(In this YAWS version a few editorial alterations have been made to the description of the CPR and Practice Directions, eg references to Part 3.8 have been changed to Rule 3.8, to ensure consistency with the remainder of the site.)
Neutral Citation Number: [2001] EWCA Civ 1073
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRESTON COUNTY COURT
Royal Courts of Justice
Strand, London, WC2 A 2LL
Friday 6th July, 2001
Before:
and
MR. JUSTICE WALL
- and -
TURBOGAME LIMITED
Respondent
Crown Copyright ©
| MR. JUSTICE WALL: | |||||||||||||||||||||||||||||||||||||||||||
| What follows is the judgment of the Court. | |||||||||||||||||||||||||||||||||||||||||||
| 1. |
This is an appeal by Jatiender Kumar Chabba (the appellant) against a
decision of HH Judge Appleton sitting in the Preston County Court on 7 December
2000 and made in proceedings under Part II of the Landlord and Tenant Act 1954Acts
(the Act of 1954) in which the appellant was the Claimant and a company called
Turbogame Limited (Turbogame) was the Defendant.
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| 2. |
The facts are not in issue, and for the purposes of this appeal fall within
a very narrow compass. The Appellant is the tenant of shop premises at 16
Adelaide Street in Blackpool. Turbogame is his landlord. The lease was due to
expire on 15 December 1999. The Appellant wished to obtain a new tenancy under
Part II of the Act of 1954. There was an exchange of notices under section 26,
and on 20 April 2000, within the time-frame laid down by the Act of 1954, the
appellant's solicitors issued a claim form for a new tenancy pursuant to
section 24(1). The appellant had a legal right to a new tenancy, and the
parties expected to be able to negotiate its terms.
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| 3. |
Unfortunately, the appellant's solicitors did not serve the claim form on
Turbogame's solicitors until 6 July 2000 which was outside the two-month period
for service laid down by the rules. On 14 August 2000, within four months of
the date of issue, they applied for an extension of the time for service of the
claim form, which they obtained from the district judge on 9 October 2000.
Turbogame successfully appealed that decision to HH Judge Appleton, whose
decision setting aside the district judge's order was given on 7 December 2000.
Permission to appeal to this court was given, on the papers, by Buxton LJ on 26
January 2001.
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| 4. |
The essential question is whether the district judge had jurisdiction to
enlarge the time for service. This turns on the interpretation of, and the
interrelationship between, four rules in the Civil Procedure Rules (CPR). The
first is CCR rule 43.6(3), incorporated into the CPR by Section B of the
Practice Direction to CPR rule 8, which covers applications for new tenancies
under section 24 of the Act of 1954. This reads -
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| 5. | The rules within the main body of CPR relating to service of claim forms and extensions of time for service are CPR rule 7.5 and 7.6, which read as follows: - | ||||||||||||||||||||||||||||||||||||||||||
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| 6. |
Finally, CPR rule 3.1(1) and (2) state:
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| 7. |
It is, we think, common ground that the court's powers under CPR rule
3.1(2)(a) only fall to be considered if, as the appellant seeks to argue,
either CPR rule 7.6 does not apply to an application to extend the time for
service of a claim form under Part II of the Act of 1954; alternatively, CPR
rule 7.6 does apply and the appellant can bring himself within CPR rule
7.6(2)(a). Certainly, if the application is caught by CPR 7.6(3) the appellant
cannot look to CPR 3.1 as a means of escape: - see
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| 8. |
For completeness, Mr. Grantham, counsel for Turbogame, helpfully drew our
attention to the fact that since the matter was before the judge, CCR rule
43.6(3) has been amended: - see the Civil Procedure (Amendment) Rules 2001 (No.
256 (L.7)). The new rule (rule 56.3(3)) states that in a claim under section
24 of the Act of 1954 The claim form must be served within 2 months after the date of issue and rule 7.5 and 7.6 are modified accordingly." (our emphasis) . This rule comes into effect on 15 October 2001. If it had been in force at the material time, it is accepted that it would have been conclusive in Turbogame's favour.
