLANETREE NOMINEES LTD |
||
| (2) MARK LORIMER | Claimants | |
| - and - | ||
HOWARD KENNEDY LLP | Defendant |
____________________
MR. C. TROMAN (instructed by RPC
LLP)
appeared on behalf of the Defendant.
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
CHIEF MASTER MARSH:
Howard
Kennedy
(a firm). The issues I have to determine this morning arise from two applications. The first is an application made by the defendant for a declaration that the claim form has not been
validly
served and, therefore, the court has no jurisdiction to proceed with the claim. Secondly, an application made by the claimant for a declaration that the claim has been
validly
served or, in the alternative, for an order under CPR 6.15 for retrospective
validation
of service by an alternative method or at an alternative place.
LLP
on 11th December 2015. The letter was sent by them to
Howard
Kennedy
LLP
and asserted that there was a claim against
Howard
Kennedy
LLP.
For convenience in this judgment I will distinguish between
Howard
Kennedy,
the firm, and
Howard
Kennedy
LLP
by referring to the former as "
Howard
Kennedy"
and the latter as "the
LLP".
Howard
Kennedy
ceased trading as a partnership in 2011 and, upon it having ceased to trade as a partnership, the practice of
Howard
Kennedy
was transferred to the
LLP;
such is, of course, an extremely common event amongst law firms. The second relevant matter is that the
LLP
moved from an address at 19 Cavendish Square, London W1 to an address at No. 1 London Bridge in 2014.
LLP,
Ms. Rebecca Atkinson. She pointed out that, as she put it, "the correct entity" is
Howard
Kennedy
and not the
LLP.
The parties agreed to enter into a standstill agreement while the letter of claim was being considered. The initial draft sent by the claimants' solicitors described the defendant as the
LLP,
but that was corrected and on 7th January 2016 a standstill agreement was entered into between the claimants and
Howard
Kennedy.
The standstill agreement was subject to termination by notice and such notice was automatically given in the event of proceedings being issued in connection with "the dispute", a term defined in the agreement.
Howard
Kennedy,
that was No. 1 London Bridge, London SE1 9BG. However, clause 10.4 of the standstill agreement provided:
"This clause shall not apply to the service of any proceedings or other documents in any legal action".
I note that that clause does not refer to the defined term "the dispute", but it appears to me that the drafting of clause 10.4 is in rather wider terms and by not referring to the defined term it seems to me the intention was to make it clear that the notice clause and its machinery had no application to legal proceedings. Indeed, it is likely that the provisions of clause 10 could not in any event affect the manner in which the CPR operates.
LLP
responded to the letter of claim. This had been forecast by Ms. Atkinson who confirmed that RPC was instructed. Her email dated 20th January 2016 stated:
"Our insurers are QBE. We have appointed. RPCLLP
to act and respond to the letter".
LLP
was the successor practice to
Howard
Kennedy
and, professional indemnity insurance being on a 'claims made' basis, the relevant policy engaged was that of the
LLP
at the date of notification of the claim. It was, therefore, accurate for Ms. Atkinson to say that the
LLP's
insurers were QBE and the
LLP
had appointed RPC
LLP.
Nevertheless, there was an overlap between the partners and the members of the
LLP
and the signatory to the standstill agreement was Mr. Steven Morris. He sent the standstill agreement on 30th December 2015 duly executed on behalf of
Howard
Kennedy.
The email was sent from his email address at the
LLP
and referred to him being a partner in
Howard
Kennedy
LLP,
no doubt meaning that in fact he was a member of the
LLP.
Howard
Kennedy.
There was no response to that email and no subsequent chasing request to RPC.
Howard
Kennedy
at the
LLP's
address and enclosing, purportedly by way of service, the claim form which had been issued nearly four months previously. The defendant a few days later disputed that the claim had been sent to the correct address and that is how the issue I am asked to decide arises.
"Where that partnership has a name, unless it is inappropriate to do so, claims must be brought in or against the name under which that partnership carried on business at the time the cause of action accrued".
This provision is a convenient device in relation to partnerships which obviates the need for the claimant to bring the claim in the name of the individuals who were partners in the firm at the date that the cause of action accrued. It is a convenience, because there may be circumstances in which the claimant has difficulty establishing the identity of the relevant partners. That difficulty, however, should in most, if not all, cases be capable of being overcome by the provisions of para.5B of Practice Direction 7A. A party, whether or not a claim has been issued, is entitled to make a request for a "partnership membership statement" and there is a requirement placed on the receiving party to respond to that request within 14 days. The party making the request must specify the date when the relevant cause of action arose. The response to the partnership membership statement must include the names and last known places of residence of all the persons who were partners in the partnership at the time the cause of action accrued. The obvious purpose behind para.5B is to enable a putative claimant to establish who needs to be served with the claim form if individual service is required.
"(3) Where a claimant has reason to believe that the address of the defendant referred to in entries 1, 2 or 3 in the table in paragraph (2) is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant's current residence or place of business ("current address").
(4) Where, having taken the reasonable steps required by paragraph (3), the claimant –
(a) ascertains the defendant's current address, the claim form must be served at that address; or
(b) is unable to ascertain the defendant's current address, the claimant must consider whether there is –
(i) an alternative place where; or
(ii) an alternative method by which,
service may be effected.
