Extension of time to serve a claim form

Nicola Sharp of Rahman Ravelli details a case where the court considered an appeal against an order setting aside the extension of time for serving a claim form.

In the recent case of Qatar Investment and Projects Holding CO and His Highness Sheikh Hamad Bin Abdullah Al Thani v Phoenix Ancient Art SA [2021], the High Court rejected an appeal and upheld the Master’s decision to set aside an order extending time to serve the claim form out of the jurisdiction. It is a case that illustrates the response to what can be perceived as a lack of action by a claimant.

Case Background 

The claim in question related to the purchase of two ancient artefacts from Phoenix Ancient Art SA (the defendant) by Qatar Investment and Projects Holding Co, (the first claimant). His Highness (the second claimant) is the CEO of the first claimant.

The first claimant had bought the two artefacts from the defendant but later claimed they were not ancient artefacts, said they had been manufactured much more recently and suggested that they were only worth a fraction of the millions that had been paid for them.

While the defendant maintained that both artefacts were over 2000 years old, they agreed to exchange them for six other items of differing age and values. It is unclear exactly what happened after the agreement but, among other things, there were delays caused by customs in the US and the exchange did not occur. It appears that the relationship broke down and the claimants decided to issue a claim. However, the defendant is and was a company based in Switzerland and, therefore, service needed to be outside the jurisdiction. 

Shortly before the end of the limitation period for filing the claim form, the claimants made an application for an extension to serve the claim. This was because they had tried engaging with the defendant’s solicitors but had not received a response as to whether they would accept service. The claimants had not taken a proactive approach in considering the steps required to effect service out of the jurisdiction, and the effects of Covid-19 had increased delays. 

On 20 July 2020, the application to extend the date for service was granted and service was carried out on 8 September 2020. On 14 September 2020, the defendant applied for an order setting aside the extension of time, and this was granted on 19 February 2021. 

The claimants then applied on three grounds of appeal:

• That the Master had failed to apply the correct legal test. This was an application to extend time before the expiry of the time limit within the Civil Procedure Rules (CPR) for service of the claim form. The Master applied the criteria where the application had been made after the time limit to serve the claim form had expired. 
• The Master failed to take into account material facts, either sufficiently or at all. The essence of this ground is that the Master gave no weight or insufficient weight to factors arising from the Covid-19 pandemic. 
• The Master failed to give sufficient reasons for his judgment.

The Law

Service of a claim form must be effected within four months of issue if service is within the jurisdiction, or within six months if it is outside the jurisdiction, as per CPR7.5. 

CPR 7.6 notes the provisions for extending time:

1. The claimant may apply for an order extending the period for compliance with rule 7.5.
2. The general rule is that an application to extend the time for compliance with rule 7.5 must be made –
   1. within the period specified by rule 7.5; or
   2. where an order has been made under this rule, within the period for service specified by that order.
3. If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if –
   1. the court has failed to serve the claim form; or
   2. the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
   3. in either case, the claimant has acted promptly in making the application.
4. An application for an order extending the time for compliance with rule 7.5 –
   1. must be supported by evidence; and
   2. may be made without notice.

Decision

The court concluded that the Master had not fallen into any error of law or principle to allow the appeal, and, therefore, it failed. Whilst the Master did not use explicit terms in his judgment, he did apply the correct legal test and had considered the impacts of Covid-19 accordingly. 

The court did not accept the arguments regarding the Master not giving enough weight to the impact of Covid-19. Although there were certain delays that could be attributed to the pandemic, the claimant had issued the claim days before the limitation period expired. While there were other factors in these proceedings, the Master was entitled to note that the pandemic had not come out of the blue, and that the general public was aware of it by March 2020. As such, the claimant’s lack of action between January and May 2020 was entitled to be considered.