Thomas v The Home Office: Agreeing extensions of time for service of a claim form - how not to do it
Thomas v The Home Office: Agreeing extensions of time for service of a claim form - how not to do it
Thomas v The Home Office [2006] EWCA Civ 1355(1) Can the parties agree an extension of time for service of a claim form outside the period specified in CPR 7.5 (service within 4 months after date of issue)?
(2) If so, must there be an agreement in writing to that effect?
(3) If there is no written agreement, can a defendant be estopped from relying on its absence?
This sorry tale contains some important lessons for claimants and defendants. It also shows that the courts are not going to be free of disputes about service of proceedings even after Horton v Sadler.
Background
C’s liability claim was agreed at 80%:20%. Proceedings were issued on 1st October 2004 and should have been served by 1st February 2005
On 21st January 2005, the solicitors agreed a one month extension for service. D’s solicitor made a file note to that effect. On 24th February 2005, a further extension to 1st April 2005 was agreed. Both solicitors made file notes and C’s solicitor wrote to D’s solicitor recording this agreement that day (D’s solicitor made reference to the agreement in a letter to the medical expert a month later). On 30th March 2005, a further extension was agreed, although the parties’ file notes differed on whether this was to 6th May or 1st May. There was further extensions given and eventually the claim form was served on 23rd June 2005.
D took the point that service took place outside the last agreed extension, but also took the point that there was no valid extension at all beyond 1st February 2005.
The parties’ power to extend time for service
CPR 2.11 says:
“Unless these Rules or a practice direction provide otherwise or the court orders otherwise, the time specified by a rule or by the court for a person to do any act may be varied by the written agreement of the parties.”
The Court of Appeal said that there was no explicit rule preventing variation of the 4 month period for service, and that the courts should only imply an exclusion of CPR 2.11 from a time limit if it was necessary to do so or if it was obvious that CPR 2.11 was not meant to apply. Neither circumstance applied here. It was noted that this meant that a series of extensions could be agreed without reference to the court, and that this would prevent the court exercises its case management powers. However, it was thought that situations where a defendant would agree to a very prolonged deferral of service would be unlikely, but would be considered justified by the parties. In this case, for example, service was delayed so that negotiations about the medical evidence and settlement could take place without further escalation of costs.
The need for a written agreement
If CPR 2.11 applies, then there must be a “written agreement of the parties”. The Court of Appeal said that this had to be met for every variation, not just the first variation. A single document signed by both parties, or an exchange of letters recording the agreement, would do. An oral agreement confirmed in writing by both sides would do too – the Court of Appeal said that we should leave aside the quibble that an agreement in writing that the parties have made an oral agreement is not quite the same as a written agreement of the parties. However, there was no written agreement here since: (a) unexchanged files notes don’t count; (b) D didn’t reply to C’s letter noting the agreement, and the letter to the expert didn’t count.
Estoppel
There will be differing views on whether it is unfair for a defendant to rely on the wording of the rule in such circumstances, when it appears that neither party was alive to the issue at the time – indeed, the lack of a written agreement point was not taken by the defendant initially, but was added on to the argument that the claim form was served after the last agreed extension.
Given the circumstances, C wanted to run an estoppel argument, but the Court of Appeal noted that this had been abandoned when faced with the reasoning of the House of Lords in Actionstrength v International Glass Engineering [2003] UKHL 17. In that case, a claimant tried to enforce a guarantee against a company for the debts of another company. There was no written note or memorandum of the guarantee as required by the Statute of Frauds 1677. The House of Lords said that the guarantor was not estopped from relying on the absence of writing. Lord Bingham said that there was no representation by the guarantor that it would honour the agreement despite the absence of writing, or that it would confirm the agreement in writing. If the guarantor was estopped from taking the point, he said that it was hard to see how any guarantor making an oral promise would not be similarly estopped, and that this would then render the statutory provision nugatory. Lord Clyde said that there would have to be something more than just the oral promise, such as some additional encouragement, inducement or assurance by the guarantor to lead the recipient to assume that the oral promise would be honoured. Lord Walker said that the argument to the contrary was “hopeless”.
Transposed to the facts of this case, D made no additional encouragement or representation beyond the orally agreed extensions of time, and to say that D was estopped from relying on CPR 2.11 in such circumstances would circumvent the rule entirely.
Consequences
All this analysis is, in fact, merely highly persuasive obiter dicta. The claim form was served after the end of the last agreed extension and so the claim failed on the facts, even if the agreed extensions had been valid. Nevertheless, the reasoning will not be departed from lightly by the lower courts.
The pitfalls of this case for claimants are obvious, but there are clear implications for defendants too, since CPR 2.11 is of (almost) general application. As often is the case, an oral agreement for extension of time (whether for service of a statement of case, an expert’s report or a witness statement) isn’t worth the paper it isn’t printed upon. Any oral agreement should be followed up immediately with a letter setting the agreed variation, asking for the other side to respond in writing to confirm the agreement. Any failure by the other side should be followed up, with the threat of an application to the court (where possible) to get a court-endorsed variation of the timetable. Estoppel arguments are dead, in the absence of additional representations as to the lack of necessity of writing, but it will be better to get the agreement in writing rather than argue about estoppel.
One further point of note: the claimant pointed out that fresh proceedings could be brought outside limitation, following the abolition of the rule in Walkley v Precision Forgings by the House of Lords in Horton v Sadler [2006] UKHL 27. The Court of Appeal was invited to give guidelines on the exercise of jurisdiction under s.33 of the Limitation Act 1980 in such circumstances. They declined. It was a hypothetical question, relating to an application that had yet to be brought in proceedings that had not been issued. Furthermore, it would be wrong to express a view on the weight to be given to one point, when there might be further evidence on it, as well as other relevant points.
At some stage, the Court of Appeal is going to have to consider the relationship of the newly-found power to permit second proceedings to be brought outside the limitation period with the line of authorities (C v CPS Fuels [2001] EWCA 1597) that supports striking out of second proceedings as an abuse of process where there has been inexcusable conduct in the first action unless there are special reasons not to do so.
Straightforward failures to serve in time would probably not count as inexcusable conduct for these purposes, so one would expect that Mr Thomas’s second action will not be struck out on that basis, but other litigants who fail on a procedural point in the first litigation must not think that Horton v Sadler means that it is open season for second claims.