(5) If, under paragraph (4)(b),there is such a place where or a method by which service may be effected, the claimant must make an application under rule 6.15.
"On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service".
Howard
Kennedy
was dissolved and its practice transferred to the
LLP
and that the
LLP
moved from the address in Cavendish Square to London Bridge in 2014. As a starting point it seems to me there is
very
real doubt about whether a partnership which has dissolved is capable of having a "place of business". Plainly, it is possible to see here that the Cavendish Square address was the last known place of business of the partnership, but what is much less clear is whether it is possible under any circumstances that a dissolved partnership is capable, for the purposes of sub-rule (3), of having a current place of business. In any event, I have
very
real doubt about whether that can be so here, given that upon dissolution of the partnership, the business was transferred to the
LLP.
There was no business of
Howard
Kennedy
left to conduct save, perhaps, for internal issues relating to the financial affairs of the partners as between themselves. The position might be different if a partnership is dissolved but continues to trade as part of the process of winding up but there is no evidence of that here.
LLP.
That was, of course, not correct. The
LLP,
as the successor practice, received the claim and pointed out that the cause of action was against
Howard
Kennedy
and Ms. Atkinson in dealing with the claimants' solicitors did so as the Director of Risk and Compliance of the
LLP.
The standstill agreement provides an address for the partnership of No. 1 London Bridge and Mr. Morris in providing the signed agreement sent an email from No. 1 London Bridge. Those facts come nowhere near to providing evidence that
Howard
Kennedy
had a current place of business at No. 1 London Bridge. It is also right to point to clause 10.4 of the standstill agreement which expressly provided that the service of notice provisions were relevant only to the standstill agreement and did not have wider application. It seems to me there was a clear statement being made in clause 10.4 that proceedings could not be served at the London Bridge address and certainly not served relying on anything in the Standstill agreement.
Howard
Kennedy,
either because
Howard
Kennedy
was not capable of having a current place of business or, if it was, it was not, on the evidence, the address at London Bridge.
v
Baadarni [2013] UKSC 44 is provided in the judgment of Floyd LJ in Barton
v
Wright Hassall
LLP
[2016] CP REP 29. The summary he provided is as follows:
"i) In deciding whether steps should bevalidated
under the rule the court should simply ask itself whether there is 'good reason' to do so: (Abela [35]).
ii) A critical factor in deciding whether tovalidate
service under the rule is that the document has come to the attention of the party intended to be served: (Abela [36]). That is the whole purpose of service: (Abela [37], [38]).
iii) However it is not by itself sufficient that the document was brought to the attention of the opposite party: something more must be present before there is a 'good reason': (Abela [36]).
iv) In deciding whether there is a 'good reason', there will inevitably be a focus on the reason why the claim form cannot or could not be served within the period of itsvalidity,
although this is by no means the only area of inquiry: (Abela [48], Kaki [33]).
v)
The conduct of the claimant and of the defendant is relevant: (Kaki [33]). It is not necessary, however, for the claimant to show that he has taken all the steps he could have reasonably taken to effect service by the proper method: (Power [39]).
vi)
The mere fact that one party is a litigant in person cannot on its own amount to a good reason, although it may have some relevance at the margins: (Hysaj [44]-[45]; Nata Lee [53]).
vii)
If one party or the other is playing technical games, this will count against him: (Abela [38]).
viii)
An appellate court will only interfere with the judge's evaluation of the
various
factors in the assessment of whether there is a good reason if he has erred in principle or was wrong in reaching the conclusion which he did: (Abela [23]).
Howard
Kennedy
at the time the cause of action arose became aware of the claim by
virtue
of it having been sent to the
LLP,
but the authorities make clear that something more must be present for there to be a good reason. It is also of note that although the focus is not exclusively upon the reason why the claim form cannot or could not be served within the period of
validity,
this is an important matter.
validate
service of a claim form. Where an error may have occurred the court must apply the provisions of the CPR and so when considering the application under CPR 6.15(2) there must be a good reason and principally that reason must be related to the difficulties experienced in serving the claim. To my mind, one of the main difficulties for the claimants on their application is the complete absence of any explanation about what was happening between the period starting with the issue of the claim form and the letter to the
LLP
nearly four months later. The claimants were aware at the date of issue of the claim that RPC had not said in response to the email of 16th March 2016 whether it would accept service and the claimants were aware that there was no response subsequently. No attempt was made to follow up that email. It is wholly unclear why the first step in relation to service of the claim form took place on 14th July 2016 and I can only assume that the claimants have chosen not to provide the court with that information, asserting, as it is entitled, a right of privilege, enabling it to cast a
veil
over that period of time.
very
real difficulty for the claimants, because there is no explanation about why the claim form could not be served within the period of its
validity.
To my mind, that in this case, on its particular facts, is fatal to the claimants' application. The claimants have simply not provided any reason, let alone a good reason, why the court should exercise its discretion under CPR 6.15(2).
LLP
and by the appointment of RPC by the
LLP. However, there is nothing in those events, to my mind, that comes close to providing a good reason for the court to exercise its power and I decline to do so.