Kelly v Ralli Ltd  EWHC B5 (Costs)
The Claimant instructed the Defendant in respect of a personal injury claim. That claim concluded in 2019, at which point the Defendant's registered office was at Jackson House in Sale. However, on 25 January 2021, the Defendant moved its registered office to another property in Sale, Dalton House.
On 26 May 2021 the Claimant commenced Part 8 proceedings under section 70 Solicitors Act 1974 against the Defendant, for an assessment of their bill of costs which had been delivered to him on 30 April 2021.
The Claimant's solicitors informed the court on 16 August 2021 that the proceedings had been served upon the Defendant on 29 July 2021, but no acknowledgement of service had been received and they consequently requested that the court list a directions hearing. On the basis of submissions made by the Defendant at that hearing the court directed that the Defendant make an application concerning non-compliant service of the Part 8 claim by the Claimant.
The Defendant’s application was made on 1 November 2021 and the Claimant made a cross application dated 16 November 2021. The Defendant sought an order that the Claimant's Part 8 Claim be struck out together with costs. The Claimant sought an order, if necessary, for service of the claim form to be dispensed with. Both applications were heard at the hearing on 29 November 2021.
The Defendant relied upon the plain wording in the applicable rule, CPR 6.9, that where the Defendant does not give an address at which the Defendant may be served, the claim must be served at their principal office of the company; or any place of business of the company within the jurisdiction which has a real connection with the claim. Therefore, as the claim had been served at the Defendant’s previous address, proper service had not been affected. The Defendant’s position being that they were not even aware of the claim until they had received a notice of the directions hearing from the Court. The Claimant’s solicitors had subsequently attempted to serve the amended claim form on 5 October 2021; by which time the period for service had already expired.
The Defendant also referred to the Court of Appeal’s decision in the matter of Kuenyehia & Ors v International Hospitals Group Limited  EWCA Civ 21; wherein the Claimants sought to serve solicitors acting on behalf of the Defendant even though they had not indicated that they were instructed to accept service. At the same time, the Claimants sought to serve the Defendant directly by faxing it a copy of the claim form. In this matter the Court provided that it should only exercise its discretion to dispense with service in exceptional cases.
In light of the above, the Defendant alleged that the claim form had not been served at the Defendant's principal place of business, since that was clearly Dalton House, within the four months required by the rules. It had been sent to the wrong address by post and it had been served by email without any request for consent to do so. The claim form could therefore not be said to have been validly served.
Master Rowley went on to say:
“The test in Kuenyehia was not satisfied in that this was not an exceptional case. Matters such as the knowledge on the part of the defendant of the existence of the claim form did not assist the claimant. There was no requirement for the defendant to point out any shortcomings as to service to the claimant. In any event, the defendant had communicated solely by email prior to the commencement of proceedings and the question of the change of address had simply not arisen.”
The Claimant stated that there had been effective service at the Jackson House address and that there was no evidence provided that the Defendant had in fact moved from that address on 25 January 2021. Additionally, the Defendant was generally very quick to respond to communications except for the two months it took for them to advise the Claimant that the address was incorrect on the claim form. They alleged that it was no mere coincidence that during this two month delay the four-month period for serving the claim form had expired.
They argued that this gave rise to an estoppel against the Defendant being able to take the point regarding any problem with the address. None of the post had been returned, and therefore it should be concluded that the claim form had in fact been served upon the Defendant correctly. Moreover, consent to service by email had been provided given that all communications from the Defendant to date were done via email.
The Claimant went further by suggesting that the Defendant’s delay in fact amounted to evading service, they referred to the matter of Lonestar Communications Corp LLC v Kaye & Ors  EWHC 3008 (Comm), that this should be considered exceptional in order for the Court to dispense with service.
Master Rowley provided:
“There is no evidence before me that the claimant's solicitors ever checked the defendant's address before commencing proceedings. The rules governing service are clear that it is the registered office or principal place of business. I have no doubt that errors such as have occurred here are often dealt with on a practical basis by amendment in the manner attempted by the claimant's solicitors. But there is nothing within the rules to require one party to assist the other and a practical solution does not alter the legal position.”
The Judge therefore found in favour of the Defendant, struck out the Part 8 claim and refused the Claimant’s application to dispense with service.
This again reiterates the importance of ensuring proceedings are prepared and served upon the correct parties at the correct address. The consequences of such errors are clear and not for the opposing party to correct. In these days of electronic service, it is imperative that specific permission is obtained from opposing parties beforehand, previous communications between the parties via email does not constitute acceptance of service in this way.