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| 9. |
The failure to serve the claim form in time appears to have occurred because
the appellant's solicitor did not look at CCR rule 43.6(3) but relied instead
on the form provided by the court, headed "Notice of Issue (non-money claim)"
which accompanied the claim form when it was returned to the appellant's
solicitors for them to serve the proceedings on Turbogame. This document is
dated 2 May 2000, and contains "notes for guidance" in the following terms: -
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| 10. |
As is immediately apparent, the "Notes for Guidance" are in fact
misleading, because, whilst pursuant to CPR rules 7.5(2) and 7.5(3) the general
rule is that a claim form must be served within 4 months after the date of
issue (where service is to be effected within the jurisdiction) and within 6
months (where the claim form is to be served out of the jurisdiction), CCR rule
43 rule 6(3) provides (1) that a claim form in relation to proceedings under
section 24 of the Act of 1954 must be served within 2 months after the date of
issue whether served within or out of the jurisdiction and (2) that CPR rule
7.5(2) and (3) will not apply.
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| 11. |
The deputy district judge who heard the application to extend the time for
service on 9 October 2000 plainly took the view that the Rules permitted him to
exercise a discretion. His judgment is short and robust:
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| 12. |
The order made by the deputy district judge was that time should be
extended to cover the date of actual service. He reserved the costs to the
final hearing and gave permission to appeal
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| 13. |
Before Judge Appleton both parties were represented by the same counsel who
appeared before us. Both produced skeleton arguments for the judge, who thus
had the benefit of full argument. He found that the application was governed
by CPR rule 7.6, and in particular was caught by rule 7.6(3). Turbogame
accepted that the appellant had acted promptly in making the application (CPR
rule 7.6(3)(c)); it was, however, conceded by the appellant (as it had to be)
that that neither of the very limited escape routes offered by CPR rule
7.6(3)(a) and 3(b) applied. Since these were the only bases for extending time
which were permitted by rule 7.6(3), Judge Appleton held that the district
judge was wrong to take the view that a discretion to extend time existed. He
accordingly allowed the appeal and set aside the order of the deputy district
judge.
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| 14. |
The judge's reasoning begins with the obligation on a claimant to comply
with any special provisions contained in the Schedules, Rules, Practice
Directions or any Act relating to the claim. That led him to CCR rule 43.6(3).
He then disapplied CPR rule 7.5(2) and (3). That left CPR rule 7.5(1) which
merely states the general proposition that, once issued, a claim form must be
served. CPR rule 7.5(1) and CCR rule 43.6(3), read together, reinforced his
view that the rules required the claim form to be served within 2 months. He
then moved to CPR rule 7.6, and held that the general rule as to the time for
service (4 months) did not apply, because CPR rule 7.5(2) had been excluded.
The claimant could not bring himself in this case within CPR rule 7.6 (2)(a)
since he was out of time on his two months. In these circumstances the "only
if" provisions of rule 7.6(3) removed any discretion and accordingly the court
could not extend the time.
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| 15. |
The Notice of Appeal advances three arguments -
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| 16. |
Miss Ewins, for the appellant, in clear and well argued submissions, put
her case on alternative bases. Her primary submission was that CPR 7.6(3) does
not apply to cases where an extension of time is sought for service of a claim
form under Part II of the 1954 Act. Her fall-back position was that if her
primary submission was wrong and CPR rule 7.6(2) and (3) governed all
applications for extensions of time for serving a claim form, the time within
which such an application may be made under Part II of the Act of 1954 without
falling foul of CPR rule 7.6(3) is four months, not two. Accordingly, since the
application to extend the time in the instant case was made within four month
of proceedings being issued, the court has a discretion to extend the time, and
the judge was wrong to hold that it did not.
