F G Hawkes (Western) Ltd v Beli Shipping Co Ltd

Factual and Procedural Background

The Defendant, Company A, filed an application seeking an order under various CPR rules to challenge an earlier order by Burton J dated 10th October 2008 ("the Burton order") which extended time for service of the Claim Form in proceedings brought by the Claimant, Company B. The underlying dispute arose from damage to cargo shipped on the Defendant's vessel, the MV Katarina, from China to Swansea in December 2006. The cargo was found damaged upon discharge in February 2007. The Claimant was the consignee under a bill of lading incorporating the Hague Rules, which imposed a one-year limitation period for claims related to cargo damage.

In January 2008, the Claimant's solicitors notified the Defendant's insurers of a potential claim and sought time extensions, which were granted until April 2008. The Claim Form was issued on 10th April 2008, the last day of the extended period, but was served out of the jurisdiction, giving six months for service. Between April and September 2008, the Claimant took no steps to ascertain the Defendant's address or serve the Claim Form, focusing instead on a claim against cargo insurers. Only in September 2008 did the Claimant begin inquiries into the Defendant's address, which were unsuccessful due to non-cooperation from the Defendant's insurers and vessel managers.

On 3rd October 2008, the Claimant applied ex parte for an extension of time to serve the Claim Form, which was granted by Burton J on 10th October 2008, extending the service deadline to 10th February 2009. The Claimant subsequently obtained permission to serve the Claim Form at the Defendant’s registered office in St Vincent and effected service on 21st January 2009. The Defendant acknowledged service but intended to challenge jurisdiction and brought the present application on 10th March 2009 to set aside the Burton order or strike out the claim.

Legal Issues Presented

1. Whether the Court has jurisdiction over the Defendant or should decline to exercise it.
2. Whether the Burton order extending time for service of the Claim Form should be set aside under CPR r.23(10).
3. Whether the claim should be struck out under CPR r.3.4(2) due to procedural defects.
4. Whether the Claimant’s failure to serve the Claim Form within the prescribed six-month period was justified and whether the Court should grant an extension of time under CPR r.7.6(2).
5. Whether the Claimant’s application for extension of time was full and frank and whether any procedural irregularities in the Claim Form (such as jurisdictional certification and address) justify setting aside the extension.

Arguments of the Parties

Defendant's Arguments

• The Claimant’s failure to serve the Claim Form within the six-month period was due to solicitor neglect, leaving inquiries about the Defendant’s address until the last moment, which does not constitute good reason for extension.
• The Defendant’s insurers and vessel managers were not at fault for refusing to disclose the address; the Claimant's delay was inexcusable.
• The Claimant was less than full and frank in its ex parte application for extension, omitting material facts regarding the five months of inactivity.
• The Claim Form contained a false jurisdiction certificate, relying on the Civil Jurisdiction and Judgments Act 1982 rather than the Judgments Regulation (EC) 44/2001.
• The Claim Form incorrectly used the address of the Defendant’s managers rather than the Defendant’s own address.

Claimant's Arguments

• The Claimant had at least a good arguable claim against the Defendant.
• The Defendant was aware from June 2008 that proceedings had been issued and knew their nature.
• The Defendant suffered no prejudice from the extension of time for service.
• The Claimant’s focus on the claim against cargo insurers justified the delay in serving the Claim Form.
• The inquiries commenced 21 days before expiry were not at the last moment and it was reasonable to expect cooperation from the Defendant’s insurers.
• The extension of time was appropriate and the Defendant’s remedies were disproportionate; alternative sanctions were preferable.
• The Claimant was not less than full and frank in its application, although more detail would have been preferable.
• The jurisdictional certification on the Claim Form was correct or at least not prejudicial, and the address issue was a non-point since the Claim Form was ultimately served at the correct address.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by identifying the sole reason for the Claimant’s failure to serve the Claim Form within the six-month period: a prolonged period of over five months during which the Claimant’s solicitors focused on a separate claim against cargo insurers and took no steps to serve the Defendant. This neglect, though not an absolute bar, was a powerful reason to refuse an extension under CPR r.7.6(2) as established in Hashtroodi and Collier.

The Court acknowledged that the Claimant did commence inquiries 21 days before expiry, which was late but not the very last moment. However, even after permission to serve out of jurisdiction was granted and the correct address identified, service took over two months, further evidencing delay.

The Defendant’s insurers’ refusal to provide the address was not a breach of duty and the Claimant could not rely on their cooperation to excuse delay. Similarly, the silence of the vessel’s managers did not mitigate the Claimant’s failure to act promptly.

In favour of the Claimant, the Court accepted there was at least a good arguable claim, that the Defendant knew proceedings had been issued, and that the Defendant would not be prejudiced by a short extension. However, these factors were insufficient to outweigh the strong reason against extension, namely the Claimant’s neglect.

The Court considered the legal framework under CPR r.7.6(2), distinguishing it from r.7.6(3), emphasizing the discretionary nature of the former but reiterating the importance of the reason for delay. The Court rejected the Claimant’s reliance on awaiting other claims as justification for delay, consistent with Collier.

Regarding the Claimant’s application being less than full and frank, the Court noted the compressed evidence was borderline but declined to set aside the Burton order on this ground alone.

The Court found no merit in the Defendant’s challenge to the jurisdictional certification on the Claim Form and considered the use of the managers’ address a non-issue since the Claim Form was ultimately served at the correct address.

Overall, the Court concluded that the Burton order extending time for service was unsustainable and refused to grant an extension, considering refusal appropriate and not disproportionate.

Holding and Implications

The Court's final decision was to SET ASIDE the Burton order extending time for service of the Claim Form and to refuse any further extension of time for service.

This decision results in the dismissal of the Claimant’s application for an extension of time, effectively barring the Claimant from serving the Claim Form beyond the original six-month period. No new legal precedent was established; the ruling applied existing principles strictly, emphasizing the importance of timely action and the consequences of solicitor neglect in service of process.