Back in the midst of the pandemic, we blogged about the decision of the Senior Master to shut down the Foreign Process Section of the Queen’s Bench Division.
The effect, as we pointed out in a follow-up blog post, was to make it practically impossible to serve abroad in many cases.
Can litigants rely on the FPS closure and the general disruption caused by the pandemic to justify extensions of time for service overseas? The answer, according to the Court of Appeal, is “it depends”.
In Qatar Investment and Project Development Holding Company & Anor v Phoenix Ancient Art SA (Rev1) [2022] EWCA Civ 422, the claimants commenced litigation alleging that an artwork they had purchased from the defendant was a fake.
Limitation was due to expire on 24 January 2020. Two days before that, the claimants issued the claim form. The time for service overseas was due to expire on 22 July 2020.
It was only on 26 June 2020 that the claimants first applied for an extension of time for service. They were given an extension on an ex parte basis to November 2020.
The extension was in due course challenged by the defendant. The challenge was accepted both by Master Gidden and on a first appeal to Davis J.
The claimants appealed again to the Court of Appeal. They focused on two particular aspects of the pandemic: the closure of the FPS and the disruption to business.
In respect of the first aspect, Whipple LJ pointed out that the Master had already made a key factual finding concerning the relevance of the closure of the FPS:
The Master found that the FPS’s closure was not a reason for the Claimants’ application for an extension, because the Claimants required the extension of time for other reasons, unconnected with that closure. The Master held that the reason or reasons for the Claimants’ not having served the claim form in time (and thus seeking an extension of time) was the Claimants’ failure to grasp the nettle and get on with preparing for service earlier than they in fact did; he noted that they did not even know the FPS was closed until late June 2020, by which time they were already up against the deadline for service of the claim form and already in need of an extension.
Also, there was in any event a “fundamental flaw” in the claimants’ argument. The court’s role was not to look at what might have been but simply to assess the strength of the reasons for the application for an extension:
Once the facts are found, the Court evaluates the reasons as good (i.e., are they sufficiently good to justify extension?) or not so good. The Claimants are wrong to suggest that the Court should investigate what the position would or might have been “in any event”. That is a different exercise altogether.
The Court of Appeal was clear that the closure of the FPS might constitute a good reason for an extension. Whipple LJ illustrated this with an example:
Mr Cooper gave the example of two claimants who issue on the same day against foreign defendants: the first makes sensible preparations for service and submits the papers to the FPS, only to find that the FPS is closed for the remainder of the period for service; the second does nothing towards service and then finds out that the FPS has in fact been suspended and that service could not have been effected anyway; both are in the same position so far as the outcome is concerned, because the FPS is closed; both make applications for extensions of time for service. Mr Cooper submits that the Court’s sympathy might very well be with the first claimant, who can show that the FPS’ closure was a reason for seeking an extension, but not with the second claimant who (like these Claimants, he argues) did nothing until it was too late and then relied on the fact of closure opportunistically. I agree that the closure of the FPS would be a reason (arguably, a good reason) for the first claimant seeking an extension of time, but it would not be a reason for the second having to do so. I agree that this example illustrates the flaw in the Claimants’ argument.
In this case, the closure of the FPS “was not a reason, let alone the reason, for the Claimants needing to seek an extension of time; they needed an extension anyway.”
In a short concurring judgment, Coulson LJ reiterated this point:
That can be tested the other way round. If in late April 2020, the Claimants had been ready to serve outside the jurisdiction, only to be told that the FPS was closed because of the pandemic, a prudent solicitor would have sought an immediate extension of time. It is highly likely that such an application would have been granted. That did not happen because, on the facts here, the Claimants had not even thought about using the FPS until about 23 June 2020, five months into the six month period. It was that delay which necessitated the application for an extension, and that was not a good reason to extend time for service.
Nor, said Whipple LJ, was it sufficient to point to the generally disruptive impact of the pandemic without providing more specific evidence of its effect:
The Court must be given sufficient detail of the effects of the pandemic in the particular case, in order to make the necessary findings of fact and evaluate the merits of the application. I therefore reject Mr Stewart’s submission that the Court should have taken or can now take judicial notice of pandemic-related disruption as a reason for the extension application. The Court cannot make assumptions about the nature and extent of business disruption, and specifically, the effect that any such disruption had on the conduct of a particular case.
The real problem for the claimants was that there was no direct evidence that the pandemic had caused the delays in this case:
My own reading of Mr Pulford’s first and second witness statements is in line with the Master’s view of the evidence and indeed the Judge’s view of it too. Pinsent Masons held back investigating service outside the jurisdiction for some months for a number of reasons, none of which was connected with the pandemic.
The appeal was therefore dismissed and the decisions to reject the extension application were upheld.