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| 17. |
Miss Ewins placed a heavy emphasis on the words "specified by rule 7.5" in
rule 7.6(2)(a) and 7.6(3). She submitted that because CCR rule 43.6(3)
expressly disapplies rules 7.5(2) and (3) in cases under Part II of the 1954
Act, and because no time is identified in CPR rule 7.5(1), there is no period
of time "specified by rule 7.5" in CPR rule 7.6. She argues from this that CPR
rule 7.6 simply does not apply, and (since she accepts that the claim form in
this case was not served in time) the court is thrown back on its general
powers of management in CPR rule 3.1(2) which give the court a discretion to
extend time.
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| 18. |
Alternatively, Miss Ewins argued that if CPR rule 7.6 does apply to a claim
form issued under Part II of the 1954 Act, 7.6(2)(a) must be read literally,
and since the only periods of time specified by CPR rule 7.5 are 4 and 6
months, those periods apply to an application to extend the time for service of
a claim form issued under Part II of the 1954 Act notwithstanding the fact that
CPR rule 43.6(3) requires such a claim form to be served within 2 months.
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| 19. |
Miss Ewins further argued that the judge's construction of CPR rule 7.6(3)
leads to an absurd result because it would make it read: "If the claimant
applies for an order to extend the time for service of the claim form after the
end of the period specified by CPR rule 7.5(1)...... ", when there is no time
specified in CPR rule 7.5(1). This, she submitted, represented at the very
least a substantial lacuna in the rules, even if it did not have the primary
consequence for which she argued.
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| 20. |
For Turbogame, Mr. Grantham, in an equally attractive and well-structured
argument, seized on the words "the general rule" in both CPR rule 7.5(2) and
7.6(2). He submitted that the existence of a general rule implied, of
necessity, the existence of exceptions to it. CPR rule 43.6(3) was, he
argued, such an exception. It followed that the disapplication of CPR rule
7.5(2) and (3) by CPR rule 43.6(3) related only to the periods of time referred
to: thus the two month period specified by CPR rule 43.6(3) should be read into
CPR rule 7.5. On this construction, the reference in CPR rule 7.6(2)(a) and (3)
to the period "specified in rule 7.5" could only be understood in the instant
case as a reference to the period of service for a claim form in proceedings
under Part II of the 1954 Act, that is, two months.
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| 21. |
Mr. Grantham sought to support his argument by a reference to the amendment
to the rules set out in paragraph 8 above. Whilst we agree with him that the
amended rule achieves the result for which he is contending in this appeal, we
think it dangerous to rely on amendments as an aid to construction, since it
could just as easily be argued that the amendment to rule 43.6(3) is a
recognition that in its current form it does not achieve the objective for
which Mr. Grantham argues; hence the need for the amendment. There is on any
view a substantial difference between modifying a rule (the amendment) and
disapplying it (the original rule).
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| 22. |
As to the lacuna, Mr. Grantham submitted, consistently with his argument on
the applicability of CPR rule 7.6(3), that it should be filled in the instant
case by reading CCR 43.6(3) into CPR rule 7.5; and, generally, by holding that
CPR rule 7.6(3) should apply whenever an application is made to extend time for
service of a claim form the period for service of which is not expressly stated
in CPR rules 7.5(2) or (3) but which is applied for after the time for service
of the particular claim form has expired. He argued that such an approach is
dictated by the need for consistency; the need in some cases to have stricter
periods for service; and the need overall to avoid delay.
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| 23. |
It is common ground that if CPR rule 7.6(3) applies in this case, there is
no judicial discretion to exercise and the appeal will fall to be dismissed.
The first question, therefore, is whether or not we get to discretion.
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| 24. |
Although we think the arguments finely balanced, we find ourselves unable
to accept Miss Ewins' first ground of appeal, namely that CPR 7.6(3) (and,
necessarily, CPR 7.6(2)) do not apply to an application to extend the time for
service of a claim form under Part II of the Act of 1954. It is, we think,
clear from the Schedule to CPR Practice Direction 8 that proceedings under the
Act of 1954 are designed to be part of the inclusive code, and in our judgment
it would be anomalous if individual proceedings were excluded from it. CPR
rule 43.6(3) limits the disapplication of CPR rule 7.5 to sub-rules (2) and
(3): CPR 7.5(1) continues to apply. We were not referred to any other parts of
the CPR in which a claim under Part II of the 1954 Act departed from the
standard procedure.
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| 25. |
We are, however, persuaded that Miss Ewins' fallback position is sound. It
is plain from CCR rule 43.6(3) that in so far as service of the
claim form is concerned (1) the form must be served within 2 months and (2) the
general rule as to service within 4 months within the jurisdiction and 6 months
out of the jurisdiction does not apply. However, CPR rule 7.6 deals with
extensions of time for serving a claim form, and in our judgment
it does not follow as a matter of construction from CCR rule 43.6(3) with its
disapplication of CPR 7.5(2) and (3) that a party in a claim under Part II of
the Act of 1954 who serves a claim form later than two but within four months
of issue falls foul of CPR rule 7.6(3).
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| 26. |
In our judgment, the phrase "within the period for serving the claim form
specified by rule 7.5" in CPR 7.6(2)(a) and 7.6(3) can only mean within 4 or 6
months. It is not legitimate to read the terms of CCR rule 43.6(3) into CPR
rule 7.5. The word used in CPR rule 7.6(2)(a) and 7.6(3)is
specified. The only periods specified in CPR 7.5
are four and six months. Mr. Grantham's construction of the rules - and that
given to them by the judge - requires us to construe the word "specified", as
though it read "incorporated into rule 7.5 by CCR rule 45.6(3)". We find
ourselves unable to do this.
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| 27. |
To put the matter another way, we do not believe that, as the rules are
currently drafted, the court is required to treat the disapplication of CPR
rule 7.5(2) and (3) contained within CCR rule 43.6(3) which relate to service
(CPR rule 7.5)) as also applying to extensions of time for serving a claim
form, to which the general rule (4 months) applies. Since the application in
the instant case was made within 4 months, the appellant, in our judgment, is
within 7.6(2)(a): 7.6(3) does not apply and it is open to the court to exercise
its power under CPR rule 3.1 to grant an extension of time.
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| 28. |
We are conscious that this construction of the rules produces a difference,
in cases under Part II of the 1954 Act, between the time allowed for service
(two months) and the time within which an application can be made to extend the
time for service without the guillotine of CPR rule 7.6(3) descending. However,
whilst it is not easy to divine the intention of the rule makers, in terms of
construing the rules we see nothing so objectionable in having a uniform period
of 4 months within which applicants who have instituted proceedings should be
able to apply to the court to extend the time for service as to render that
construction of the rules untenable. An application for such an extension can,
after all, be refused if it is without merit, and in the instant case such a
construction of the rules enables us, in our judgment, to do justice between
the parties.
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| 29. |
We hasten to add, however, that whilst we feel able to interpret the rules
in this way in the instant case, the position will, in our judgment, be
different once the amended rule (56.6(3)) is in place after 1 October 2001.
The modification of rule 7.5(2) and (3) to incorporate a
reference to 2 months for service must, we think, mean that the 2 month period
will be incorporated into CPR 7.6(2) and (3). Thus the arguments which have
succeeded in this case are, in our judgment, unlikely to succeed after 1
October 2001.
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Discretion
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| 30. |
There was some argument before us as to whether or not the judge exercised
a discretion. In our judgment he did not, since his finding that CPR 7.6(3)
applied, with its "only if" provisions, effectively prevented him from doing
so.
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| 31. |
It follows that we can remit the matter to the judge for him to consider
the exercise of discretion in the light of this court's decision: alternatively
it is open to us to exercise our own discretion. We think we should take the
latter course. There is no dispute on the facts: no oral evidence has been
given below, and we are therefore in as good a position as the judge to
exercise the discretion. Such a course also has the beneficial effect of saving
costs, and neither side has opposed out taking it.
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| 32. |
Miss Ewins advanced a number of reasons why the discretion of the court
should be exercised to extend time. These were: -
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| 33. |
As to the first of these arguments, Mr. Grantham submitted that a solicitor
should not rely on notes that are intended for general guidance and that to
permit an extension of time on this ground would be to condone the solicitor's
failure to familiarise himself with the rules. Mr. Grantham submits that items
2 and 3 are immaterial. As to item 4, he argues that this an insufficient basis
to exercise discretion and that the appellant will not be losing a level
playing field; rather the level playing field of the market will be restored.
As to 5, the exchange of notices did not free the appellant from the need to
issue and serve his claim in time. Whilst item 6 was correct, the absence of
prejudice to Turbogame relied upon in item 7 was not a basis for granting
indulgence to the appellant.
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| 34. |
On the exercise of discretion under the Rules of the Supreme Court, we were
referred to
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| 35. |
In giving the leading judgment in
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| 36. |
The overriding objective of the CPR is to enable the court to deal with
cases justly. In our judgment, it would not be doing justice in the instant
case if this court were to exercise its discretion by refusing to allow an
extension of time for the service of the claim form. Whilst we do not condone
the solicitor's failure to know and apply the rules, the misleading nature of
the notes for guidance provided by the court is a factor which can properly be
taken into account and which explains the failure to serve the document in
time. It would not, we think, on the facts of this case be doing justice if the
court compounded the error on the form with a refusal to allow the appellant an
extension of time in which to serve his claim form.
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| 37. |
We are also strongly influenced by the fact that, if an extension of time
is not granted, the appellant will lose his right to have the terms of his new
tenancy determined by the court in the absence of agreement. As was pointed out
in argument, the Act of 1954 is designed to assist small businesses to renew
their tenancies without being disadvantaged by the greater bargaining power of
their landlords and the exigencies of the market. Mr. Grantham, in argument,
fairly acknowledged the force of this point.
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| 38. |
We also bear in mind that notices had been duly served, the claim had been
issued, the delay in service was small, and as soon as the appellant's
solicitors realised their mistake, they moved to rectify the position. The
prejudice suffered by Turbogame, if time is enlarged, will be the closing off
of their adventitious escape from the 1954 Act.
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| 39. |
Accordingly, the cumulative effect of the reasons advanced by Miss Ewins
is, in our judgment, sufficient to make it appropriate for the court to
exercise its discretion in the appellant's favour to extend the time for
service of the claim form.
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| 40. |
Before parting with this case, we would like to make it clear that nothing
in this judgment should be taken in any way as derogating from the propositions
that strict obedience to the Civil Procedure Rules by practitioners is
imperative, and that failure to do so will not be condoned. In particular, the
messages from this case seem to us to be the following: -
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| 41. |
For the reasons which we have attempted to give, therefore, we would allow
this appeal and extend the time for service of the claim form.
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| 43. |
In a sensible move to save costs, the parties have adopted the court's
suggestion that this judgment should be handed down in open court without the
need of either side's attendance and that it should make provision for costs
subject (but only if necessary) to further argument.
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| 44. |
The district judge's order will be restored. The appellant is to have his
costs in this court and before the circuit judge. We assess the costs in this
court in the amount of the appellant's revised statement, which appears to us
proper in all respects, at £3198.49. There will be liberty to either side
to apply within 14 days of the handing down of this judgment if a different
order is sought. The appellant is also to be at liberty within the same period
to submit his bill of costs in the county court appeal for inclusion in the
court's order by agreement. Failing agreement, there will be an assessment.
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ORDER: Appeal allowed and time extended for the service of the claim
form; district judge's order restored; Respondent to pay the Appellant's costs
assessed in the sum of £3,198.49; liberty to apply.
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| (Order does not form part of approved Judgment) |